Dollar Dives

By: Stock Barometer | Tue, May 6, 2014
Print Email

5/6/2014 5:41:05 AM

Good morning Traders,

Monday brought us a gap down followed by a rally back to highs. This pattern can be bullish, but bigger picture we have the dollar taking a hit in the futures market. This dollar weakness can be concerning, but so far markets are shrugging it off. Today we will take a look at sentiment and some McLellan oscillator data:

Generally speaking, when bearish sentiment is building (heading lower) it results in a move lower in the market. The longer that sentiment builds without being reflected in price action, the more bullish it can be. The fact that the SPY is STILL hanging around near highs is bullish. But that can break at any point. So let's look behind the sentiment.

Cumulative Bearish Sentiment Chart

I'm a big fan of data telling the story and NOT the news. So let us look at the NYSE a little more closely:

NYSE McClellan Oscillator Chart

This view of the McLellan oscillator is bearish as it sits below zero. So the question is, if the market breaks lower here, will there be more damage in the NYSE or the Nasdaq?

McClellan Oscillator NASDAQ Chart

Note there are a couple of interpretations of this data. First is the positioning above and below zero as being bullish or bearish. Next is if the indicator settles above or below. So a reversal lower may not be bearish as it could hold above the zero level.

Now the above looks at breadth, how about if you apply it to volume?

McClellan Oscillator NASDAQ Volume Chart

We see that volume is confirming here on the Nasdaq. That head and shoulder's pattern is looming though...

As a heads up, you can access all our charts in our IRG Market Timing Research for only 9.95 a month. You can even use them in your own publications as this research is quickly becoming very popular with other newsletter writers... Visit and scroll to the bottom of the page for the subscribe links.

And finally, the barometer, which drives our advice in the DSB:

Daily Stock Barometer Primary System Chart

So we remain in Buy Mode, cautious that today is a key reversal date. Also cautious that the crowd is no longer calling for a correction, which leaves the market even more exposed to one. We'll have more on that later in the week as tomorrow we start publishing our key weekly indicators.

Good trading!



Stock Barometer

Author: Stock Barometer

Stock Barometer is completely independent. We have never and will not ever accept compensation from any company whose stock we recommend.

Our goal is to make you money. We offer you the tools and information to do so and leave it to you, the individual investor, to apply them in the best way possible.

Important Disclosure: Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.

Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.

In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.

For a complete understanding of the risks associated with trading, see our Risk Disclosure.

Copyright © 2004-2017 Investment Research Group, Inc.
d/b/a All Rights Reserved.

All Images, XHTML Renderings, and Source Code Copyright ©