Sunday, January 31, 2010

Market Timing Charts Revisited -- as of Friday Close, January 29th, 2010

Market Timing Charts Revisited -- as of Friday Close, January 29th, 2010SocialTwist Tell-a-Friend
Fari Hamzei

Here is our Timer Chart with NYSE McClellan Oscillator closing the week at -286, 7thday in the row below the negative 150 oversold threshold.  We keep on reminding ourselves that a short/term bounce, albeit a dead cat bounce, should be near.  Notice NASDAQ Volume MO is also pretty nasty -- many names being punished despite of good [/quality] earnings.  Yet we have not seen a volume spike.  Even with a dead cat bounce, the selling should resume till we see capitulation.  Next stop for SPX should be its 200-bar moving average (which is a fast moving target here).  IOHO, maybe around 1020.  SELL THE RALLIES.

As far as vols are concerned, the ROC of Vols have slowed down but now lining up into a clean and rising +1 to +2 channel upward channels.

The % of SPX components over their respective 200 bar MovAvg chart needs no explanation.  KIDs are running for the hills.  Hearing IPO windows tightening up, private equity and VCs boyz are getting a bit nervous.  It is still early.

Our coveted SP1 MoMo Indicators getting a real Royal Flush.  Long Term [Modified] Breadth (SP1) looks worse than it did at October lows, while Short Term [Modified] Breadth (MoMo) does not.  This tells us a strong push down, after a dead cat bounce (should we be lucky to witness it), is a must somewhere here.  Next big news day, is this coming Friday Feb 5th (Jan Non-Farm Payroll at 0730 CT), could well turn out to be the Mother of All NFPs.  Small accounts should step aside and stay on sidelines.

Bottom Line:  Washington Policy Makers are dueling it out on weekend news programs. We were very happy to see Dr. Ben Bernanke finally was confirmed to serve another term at The Temple.  (This is a great read ).

Both intraday and long term Vols are rising and we are seeing some trending days.  This is day traders paradise.  We are in heavens.  Brokers and Sausage Makers are not so lucky.

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