Short Term Sell – 08/01/11 © ™

  • Short Term
  • July 7, 2011 to Present – Decline Underway
  • Action Status – Sell

Sunday night the SP 500 futures were up 20 points from Friday’s close.  That’s equivalent to a 200 point rally in the Dow.  When the market opened Monday morning that 200 point rally had dwindled to about 130 Dow points.  After 30 minutes of trading the ISM manufacturing data came out (bad reading for the economy) and the market reversed and dropped over 100 points into the red.  From there the market clawed its way back to almost even.  That’s quite a see-saw day and reminds me of many of the failed rallies during 2008.  We will see if tomorrow can produce more positive results.

We have a short term sell signal and an intermediate term sell could take place soon.  With this short term sell signal comes the prospect of a rally.  In fact the subsequent rally could be a good exit point and the aggressive trader could also short the market.  The McClellan oscillator is very oversold and indicates a rally could come soon.  Also there was strength in the high low index, which “can” precede a rally.

08-01-11 McCLELLAN SUMMATION & MOMENTUM INDEX

  • We are likely in the second step down . . . . . of a larger second step down
  • The current small step is a mini-waterfall apparently accelerated by the political climate
  • We are forming lower highs and lower lows.  When this changes, we will likely have a channel (trend) break and the conclusion to a step.  If we are in an intermediate down trend, there should be more steps to come.

At the moment we don’t have a penetration of the June lows.  Should that happen we will be in an intermediate term decline.   My best guess at this time is that we are in an intermediate term decline.  I base this primarily on the wave count and the broken trend channel dating back to the July 2010 lows..

Intermediate term corrections can manifest themselves by occupying time and going nowhere (Jan 2004 to Jan 2005 correction) or they can decline 20-30%.  I don’t believe this is an opportune time to own stocks for the short term.  A time to buy stocks at better prices should present itself later.

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See my charts (updated constantly)

  • The link above has charts that are updated constantly during market trading.  They do not lag market trading and are current at all times.
  • My lines and counts may not be up to date as they may lag the blog’s interpretations.  An email to me would prod me to update.
  • I think you will find these charts very useful as they cover time frames from minutes to decades.  The final section of these charts consists of growth stocks.
  • The growth stocks show daily and weekly market action.  Their respective time frames are 3 and 12 years.  This gives a good perspective to the past and how these stocks behaved during good or bad times.
  • Page 1 – Indicators (shorter time frames)
  • Page 2 – Indexes With 1 Minute Bars
  • Page 3 – Indexes With 5 Minute Bars
  • Page 4 – Indexes With 15  Minute Bars
  • Page 5 – Indexes With 30 Minute Bars
  • Page 6 – Indexes With 60 Minute Bars
  • Page 7 – Indexes With Daily Bars
  • Page 8 – Indexes With Weekly Bars
  • Page 9 – Indexes With Monthly Bars
  • Page 10 to Page 11 – Indicators (longer time frames)
  • Page 12 to End – Growth Stocks (daily and weekly time frames)

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