"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 54 mins Gold Bulls, Brace Yourselves – Fed Hikes Are Coming!
  • 3 hours Stocks Fail to Hold Gains, But Still No Correction
  • 5 hours Cryptojacking: A New Threat Vector To Critical Infrastructure
  • 22 hours Why The Next Oil Boom Will Be Fueled By Blockchain
  • 1 day 5 Things Investors Should Know About China this New Year
  • 1 day Is The South Korean Crypto-Drama Finally Over?
  • 1 day Miners’ Rally? What Rally? Watch Out for More Fake Moves!
  • 1 day Four Percent 10-year Note Yield Will Be a Floor Not a Ceiling
  • 1 day The End Is Near
  • 2 days 5 Record Breaking Gemstones Even Billionaires Can’t Buy
  • 2 days Irredeemable Currency De-tooths Savers
  • 2 days CFTC Offers Bounty For Crypto Pump And Dump Whistleblowers
  • 2 days Have You Been Getting Run Over By This Stock Market Action?
  • 2 days Decision Time
  • 2 days 1 Week Later, Risk Remains ‘On’ as 2 of 3 Amigos Ride On
  • 3 days The Most Polarized Commodity Ever
  • 3 days Commodity Coins and Us: What To Expect From The "Tokenization of Everything"
  • 3 days U.S. Dollar Bull and Bear Markets
  • 3 days GLD May Not Yet Be Ready To Break Out
  • 5 days Permanent Market Support Operations
Stock Barometer

Stock Barometer

Stock Barometer is completely independent. We have never and will not ever accept compensation from any company whose stock we recommend. Our goal is to…

More Info

Dollar Dives

5/6/2014 5:41:05 AM

Good morning Traders,

Monday brought us a gap down followed by a rally back to highs. This pattern can be bullish, but bigger picture we have the dollar taking a hit in the futures market. This dollar weakness can be concerning, but so far markets are shrugging it off. Today we will take a look at sentiment and some McLellan oscillator data:

Generally speaking, when bearish sentiment is building (heading lower) it results in a move lower in the market. The longer that sentiment builds without being reflected in price action, the more bullish it can be. The fact that the SPY is STILL hanging around near highs is bullish. But that can break at any point. So let's look behind the sentiment.

Cumulative Bearish Sentiment Chart

I'm a big fan of data telling the story and NOT the news. So let us look at the NYSE a little more closely:

NYSE McClellan Oscillator Chart

This view of the McLellan oscillator is bearish as it sits below zero. So the question is, if the market breaks lower here, will there be more damage in the NYSE or the Nasdaq?

McClellan Oscillator NASDAQ Chart

Note there are a couple of interpretations of this data. First is the positioning above and below zero as being bullish or bearish. Next is if the indicator settles above or below. So a reversal lower may not be bearish as it could hold above the zero level.

Now the above looks at breadth, how about if you apply it to volume?

McClellan Oscillator NASDAQ Volume Chart

We see that volume is confirming here on the Nasdaq. That head and shoulder's pattern is looming though...

As a heads up, you can access all our charts in our IRG Market Timing Research for only 9.95 a month. You can even use them in your own publications as this research is quickly becoming very popular with other newsletter writers... Visit www.stockbarometer.com and scroll to the bottom of the page for the subscribe links.

And finally, the barometer, which drives our advice in the DSB:

Daily Stock Barometer Primary System Chart

So we remain in Buy Mode, cautious that today is a key reversal date. Also cautious that the crowd is no longer calling for a correction, which leaves the market even more exposed to one. We'll have more on that later in the week as tomorrow we start publishing our key weekly indicators.

Good trading!


Back to homepage

Leave a comment

Leave a comment

Don't Miss A Single Story