Best Stock Market Indicator Ever
Stock-Markets / Stock Markets 2012 May 06, 2012 - 08:57 AM GMTBy: PhilStockWorld
Courtesy of Doug Short. The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com that can be used to forecast conservative entry and exit points for the stock market.
The OEXA is used to find the “sweet spot” time period in the market when you have the best chance of making money. See Is This the Best Stock Market Indicator Ever? for a discussion of this technical tool.
The charts below are current through this past week’s close.
Daily OEXA200R past 12 months
Monthly OEXA200R since April 2007
Interpretation:
The OEXA200R closed out the week down 7 points at 80%.
Of the three secondary indicators:
- RSI is above 50 and positive.
- MACD has crossed and is positive (black line above red).
- Slow STO (black line) is above 50 and is positive.
Commentary
The OEXA200R hit a high of 89% on Tuesday only to drop to 80% after the pathetic unemployment news on Friday (a 6% drop on Friday alone). The two secondary indicators, MACD and Slow STO, are edging toward flipping from positive to negative. They’re the “canaries in the coal mine” that forewarn a possible major drop by the primary indicator OEXA200R. The OEXA200R at 65% is the sell signal. We’re not there yet and are probably due for another rebound before the down trend really takes hold.
- Phil
Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)
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