Stock Market Review..McClellan Oscillator..Summation Index Chande Momentum..Stochastic Oscillator..Market Bias
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The One-Day Stock Price Reversal Pattern
The one-day reversal pattern can give a warning that at least a short-term trend change is about to occur. In an up-trend (downtrend) a new high (low) on a surge in volume with a close lower (higher) than that of the previous day can serve as an alert. A wider price range, higher volume, and bigger closing difference all add significance to the pattern.
Fibonacci Numbers and Stock Retracements (Counter-trends)
Trends consist of moves and counter moves. Many traders use Fibonacci studies to estimate where support is likely to occur (when the counter move is likely to end). Stop losses are often placed just below a Fibonacci level because failure of support at a Fibonacci level implies that the stock is likely to decline further.
Use Price Channels to Buy, Sell, or Gauge Stock Strength
Price channels can be used to estimate the strength or weakness of a stock trend before that trend breaks down or accelerates. They can provide entry or exit points for short-term trades and to lock in short-term profits. Finally, they can be used to estimate the price range of a surge or decline if a breakout should occur.
Trendline Penetrations, Adjustments, and Price Targets
Steep trendlines are often penetrated without a change in the general trend direction. Sometimes, the angle of ascent is too steep to be sustained and the stock must moderate the angle. The amount of decline that will occur after trendline penetration can be estimated. Extensive penetration will result in resistance at a level that can also be estimated.
Gann Retracements, Angles, and Fan Lines
Gann retracements, angles and fan lines can be quite useful when trying to estimate potential areas of support and resistance. Gann fan lines also are helpful in estimating potential reversal points. The most sustainable advance is one in which prices advance at a 45-degree angle.
Stock Trends, Trendlines, and Trendline Penetrations
Stock price trends can be used to make objective buy and sell decisions based on the behavior of the stock rather than on the feelings of the trader. There are several precise ways in which to define a valid trendline penetration. Volume can help a trader assess a trendline penetration, and in some cases, warn of a coming reversal in trend direction.
Everything below this point, except the
Gold charts, is now In The Valuator
Signals for the S&P500, Nasdaq, and Dow
If the blue line is above red line, the last signal was a “Buy.” Otherwise, it was a “Sell”
The following explanations apply to the charts above and below these comments
The Stochastic Oscillator is a short-term indicator. It can be helpful in estimating when a security (or index) is likely to change its direction in the near future. Most technicians consider it a “buy” signal when the Stochastic Oscillator falls below 20 (a few technicians use 30) and then moves above that level, and a “sell” signal when the Stochastic Oscillator rises above 80 (a few technicians use 70) and then falls below that level. The Stochastic Oscillator can remain above 80 (or below 20) for prolonged periods while the stock or index continues moving to higher (or lower) levels. If the stock (or market) is non-trending (moving sideways confined within upper and lower parallel boundaries), then trades based on overbought or oversold levels should produce the best results. However, if the market is trending upwards or downwards, then the Stochastic Oscillator can be used to enter trades in the direction of the trend. There are also more aggressive traders who consider it a “buy” signal when the blue line rises above the dashed black line and a “sell” signal when it falls below it. Also, look for divergences. When the market is making a series of new highs and the Stochastic Oscillator is failing to surpass its previous highs, the oscillator is giving us a warning signal.
The Chande Momentum Oscillator is The use of the Chande Momentum Oscillator (CMO) is similar to that of the Relative Strength Index (RSI). However, the Chande Momentum Oscillator measures momentum directly by combining data for both up and down days in the numerator of its equation (the RSI uses up days only in its numerator). In addition, the Chande Momentum Oscillator or CMO does not have any built-in smoothing that would obscure very short-term momentum extremes (the RSI has smoothing and tends to obscure these details). The black solid line is the zero line. The dashed horizontal lines in the chart mark the -50 and +50 levels of the indicator. The Chande Momentum Oscillator indicates overbought (+50) and oversold (-50) conditions. For example, at -50 the downside momentum is 3 times the upside momentum, and at +50 the upside momentum is 3 times the downside momentum. These levels are extreme and tend to be followed by a reversal of the Index (though the reversal may not be immediate). The Chande Momentum Oscillator can also be used to measure the degree to which the market is trending. The more extreme the CMO, the stronger the trend. A low CMO reading close to “0” indicates the market is neutral or in a sideways trading range.
