The McClellan Summation Index has crossed for both the NDX and NYA.
Why should you care about breadth? Simply put, breadth measures if more stocks are being bought than sold. My favorite is the McClellan Summation Index, which is simply a running total of the (NYMO) McClellan Oscillator values.
Even though it is called a Summation Index, the indicator is really an oscillator that fluctuates above and below the zero line. The moving average that I’ve applied helps identify bullish and bearish trends. Note the moving average is turning up.
NYSI produced a bullish cross on Thursday; thats also bullish. I like saying bullish.
52 Week Highs minus 52 Week Lows
Another measure of breadth is the NYSE High Low (NYHL), which is set as the featured image in this post.
NYHL measures the number of stocks that are trading at 52 week highs and compares that figure to the number of stocks trading at 52 week lows. The resulting calculation has remained bullish since March.
Back and fill is anticipated as this indicator will dip as we see recently. However, sell signals only trigger when the histogram turns red and drops below the zero line for more than one session. Currently, the long term trend is up and the moving average has turned higher. The spike yesterday is a sign of strength, not weakness.
NYSE (NYA) Composite gapped higher on Thursday, producing a follow through day for the markets. Volume by Price signals more back and fill, as this level will provide resistance. Note MACD is turning very quickly from “below zero”. When this condition presets itself, it means momentum has changed sharply from bearish to bullish. Short term we would anticipate higher prices, with similar (not exact) price action as that which occurred post-Brexit, Friday June 24.
Price is above the 9/20ema on all major US indices
That is bullish my friends and until that changes anticipate your watch list long positions will move higher, though not in a straight line.
Finally, we know seasonality is always a concern, especially on September OPEX. Said another way, always use stops. Don’t second guess your bias when price action moves against you. The odds are in your favor when you take your stop and move along to the next “high probability” setup.
Have a great day!
And, Happy Fry-Day……..Vinny