Best Stock Market Indicator Ever: New Update
As we all know, the key to successful investing is very simple: "Buy low, sell high."
However, you enter a chaotic, fun-house world of uncertainty once you ponder the logical follow-up question: "When?"
The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com used to accurately forecast conservative entry and exit points for the stock market. See Is This the Best Stock Market Indicator Ever? for a discussion of this technical tool.
After a major S&P correction, the conditions for safe re-entry into the market are when:
Interpretation:
Although the primary indicator, OEXA200R, is at 66% this only occurred late Friday afternoon. It had been below the 65% threshold all week and shows no sign of a bullish trend. Therefore, I would interpret the indicator as neutral at the present time.
Of the three secondary indicators:
RSI is at 51.21, again occurring only late Friday. As with OEXA200R, I would interpret the indicator as non-bullish and neutral at the present time.
MACD has not yet crossed into positive territory and so is also non-bullish and neutral.
Slow STO at 61.57 is the only strongly positive indicator.
Conclusion:
There is only one strongly positive indicator, Slow STO, and that is a secondary indicator. The primary indicator and the other two secondary indicators are neutral and non-bullish. Simply put, the market remains unstable and is not yet safe to re-enter for normal long position trading.
Commentary:
At present, all eyes are on Europe.
There is more than 457 billion euros of euro zone government debt due to be repaid in the first quarter of 2012. Italy has to repay almost 113 billion euros in the next three months at a time when its funding costs remain at near unsustainable levels. The euro is on a downward trajectory against other currencies. All things considered, a regional recession seems a foregone conclusion and the euro zone and euro will most likely unravel in the near future.
Note: Stockcharts.com offers free access to the $OEXA200R indicator on a daily and weekly basis. The monthly view requires a subscription.
(c) John F. Carlucci
Read Full Article »