The Chande Momentum Oscillator can help establish entry and exit points when used in conjunction with a trend-following indicator, such as a moving average. For example, if a moving average has turned positive, you could enter the market when the Chande Momentum Oscillator is advancing (the CMO, unlike a moving average, does not lag the market) and exit when it moves lower or when the moving average gives a sell signal. The moving average can be used to define a buy or sell bias, and the CMO can function as your “trigger.” Finally, look for divergences between the action of the Index and that of the CMO. For example, if the Index is making a new high (or low) and the Chande Momentum Oscillator is failing to surpass its previous high (or low), the CMO is “anticipating” a reversal in the Index. The CMO in the chart is based on 14 days. The dotted black line is the 10-day simple moving average of the CMO. This line can aid in initiating a trade before the CMO crosses the zero line. For example, a person could buy when the CMO crosses above the average instead of waiting for it to cross zero. He could sell when the CMO crosses below the average. Just be aware that this approach can give premature signals.
Three ETFs To Watch
TQQQ, SOXL, AIS
Interest rate Spread
The Volatility Index (VIX)
Updated Daily
VIX Indications
Market Bias Indicator
Updated Daily
McClellan Oscillator & Summation Index
The McClellan Oscillator (first chart) is a breadth-of-market indicator. It is effective for interpreting short-to-intermediate-term market moves. The McClellan Summation Index (second chart) is a running total of each day’s McClellan Oscillator value. The Summation Index is effective for interpreting intermediate-to-long-term market moves. Together, they can be useful in evaluating the dynamics of the ebb and flow of the market, and in planning g entry and exit points.
Oscillator readings of 150 (plus or minus) are extreme and tend to correlate well with buying and selling climaxes in the market. The Oscillator reaches these extreme values , measuring overbought and oversold conditions, in advance of market turns. It then passes through zero at or very soon after market turning points (to put this in perspective, extreme readings occur much less frequently than a pass through zero. Passes through zero tend to indicate market reversals at approximately 2 to 6 week intervals). The type of action to be taken, if any, depends on the major trend of the market (as indicated, for example, by the Summation Index) and on whether the move originated from an extreme reading. Thus, in the early and middle phases of a bull market emphasis might best be placed on buy signals. In a bull market, buy signals occur earlier, and positions can be taken when the oscillator clearly moves out of its basing pattern, even if it is still negative. In a bear market, sell signals occur when the oscillator moves clearly put of a topping formation, even if it is still positive.
The amplitude of the oscillations above and below zero correlates with the general volatility of the market. The oscillator shows distinct cycles (lasting 22 to 24 weeks) between significant bottoming formations. Divergence between oscillator moves and conventional market indicators forecasts an impending change in market direction. Conventional trend-line theory can be applied to oscillator patterns. For example, a triple top formation in the McClellan Oscillator forecasts a termination of the preceding up-trend.
If the Summation Index is rising (or declining), it is intermediate-term bullish (bearish if declining) and the market’s trend is up (down if the Index is declining). If the Index is declining, the first positive sign will be a flattening out of the entries (but this stage is sometimes skipped). The second positive sign is a reversal in direction. Some investors use the second posting in the positive direction as an early buy signal). They view the opposite conditions as negative, culminating in a sell signal.
The horizontal black line in the Summation Index is the Neutral Level. It’s a reference line that separates broadly bullish market breadth from broadly bearish market breadth
What else is In The Valuator?
See what this means
Stocks With Lowest PE-Ratios
Probable PE-Ratio Range for each Stock
Probable High and Low Price Range For Each Stock
Stocks With Lowest and Highest RSI
10-Day Momentum For each Stock
The ATR (Average True Range) and the Standard Deviation
For Each Stock, both of which can be used
to compute a stop loss setting.
A Valuator “Strong Stock”
Gold and Silver