Custom Search

Monday, January 5, 2009

McClellan Oscillator, Super Overbought

The McClellan Oscillator hit the highest overbought reading in more than 3 years. Today's reading blasted past even the last record reading of 99.46.

Historically, only the largest spikes presented tradable countertrend opportunities and there was a lag of several days from the spike to the actual turning point in the index. This worked for both long and short trades.

The current overbought reading is higher even than all the readings during the last Bull market...

The best way to use this indicator is in conjuction with a whole bunch more. For example, although the market is off to a Good Start to the Year, Beware the Bear Wedge and notice The Bullish Percent Index, Flashing Warnings Signs.

If you’re thinking, “What the deuce is the McClellan Oscillator?” click here.


Vijay said...

The ninja is BACK!

BUY ON THE DIP said...

Nice post.

We bought some SDS today when our "slow clean" hit green!

Go team!

Ariel said...

Fascinating - thanks for some very good information on the McClellan Oscillator spike!

hector said...

I was just looking at the same indicators just before reading your blog and i completely agree way overbought/extreme.