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fib_1618

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Reply with quote  #1 
Are now up and can be reviewed by clicking here.

BETS -15: Neutral, Cash Position

Fib

[bets101615]

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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

"An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan

"What we see depends mainly on what we look for" - John Lubbock

"The eye sees only what the mind is ready to comprehend" - Henri Bergson

“Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977

"You know the very powerful and the very stupid have one thing in common - they don't alter their views to fit the facts, they alter the facts to fit their views (which can be uncomfortable if you happen to be one of the facts that needs altering)" - Dr. Who - 1977

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hiker

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Reply with quote  #2 
hi Dave and thank you again for treating us to this very helpful work!

In the coming weeks, we have an unusual opportunity to sharpen our skills
regarding the profitable interpretation of the Advance-Decline breadth and volume lines
and the related McClellan tools.

Tom McClellan has an excellent October 16th article at his site about this topic, for
which the link is shown below with an excerpt I selected that relates to
interpretation rules for the McClellan Oscillator:

http://tinyurl.com/qbvlhwv

"If I were to distill all of the collected wisdom about the McClellan Oscillator into simple sound bites, I would have to break it down according to levels of understanding of the complex messages it can convey.  So here, in degrees of increasing sophistication, are the important points:

McClellan Oscillator 101 – Positive is good, negative is bad.

McClellan Oscillator 201 – Overbought and oversold readings are important, as are divergences, although they can sometimes be misleading. 

McClellan Oscillator 301 – Complex structures above or below zero convey an important message about which side, bulls or bears, is in control.  Conversely, simple across-and-back structures imply a lack of control. 

Graduate Level – How one should interpret the McClellan Oscillator is dependent on whether the stock market is in an uptrend or a downtrend."


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hiker

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Reply with quote  #3 
NYSI daily chart - October 16, 2015:

* the cyan colored horizontal lines mark the lows achieved
in January 2015 and the first May 2015 low, which now represent
potential important chart levels for the NYSI
( +213 and +233 levels, rounded )

+212.99 = a major failed horizontal support level for the NYSI during 2015, so it
now represents a major inflection level for both the bullish and bearish case, going forward

http://stockcharts.com/h-sc/ui?s=%24NYSI&p=D&st=2014-07-01&en=today&id=p74678910349&a=382915264

NYSI daily - October 16, 2015.png 




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fib_1618

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Reply with quote  #4 
Quote:
Originally Posted by hiker

Tom McClellan has an excellent October 16th article at his site about this topic, for
which the link is shown below with an excerpt I selected that relates to
interpretation rules for the McClellan Oscillator: http://tinyurl.com/qbvlhwv

"If I were to distill all of the collected wisdom about the McClellan Oscillator into simple sound bites, I would have to break it down according to levels of understanding of the complex messages it can convey.  So here, in degrees of increasing sophistication, are the important points:

McClellan Oscillator 101 – Positive is good, negative is bad.

McClellan Oscillator 201 – Overbought and oversold readings are important, as are divergences, although they can sometimes be misleading. 

McClellan Oscillator 301 – Complex structures above or below zero convey an important message about which side, bulls or bears, is in control.  Conversely, simple across-and-back structures imply a lack of control. 

Graduate Level – How one should interpret the McClellan Oscillator is dependent on whether the stock market is in an uptrend or a downtrend."


Thank you Steve for sharing this important essay with the board...I took the opportunity in shortening the link as well.

Fib


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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

"An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan

"What we see depends mainly on what we look for" - John Lubbock

"The eye sees only what the mind is ready to comprehend" - Henri Bergson

“Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977

"You know the very powerful and the very stupid have one thing in common - they don't alter their views to fit the facts, they alter the facts to fit their views (which can be uncomfortable if you happen to be one of the facts that needs altering)" - Dr. Who - 1977

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doc

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Reply with quote  #5 
Thanks for the interesting discussion. First of all, since bull and bear markets are harder to define much less agree on a definition and to know it in real time, I have come to prefer using the terms Risk On and Risk Averse environments.

In my years of studying the McClellan data I have found that in Risk ON conditions, the breadth McSum usually finding support at the -250 +/- level except when a reliquification is needed and a deeper correction occurs. Conversely, in a Risk averse environment you find +250 as a resistance level. It is not usually exact and so the +200-300 area is what will functionally be the area to watch as opposed to an exact level or line in the sand IMHO.

On a shorter time basis relating to the MCO, i have found that in Risk On environments, that after a strong move up to high levels on the MCO, that despite being "overbought", the equity indexes continue to march upward despite falling MCOs, even to the point of one or more "bearish divergences" until the MCO falls below the zero line. That is the usual time the indexes might reach a price top and even then you might even get your final price high as the MCO snaps back to or towards the zero line. THEN and only then are short positions going to have a reasonable chance of being profitable other than simple scalping. On the other hand, in Risk Averse environments, sometimes the MCO peak marks the near term top of the equity index advances or close enough to it that short positions might do well right off the bat.

On a separate note, my belief is that this rally in October has nothing to do with the Fed putting off the first minuscule 1/4% increase in interest rates. It will turn out to be a reflex rally in a downtrend if nothing else happens. On the other hand, it might turn out to be an initiation type rally if new money is put into the system via a new QE by the Fed or perhaps stimulus from China. We won't see much more out of EU as they are already in there QE and I think Japan has given up after 20 years that QE does anything for their economy. Even China has already done a few stimulus packages that haven't had much impact in 2015. I think it is all up to whether the US will do another round of QE as far as stock prices go.

Doc

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hiker

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Reply with quote  #6 
$NYA daily chart with $10387 vigilance - October 20, 2015:

$NYA daily chart with $10387 vigilance - October 20, 2015.png


S&P 500 index daily closes chart with:

the A-D breadth & A-D volume lines - October 20, 2015

* the A-D volume line approaches the multiple 2015 lows

S&P 500 index daily chart with 50,2 Bollinger Bands and with A-D breadth & A-D volume lines - October 20, 2015.png 


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hiker

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Reply with quote  #7 
S&P 500 index daily closes chart with A-D lines - October 22, 2015

* 70.9% advancing retracement = today's closing price vs.
the prior declining distance of $260.67 (using daily closes)

* $2060 = the 200-day sma

SPX daily closes with A-D lines - October 22, 2015 - 70.9% advancing retracement at today's close.png 


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