SPY - tools for swing trading a cap-weighted index

Steven Berry

The 6 pages of charts below display cumulative Advance-Decline breadth lines
which are the cumulative total of daily net Advance-Decline values

Common Stock Only indicators for the NYSE are calculated using approx.1800 common stocks
which are operating companies within the NYSE Composite Index (funds are excluded)
CSO indicators often present a more accurate internal picture for the NYSE Composite Index
The NYSE All Issues indicators are calculated using all issues traded on the NYSE

The McClellan Oscillator is the difference between the 19-EMA & 39-EMA of daily advances minus declines.
It reflects the short-term strength and direction of market liquidity.
A longer-term view is provided by the McClellan Summation Index, which is the cumulative total of the daily McClellan Oscillator values.
These indicators move within a trading range and often identify the overbought/oversold condition of the market

( McSum = McClellan Summation Index )

the dominant rule is: price will eventually follow the direction of the McSum, except for brief periods of price divergence

The McSum is neutral at the zero line,
bullish while above,
and confirmed bearish while below zero

* the distance down to the McSum zero line currently represents
one objective measure of the minimum downside risk

Confirmed sell signals are a lasting decline below the McSum zero line,
though price action has usually declined by a large amount by the time
zero is reached from the McSum peak above.

Large distances between the McSum daily chart values represent acceleration events in the A-D breadth decline or advance,
and the follow-on price impact has a high correlation with the McSum's direction, and usually has several days staying power

001.5 - QQQ weekly

001.6 - QQQ daily w/ # of New Highs / New Lows

001.7 - QQQ monthly w/ 3 BB settings, BB width, plot of 15 sma direction

002 - S&P 500 Advance-Decline line with BB width

5/22

S&P 500 A-D line achieves a new record high, which
is bullish while the stair-stepping higher continues

4/25 end of day update -

* be alert for the future A-D line directional outcome
in late April and May:

the S&P 500 Advance-Decline line now displays multi-year record
narrow width for its 50,2 Bollinger Band ...

the BB narrowing during 2016
eventually had bearish implications after September which lasted until
early November, and an A-D line upward thrust followed

Note - the single other BB extreme narrowing took place in 2015,
and initially resulted in a new record A-D line high printed in May 2015,
followed by a downward thrust by the A-D line lasting many weeks

100 - S&P 500 Advance-Decline line with %b's

4/27 - * high vigilance until the S&P 500 A-D line shows steady improvement,
and lasting higher highs

4/19 - Objectivity is the trick here, in spite of the fact the majority of index McSum's currently remain above their neutral zero lines
What is most important is the ongoing printing of new March/April lows by important index McSum's including SPX, OEX, COMPQ, NDX, INDU
This opens the probability of future zero line tests from above by even more index McSum's,
which presents a high degree of technical uncertainty now on display by the internal indicators
for multiple indices, in spite of potential near-term bottoming price action evidence

4/13 - S&P 500 A-D line today displays lower lows violating its March/April lows for day #1,
which is the starting evidence for technically confirming a probable sustainable decline
by the A-D breadth line and by price action on an intermediate-term basis

day #2 SPY closes below its 50-day sma for 1st time since November 8th, bearish

SPY 15,3 BB has started to expand its width with this week's price decline, downside vigilance required especially if the expansion continues

4/11/17 - the A-D line 50,2 %b hovering near its 0.50 line reflects a high degree of uncertainty what will next follow
It is important whether the A-D line %b's remain abv or below the 0.50 line, and represents a high vigilance item for bulls & bears

*the S&P 100 A-D line printed a new March/April low again, bearish while this
downtrend continues

101 - NYSE common stock only Advance-Decline line with %b's

4/24

vigilance watch:

* April 5th price high above, bullish case depends on a lasting hold above
&
* un-tested horizontal price zone below
$11,249.28 remains below & is
the prior quadruple-resistance mark at the Dec. 13th close, January 4/5 & Jan. 24th daily closes
any future lasting price decline below this level will confirm an intermediate market 'top'
( Point & Figure charting 101 )

https://stockcharts.com/h-sc/ui?s=%24NYA&p=D&yr=0&mn=4&dy=0&id=p09265273899&a=340963780

$11,343.78 January 25th close,
represents the January daily close high, an important prior breakout mark ...
bearish only while price holds below this level

4/12/17 - numerous bearish internals are evident in chart #103, so look for lower equity prices while this continues.
The NYSE Commons A-D line will eventually provide clear evidence whether a lasting advance is taking place or not
And this A-D line is recently showing slight near-term improvement
off its March/April lows, though its pattern structure is not yet resolved
for the intermediate term

High level of uncertainty at this time about which direction will be chosen on a lasting basis.
Be watchful regarding the A-D line March/April lows and the February 21st A-D line high with
the March 1st A-D line high, which was a slight negatively divergent &
'declining-tops technical event' at the time SPY and the S&P500 index
printed their record intraday price action on March 1st.

