Cumlative Charts - 1/18/08, Long Term Investors Take Heed Options

[fib_1618]

Back in 2003, and again in 2004, the NYSE breadth McClellan Summation Index promised bull market conditions until the 1st quarter of 2008. This last weeks worth of breadth data is now in a position where a bear market confirmation signal can be given IF the NYSE breadth McClellan Oscillator does not hold its current divergent structures.

With that said, this weeks array of breadth charts are cross posted to fulfill promises made over the last 5 years of when the market, and not opinion, would provide enough evidence in which a change in the tide can be anticipated, and from this, a change in longer term trading strategies might be indicated.

Fib

Cumulative Charts

[denleo]

MCO charts are basically saying that if the market doesn't come back on Tuesday, they will confirm / generate a new bearish pattern (money flow). Most indicators are at bear market lows. If Tuesday is a big down day (no come back), just about every indicator out there will be at ridiculous levels. Dave, how will you interpret that?

Denleo

[NAV]

Fib_1618,

I would like to take this opportunity to congratulate on your call back in 2003, where you were the "ONLY" technical analyst who called for new all time highs on SPX, backed with technical evidence and not just personal opinion. Every other Guru out there were looking for a retest of Oct 02 lows or calling it a bear market rally to be completed in a few weeks to few months. That was one heck of call !.

Again, IMO you are one of the best IT-LT technical analysts out there. I have myself learn't a lot of tricks of the trade from you. Keep up the good work.

[ed rader]

Fib_1618,

I would like to take this opportunity to congratulate on your call back in 2003, where you were the "ONLY" technical analyst who called for new all time highs on SPX, backed with technical evidence and not just personal opinion. Every other Guru out there were looking for a retest of Oct 02 lows or calling it a bear market rally to be completed in a few weeks to few months. That was one heck of call !.

Again, IMO you are one of the best IT-LT technical analysts out there. I have myself learn't a lot of tricks of the trade from you. Keep up the good work.

Fib had also proclaimed that the economy had soft-landed last year and recently said that RE was nearing a buy. i think if you extract the obvious bias then yes Fib is one of the best that i've seen .

ed rader

[Woody]

Back in 2003, and again in 2004, the NYSE breadth McClellan Summation Index promised bull market conditions until the 1st quarter of 2008. This last weeks worth of breadth data is now in a position where a bear market confirmation signal can be given IF the NYSE breadth McClellan Oscillator does not hold its current divergent structures.

With that said, this weeks array of breadth charts are cross posted to fulfill promises made over the last 5 years of when the market, and not opinion, would provide enough evidence in which a change in the tide can be anticipated, and from this, a change in longer term trading strategies might be indicated.

Fib

Cumulative Charts

Dave, would also like some insights into the Cumulative TICK Charts.....not sure how the signals are interpreted...when does it indicate negative money flow? During 2000 TICK was seldom below both MA's.
Thanks.

CW

[Russ]

Back in 2003, and again in 2004, the NYSE breadth McClellan Summation Index promised bull market conditions until the 1st quarter of 2008. This last weeks worth of breadth data is now in a position where a bear market confirmation signal can be given IF the NYSE breadth McClellan Oscillator does not hold its current divergent structures.

With that said, this weeks array of breadth charts are cross posted to fulfill promises made over the last 5 years of when the market, and not opinion, would provide enough evidence in which a change in the tide can be anticipated, and from this, a change in longer term trading strategies might be indicated.

Fib

Cumulative Charts

You predicted the market would go up until 2008 way back in 2003? If so that is fantastic. So when is the bear market low coming?

[fib_1618]

MCO charts are basically saying that if the market doesn't come back on Tuesday, they will confirm / generate a new bearish pattern (money flow). Most indicators are at bear market lows. If Tuesday is a big down day (no come back), just about every indicator out there will be at ridiculous levels. Dave, how will you interpret that?

Although it is a fact that many analytical and technical tools are tremendously "oversold" right now, breadth data is as important to market analysis as a skeleton is to a life form...without good internal structure, whatever is built on this same framework, is probably doomed to collapse eventually.

With this in mind, the current challenge for traders and investors is in determining whether the ongoing market decline from the October highs is the start of a longer term bear trend or just the final capitulation process of a correctional bull market price pattern sequence. In order to do this, we must be able to understand what the actual trend of money flow is, and this what the McClellan Oscillator allows us to do.

Based on the information we might get at the close on Tuesday, we're at a juncture in which such determinations can be understood and then be used in relation to any impending reflex rally that MUST occur because of the physics involved with such analysis (that being "oversold"). So if we do break below the MCO levels noted on the cumulative charts, a longer term bear market will be signaled as it apply directly to this same measure of money flow direction, with any release of this same compression being that of positioning opportunity for the next down leg. However, if we do hold these same MCO levels marked on the charts, then one's strategy would be that of continued accumulations with the expectation of higher price highs still yet to come in the not too distant future.

Again, I must stress here that it's not how we open, or even what price levels we close at that counts near term. What does count in this analysis is only the plurality of breadth that we see when everything is evened up at the end of the day in order to make such longer term conclusions and be able to trade accordingly.

would also like some insights into the Cumulative TICK Charts.....not sure how the signals are interpreted...when does it indicate negative money flow? During 2000 TICK was seldom below both MA's.

It's the positioning of the cumulative line itself in relation to that of the 19 day EMA (10% Trend) and the 39 day EMA (5% Trend), and then any interplay crossovers between these same EMA's that generate these specific signals. Keep in mind that we're only measuring end of day money flow where we don't necessarily need to be in bullish or bearish configurations in order to be either positive, neutral, or negative (although the context of the time represented by these same EMA's does have its referenced importance in the greater scheme of things).

So when is the bear market low coming?

One thing at a time...let's first determine if we're in a bear market or not...we should know soon.

Fib

[mss]

I going to weigh in here with a "crumb" of thoughts. If we are not in the start of a Bear market, then we are in one hell of a correction in a Bull market. Quick suggestion as to SPX range - in steps - UP 1340, 1391, DOWN 1285, 1246, 1180 and there is a far off suggestion of 1116. Just something to think about.





mss

[NAV]

Fib_1618,

I would like to take this opportunity to congratulate on your call back in 2003, where you were the "ONLY" technical analyst who called for new all time highs on SPX, backed with technical evidence and not just personal opinion. Every other Guru out there were looking for a retest of Oct 02 lows or calling it a bear market rally to be completed in a few weeks to few months. That was one heck of call !.

Again, IMO you are one of the best IT-LT technical analysts out there. I have myself learn't a lot of tricks of the trade from you. Keep up the good work.

Fib had also proclaimed that the economy had soft-landed last year and recently said that RE was nearing a buy. i think if you extract the obvious bias then yes Fib is one of the best that i've seen .

ed rader

ed,

I am not sure what kind of gratification you get from these kind of deliberate skewed comments. Did i mention a single word about economy or real estate ?. The comment was related to the stock market and
Fib made one heck of a call then. And that's a fact !