SPY - tools for swing trading a cap-weighted index

Steven Berry

The 3 pages of charts below display cumulative Advance-Decline breadth lines
which are the cumulative total of daily net Advance-Decline values

Common Stock Only indicators for the NYSE are calculated using approx.1800 common stocks
which are operating companies within the NYSE Composite Index (funds are excluded)
CSO indicators often present a more accurate internal picture for the NYSE Composite Index
The NYSE All Issues indicators are calculated using all issues traded on the NYSE

The McClellan Oscillator is the difference between the 19-EMA & 39-EMA of daily advances minus declines.
It reflects the short-term strength and direction of market liquidity.
A longer-term view is provided by the McClellan Summation Index, which is the cumulative total of the daily McClellan Oscillator values.
These indicators move within a trading range and often identify the overbought/oversold condition of the market

( McSum = McClellan Summation Index )

the dominant rule is: price will eventually follow the direction of the McSum, except for brief periods of price divergence

The McSum is neutral at the zero line,
bullish while above,
and confirmed bearish while below zero

* the distance down to the McSum zero line currently represents
one objective measure of the minimum downside risk

Confirmed sell signals are a lasting decline below the McSum zero line,
though price action has usually declined by a large amount by the time
zero is reached from the McSum peak above.

Large distances between the McSum daily chart values represent acceleration events in the A-D breadth decline or advance,
and the follow-on price impact has a high correlation with the McSum's direction, and usually has several days staying power

000.1 - S&P 500 # of New Highs & # of New Lows


XLK, XLI, & XLB achieve new price highs - their collective weighting is influential on the SPY daily % price change

XLF daily PMO indicator holds above its signal line & above zero line,
both of which are required conditions for a lasting bullish price outcome
for this heavily weighted influence on the S&P 500 index

a consolidated chart set for the US indices by Erin Heim showing PMO setups is located here -
the Chart Gallery for the S&P 500 index -


# of new 52-week lows expands to 20; a multi-month high for this metric

* bullish for SPY price action while the # of new lows is not routinely expanding
* firmly bearish only when the # of new lows expands for multiple weeks
* SPY closed today near the 55-day ema


declining # of new 52-week price highs since the 2nd half of April,
which is mildly bearish for the future SPY price action
until the declining trend actually reverses

* May vs. April sees a steady increase in the # of new 52-week price lows,
which is bearish in the near term

** Note: the top weighted 25 stocks in SPY comprise 34% of the SPY price action as of 5/12
top 10 = 19% of the SPY price action


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