Since Friday, January 13 into January 20th - the /ES S&P 500 emini futures contract price range
& high or low Volume Node regions near $2242 downside vs. $2271.50 upside have contained the majority of the price action volume
for all January, and the technical read has been overly uncertain

The A-D line tends to move up & down firmly, as the %b's for the A-D line violate the 0.50 level

102 - S&P 1500 Advance-Decline Percent with S&P 1500 price action with 3 Bollinger Band settings

7/19

the S&P 1500 index internals displayed on this chart do not support the new record high price printed today by this index, so high caution is prudent unless these internals steadily improve

7/03

bullish only while price remains above 50 dsma ... internals are OK,
requiring improvement to strengthen the probability of a future bullish outcome

5/18

the net High-Low % prints below zero for 2 days, a
serious caution to the bulls & a high vigilance item
for any continuation

5/17

$545.20 is the April 21st close, before the large gap open on 4/24
vs. today's low of $545.87

* bulls want to see a lasting bounce from this level, or much lower
price levels are likely to be tested at some time

4/20

the April low vs. March low represents a higher low pattern, bullish while it lasts
$538.16 March low remains below as the un-tested low

Link shows daily price action up close -

https://stockcharts.com/h-sc/ui?s=%24SPSUPX&p=D&yr=0&mn=1&dy=25&id=p98113153194&a=517927603

$546.31 = 1st level of potential horizontal resistance, must become support to confirm future lasting upside price action

Distinguishing between a bull market correction actually reversing to the upside in a lasting way
or continuing to much lower price levels will depend
on this chart to a great degree

1/27/17 - Despite new record price high this week, 1/3 of stocks in the
S&P 1500 reside more than 10% below their 52-week high.

1/26/17 - the $535.32 new record high on January 26 resides
near the 3 std deviation 21-day Upper BB

1/24/17 a.m. - * price action tagged the Upper Bollinger Band, and reversed back down for today's close

103 - NYSE & common stock only McClellan Oscillator, McClellan Summation Index & A-D line

4/19 - triple-bottom at the March price low is potentially bullish while it holds

McSum is recently advancing, but remains below its 'ledge resistance' location from mid-March
Be skeptical of the McSum advance actually having staying power
until the McSum advance surpasses & holds above its ledge resistance

McSum displays few improvement days for all of March & April; the sustainable bullish case is far from proven

It represents optimal negative divergence by the McSum March/April pattern vs. the $NYA price action - with high odds for resolution soon
Either price or the McSum has a power move coming, or a grinding McSum upside move could resolve it

4/12 summary -

the single bullish argument with the most technical weight & merit is the number
of index McSum's above their zero line outnumber those below their neutral zero line:

NYSE Commons - above
NYSE all issues - above
Nasdaq Composite - below
Nasdaq 100 - above
S&P 500 - above
S&P 100 - above
Dow Jones Industrial - above
S&P 400 Mid Cap - above
S&P 600 Small Cap - below

104 - NYSE All Issues & ratio-adjusted McClellan Oscillator, McClellan Summation Index & A-D line

4/19/17 - day #3 the PMO attempts to violate the zero line,
* only a lasting hold below the neutral zero line is bearish confirmation

4/13/17 - day #1 the $NYA price closes below its $11,343.78 January 25th close,
representing the January daily close high, an important prior breakout mark,
* bearish only while price holds below this level

$11,249.28 remains below & yet untested from above is:
the prior quadruple-resistance mark at the Dec. 13th close, January 4/5 & Jan. 24th close levels,
* any future lasting price decline below this level will confirm an intermediate market 'top'
( Point & Figure charting 101 )

strong bearish signal that the internals are much more negative
for the NYSE common stock only symbol set than for the NYSE all issues symbol set

NYSE Composite Index monthly chart with Dow Jones Transports, S&P 500 index, & NYSE all issues McSum vs. its zero line:

* the pink overlay represents the plot of the monthly closes for /CL oil futures
* watch all these chart elements.
* 8 to 15% price declines in any future major retracement down will test and/or downside violate key levels for each chart element
* The early clues will unfold in this $NYA monthly & the daily/weekly $NYA

Shown in the chart link - $9198.20 is the $TRAN prior record daily close high in late 2014, above which the 'bullish breakout' case depends

https://stockcharts.com/h-sc/ui?s=%24NYA&p=M&st=2009-01-01&en=today&id=p59735735176&a=364138002

NYAD daily histograms, with 3 smoothing moving avgs. -
https://stockcharts.com/h-sc/ui?s=%24NYAD&p=D&yr=0&mn=8&dy=13&id=p73169467985&a=382915168

Vigilance watch the smoothed NYAD for:
1. trend change Confirm - smoothed NYAD status change vs. the NYAD zero line
2. for Positive or Negative Divergence vs. price structure
3. for incidents of 'tap and reverse' action following approaches of the Buy or Sell zones marked on the NYAD chart

105 - NASDAQ & McClellan Oscillator, McClellan Summation Index & A-D line

9/19

A-D line new high is bullish confirmation of the price action while
it continues to higher highs, time will tell so be vigilant of this metric

4/20

the April price low vs. March low represents a higher low pattern, bullish while it lasts

PMO this week achieves a new multi-month low at level not seen since early December, bearish while the PMO downtrend continues

* The McSum April high represents an actual reversal level taking place at the McSum 'ledge resistance' region from mid-March.
Be skeptical of any future McSum advance actually having staying power
until the McSum advance surpasses & holds above its ledge resistance

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