Wall Street Craps – 2012 Global Ebook Finance Award-Winner

The stock market is hovering near its all-time highs with no apparent reason to decline at this point in time. In fact, the market sentiment as measured by the “Fear/Greed Index” suggests that a short-term buy signal is close at hand. With the Memorial Day holiday quickly upon us, it doesn’t look like a trading opportunity of any kind is not likely until June. This is a time to let the market set itself up for its next big move. In the meantime, the odds still favor a market that continues to drift upwards.

Key underlying short-term timing indicators show the following:

• NYSE McClellan Oscillator – Ultimate Indicator – 55 (neutral)
• Nasdaq McClellan Oscillator – Ultimate Indicator – 65 (neutral)
• Volatility Indicator – Ultimate Indicator – 59 (neutral)
• NYSE Advance/Decline Oscillator – Ultimate Indicator – 61 (neutral)

***********

NYSE McClellan Summation Index: This indicator is clustering in the oversold range. This is an indication that a breakout is eminent. But in which direction is not clear right now.

Fear/Greed Index: This popular indicator is in the “Fear” territory which is close to the “Extreme Fear” zone that often signals a buy. If the market were to have a short term decline, a buy signal from this indicator could be triggered.

The stock market bottomed in early March and has not retested that level since. Right now, all of the internal indicators are mid-range with no pressure to go in either direction. With recent new all-time highs, a correction can be expected especially with earning season having already passed. If a correction starts now, it could be finished by the end of the week or the beginning of next week at the earliest. Then one could expect another run to higher highs in all the major indices.

Key underlying short-term timing indicators show the following:

• NYSE McClellan Oscillator – Ultimate Indicator – 44 (neutral)
• Nasdaq McClellan Oscillator – Ultimate Indicator – 53 (neutral)
• Volatility Indicator – Ultimate Indicator – 43 (neutral)
• NYSE Advance/Decline Oscillator – Ultimate Indicator – 63 (neutral)

***********

NYSE McClellan Summation Index: This indicator ticked lower on Friday and could suggest the beginning of a downtrend. Overall, this indicator has held up well for the market.

Fear/Greed Index: This popular indicator is in the “Greed” territory which suggests that a bottom won’t materialize until it at least touches the “Extreme Fear” reading. That would take 5 to 7 trading days at the very least.