WALL STREET CRAPS STOCK MARKET STRATEGY JANUARY 8, 2022
The stock market had a rocky start to 2022. With several non-confirmations during the last week of December, it is not surprising that there would be problems this week. With that being said, the general market could stay in this range without a major move in either direction. But with the large percentage losses in many of last year’s dynamic growth stocks, the background is set for a final plunge for these shares. However, there aren’t any signs of capitulation that would mark that final bottom. So for now, I would recommend keeping your powder dry and resist the temptation of going long until we see more signs of extreme behavior/sentiment.
Key underlying short-term timing indicators show the following:
- NYSE McClellan Oscillator – Ultimate Indicator – 36 (neutral)
- Nasdaq McClellan Oscillator – Ultimate Indicator – 45 (neutral)
- Volatility Indicator – Ultimate Indicator – 41 (neutral)
- NYSE Advance/Decline Oscillator – Ultimate Indicator – 55 (neutral)
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NYSE McClellan Summation Index: This indicator has rallied from its December 20th low and is in the process of clustering at a peak before heading lower again. A tradable bottom usually isn’t signaled unless the clustering starts after a sustained move down. That point is still weeks away in time.
Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 52. At the December 2018 bottom, this indicator reached a reading of 3. So we are a long way away from a swing trade to the upside. A minimum reading of 25 is required to reach the “Extreme Fear” range.