Market is Bull till mid July 2010

I just read an article about forecasting that market will rally into July 2010. It’s quite interesting method of identifying bull or bear . The author is using “NYSE summation index”  (It’s a momentum indicator with an excellent track record of identifying short-term turning points in the stock market.) Author is using its MACD chart to identify bull and bear.

The indicator generates “buy” signals when the short-term moving average convergence divergence (MACD) – the black line on the bottom graph – crosses up and over the longer-term MACD line – the red line. Buy signals are marked by the green circles on the chart.

“Sell” signals occur when the short-term MACD line curls down and crosses below the long-term line. Sell signals are marked by the red circles.

And here are the charts of NYSE summation index ($NYSI) and S&P 500 side by side to compare the SELL (red) or BUY alert (green) of NYSE index with S&P 500 charts. It matches almost perfectly.

The recent BUY signal started on Jun 9th (where the Black MACD line crosses up red line) and the author expects the current short term bull trend will continue till mid July 2010.

By the way, you can access these graphs directly from stockcharts.com

His argument is pretty much convincing. And if you want to buy stocks,  you might want to consider DIA ($104.49 0.13 +0.12%) or SPY ($111.73 0.13 +0.12%). They are ETF that you can buy or sell DOW Jones or S&P 500 index just like regular stock.

Hold Your Nose and Buy

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