Wednesday, August 26, 2009

$NASI top suggests that for the next month Nasdaq NOT going much higher


The McClellan Summation Index is a popular market breadth indicator that is ultimately derived from the number of advancing and declining stocks in a given market.  The $NASI tracks the Nasdaq.  We are undergoing a complex top in the $NASI.  Raff Regression of the current unfolding top  suggests that for the next 7-10 days  the Nasdaq ($SPX) will NOT go up much. The central line is the linear regression line.  It then looks like the Nasdaq will fall, at an unknown rate, for the following month. Turquoise line is where we stand now, compared with past $NASI tops.  Yellow line was when to go short.  Orange line was when to sell short positions.


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