The Golden5: Breadth

Breadth always wonders what the Herd is doing. I usually start my analysis by assessing the McClellan Oscillator and Summation Index (sort of the proven workhorse that measures in a free sense the degree of particpation in particluar market moves) for an arbitrary portfolio of approx 60 "Elephant" Stock that are constituents of most Institutional Money portfolios.

This gives me an idea where the Elephants are going and whether this is consistent with other market indices.

The Chart below has 3 sections:

Section 1:
equally weighted Elephant portfolio performance

Section2:
a) The StoRSI on the Mc McClellan Summation which serves as a reliable turn indicatior, meaning you wait for the turn to occur before repositioning.

Current Reading: see (1) : correction in progress

b) A Mc OSC divergence Scanner that looks for higher (significant) lows & lower (significant) highs (see (2) last bullish reading was 2-3 weeks ago)


Section 3:

• The McClellan Osc
• The McClellan Sum index

What else can we observe:
a) the McClellan Summ. Index looks high and is trying to mover down (purple line)
a) the McOSC is in a neutral position with a downward bias (green line)

Conclusions:

1. The Elephants are correcting
2. Correction runs until it ends (McOSC and/or McClellan SUM and/or StoRSI moves up)
3. Correction could run weeks
4. The low to neutral position of the Mc Clellan OSC could hint at another MELT UP (BULLISH !!) episode before the correction will restart and run its course