This Indicator Was Spot on In May

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 charts below are current through Friday's close.

Daily OEXA200R past 12 months

Monthly OEXA200R since April 2007

Interpretation:

The OEXA200R ended the week down 6 points at 53%, having previously dropped to the crucial 65% "Sell it all!" line on May 15.

Of the three secondary indicators:

• MACD has flipped from positive to NEGATIVE (red line above black).
• Slow STO has flipped from positive to NEGATIVE (red line above black).
• RSI is below 50 and is NEGATIVE.

Commentary

Well, I hope you "went away in May" (May 15 to be precise, you were warned) because June has started off with a bang. The unemployment numbers are a disaster and we still have the end of Operation Twist and the Grexit to look forward to. The next stop is when OEXA200R hits 50% and the bottom really falls out. This might be one long, hot summer.

http://advisorperspectives.com/dshort/guest/John-Carlucci-Best-Indicator-Ever-Update.php

Target is 1200

Get Some Popcorn

Pimco

Lost Decades?

http://www.minyanville.com/special-features/random-thoughts/articles/todd-harrison-todd-harrison-minyanville-todd/5/31/2012/id/41348

End Game

The End Game

Interesting Chart

Stock market investors continue to hold on to their stocks in the hope that we will again see bull markets like in the 1980s and 1990s. But looking at the very long term Dow/Gold ratio chart this optimism seems unfounded. The chart shows a major “megaphone” pattern that has a target of 1. This would mean that gold and the Dow would be equal in value. It would also mean another 90% fall of the Dow against gold. In my view the pattern will probably overshoot and we will go well below a one to one ratio.



Even if we “only” go to a Dow/Gold one for one ratio, at what level would that be? For many years I have forecast gold at $10,000 dollars, and that would mean the Dow would be at the same level. But remember this means that gold would go up 6 times from here and the Dow would be down 16%. With hyperinflation gold could go considerably higher. So investors who want to preserve their wealth in the next few years are likely to do much better by owning physical gold than stocks.

Egon von Greyerz
Matterhorn Asset Management AG

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/31_Greyerz_-_Market_Chaos_%26_Incredibly_Important_200_Year_Chart.html