The MCO is suggesting a reversal here.

If we get some follow through in the next few days, the McClellan Oscillator is suggesting we may be making a major reversal in the indexes. So far we have a test of the recent price lows with market breadth, as measured by the advance-decline oscillators, is NOT confirming the low.

This, accompanied by the recent high reading on both the MCO and 10% Index is an event which has not occurred for over a year and suggests to me that the markets are indeed going higher.

The McClellan Oscillator for Wed 1-21-09
Click to enlarge

Capitulation?

At 12:42 the advance decline statistics are noticeably negative, as follows

adv 482
dec 3204
A-D diff -2722 <==
the 10% -365.71 <== still above -500
the 5% -134.87
the MCO -230.85 <== In the area where normally there is a bounce/reversal.

Further, the indexes are down now 6 days running, only in October (1-10) was there
a longer negative run of 8 days down.

All indicators are not confirming the retest of the previous low zones.

I've been watching the TICK and the 20 bar average on the 65 minute chart has
made new 4 month lows, lower than October or November. This leads me to believe
that the markets are seeing either the start of a new leg down OR the finishing up of
the current one. I believe the latter is the case.

If I'm seeing this correctly, we should reverse later in the day or tomorrow in the AM.

Original comment was on January 15, 2009 at 12:50:06 on WollieWorld

MCO for Tuesday 1/13/09

This is an updated chart in my previous post MCO hits new highs with the last two days added on. So far the MCO has come right down to my trendlines and made a small daily change indicating a bit more volatility in the next few days. Up or down? That's always the question.

The McClellan Oscillator for Tuesday 1-13-09
Click to enlarge

SPX Cycles for 1/12-1/16

It's option expiration week which is typically very choppy. The cycles on the SPX 65 minute chart go along with the idea.

SPX 65 Min. chart to 1/09/09
Click to enlarge

MCO hits new highs.

The McClellan Oscillator peaked over +300 with the 5% Index in the +800 zone intraday suggesting that in spite of the upcoming corrections the market will continue to move higher.

The McClellan Oscillator for 1/09/09
Click to enlarge