Thursday, January 19, 2012

Sum Index update - Jan 19

The SPX with the MCO and Summation Index
Click to enlarge

A generally bullish configuration of these indicators. The MCO and 10% Index are slightly overbought so we could see a pause to refresh at some poing in the next few days.

Top Plot: The MCO has been above 100 for 12 of the last 18 sessions. This indicates that AD line is now strongly trending higher.

2nd Plot: The CVI (Climatic Volume Indicator) is well behaved. Its 10 day MAVG is at 24 which is bullish but the raw CVI has been less spiky indicating that the trend is strong but less nervous.

3rd Plot: The SPX with 2 & 3 STDEV Bollinger Bands

4th Plot: The 5% and 10% components (moving averages of the AD line) are trending higher at about the same rate (they are parallel)

5th Plot: The Summation Index (dots) with its 13 day MAVG.
The SUM Index is above 1300 and in the region where stocks start to make sharper price moves higher. The CVI doesn't show this just yet indicating that the trend is grinding higher without drawing too much attention to itself. I view this as strongly bullish because it indicates we haven't reached the recognition phase yet. The SUM Index tends lag the actual market turn since it doesn't turn positive until the MCO is above zero. It is currently above its 13 day MAVG which indicates it's trending bullishly higher.

6th Plot: This is a 12-14-15 MACD on the SUM Index. Seems to be reasonably good at indicating turns in the SUM Index.

Bottom Plot: This is a default 12-26-9 MACD on the SPX for reference.

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