Friday, November 25, 2016
NYMO McClellan Oscillator and NYA NYSE Composite Daily Charts; NYMO Indicates Near-Term Market Top At Hand
The McClellan Oscillator is printing highs at 60-ish over the last couple days. The green circles highlight the low NYMO's when a stock market bottom occurs and the red circles highlight the high NYMO numbers resulting in a stock market top. What do you think will happen?
The sentiment indicators show the stock market boat is loaded on the euphoric bullish side after the Trump election win two weeks ago. The VIX has a 12-handle indicating lack of fear in the market. The CPCE is printing uber low numbers over the last week indicating rampant complacency in markets. Other sentiment indicators indicate high levels of bullishness and very lows levels of bearishness (very few expect the stock market to sell off).
The NYMO is elevated also indicating that an inflection point in the stock market is likely. The expectation is for stocks to sell off going forward to take a rest from the Trump upside orgy. The Keybot the Quant algorithm is bullish and tracking VIX 13.85 and GTX 2249.
When the stock market selling begins, watch volatility and commodities. As stocks drift lower, if VIX moves above 13.85 and GTX under 2249, the bears will have downside momentum for the stock market. If only one parameter turns bearish, the downside move will be muted. If one of the two parameters turn bearish but then jumps back into the bull camp, stocks will quickly recover from the short term pull back. If VIX moves above 13.85 and stays above, and GTX under 2249 and stays under, stocks will be in trouble and the Trump Rally will vaporize.
Today is an uber upside day seasonality-wise for the stock market with the day after Thanksgiving up most of the time, however, the rally has been ongoing for nearly three weeks and stocks need a rest. Tuesday is a new moon and stocks are usually weak moving through the new moon. A Bradley turn date is Tuesday so stocks are in a window now for a trend change (which would be stocks moving lower ahead), or, a sharp upside acceleration; the Bradley does not predict which will occur only indicating that an inflection point is at hand. Judging from the charts, the bearish outcome with stocks moving lower in the near-term would be favored. 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.
Note Added Friday Evening, 11/25/16: The Trump Rally is unstoppable. Stocks continue floating higher printing new all-time record highs. The SPX all-time closing and intraday record high is 2213.35 from today (price closed at the high). NYMO at 60-ish. CPCE is uber low at 0.50-0.61 over the last week. CPC drops to 0.80. Commodities, GTX, fall below 2249 to 2234 (the 2249 level is identified by Keybot the Quant) which is a feather in the bear's cap despite the up day in stocks. VIX 12.34. The above analysis remains in play. The stock market top may have printed today. If not, the top is likely on Monday or Tuesday. The question will be if stocks drop strongly, or, if they only print a minor pull back from the Trump Rally; we will know next week.