NYSE and NASDAQ Markets
Tim Ord
The NYSE Market:
Below is the NYSE McClellan Summation index and the McClellan Oscillator dating back for three years. The NYSE market becomes overbought when the Summation index reaches above +3500. The Summation index has been in the +3500 range since last October which implies the NYSE has been overbought since last October. Tops form on the NYSE when the NYSE makes higher highs and the Summation index makes lower highs. Recently the NYSE just tested its previous high of late February and the McClellan Summation index is making a lower high for the third time. The next time the NYSE Summation index turns down it will mark the top in the NYSE.
The NASDAQ-100 market:
A similar bearish setup occurred for the NDX. However, we believe a top is in for this index. There is a gap on the NDX near the 1808 level and that level is being tested on much lighter volume and triggering a bearish signal. Therefore is unlikely NDX will rally through the gap level which implies the February high will be the top. The same bearish scenario is present with the NDX McClellan Summation index as with the NYSE McClellan Summation index. The NDX made higher highs as the Summation index made lower highs. After the second lower high turned down on Summation index as the NDX made higher highs produced the sell signal. This sell signal was triggered near the February high. Strongest part of the decline may come when the Summation index turns down the next time.
