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[TTHQ Staff]

The Daily StockBarometer is a proprietary measure of market energy.  Thedirection of the stock barometer determines our short-term outlook on the market'sdirection.  A BUY or SELL signal is triggered when theindicator clearly changes direction. If the line is moving up, we are in BUY MODE andif it's moving down, we are in SELL MODE.  The black line is a5-day moving average that we use to confirm changes in direction. 

 

EQUITY PUT CALL RATIO CHART
 
 
 

The CBOEput/call ratio is comprised of two sets of data; equity options and index options.  The index component contains items that are used as a hedge, therebydistorting the correlation and interpretation of the indicator.  Iuse the equity put/call ratio.  This is one of the most accurateread of investor's fear and complacency.

 

TRIN/ARMS CHART

 

Richard Armsdeveloped the arms index.  It is also referred to the TradingIndex or TRIN for short.  It is a measure of the ratio of upstocks and down stocks divided by the ratio of up volume and down volume. Our Spread Chart converts the arms index data into momentum Buy and Sell Signals.

TICK CHART

 

The tick indexis represents the sum of all stocks ticking higher minus all stocks ticking lower (a stockis said to be trading on an up tick when it trades at a higher price than the last sale).  It's utilized as a day trading tool as it gives you an up to thesecond read of the intensity of buying and selling.

BREADTH (ADVANCE - DECLINE) CHART

 

Each day severalthousand stocks either advance, decline or remain unchanged.  Thenumber of advances and declines normally ranges from +2500 to -2500.  Ahigh number of advancing stocks normally marks a top just as a high number of decliningstocks normally marks a bottom.  Monitoring the 5 and 13-daymoving averages of this allows us to better predict future prices.

 

VXO CHART

 

The VIX is ameasure of volatility on options pricing.  We use the old VIX,which is now called the VXO.  The higher the volatility, the morelikely the market is close to a bottom, as traders are willing to pay more premium forputs, which act as Insurance on their long positions.

 
Cycle Time
Monday will beday 11 in our up cycle.

The StockBarometer signals tend to follow a 5, 8 and 13 and sometimes 21 day Fibonacci cycle thatbalance with 'normal' market cycles.  Knowing where you are in thecurrent market cycle is important in deciding how long you expect to maintain a position.

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Potential Cycle ReversalDates

2007 PotentialReversal Dates:  1/10, 1/14, 1/27, 1/31, 2/3, 2/17, 3/10, 3/24,4/21, 5/6.  We publish these dates up to 2 months in advance.

This weekend holds our current key reversal date.  We've beenseeing a lot of bullishness in the Qs lately, so we'll see what the market holds in storefor us Monday and Tuesday.  With May 6^th comingquickly, and a gap up reversal in the Qs, the likelihood of a move lower into 5/6increases.

My timing workis based on numerous cycles and has resulted in the above potential reversal dates.  They're predictive and have nothing to do with the barometer cycletimes.  However, due to their accuracy in the past, I post thedates here.

 

2006 potentialreversal dates: 1/16, 1/30, 2/25, 3/19, 4/8, 5/8, 5/19, 6/6(20), 7/24, 8/20, 8/29, 9/15,10/11, 11/28.  2005 Potential reversal datesbased on 'other' cycle work were 12/27/04, 1/25/05, 2/16, 3/4, 3/14, 3/29, 4/5, 4/19, 5/2,6/3, 6/10, 7/13, 7/28, 8/12, 8/30-31, 9/22, 10/4, 11/15, 11/20, 12/16.

 

Stock Barometer Buy And Sell Signals

 
QQQQ orSPY Chart: A chart is provided in every bi-weekly report and shows the barometer Buy andSell Signals (which are provided in my morning updates) as well as showing the nexthighlighted 'reversal' window.  The numbers adjacent to the buyand sell signals are the number of days between signal (cycle time).

 

Here's one years of our end-of-day buy and sell signals for the Stock Barometer over the past year.  They're marked on the QQQQ chart with red and blue lines (or red andblue arrows).  Note we recently changed bottom and top toread buy and sell.  

