Tuesday, October 17, 2017

chart: SPY vs Hi - Lo 10DMA

The SPY vs Hi - Lo 10DMA as of today's close


This chart should be self explanatory.
 
Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepage. This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  Past performance is not indicative of future results

chart: Goldman Sachs Says....

Courtesy of Jesse Columbo,  @TheBubbleBubble

Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepage. This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  Past performance is not indicative of future results

Wednesday, October 11, 2017

chart: McClellan Summation

Below are two McClellan Summation (MS) charts as shown by Worden Bros charting service.
The top chart is from 2009-2017.  Note that the area highlighted in yellow was enlarged in the lower chart. 
Most of the time the MS goes between either -2000 & +2000 or -3000 & +3000.  Occasionally it does reach extreme readings of -4000 & +4000.
As you can see in 2009 & in 2016 the MS did go below -4000 and in 2012-2013 it went between -3000 & +3000.
But, starting in 2015 the MS did not get above +500 even while the stock market did trade higher and was making new ATH's.
It is currently at a triple top area at or just under +500.  
If the MS cannot get past +500 decisively, then a correction of some sort may be on the horizon.
Also, a chart of stocks above their 200DMA have had lower tops over the last 18 months.
This also confirms the current MS chart.
At the very least, if the MS stalls here as it did the last two times, highlighted in yellow & circled in red in the lower chart, you can see that the market went into a sideways trading pattern,

Courtesy of Worden Bros.

Courtesy or Worden Bros.

By Investopedia
The index is calculated by adding the current day's McClellan Oscillator to the previous day's Summation Index, making it a cumulative measure of movements. Given that it is based on past prices, it is a lagging indicator.
Usually, a small number of stocks making large gains characterizes a weakening bull market. This gives the perception that the overall market is healthy, but in reality it isn't, as rising prices are being driven by a small number of stocks. Conversely, when a bear market is still declining, but a smaller amount of stocks are declining, an end to the bear market may be near. The McClellan Oscillator — which the Summation index is based on — is calculated using 19- and 39-day exponential moving averages, which avoids applying large gains and declines of a few stocks to the whole market, thus it indicates the trend itself, as well as the strength of it.

Interpretation

(By StockCharts.com Chart School)
The Summation Index rises when the McClellan Oscillator is positive and falls when the McClellan Oscillator is negative. Extended positive numbers in the McClellan Oscillator cause the Summation Index to trend higher. Conversely, extended negative readings cause the Summation Index to trend lower.

Because of its cumulative nature, the Summation Index is a slower version of the McClellan Oscillator. The index crosses the zero line fewer times, forms divergences less often and produces fewer signals in general. Whereas the McClellan Oscillator can be used for short-term and medium-term timing, the Summation Index is generally used for medium-term and long-term timing.

There are three basic signals. First, the Summation Index generally favors the bulls when positive and the bears when negative. Second, chartists can look for bullish and bearish divergences to anticipate reversals. Third, chartists can identify directional movement to define a bullish or bearish bias.

Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepage. This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  Past performance is not indicative of future results

Sunday, October 8, 2017

Picasso Cycle Update

In this update only the date/s will be mentioned with an "H" for high and a "L" for low.
The chart amplitude can and will be misleading at times.
In addition, it is the date/s that is most important rather than if that date is a projected high or low.
One important reason is because in some cases a date may invert and the "H" or "L" may not mean anything.
A low may actually turn out to be a high and visa versa.
Also it is very important that other tools always be used to confirm any potential ST Cycle Date. 

Picasso Dates, always +/- 
Mar 3-14 H - high occurred on Mar 15th
Mar 20-28 L - possible low occurring in this time frame - Low occurred on March 27th
Apr 10-13 H (+/-) - high occurred on April 5th & later on Apr 10th
Apr 4/21-24 L (+/-) - lows occurred on April 13th, 18th, 19th, 21st
Apr 28- May8 H - highs on April 26th & May 9th...only 3 day correction, then grinded higher
May 21 L  - actual low 2 TD's early on May18
May 25-June 1 H - June 1 hit a high then grinded marginally higher to June 9
June 10-19 L - actual low June 16
June 28-July3 H - June 26th high near this time frame - DJIA high, so far, July 3rd
July 7-14 L - low was July 11
July 19-28 H - So far, SPY 7/27 H, QQQ 7/27 H, IWM 7/25 H
Aug 4-12 L  - low was SPY 8/11
Aug 8/18-23 H - highs were made on 8/16 & 8/22
Aug 30-Sept 7 L - a low was made on 8/29
Sept 13-22 H  - a high was made on 9/14
Sept 29-Oct 5 L - a low was made on 9/25 (left translation of this cycle date)
Oct 11-17 H

Comments:

Long term indicators appear positive, so far.  Negative divergence on many indicators were broken very late last year and so they now suggest further upside.  So, if pullbacks develop into the Picasso cycle date lows and daily indicators are OverSold, it may present a good buying opportunity.
So far this forecast came to pass.  The August low was accurate. 
 
