Friday, November 22, 2013

NYMO McClellan Oscillator Daily Chart

The pink sideways triangle pattern continues with price tapping the upper and lower rails, squeezing in for a major market decision. The blue zero line rules the roost, bears win below and bulls win above. Note how the oscillator favors the bear side for the last 3 weeks but the bulls keep finding a way to pump markets higher (the Fed and BOJ easy money). Interestingly, Keystone's trading algo, Keybot the Quant, is an oscillator at its core, and its behavior over the last 2 weeks is very similar, remaining bearish on the markets despite the run-up in stocks. We will not have to wait long; something is going to break any day. It is odd to be moving into the typically bullish Thanksgiving week of trading under these circumstances.

The indicators are not tipping their hand. Price will simply make a commitment out of the triangles to signal the winner. The NYMO is unable to make a decision today and instead sits on the zero line to think things over during the weekend. Note that an up move would send the NYMO above zero and give the bulls the nod forward creating an upside triangle break out. Therefore, the action on Monday morning is very important. The expectation is for markets to top and sell off at any time moving forward (NYMO will continue lower, under zero, and then collapse under the triangle lower rail at -30) but perhaps the only way this will happen is if the Fed and BOJ party too much and are hung over come Monday morning forgetting to turn on the printing presses. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

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