
McClellan
#61
Posted 07 August 2009 - 12:03 PM
#62
Posted 10 August 2009 - 01:16 PM
diogenes
Yesterday brought a tick down...red line...on the NASI. Yet you did not go short. Are you waiting for the NYSI to confirm the change? Do you trust the NYSI more than the NASI?
I'm very much impressed by this system since I first found you posting on the FF thread, and would like to learn more of your thought process that goes into taking or not taking a trade. I've studied this thread back to November and for a few of the trades it appears you made a move to the opposite side when only one of the indicators (NASI or NYSI) goes against the present trend. And for others you waited until you had confirmation with both?
Thank you for any insights you can provide. Consider me an eager student.
itrytowin,
Thanks for the post. Context is everything with the McClellan Oscillators and Summation indexes. At their most basic they tell if there is a prevailing up trend or down trend in the market. And since they are constructed on the Advance/Decline lines they give as broad an indication of general market direction there is. Stocks that want to go up have an easy time of it during a Summation rise and stocks that want to go down have to do so against the market trend. Viceversa, when the summation is declining.
But, to answer your questions, yes the NASI down ticked last week for one day and the NYSI was no where close to confirming it. Usually, these two, if they differ at all, only differ by a day. So the NASI dip appeared to be just a normal momentary pullback, and so it was. In fact it appears it was a "hook" -- which is to say one or two days down then acceleration in the direction of the previous trend.
It is also be noted, as dowdeva does here, that the McClellan was only part-way through a "normal McClellan cycle" -- it likes to go up 25 plus days or more -- so there was also a good chance that the NASI dip was only an additional buying opportunity (and so it was).
As to your question about whether I trust the NYSI more than the NASI, I do but I shouldn't. It's entirely possible to trade in the context of the NASI without ever looking at the NYSI.
However, if you're going to trade leveraged ETFs instead of, say, stocks, watch out for the lag in the summation indexes. Those ETFs can get ripped apart on the turn. Better to, as they say, sell too soon. For instance, since a basket comprised of SSO, QLD, and UWM is at the moment up nearly 25 percent since the NYSI buy July 15th, why not put in sell stops to guarantee a 20 percent or so profit and still give them some room to run?
Hope this helps.
Good trading to you.

Edited by diogenes227, 10 August 2009 - 01:17 PM.
"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).
“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”
"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."
#63
Posted 11 August 2009 - 06:36 PM
-Scott O'Neil (son of William O'Neil), Portfolio Manager at O’Neil Data Systems, when asked where the Dow would go in the coming months
#64
Posted 11 August 2009 - 08:14 PM
Yes, both the NYSI and NASI gave sell signals today, and, yes I think it's too early in the cycle. In a typical McClellan cycle there is often a dip in the seventh or eighth week after the last deep Oscillator low (see blue circle below) before another run to new highs for the cycle. At least, that was the way it was in bull markets. We are entering the the seventh week. I would not be surprised to see another run to new highs for this rally before a more substantial correction.
But, I'm not going to fight the tape and for now this is a sell. One should either be flat or short. The leveraged short side ETFs would be SDS, QID, TWM, and if one likes to walk on the wild side, TZA and FAZ. (One might want to have tight stops, especially on the later screamers).
For the record, since the July 14th NYSI buy, a basket of the 2x leveraged SSO, QLD, and UWM finished this trade up 22 percent. And the wild 3x guys -- TNA and FAS -- were up 51 percent.
Good trading to everyone.

http://stockcharts.c...51&are=1457.png
"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).
“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”
"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."
#65
Posted 11 August 2009 - 08:44 PM
-Scott O'Neil (son of William O'Neil), Portfolio Manager at O’Neil Data Systems, when asked where the Dow would go in the coming months
#66
Posted 12 August 2009 - 03:30 PM


"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).
“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”
"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."
#67
Posted 16 August 2009 - 10:44 PM

"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).
“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”
"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."
#68
Posted 17 August 2009 - 03:05 PM
Good trading to everyone.

http://stockcharts.c...31&are=7555.png
"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).
“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”
"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."
#69
Posted 17 August 2009 - 03:58 PM
#70
Posted 17 August 2009 - 11:07 PM