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Small Cap Relative Strength

 
weekly Chart In Focus

The Russell 2000 Index has had a good month so far in August 2014, rebounding more strongly than the NYSE-dominated indices.  But that seeming strength just within August conceals what happened before in July 2014, when the Russell 2000 had a pretty bad month.

Comparing indices based on just a single month’s statistics can mislead investors and analysts.  For that reason, some type of relative strength analysis is in order.  One of the easiest ways is with a simple relative strength ratio. ... Read More

Grains Down, Beef Up

 
weekly Chart In Focus

Grain prices have been falling, as expected.  But cattle prices have been rising, which might not be as expected. There is a lesson in this difference.

Gold prices give us a year’s warning about what grain prices are likely to do.  That is counterintuitive, since grain prices are often dependent upon climatic growing conditions, while gold prices are dependent upon monetary conditions as dictated by the Fed and similar agencies. So how is it that gold could know a year in advance the... Read More

2nd Presidential Years Are Different

 
weekly Chart In Focus

By now most who follow the stock market know that the first two years of each presidential term are basically flat, but the good times come in the 3rd year which is nearly always an up year.  What a lot of people do not know is that it matters a lot in the 2nd year whether you have a first term president or a second termer. 

This week's chart helps to make that point.  To create each plot, I took the historical data for the SP500 (or its predecessor the Cowles Index) going back to 1936 and... Read More

A Scary Valuation Indicator

 
weekly Chart In Focus

If you want to get worried about long-term stock market valuations, this week's chart should do the job.  I saw a version of this chart recently in a research report by Daniel J. Want, who is Analytics Director for Prerequisite Capital Management in Queensland, Australia.

What is unique about this indicator is that it combines two separate data series into one indicator.  When I first saw the version of this chart in Daniel Want's report, I thought it was just wrong to put the CAPE data... Read More

A-D Line Divergence Again

 
weekly Chart In Focus

The Fed is still pumping liquidity into the banking system, albeit at diminished rates, and the large cap indices are still showing no signs of trouble, with the DJIA making higher highs and higher lows. 

But when price indices make higher highs and the NYSE's A-D Line refuses to confirm, that condition usually leads to a meaningful selloff.  That is the condition we are seeing right now, with a classic looking A-D Line divergence.

I should emphasize that this short term divergence is not... Read More

Fishing Around For a Gold Cycle Bottom

 
weekly Chart In Focus

The price bottom associated with gold's 13-1/2 month cycle is ideally due right now.  The problem is that gold does not always bottom exactly when it is supposed to, and there is still work yet to do.  By that I mean that there are tasks associated with this cycle bottom which gold has not yet accomplished.

I mentioned back in April 2014 that gold was currently in "left translation" for this current cycle, and that this implies we should see a price low at the cycle bottom which goes below... Read More

 
Daily Timing Chart

 

08/27/2014 IssuesVolume(000s)
McC OSC 134.226 135996
Sum Index 2454.788 532602

More Data

The McClellan Oscillator

 

OscillatorCreated 1969, the McClellan Oscillator is recognized by technical analysts as the essential tool for measuring acceleration in the stock market. Using advance-decline statistics, it gives overbought and oversold indications, divergences, and measurements of the power of a move.