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 charts below are current through Friday's close.
Daily OEXA200R past 12 months
Monthly OEXA200R since April 2007
Interpretation:
The OEXA200R ended the week up 10 points at 63%, 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
The OEXA200R rebounded 10 points this week, up 7 the day after the Wisconsin election. But don't be fooled; we're still in "bear trap" territory. All three secondary indicators underpinning the OEXA200R remain weak, meaning it could suffer a sudden reversal at any time. Without the solid foundational support of two out of three secondary indicators it is unsafe to trade even if OEXA200R edges above the 65% line.
With Europe in shambles and a Grexit within sight it's just a matter of time before Mr. Bernanke announces another round of QE. No surprise there. The big unknown is whether it will be enough to counterbalance the Euro implosion's effect on the market. That's anyone's guess at the moment. And there's still the hanging question of how long Pres. Obama can keep a lid on an Israel - Iran conflict and the market chaos that will ensue. The long, hot summer of 2012 continues.
