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Why These Stock Market Indicators Should Grab Your Full Attention

The McClellan Summation Index has been “in a clearly defined downtrend since late December”

by Bob Stokes
Updated: April 01, 2021

Many Main Street investors only pay attention to the daily trading closes of the main stock indexes.

But those who fall in that camp are missing out on a lot of valuable insights regarding the strength or weakness of a trend. In other words, when it comes to the stock market, it pays to "look under the hood."

For example, on Friday (March 26), all three major indexes rallied with the S&P 500 climbing 1.7% to hit a record closing high. Those who glance at the stock market headlines may have concluded "all systems go."

Yet, on Monday (March 29), our U.S. Short Term Update took a look "under the hood" and saw a rally that was showing signs of fatigue. Here's a chart and commentary:

PositiveBreadthWanes

Today's Dow rally to a new high was attended by a negative NYSE advance/decline ratio of 0.48:1 and more down volume than up volume... The weak breadth measures are seen on the chart of the McClellan Oscillator in the middle graph and the McClellan Summation Index in the lower graph. The McClellan Oscillator is an indicator based on the exponential moving averages of the daily advance/decline data and the Summation Index is in essence a running sum of the daily values of the Oscillator. The Oscillator has been traversing the zero line, while the Summation index is in a clearly defined downtrend since late December.

Interestingly, the very next trading day, all three indexes closed lower.

The message of the McClellan Oscillator and Summation Index align with the message of the Elliott wave model.

Now is the time to get the details of our Elliott wave analysis.

Our U.S. Short Term Update provides wave labeling for the main stock indexes, explains the importance of the current Elliott wave and clearly lays out what to expect next.

Our U.S. Short Term Update is part of our flagship investor package, and by following the link below, you'll be on your way to getting the timely Elliott wave insights that you need.

See a Stock Market Setup That Dates Back to...1697!

That's right, the February Elliott Wave Theorist -- which is still available to those who subscribe now -- offers analysis of Elliott waves which go all the way back to 1697.

Here's a revealing quote from the February Theorist:

How can we go back so far when the major US stock indices do not have data going back to 1697? We prepend data from preceding records to the stock index in question to achieve an approximate longer-term history. In house, we call this process stitching. The amount of independent datasets that can be stitched together is unlimited...

Figure 6 shows the market at the highest scale for which we have data. It comprises countless individual Elliott waves that have taken many generations to play out.

At this scale, we finally understand our full Elliott wave position.

Get more insights from the February Theorist (plus read the March Theorist) so you can prepare for the resolution of a stock market setup 324 years in the making!

The Elliott Wave Theorist is part of EWI's flagship investor package.

Follow the link below to learn how you can get access.

See This “Anatomy of a Bursting Bubble”

The highly specific rules and guidelines of the Elliott wave model help you to establish high-confidence forecasts. See how a forecast for "a near 50% sell-off" worked out in this global financial market. Take a look at these two charts which depict an "Anatomy of a Bursting Bubble."

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Russian Stocks (RTS): "A Very Interesting Setup"

Triangles are one of the most reliable Elliott wave patterns of market psychology. You only see them in very specific parts of the trend. Watch our European Short Term Update editor explain triangle's implication for the next move in Russia's RTS stock index.

8 Indicators in 1: Here's the Message of the Panic/Euphoria Model

Investor psychology has moved back and forth between extreme optimism and extreme pessimism repeatedly throughout financial history. Here's analysis of a "model" which is an amalgamation of eight indicators -- and what it shows today.