Thursday, May 6, 2010

MCO Update

The market is in the midst of a mini panic in response to uncertainties over sovereign debt, primarily Greece. As of todays close the McClellan oscillator is very oversold and I would expect a bounce between tomorrow and Tuesday. Because of the seriousness of the decline it's likely the markets will need a week or two to rebuild confidence.

The McClellan Oscillator and its Components
Click to enlarge


Anonymous said...

George - I was beginning to think you lost interest in the markets - no posts for quite some time! Had to work, so I missed the fun ride today. Did have buy orders in for some income stocks that got hit. After the ride was over, they returned to yesterdays close. I'm pleased!
Don't be afraid to post - you do have an audience.
Russ from LutzCats

George said...

Russ, thanks for the comment, I'm never sure if anyone is paying attention. I'm still following the markets but also busy in the painting studio so posting less here.

Yesterday's swoon happened so fast I hardly noticed it but the Advance-Decline line had been severely negative all day. I saw the MCO was deeply oversold on a intraday basis and remained so at the close.

While the market could continue lower I don't think the fundamentals are as negative as they were in 2008-9 and therefore I think it's very likely the markets will make a low over the next day or so.

This is the kind of correction which will turn traders bearish again and bring down the Investors Intelligence number - just what's needed to keep the bull market going.

Good trading to you.