GOLDEN 5 BREADTH & Sentiment

This is our McClellan Summation and Osc. (bottom 1/3rd) combined with an STORSI on the Summation INDEX. This has all been applied to our MUST HAVE INSTITUTIONAL/ FUND MANAGER PORTFOLIO.
Don't get confused by the technicalities. The purple SUmmation Index is deeply Overbought, the blue STORSI (middle portion of the chart) has turned and the OSC (green line) sports a lower high (neg.Divergence !!).

Conclusion: It can't get better for the bearish case!!

Here again our standard breadth chart covering our Institutional BUYING and SELLING PRESSURE (bottom) compared to the 20day NEW HIGHS an NEW LOWS.
Both show lower highs in both categories = weakening rally !!

Also pls find our 2 classic version of our VIX OSCilators, which both show lower highs that do not support a healthy rally. Have also a close look how both OSCs have behaved last fall/early spring when both displayed higher lows in spring and thus signalling a rally.....

Bottom Line:

the rally is..

• unhealthy
• weakening
• with deteriorating participation (look at the insane volumes of CITI & AIG and what % they represented of the overall Volume on those days last week. Those "sickos" can not lead a healthy rally!!!)
  
  

MESSY Breadth Picture

The IM Portfolio is showing a messy breadth picture for this last leg of the rally.

(1) messy - green McClellan Oscilator with no clear broad participation

(2) a lower low in the green OSC as highlighed by the signal

(3) a fallin purple McClellan Summation Index

Breadth can be messy for some tim but tends resolve into a trend .....

Overall short term bias: BEARISH

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