In addition, the LT cycles suggested a low in August +/-, which we had, & a high in November +/-. 
Always remember to confirm cycle dates with your or your professional investment advisors analysis.
The LT Cycle low suggested for August was shallow.  The DJIA high was 22,179 and the DJIA low was 21,600.   This was a 2.6% correction.  Not much, but, it was a correction as forecasted nevertheless.

Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepage. This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  Past performance is not indicative of future results

Are We There Yet?

On March 29,2017 we discussed the Zweig Breadth Thrust.  A copy of that post is below.  The interesting part of that post is when you look at the DJIA projection.  If you apply the average gain of the ZBT to the low at Nov 2016 you hit a forecast of 22,500 11 months later in Oct 2017.   That is about where we are right now.   That forecast when applied to the S&P500 is 2,625 and we are not at that point yet.   But, we are not too far away.   Maybe if we take an average of the DJIA and the S&P500 we will get a better forecast. In any event, between the ZBT and the Long Term Picasso Cycles forecast of a potential November 2017 high, the caution light is on to watch your charts carefully for any intermediate term sell signals on the weekly and monthly charts.

 

Wednesday, March 29, 2017

Zweig Breadth Thrust

The Breadth Thrust indicator is a market momentum indicator. It was developed by Dr. Martin Zweig. The Breadth Thrust is calculated by dividing a 10-day exponential moving average of the number of advancing issues, by the number of advancing plus declining issues.

Interpretation

A "Breadth Thrust" occurs when, during a 10-day period, the Breadth Thrust indicator rises from below 40% to above 61.5%. A "Thrust" indicates that the stock market has rapidly changed from an oversold condition to one of strength, but has not yet become overbought.

According to Dr. Zweig, there have only been fourteen Breadth Thrusts since 1945 (as of the date of the original printing of this article ???). The average gain following these fourteen Thrusts was 24.6% in an average time-frame of eleven months. Dr. Zweig also points out that most bull markets begin with a Breadth Thrust.

The last ZBT that we noted, occurred starting Nov 8,2016.
If we apply the the average gain of 24.6% to the average length of 11 months we get:
DJIA         Nov. 2016     18,000 --->22,500 forecast 11 months later in Oct.2017
S&P500    Nov. 2016       2,100 --->  2.625 forecast 11 months later in Oct.2017 

Will the stock market possibly continue straight up until Oct, 2017?  We doubt it.  In fact, the LT Picasso Cycle dates suggest an April high +/-, an August low +/- and then a Nov high +/-.  This last high in Nov is very close to the ZBT average forecast high in Oct. 2017.

Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepage. This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  Past performance is not indicative of future results

 

Monday, September 11, 2017

Picasso Cycle Update

In this update only the date/s will be mentioned with an "H" for high and a "L" for low.
The chart amplitude can and will be misleading at times.
In addition, it is the date/s that is most important rather than if that date is a projected high or low.
One important reason is because in some cases a date may invert and the "H" or "L" may not mean anything.
A low may actually turn out to be a high and visa versa.
Also it is very important that other tools always be used to confirm any potential ST Cycle Date. 

Picasso Dates, always +/- 
Mar 3-14 H - high occurred on Mar 15th
Mar 20-28 L - possible low occurring in this time frame - Low occurred on March 27th
Apr 10-13 H (+/-) - high occurred on April 5th & later on Apr 10th
Apr 4/21-24 L (+/-) - lows occurred on April 13th, 18th, 19th, 21st
Apr 28- May8 H - highs on April 26th & May 9th...only 3 day correction, then grinded higher
May 21 L  - actual low 2 TD's early on May18
May 25-June 1 H - June 1 hit a high then grinded marginally higher to June 9
June 10-19 L - actual low June 16
June 28-July3 H - June 26th high near this time frame - DJIA high, so far, July 3rd
July 7-14 L - low was July 11
July 19-28 H - So far, SPY 7/27 H, QQQ 7/27 H, IWM 7/25 H
Aug 4-12 L  - low was SPY 8/11
Aug 8/18-23 H - highs were made on 8/16 & 8/22
Aug 30-Sept 7 L - a low was made on 8/29
Sept 13-22 H
Sept 29-Oct 5 L

Comments
The Picasso Cycle dates have been working well lately.  Let it continue !

Long term indicators appear positive, so far.  Negative divergence on many indicators were broken very late last year and so they now suggest further upside.  So, if pullbacks develop into the Picasso cycle date lows and daily indicators are OverSold, it may present a good buying opportunity.
So far this forecast came to pass.  The August low was accurate.  Although September does not have a good reputation and the Picasso Cycle dates are forecasting a low Sept 29-Oct 5 +/-.
 
In addition, the LT cycles suggested a low in August +/-, which we had, & a high in November +/-. 
Always remember to confirm cycle dates with your or your professional investment advisors analysis.
The LT Cycle low suggested for August was shallow.  The DJIA high was 22,179 and the DJIA low was 21,600.   This was a 2.6% correction.  Not much, but, it was a correction as forecasted nevertheless.

Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepage. This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  Past performance is not indicative of future results

Wednesday, September 6, 2017

chart: q and CAPE, valuations

Courtesy of Andrew Smithers/Smithers & Co
This chart is self explanatory.
Yup, second highest CAPE and third highest q in 100 years.

Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepage. This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  Past performance is not indicative of future results