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Weekend Update: The Best Stock Market Indicator Ever.

  • Written by Syndicated Publisher 41 Comments41 Comments Comments
    March 19, 2012

    The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com that can be used to forecast conservative entry and exit points for the stock market.

    The OEXA is used to find the “sweet spot” time period in the market when you have the best chance of making money. See Is This the Best Stock Market Indicator Ever? for a discussion of this technical tool.

    The chart below is current through the March 9 close.

     

    Click to View

     

    After a major S&P correction, the conditions for safe re-entry into the market are when:

       a) $OEXA200R rises above 65%.

    And two of the following three also occur:

       b) RSI rises over 50.
    c) MACD cross (black line rises above red line).
    d) Slow STO (black line) rises over 50.

    Interpretation:

    For the second week in a row, OEXA200R closed out at 88%.

    Of the three secondary indicators:

    • RSI is above 50 and positive.
    • MACD has crossed and is positive.
    • Slow STO is above 50 and is positive.

    Commentary
    The OEXA200R remains in healthy, tradable territory. It’s forecasting fair weather for the foreseeable future.


    NoteStockcharts.com offers free access to the $OEXA200R indicator on a daily and weekly basis. The monthly view requires a subscription.

     

    (c) John F. Carlucci

    John F. Carlucci is a regular contributor to Advisor Perspectives.

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    Images: Flickr (licence attribution)

    About The Author

    My original dshort.com website was launched in February 2005 using a domain name based on my real name, Doug Short. I’m a formerly retired first wave boomer with a Ph.D. in English from Duke. Now my website has been acquired byAdvisor Perspectives, where I have been appointed the Vice President of Research.

    My first career was a faculty position at North Carolina State University, where I achieved the rank of Full Professor in 1983. During the early ’80s I got hooked on academic uses of microcomputers for research and instruction. In 1983, I co-directed the Sixth International Conference on Computers and the Humanities. An IBM executive who attended the conference made me a job offer I couldn’t refuse.

    Thus began my new career as a Higher Education Consultant for IBM — an ambassador for Information Technology to major universities around the country. After 12 years with Big Blue, I grew tired of the constant travel and left for a series of IT management positions in the Research Triangle area of North Carolina. I concluded my IT career managing the group responsible for email and research databases at GlaxoSmithKline until my retirement in 2006.

    Contrary to what many visitors assume based on my last name, I’m not a bearish short seller. It’s true that some of my content has been a bit pessimistic in recent years. But I believe this is a result of economic realities and not a personal bias. For the record, my efforts to educate others about bear markets date from November 2007, as this Motley Fool article attests.
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