Market Comments for 4.26.19

MARKET BREADTH – someone every trader should follow is Tom McClellan, son of Sherman McClellan, who created the McClellan Oscillator…

Without going into the maths, there are several versions of this oscillator that measures market participation (breadth), and based on present readings, this market has quite a bit of life left in it…

Here is an excerpt from Tom’s free weekly newsletter:

The basic point which matters right now is that the ability of the RASI to climb up to a nice lofty value conveys an important message.  It says that liquidity is plentiful, and that is a condition which is likely to continue for a while longer.  A high RASI reading says that there is still more uptrend yet to come.  There might be an ordinary, garden-variety correction to help restore equilibrium, but we are not at the end point for the uptrend.

 

 

Final price highs do not typically arrive with the RASI up above +500.  The time to worry is when we are seeing prices moving to new all-time highs but the RASI is down below +500.  This is especially important when there is a normal correction which takes the RASI down below +500, and then it fails to climb back above +500 on the ensuing rally.  That is a big invitation to trouble.

But it is not at all what we are seeing now.  The RASI is up at +1005 as of April 24, so it is a long way from decaying down to the point where it would be signaling a problematic loss of liquidity for the stock market.  An ordinary correction can still appear at any time, and we have to accept that and be ready for it, but this is not the end of the uptrend.  And that is a really nice piece of information to have the market give to us.

 

RASI-April2019.gif

 

SP00s – a couple months ago, the market was in a downtrend, though a possible reversal back to long was showing itself just before the FOMC meeting was going to reveal any rate change and the policy going forward…

The position at the time was nicely profitable, and FOMC days tend to be higher volatility than normal, so I waited to see the results of the meeting – it disappointed and the market tanked, and the signal earned another hundred points for a small bit of patience and wisdom…

Last night, the momentum indicator line on the 240-min SP00s chart fell just slightly through its UTL, BUT important economic numbers were due out this morning, as the SP00s were telegraphing the possibility that the GDP would be better than expected with their resistamce to drop ahead of the release, this also caused the momentum indicator line to hook upward…

I made the same play as I mentioned above with the FOMC day, and gave the benefit of the doubt to the bulls and drew the UTL at the bottom of the hook that developed in the globex session…

The numbers blew out expectations and the SP00s are attempting to move higher – if this fails, then more of a momentum reset is needed, and the next attempt higher will be from lower on the momentum indicator line…

At the time of this post, my SAR swing system remains long from 2910… watching.

 

 

Rotation – At about the 9;00 am mark here in Denver, the US equities markets are seeing more rotation, as the news of a much stronger economy is being digested – even the small caps are seeing some buying today…

The IT trend and LT trend in the SP00s remains upward, though if the SP00s cannot push upward crom here, there will be a ST reversal today… watching.

 

 

SP00s – At the 10:00 am bar here in Denver, the SP00s are trading near their sessions highs, and may even push to new swing highs if the Boyz don’t play games before the close – 2940 is the mark I’m looking for…

The US economy is in great shape, and the world economy is not as bad as we’ve thought, so new ATHs should be upon us as early as next week…

My SAR swing system remains long from 2910… watching.

 

 

SP00s – BOOM… new highs on the day, and soon new ATHs…

My SAR swing system remains long from 2910… watching.

 

 

SP00s – I was looking for the 2940s in SP00s this week, and in the last minutes of the trading week, it came to pass…

The momentum indicator line on the 240-min SP00s chart is showing negative divergence of momentum against price, but my TA work suggests the SP00s have a destiny with a target quite a bit higher from here, so we’ll see how this whole thing plays out…

My SAR swing system remains long from 2910… watching.

 

 

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