WALL STREET CRAPS STOCK MARKET STRATEGY – DECEMBER 4, 2016
STOCK MARKET STRATEGY FOR DECEMBER 4, 2016: The stock market has been correcting its move from the election lows over the past several days. With the majority of internal breadth indicators at “oversold” readings, a short-term rally should begin now. This final rally should mark the end of the big move from February’s low. Look for this rally to be lead by the oil stocks and unconfirmed by the leading technology stocks which typically signals the end of a major move.
Key underlying short-term market indicators show the following:
- NYSE McClellan Oscillator – Ultimate Indicator – 29 (oversold)
- NYSE Overbought/Oversold Indicator – Ultimate Indicator – 29 (oversold)
- Nasdaq McClellan Oscillator – Ultimate Indicator – 19 (oversold)
- Nasdaq Overbought/Oversold Indicator – Ultimate Indicator -20 (oversold)
- Volatility Indicator – Ultimate Indicator – 33 (neutral/trending down)
***********
THE BOTTOM LINE: The Fear/Greed Index is currently reading “Greed” after a short stint in the “Extreme Greed” territory. If we get a rally from right here, the new readings should mostly be in the “Extreme Greed” area and signal a time to get out of the market for the intermediate term. Expect a decline after this next rally to last two to three months and probably retract all of the “Trump Rally” and possibly more. But for now, look for one more short-term rally with several non-confirmations to finish this major move from the February lows.
