$SPY – Up, up, up…

After muddling around for nearly two weeks in a sideways-to-down consolidation, SPY and the rest of market appears now to want to go up, up, up.

Friday, the most important triggers all lined up as buy signals – short-term breadth, long-term breadth, and price. In addition, the VIX also is in line, and happens to be below 15 which is bull-market territory.

These are signals that repeat again and again in the market.

First, a low above a low pattern on the short-term breadth, measured by the McClellan Oscillator (the NYMO, see the green circles on the chart below), then an upturn in long-term breadth, measured by the McClellan Summation index (the NYSI, see the green vertical line on the chart for Friday), followed by a a follow-through in price (which appears to happening in the futures for Monday).

And oftentimes, when all of these bullish signals are in play, they result in a 10-to-14 week upswing in the market from the bottom on the NYMO (three weeks ago). If so, this rally could easily go to what they say — “sell in May and go away…”. And that could challenge the all-the highs.

I still think this is a major bear-market rally but in the meantime it’s buy and hold the swing and buy the dips when and if they come, until further notice.

(click on the chart for a larger view)

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