Pull the trigger with confidence.

In a September 2010 Chart In Focus article, I showed this same 3-decade rising trend channel in T-Bond prices.  The message then was that bond prices were getting up toward the "expensive" side of things, and afterward bond prices sure enough came back down to touch the bottom of that channel by the end of 2010.

Now the message is similar, except that all of the worries over European debt problems have pushed T-Bond prices up even higher toward "expensive" territory.  And now with a deal reportedly getting worked out between Greece and its creditors over the size of the "haircut", traders are concluding that the supposed safety of T-Bonds does not merit as much premium as it used to.

At the same time, commercial traders of both T-Bond and T-Note futures are getting to a point of being net short in the biggest way that they have been in years.  Commitment Of Traders (COT) Report data is something that I address every Friday in the Daily Edition.  And... Read More

The Ratio Adjusted Summation Index (RASI) is back up above +500, and that is a bullish piece of news.  It takes a sustained period of positive breadth numbers to achieve this, and I like to say that gobs of positive breadth is almost always a good thing. 

The Ratio Adjusted Summation Index is much like the classic version, with one difference.  We factor out the changing number of issues on the NYSE in order to make long term historical comparisons more meaningful.  You can see the whole calculation method here.

Like the classic Summation Index, the RASI moves up and down with the trend of the market, and it gives important information about the state of the trend when it gets to very high or very low levels.  But the factor I like the most about the RASI is what it tells us based on how it behaves around the +500 level.  That is an important threshold for telling us whether there is strength to continue both an uptrend and a bull market. 

If you see a nice... Read More

In this week's chart, I take a look at an indicator which is featured in every issue of our Daily Edition.  It looks at each of the 30 stocks which make up the Dow Jones Industrial Average (DJIA), and checks to see what percentage of them have a rising Price Oscillator.

A Price Oscillator is calculated similarly to the McClellan A-D Oscillator, except that instead of using the daily difference between Advances and Declines, we look at the closing price.  See Calculating the McClellan Oscillator, and Calculating Indicators in Daily Edition Table.  To get this composite indicator, I do 30 different Price Oscillator calculations, one for each of the 30 DJIA component stocks.  Then I count how many of those Price Oscillators are rising. 

Those 30 stocks which make up the DJIA are generally well correlated with each other, but there will be slight differences at times which can give us important information.  That is what this indicator is designed to detect.  If... Read More