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Unemployment Is Not “Good”, But It Is Bullish

 
weekly Chart In Focus

The officially stated rate of U.S. unemployment in April 2020 was 14.7%, the highest since the Great Depression, when the data were not as rigorously tabulated compared to these days.  Regardless of whether the 14.7% number is exactly correct (it isn’t), it is still a high number.  And May’s number may be higher still when it gets announced on June 5. 

That is a horrible development for our country, because our GDP misses out on the economic contributions of those who are not working. And... Read More

Higher High for HY Bond A-D Line

 
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Stock prices are doing their best impression of a V-bottom rebound, even if it is a somewhat lopsided V shape.  For much of this rebound, it has been possible to argue that this is “just a bear market rally”.  The higher that prices go, the harder it is for adherents to stick by that assertion. 

The big worry is over whether the Fed can throw enough liquidity at the financial markets to overwhelm the economic damage from the Covid Crash.  This week’s chart says that the Fed is prevailing at... Read More

Gold’s Choppiness Index

 
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The 14-day Choppiness Index for gold prices is up to a really high level.  The message of such a reading is that a new trending move should commence, but it does not tell us in which direction.

The Choppiness Index was created by Australian commodities trader E.W. Driess, as a way to quantify how linear (or not) the recent trend has been.  It takes into account the size of the recent daily price ranges, as well has how far prices have moved over the lookback period.  Here is the formula, in... Read More

Investors Fleeing Out of SPY

 
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Stock prices have risen energetically off of the March 23 price low.  At first there was a big surge of money pouring into SPY, the largest of the SP500 ETFs, and that lifted its number of shares outstanding.  But as the rally has proceeded further, investors have started getting shy and pulling out of SPY, taking the number of shares outstanding to one of the lowest readings of the past few years. 

In ETFs, unlike in common stocks, the numbers of shares outstanding will change up or down... Read More

Dow Stocks’ Behavior Says More Uptrend Ahead

 
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The market has rallied strongly off of the March 23 bottom, and the enduring question is whether it is a new uptrend, or just a snapback rally.  This week’s chart argues for more rally yet to come.

The DJI Oscillator Rising Index (DJORI) is something I came up with about 20 years ago.  It involves calculating a McClellan Price Oscillator for each of the 30 Dow stocks, and then evaluating whether each one is rising or falling.  The DJORI then reflects the percentage of the 30 Dow stocks... Read More

VIX Open Interest Still Lagging Price Rebound

 
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The SP500 has already gained back half of the Covid Crash.  But thus far the total open interest in VIX futures is still at a very low level, indicating that traders are not yet interested in speculating there. 

VIX futures did not even begin trading until 2004, and during the first few years there was not much interest in these new trading instruments.  That began to change beginning in 2012, when open interest finally climbed up above 200,000 contracts.  So that is where I begin our look... Read More

Covid-19’s Effect on CO2 Levels

 
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Climate scientists are anxiously awaiting more data to see how the global Covid-19 shutdown will affect climate data.  One key is to look at CO2 numbers, which have been rising for centuries, but more earnestly since 1950.

The coincidence of the rising CO2 and temperature plots is what makes a lot of people believe that CO2 is the driver of temperature.

One challenge for identifying the CO2 response to the Covid-19 economic shutdown is that there is a big annual seasonal factor in the CO2... Read More

 
Daily Timing Chart

 

06/03/2020 IssuesVolume(000s)
McC OSC 272.677 489729
Sum Index 3006.434 2765234

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.