Thursday, November 29, 2012

McClellan Oscillator: The Market Will Likely Go Higher From Here

I talked on Sunday about what type of bounce the market will receive, and if it will just be a short bounce or a continuation of June's uptrend. What I was specifically looking at was the McClellan Oscillator hitting overbought levels. Right now it has hit overbought levels, and it has done it in impressive fashion (by staying above 0 for several trading days).

Look at May's action (after April's correction): completely different, the $NYMO failed to reach an overbought level. Right now the $NYMO is building a strong overbought structure above 0. When this occurs, the market almost never makes a final high. That means the market will most likely go higher. Also keep in mind the Summation Index (a tool that is used to measure bear/bull markets) is promising us higher highs. My thoughts are QE is having this market run and Fiscal Cliff is just noise. The last time the market made an overbought complex structure was in September and the market made a double top.

nymo analysis mcclellan oscillator