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Bill L.
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Methodology: setups require certain criteria to be met before trades can be executed, which include weighted statistical studies on several indicators of price, breadth, volume, and sentiment . Amount of risk taken is proportional to how many indicators are aligned. I mainly trade market... More
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  • Q&A: The McClellan Oscillator  0 comments
    Sep 7, 2011 9:55 PM | about stocks: SPY
    Q: I'm new to your format/graphs. Are you in layman's terms saying this is just a bounce? And expect more decline?

    A: No oscillator, index, or indicator guarantees anything. That said, we can see that peaks in the McClellan, over approximately 1 standard deviation generally occur near tops. A second observation: a peak above +1 standard deviation tends to lead to a reversal to -1 standard deviation below the mean.

    So currently in the graph we can see we have a peak over +1stdev and no reversal below -1stdev. The reasonable assumption is that the market will continue lower until the McClellan is below -1 stdev.

    Themes: McClellan Oscillator Stocks: SPY
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