150507-McClellan Ossicilator Update

The market bounced off of yesterday's oversold levels in the McClellan Oscillator. At the worst part of the day yesterday SPX was down to the -3 STDEV Bollinger Band and bounced. However the chart, and the daily candles don't look like this the market is forming a bottom here. At best I would expect the SPX to test the 200 day moving average which is 3% below today's close.

Cycle Update

4-7-15 Cycles Analysis

The wandering of a 21 day and 22 day cycle

The Christmas Rally Continues

Don't fight the FED. The crossovers in the MACD's generally result in 15-20 trading days of upward movement. We are just starting.

The McClellan Oscillator and Summation Index

at the close on Dec 26 2013

Update on Oct 1st (the sequester day)

The current corrective phase is at the mercy of politics> The cycles and othe indicators suggest another week of choppy behavior.

The McClellan Oscillator and SUM Index

This is in a minor corrective phase within an uptrend

Click images to enlarge

The S&P 500 index with 15 day cycle

The Nasdaq Composite index with 15 day cycle

The QQQ with 15 day cycle (10/2 close)

Oversold- Working on a bottom

A long term chart of the McClellan Oscillator and Summation Index In oversold territory but I expect more choppy action, possibly lower lows before a reversal.

Click to Enlarge

Oversold and dangerous

At Mondays close the McClellan Oscillator is retesting the recent lows with the 10% Index going well below -500. This indicates that any rally will be followed by another retest of the current lows. In all likelihood the major induce will retest their 200 day moving averages. Caution is warranted.

Oversold but dicey

The McClellan Oscillator is in the oversold zone in an apparent retest of the last low where the 10% Index went below -500. It would be most constructive if the market rallies Monday 8/19 and keeps the 10% Index above the -500 level.

Overbought but still bullish

The NYSE McClellan Oscillator at the 5/17 close
Click to enlarge

Overbought - but Fueled by the FED

Don't fight the FED. Low interest rates will continue to fuel higher stock prices. The supply-demand pundits have not taken into account trillions of dollars currently invested in the bond market as further fuel for this rally. Money seeking better returns will continue to migrate into the stock market.

2Year AD Line and McClellan Summation Index — So far the AD Line has stayed below the 3 STDEV Bollinger Band which I view as overbought but constructive for continuation of the upward trend. Expect a correction and a retest of the highs.

Click to Enlarge

AD Line and McClellan Summation Index from mid 2006 showing the breakdown in the AD Line and SUM Index, At the present these indicators are giving no signs of a top.

Click to Enlarge

OE3 greases the skids

A quick look at the Philly Financial Index which has broken above the trendline and looks to be headed back to the old all time highs (given time). All the other indexes should follow.

The Monthly(L) and Weekly $BKX Charts
Click to Enlarge

Weekly DJIA Charts

Here are the weekly charts for the DJIA components sorted by price. I've included percentage bands from the 50 week moving average.

Big chart-click to enlarge

Big chart-click to enlarge

MCO update

We are a little overbought here but headed higher.

The SPX and MCO
Click to enlarge

MCO update 6/8/12 - A reversal in the making.

After a rather nasty string of declining days the MCO and SUM Index appear to have reversed indicating that a new rally may be underway. I don't discount the chance of another pullback over the next several days but unless the 10% Index breaks down below -500 again, it should be just viewed as a retest.



The SPX divergences with the MCO
Click to enlarge

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.

Click to Enlarge 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.

MCO update - dicey but constructive

The last few trading days were a little rougher than I expected but I still expect the markets to work out a positive reversal here. The Climatic Volume Indicator has been in the -25 to -50 area the last four sessions and todays last hour of trading looked like a reversal to me. The SUM Index will probably violate its 13 day moving average tomorrow but this appears like it's a retest from above, a bump and run. Nothing is written in stone but with sentiment so bearish it looks bullish to me.

The SPX for 12/05/06
Click to enlarge

GO

The Summation index is finally turning higher and crossing its 13 day moving average. In the past this has led to rallies lasting a month or more.

The MCO and SUM Index
Click to enlarge

Facebook IPO May 17

The Facebook IPO is set for May 17, 2012. I was curious about how the general market reacted after the last mega IPO for Google. Here are the comparative charts starting in August 2004 until Google peaked out along with the indices. With the current market in a defensive mode, the old adage to "Sell in May" may not apply this time around. The MCO and SUMmation Index are moving slowly towards a buy configuration and the Facebook IPO may be the catalyst.

Click to enlarge

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

MCO Update 4/09/12

The McClellan Oscillator dropped into oversold territory Monday. This was accompanied by the Cumulative Volume Index spiking down to -55, an area which has produced bounces in the past. It is not clear whether or not the current decline harbingers something worse to follow.

The Summation INdex, at -2417 is now in neutral territory (zero=+1000) and with the MCO below -200 even if the market begins to bottom here, with the MCO forming a complex reversal pattern, the SUM Index should get below -2000 before turning higher.

Because of the prolonged divergence between the MCO and SUM with the SPX the current spike may only represent a retest of the early March lows. So far the 10% Index has stayed above the -500 threshold which is constructive. All of this looks like a "wall of Worry" correction in a bull market fueled by low interest rates. As long as we don't experience a complete breakdown over the next week or so we can expect a decent rally into the summer months.

The SPX with the MCO and Summation Index
Click to enlarge

MCO Update 3/23/12

The McClellan Oscillator is pulling back to retest the low made two weeks ago. We are in the zone for the 39 TD (trading day) and the 13TD cycle low spots. It might have been Friday but I have a hunch it will probably stretch out a little longer into either Monday or Tuesday.

What we don't want to see here is a breakdown in the MCO and its components. The MCO, New Highs and Summation Index have been diverging from the SPX price, moving lower while the SPX moved higher. Late in a move this might be of some concern. However, since the markets made very oversold lows last October, and fear is still prevalent among the investing public, I think what we are seeing is a quiet correction in stocks as investors remain skeptical and exit the market. On the positive side, the Climatic Volume Indicator (not shown here) has remained well behaved and not given any signals that could be seen as the buying climaxes one would expect if the market was forming a top. Some caution is warranted until the indicators quit lagging the price action but my view remains bullish.

This chart is a bit different than the others. It only covers the last three months with the $SPX plotted using hourly data and the indicators using daily data. There is a slight misalignment but it's small, about 1/2 a day.

The SPX with the McClellan Oscillator
Click to enlarge