Primary Market Trend: McClellan Oscillator - 01/17/24

Chart of the Day: (01/17/24)

McClellan Oscillator

• The S&P500 and TSX are consolidating. After a strong November and December, it is normal and expected. It can do so through price or time. As it is, our Core Growth Fund is up over 1% mid-month in a down market.

• As a Portfolio Manager you don't want to overthink it or stress over every move in the market; keep it simple and use patience. We study past charts and indicators so we know what's normal.

• One of the important tools I use is the McClellan Oscillator. 

• The McClellan Oscillator portrays the acceleration taking place in the Advancing vs. Declining data. If you go from having the Advance/Decline Line moving up steeply (many more advancing stocks vs. declining stocks) to just going sideways or slightly down, in physics terms that is a downward acceleration, and so the McClellan Oscillator goes negative. 

• Generally speaking, a nice oversold Oscillator in an uptrend is a wonderful opportunity. Still just because we notice an oversold condition, it does not necessarily mean that it is finished pulling back yet.

• For the moment, this should be viewed as a pullback in a Primary Up Trend.

• Our Chart of the Day is intended to be a standalone technical chart.

• We use them to highlight open positions, stocks on our watch list, or indicators that we believe are important, or just interesting at the time. 

• It is not a directional market call. 

• Feel free to share them with others who may be interested.