 

• 4/5 BUY (7 days)
• 3/27 SELL (13 Days)
• 3/8 BUY (34 Days)
• 1/18 SELL (4 Days)
• 1/11 BUY (17 Days)
• 12/22   SELL (6 Days)
• 12/14   BUY (0 days)
• 11/24   SELL (0 days)
• 11/14   EXIT/CLOSE/CASH (9 days)
• 11/01   SELL (18 days)
• 10/26   BUY (18 days)
• 10/2 SELL (4 days)
• 9/26 BUY (14 days)
• 9/6 SELL (15 days)
• 8/15 BUY (4 days)
• 8/9 SELL (12 days)
• 7/24 BUY (10 days)
• 7/10 SELL (29 days)
• 5/26 BUY (33 days)
• 4/10     SELL (8 days)
• 3/29     BUY (6 days)
• 3/21 SELL (5 days)
• 3/14     BUY (10 days)
• 2/28 SELL (8 days)
• 2/15 BUY (23 days)
• 1/12 SELL (6 days)
• 1/04 BUY (31 days)
• 11/29    SELL (28 days)
•  (historical reversal dates and performance figures are published at the bottom of the home page and updated annually)
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  Thefollowing work is based on my price based spread/momentum indicators for the USD$,XAU, GLD and TLT.  They are tuned to deliver signals in line withthe Stock Barometer. Combined with up/down indicators and you have a powerful tool forpinpointing market reversals. 
  
  Gold (GLD:AMEX & INDEX:XAU.X)
  
   
  
   
  
  I monitor Goldin the form of GLD and the XAU as well as the US Dollar Index as a general guide to theoverall health of the US Economy and the markets, as well as to assist us in the entry ofpositions in our Gold Stock Service.
  
  Bonds (Amex:TLT)
  
   
  
  I include bondsin our studies and use Lehman’s 20 year ETF, as the direction of bonds can have aninverse impact on the stock market.  Normally, as bonds go down,stocks will go up and as bonds go up, stocks will go down.
  
  Summary & Outlook
  
  We remain in Buy Mode as the Qs continue to push and push at the door of the Februaryhighs.  We actually saw action on Friday that broke the previoushigh, but the bulls weren't able to sustain their momentum so the Qs settled back inslightly below the highs.
  
  However, given the high level of complacency as evidenced by the put/call ratio, we arelikely seeing a top of hope.  With everyone bullish, everyone'spretty much bought into the advance.  When an advance runs out ofliquidity, it's doomed to fail.  And that's what we'll be lookingfor early next week.
  
  Again, if you're new tothe biweekly stock barometer, welcome.  This article comes outevery 2 weeks and gives a big picture view of the market and our recent activities.  If you're interested in following our signals and learning more aboutour system, then I invite you to click here and subscribe to the daily service- since the market can turn on a dime and so to can our interpretation as the market givesits daily clues to the future.  Or sign up for our[color= red;] freeweekly newsletter[/color], where we provide up to date articles from our varioustrading services.  We're also going to be releasing a free tradingvideo in 2007 - so sign up today.
  
  As always, if you have any questions or comments, feel free to email me here at jay@stockbarometer.com. 
  
  Regards,
  
  Jay DeVincentis
  
  Tradinginvolves high risk.  Past results are not indicative of futurereturns.  Stockbarometer.com and all individuals affiliated withStockbarometer.com assume no responsibilities for your trading and investment results.
  The Daily StockBarometer is issued each morning by 7:30 am Tuesday through Friday.  Monday'sarticle comes out over the weekend.  The Bi-weekly StockBarometer is issued every two weeks in place of the Monday daily report. 
  
  The QQQQ Trader and Rydex Trader services are issued by 10pmin the evening when the system triggers a Buy or Sell Signal. 
  
  
  The 5 stock trading/investingservices (ExplosivePotential, IPO Profit, Dynamic Dividend, Low Priced Speculator & Gold Stock Investor)are issued as dictated by market action.  All5 stock trading services are now being provided for the low price of $9.95 per month or$95 per year.
  
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