NYSE McClellan Oscillator ($NYMO)

• Charles Amadeus
• August 30th, 2009

Most indicators at my disposal say the market is strong and rising, except the NYSE McClellan Oscillator. $NYMO has dipped below the zero line, suggesting a short term downtrend and further consolidation.

This is generally a good reason to closely manage risk by tightening stops and cutting losses in order to raise cash. The uptrend that began in March 2009 will probably hold, but a dip will present a buying opportunity in high quality stocks.

I rest assured knowing that opinionated folks are talking about the top in equities, yet the S&P 500 remains and in a primary and secondary uptrend. Sure, China ($FXI) has been lagging of late, but the move in Home Builders ($XHB) has been impressive and fundamentally important.

Awareness and adaptability remain paramount, so stay focused on the real data and always be ready to reorganize your positions when circumstances warrant action.