TREND TRADE: Down from open, 1/20.
SWING TRADE: Neutral from open, 1/23.
DAY/SCALP TRADE: Selling the bounces with the trend trade
PRICE TREND: Nasdaq down 1 day, whipsawing.
Market breadth as measured by the McClellan Oscillator (NYMO) and Summation Index (NYSI) has turned negative with a falling NYSI and highs below highs on the NYMO (see first chart below).
One of the great things about the McClellan is that the two indicators give hints ahead of time as to what is likely to come next in the general market. If there is another high below a high on the NYMO, especially below the zero line, it will likely be a gift to the bears.
The McClellan is not infallible but it almost is.
In addition (see second chart below) this post-election rally has been mirroring the post-Brexit rally almost perfectly. If that continues, it is also saying a sell-off is right around the corner.
To state the obvious, the sell-off itself indicated above has not, as yet, happened.
But maybe tomorrow. An age-old “turn around Tuesday”? If not it likely to be soon.
(click on the charts for a larger view)