A Different Perspective

Let’s begin by acknowledging my viewpoint last weekend was incorrect. While my perspective was one where a Bear T was imminent, we actually had a strong rally to put that idea to rest last Monday. In fact, it has the potential at this point to lead to a Positive T until that same date, July 12. But it hasn’t fully developed yet.

While we have an extreme bottom with the move above the zero line on both the McOsci and the Volume Oscillator, we are missing the final confirmation of higher highs (prior to the move below their respective zero lines). Normally, we would expect an extreme move higher on these two indicators after such a strong rally early this week.

Last week, I emphasized the point that we had made a “Complex Structure” below the zero line, which created a bearish formation. Later that day, I emailed Tom McClellan regarding this structure, as in his weekly post he projected a bullish outcome with his article on the Summation Index crossing the neutral level. In response to my question, Tom indicated that while we did have that “Complex Structure”, it was “negated” by his view of the Summation Index cross.

After receiving his email, I advised those on elliiottwavetrader.net regarding his stance, with a link to the above-mentioned article. When we were at 6322 I posted a chart referencing this to be a line of support (noted in last week’s report) which dated back to last August, adding that Pension funds and insurance companies usually have to buy into the market on the last 2 days of the month, and withdraw amounts the next 2 days based on their institutional needs.

None of these acts detract from the fact that the premise of last week’s post was totally off base.

That being said, Price action has been very strong, without similar sharp strength being shown by the VO and McOsi as noted above–the last T-Theory clue will be a further move higher in the Volume Oscillator and McOsci. BPSPX also needs to cross back through the lower Keltner band and move above 50:

It’s interesting to note that in this week’s article on Tom McClellan’s site, he is also waiting for a move higher on the McClellan Oscillator to confirm the uptrend. As he puts it on his site,

The Oscillator can next give us additional confirmation of a bullish change by zooming up to a really high positive reading. Very low negative readings are usually conclusive in their nature. But a very high positive reading is a sign of strong initiation of an uptrend. We have not yet gotten that piece of confirmation. It will be something to look for in the days ahead.

Best to your trading.