Having the $NYMO (McLennan oscillator) pinned to a sub-zero
reading is pretty rare. Sometimes it marks a bottom,
sometimes a sharp bounce, but certainly dangerous to remain short
the market with $NYMO sub 100. Good potential for beaten down
stocks to outperform here for a short period. I will caution
and say that if the contagion spreads to "untouchables" -- AAPL
etc., then I don't know what will happen (a flash crash is a
possibility).
Check out this sequence of $NYMO, $RUT and $SPX action from
2010. If we repeat, maybe we rally hard tomorrow (on a
monster gap up), reverse yesterday's loss (on $SPX at least), only
to hit 13 ema and come back down for a test of 1340. So,
1390ish, then back to 1340 or so. That might mark a more
sustainable "bottom" -- don't think we can just flat out bottom
today. A new low in the 1340 area will likely produce a
honkin $NYMO divergence, $VIX divergence and lots of bearishness.
I believe this scenario is predicated on AAPL not topping
until very close to their earnings.
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Sub hundo club
Posted by kalinm on 10th of Apr 2012 at 05:08 pm
Having the $NYMO (McLennan oscillator) pinned to a sub-zero reading is pretty rare. Sometimes it marks a bottom, sometimes a sharp bounce, but certainly dangerous to remain short the market with $NYMO sub 100. Good potential for beaten down stocks to outperform here for a short period. I will caution and say that if the contagion spreads to "untouchables" -- AAPL etc., then I don't know what will happen (a flash crash is a possibility).
One day selloff and already
Posted by freddy123321 on 10th of Apr 2012 at 06:52 pm
One day selloff and already oversold? 3 months up and never overbought? Interesting next col days for sure
Uh, how about a 5-day
Posted by hamvestor on 10th of Apr 2012 at 07:44 pm
Uh, how about a 5-day sell-off?
what's your take on the
Posted by kalinm on 10th of Apr 2012 at 06:59 pm
what's your take on the action Freddy?
Mentioned spy puts last week
Posted by freddy123321 on 10th of Apr 2012 at 07:02 pm
Mentioned spy puts last week June130. Small diamond. Need to see setups to go long not buying breakouts off extended 10dma. Not for me.
Amen
Posted by ronjuan on 10th of Apr 2012 at 06:57 pm
Funny how that seems to be the case here....but then it takes 6mos to build the house and only 10 mins to burn it down.....
Wow, the Daily NYMO below
Posted by sethbru on 10th of Apr 2012 at 05:15 pm
Wow, the Daily NYMO below 100 last occurred at the Nov low before the long leg up. Could be a short term bottom.
http://stockcharts.com/h-sc/ui?s=$NYMO&p=D&b=5&g=0&id=0
Hypothetical $NYMO positive divergence
Posted by kalinm on 10th of Apr 2012 at 05:33 pm
Check out this sequence of $NYMO, $RUT and $SPX action from 2010. If we repeat, maybe we rally hard tomorrow (on a monster gap up), reverse yesterday's loss (on $SPX at least), only to hit 13 ema and come back down for a test of 1340. So, 1390ish, then back to 1340 or so. That might mark a more sustainable "bottom" -- don't think we can just flat out bottom today. A new low in the 1340 area will likely produce a honkin $NYMO divergence, $VIX divergence and lots of bearishness. I believe this scenario is predicated on AAPL not topping until very close to their earnings.