View: Flipping Short

Flipping Short

As you can see, a reading above 80 on the McClellan Oscillator has marked interim tops pretty reliably. It triggered in July 2011 just before the August crash, in late August 2011 before the sharp move lower in September 2011 (especially in commodity stocks!), then again in mid and late October 2011 as the market headed for the sharp move lower in November 2011. Per my last article, I went long energy stocks on June 4th and was already long miners from May and the positions are overall nicely in the green, with all losses from trying to catch the lows too early in GDX completely made up and then some. I was optimistic that we were in the early stages of a nice rally, but this troubling signal should not be ignored in my opinion given it's uncanny ability to call the turns over the last three years. Thus, tomorrow morning I will be booking profits in ALL long positions ahead of the FOMC news and entering a moderate short position via ERY. The odds are no longer favorable towards long positions in my view, and despite the rally of the last few days price action has overall not been as good as I had anticipated. Longer term, I still think miners have a lot of upside and if this signal hadn't presented itself, I would remain happily long. It is what it is - I've learned not to ignore high probability breadth signals and this is one of the most reliable I know of. Ignore it at your own peril.

Comments

Ramsey 2016 - A New Hope for GDXRamsey 2016 - A New Hope for GDX
NYMO is at 100 as of the close on 7/3. you will regret going long with NYMO north of 80. odds are we see a pullback into the middle of the month at least to relieve severe short term overbought conditions. the market is more overbought now than at any other point this year based on my indicators. 7/4/12
Tim KnightTim Knight
No need to worry about me. I am probably not going to take on a SINGLE long position this entire quarter. We shall see, but I'm trying this "pure" approach. 7/4/12