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Thursday, April 25, 2013

Daily update 4/25

This is kind of odd.  Check out these two charts.

The first chart is last spring and the second chart is the current situation.  After Feb. both years the McClellan oscillator (MCO) in the bottom panel spent most of the time in negative territory while the market climbed higher.  When that happened last year I looked back into the 70s and I could not find any other time like that.  I have no idea why it happens.  Last year there was a retest of the prior high in the circle on the price part of the chart that was accompanied with a surge in the MCO.  That was the strongest reading in the MCO in two months.  I thought the market might be getting a shot of energy and was going to climb higher, but it rolled over and headed south.  We have an eerily similar chart today.  We have a shot of energy in the MCO and a retest bar today that had a reversal just like last year.  So the question becomes is that shot of energy in the MCO going to propel the market higher or will it fold again like it did last year.  No wonder the bullish percent indicator I showed this morning looks just like last year.  The market is acting almost exactly the same way.

Here is the daily SPX chart.

The volume increased again for the third day in a row.  This chart looks a bit unstable to me with the sudden spikes up and down.  I don't think you see that very often in SPX.  Lets zoom in to the SSO 195 minute chart.

I think the trend line below the current rally is important.  If we break that it could be an indication of a failed retest of the high.  We are getting close to May.  Will we top or keep on going?


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