Tuesday, April 10, 2012

MCO update 4/11/12

The SPX.X, New Highs-Lows. MCO and SUM Index.
click to enlarge

Yesterday I noted elsewhere that the Climactic Volume Indicator was suggesting the bounce which we saw today.

Tuesday: The chart below should be self explanatory. The CVI is made a rather extreme low today indicating panic in the market and the potential for an immediate reversal tomorrow. Of course nothing with the market is black and white and this coould be the start of a waterfall decline like we saw in late 2011 (left side of chart).

However the MCO closed at -315, with the 10% Index at -488 which is quite oversold and the area one would expect to generate at least a healthy . bounce.

The SPX cash closed at 1358.59 below the 2STDEV BB at 1375.14, and below the 3 STDEV BB at 1362.17, just above the July 2011 high at 1356.50. With the SPX below the Bollinger Bands like this we need to see an immediate rally and then a retest of the current lows within a few trading days to reverse the market correction which has been in effect for the last few months. If not...

The SPX.X and the Climactic Volume Indicator
making lows not seen in awhile.
click to enlarge


Anonymous said...

OK, George, I give up. CVI is a decisionpoint indicator. How did you manage to get it into StockCharts?


George said...

Photoshop :-)

Anonymous said...

Nice job - especially in the upper left corner where you put !CVISPX Daily. Nice touch!