More On This Week’s Big Oscillator Readings
By
Rennie on Thursday, September 17th, 2009 at 11:12 pm
Yesterday I reviewed the long-term bullish implications of a Standard & Poors Oscillator over 10.0. It’s equally noteworthy that this indicator could trigger what’s been a reliable intermediate-term signal. On Tuesday, the Oscillator closed over 7.0, a high reading from a historical perspective. Note from this long-term chart that readings over 7 are rare. When they do occur, they tend to lead to higher prices over the intermediate-term. You want to trade on the same side as the indicator, long when it’s over zero and short when it’s under zero. This is why unusually high readings are generally not bearish. They merely reflect an unusually strong trend. Two-thirds of the time, the S&P is trading at an even higher level one week later, which is pretty impressive considering that 7+ readings always come at relatively high points on the daily chart. What’s especially impressive is the performance of the S&P when it IS higher one week later (in other words, when there’s immediate follow-through). The table below lists all 30 instances since 1965 in which the S&P closed higher one week after the S&P Oscillator crossed over 7.0. Note the market’s consistently solid performance over the intermediate-term. Gains are not especially large, but the market generally has a consistent underlying bid.
S&P Oscillator Over 7.0, SPX Higher One Week Later
07/28/09… S&P +1.5% two weeks later
05/11/09… S&P +0.1% two weeks later
04/13/09… S&P -0.1% two weeks later
03/26/09… S&P +2.8% two weeks later
06/08/04… S&P +0.5% two weeks later
01/07/04… S&P +0.9% two weeks later
06/10/03… S&P +0.6% two weeks later
03/15/02… S&P -2.3% two weeks later
10/30/98… S&P +3.8% two weeks later
05/16/97… S&P +1.3% two weeks later
01/08/92… S&P +1.6% two weeks later
02/06/91… S&P +2.2% two weeks later
01/20/87… S&P +3.0% two weeks later
02/28/86… S&P +4.9% two weeks later
01/28/85… S&P -0.1% two weeks later
08/13/84… S&P +0.6% two weeks later
10/19/82… S&P +0.8% two weeks later
08/30/82… S&P +3.3% two weeks later
08/11/78… S&P +0.5% two weeks later
05/02/78… S&P +1.7% two weeks later
11/23/77… S&P -4.3% two weeks later
01/13/76… S&P +4.9% two weeks later
02/04/75… S&P +4.0% two weeks later
01/14/75… S&P +7.1% two weeks later
10/02/73… S&P +1.1% two weeks later
12/15/71… S&P +2.9% two weeks later
12/10/70… S&P +0.9% two weeks later
09/03/70… S&P -0.9% two weeks later
04/17/68… S&P +0.6% two weeks later
01/20/67… S&P +1.2% two weeks later
In 25 out of the last 30 occurrences, or 83% of the time, the S&P was higher two weeks later, significantly above the 57% at-any-time odds for a higher S&P two weeks later. For this setup to go into effect, the S&P needs to close above Tuesday’s settlement of 1052 next Tuesday (September 22nd). If it does, it would further confirm the already bullish implications of the 10+ Oscillator reading recorded on Wednesday.
More On This Week’s Big Oscillator Readings
By Rennie on Thursday, September 17th, 2009 at 11:12 pmYesterday I reviewed the long-term bullish implications of a Standard & Poors Oscillator over 10.0. It’s equally noteworthy that this indicator could trigger what’s been a reliable intermediate-term signal. On Tuesday, the Oscillator closed over 7.0, a high reading from a historical perspective. Note from this long-term chart that readings over 7 are rare. When they do occur, they tend to lead to higher prices over the intermediate-term. You want to trade on the same side as the indicator, long when it’s over zero and short when it’s under zero. This is why unusually high readings are generally not bearish. They merely reflect an unusually strong trend. Two-thirds of the time, the S&P is trading at an even higher level one week later, which is pretty impressive considering that 7+ readings always come at relatively high points on the daily chart. What’s especially impressive is the performance of the S&P when it IS higher one week later (in other words, when there’s immediate follow-through). The table below lists all 30 instances since 1965 in which the S&P closed higher one week after the S&P Oscillator crossed over 7.0. Note the market’s consistently solid performance over the intermediate-term. Gains are not especially large, but the market generally has a consistent underlying bid.
S&P Oscillator Over 7.0, SPX Higher One Week Later
07/28/09… S&P +1.5% two weeks later
05/11/09… S&P +0.1% two weeks later
04/13/09… S&P -0.1% two weeks later
03/26/09… S&P +2.8% two weeks later
06/08/04… S&P +0.5% two weeks later
01/07/04… S&P +0.9% two weeks later
06/10/03… S&P +0.6% two weeks later
03/15/02… S&P -2.3% two weeks later
10/30/98… S&P +3.8% two weeks later
05/16/97… S&P +1.3% two weeks later
01/08/92… S&P +1.6% two weeks later
02/06/91… S&P +2.2% two weeks later
01/20/87… S&P +3.0% two weeks later
02/28/86… S&P +4.9% two weeks later
01/28/85… S&P -0.1% two weeks later
08/13/84… S&P +0.6% two weeks later
10/19/82… S&P +0.8% two weeks later
08/30/82… S&P +3.3% two weeks later
08/11/78… S&P +0.5% two weeks later
05/02/78… S&P +1.7% two weeks later
11/23/77… S&P -4.3% two weeks later
01/13/76… S&P +4.9% two weeks later
02/04/75… S&P +4.0% two weeks later
01/14/75… S&P +7.1% two weeks later
10/02/73… S&P +1.1% two weeks later
12/15/71… S&P +2.9% two weeks later
12/10/70… S&P +0.9% two weeks later
09/03/70… S&P -0.9% two weeks later
04/17/68… S&P +0.6% two weeks later
01/20/67… S&P +1.2% two weeks later
In 25 out of the last 30 occurrences, or 83% of the time, the S&P was higher two weeks later, significantly above the 57% at-any-time odds for a higher S&P two weeks later. For this setup to go into effect, the S&P needs to close above Tuesday’s settlement of 1052 next Tuesday (September 22nd). If it does, it would further confirm the already bullish implications of the 10+ Oscillator reading recorded on Wednesday.