Top Advisors Corner

October 2017

Top Advisors Corner

Tom McClellan: Bond McClellan Oscillator Almost Oversold

by Tom McClellan

October 27, 2017   When we talk about “the McClellan Oscillator”, we usually mean the indicator calculated on the Advance-Decline (A-D) numbers from the NYSE.  But a McClellan Oscillator can be calculated on any sort of breadth data. And when the same math is used on closing prices, we call that a McClellan Price Oscillator. The chart this week shows a McClellan Oscillator calculated on investment grade corporate bond A-D data.  Those data are published each day by FINRA, and they correlate very closely with the movements of Treasury bond prices Read More 

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Tim Ord: The Ord Oracle October 25, 2017

by Tim Ord

SPX Monitoring purposes; long SPX 10/16/17 at 2557.64. Monitoring purposes GOLD: Covered short GDX at 23.23 on 10/20/17 =gain 2.56%; Short GDX on 10/13/17 at 23.84. Long Term Trend monitor purposes: Neutral. Yesterday the Tick closed at -347 and the TRIN at 1.56 which is a bullish combination.  The last time the market was near a high and the Tick and Trin closed near the current levels came on April 27, 2017 and the market staggered higher for another three weeks.  It common for the market to produce high or lows around holiday’s and the next holiday is Thanksgiving November 23 Read More 

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Tom McClellan: AAPL Not Confirming Market's Higher Highs

by Tom McClellan

The share price of Apple Corp (Nasdaq: AAPL) is not making higher highs along with the Nasdaq 100 Index, and historically that has indicated a problem for the overall market.  AAPL is the largest component of the Nasdaq 100, and accounts for 12% of the index’s calculation based on the modified capitalization weighting of that index.  So it is natural that there is going to be a strong correlation in the price plots.  When the two are doing the same thing, that is what’s expected, and so it is not newsworthy.  It is when there is a difference in their behavior that we Read More 

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David Keller: Discovering Downtrends

by David Keller

As part of my regular screen for stocks that are oversold, I came across Discovery Communications, LLC (DISCA).  This chart reminds me that it is incredibly unwise to follow RSI as a standalone indicator. The stock has underperformed the S&P 500 index by over 37% since the beginning of the year.  DISCA was up slightly through the end of April, then began a steady downtrend since May with a series of lower lows and lower highs. During this recent downtrend, the Relative Strength Index (RSI) has become oversold a number of times, each of which has led Read More 

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Tim Ord: The Ord Oracle October 18, 2017

by Tim Ord

SPX Monitoring purposes; long SPX 10/16/17 at 2557.64. Monitoring purposes GOLD: Short GDX on 10/13/17 at 23.84. Long Term Trend monitor purposes: Neutral. The Total put call ratio (CPC) closed yesterday at 1.17.  Total put call ratio (CPC) closing at 1.20 and higher predict market will be higher 92% of the time in the next five days with an average gain of 1.8%. On the chart above we market with red vertical lines the times the CPC closed at 1.20 and higher.  The blue vertical lines show the failures.  True that CPC didn’t close above 1.20 yesterday but 1.17 does lean Read More 

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Tom McClellan: Treasury-Bund Spread Says Dollar Has More Room to Fall

by Tom McClellan

 In Dec. 2016, the monthly closing spread between yields on U.S. 10-year Treasury Notes and the equivalent debt instrument from Germany was 2.24 percentage points, the highest reading we have seen since the 1980s.  As the spread has started to contract, we have watched the US Dollar Index make its biggest drop since 2011.  Those German bonds are known as “bunds”, which is short for bundes which means “federal” in German, as in the Bundesrepublik Deutschland.  This week’s chart shows that the Treasury-Bund spread is well correlated to the movements of the Dollar Read More 

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Tim Ord: The Ord Oracle October 11, 2017

by Tim Ord

SPX Monitoring purposes; Short SPX on 8/30/17 at 2457.59. Monitoring purposes GOLD: Sold 10/10/17 GDX at 23.57= gain 2.34%; Long GDX on 10/2/17 at 23.05 Long Term Trend monitor purposes: Neutral.   In general the VIX trades opposite the SPY and when there is a divergence between the two a direction change in the SPY is possible.  Today the SPY hit a new short term high and to keep the “Rhyme” of the market going, VIX should have hit a new short term low. Instead the VIX made a higher low and produced a divergence, which is a similar divergence that appeared at the August high Read More 

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Tom McClellan: Another Narrow Range for McClellan Oscillator

by Tom McClellan

Back in June, I introduced you to the indicator in this week’s chart, which examines how much movement the McClellan Oscillator has had over the preceding 15 trading days.  My timing was excellent, in that I so precisely picked the one time that a really low reading did not seem to matter at all.  Most of the very low readings for this indicator mark meaningful tops for stock prices.  It was just my luck that I called attention to it just at the moment when a wonderful exception appeared.  Now we have another very low reading, the lowest in 16 Read More 

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Tim Ord: The Ord Oracle October 4, 2017

by Tim Ord

SPX Monitoring purposes; Short SPX on 8/30/17 at 2457.59. Monitoring purposes GOLD:  Long GDX on 10/2/17 at 23.05 Long Term Trend monitor purposes: Neutral. There is a cycle high due October 3 which can arrive early or late.  The above chart is the NYA with its 14 period RSI, which goes back five years. We marked with red vertical lines when the RSI reached above 70.  The current reading is 78.99 and the highest reading on the chart.  Previous times when the RSI reached above 70 the market was at least at a short term high and we would expect at least s short term Read More