Monday, May 21, 2012

MCO Update 5/18/12

We have experienced a general breakdown in this indicator which now indicates the markets need some time to reestablish confidence before a n extended move higher can get underway. While I do not expect it to occur a waterfall decline is still possible. Caution is warrented.
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A long term view of the market with the MCO and SUM Indexes. We are very oversold on the MCO and should expect a bounce by Tuesday at the latest. The breakdown is severe enough that I believe we need another two weeks to establish a base again before looking for a reliable reversal.

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