Thinking out loud about trying to get on the market rocket when you’ve missed the launch? — the useful NYMO — 11/20/2023
The stock market either goes up or goes down, taking its stocks and ETFs with it. And yet It is amazing how difficult it is to recognize that simplicity.
THE TRADING STRATEGY
Short-term swing trading: When the NYMO turns up, it is time to buy stocks on the next open. When the NYMO turns down it is time to sell stocks on the next open.
Longer-term swing trading: When the NYSI turns up it is time to buy stocks on the next open. When the NYSI turns down, it is time to go to cash or to go short on the next open.
Most stocks and ETFs move with the market.
Simple as that.
To my mind, there is no better market-timing tools than the McClellan Oscillator (the NYMO) and its Summation Index (the NYSI).
And when the NYMO/NYSI gets rolling there is no clearer example of the value of both the short term (NYMO) and the longer term (NYSI).
The NYSI turned up on October 31st, triggering a general market buy signal on the open of November 1st, now fourteen trading days ago.
I’m sure there are those who did not believe it on October 31st when “the sky was falling” and the NYSI said “no, it isn’t, we flying off into the wild green yonder.”
The red color-coding on the charts in the chart panel at the bottom of this post is a falling NYSI, the green a flying NYSI.
So now that the NYSI rally is obvious, in fact scary obvious as virtually EVERYTHING IS GOING UP what to do, what to do?
Well, the NYMO can be a help.
See the chart above — the NYMO is the squiggly line at the top of the chart with the green circles ever rising. Those green circles are my vaunted “lows about lows.” They forecast turns in the NYSI from down to up on a regular basis and after each dip confirm the rally moves on.
After a two-day dip in the NYMO last week, the NYMO turned up again Friday, putting yet another low above a low and…