Pull the trigger with confidence.

The daily A-D Line for high yield corporate bonds peaked back on Feb. 19, 2026, and has been in a downtrend since then.  This is bad news for the stock market.

FINRA divides corporate bonds into "investment grade" and "high yield" categories, based on the agency ratings of each bond issuance.  The investment grade bonds tend to trade more like Treasury Bonds, while the high yield bonds trade more like the stock market.  This is important because the high yield bonds are considered low... Read More

Economists are scratching their heads about the latest Employment Situation Report just out on August 7.  Unemployment fell from 4.2% to 4.1%, but total nonfarm payrolls actually shrank by 23,000 jobs.  The head scratching is not just about how those two numbers can be in the same month's jobs report, but also about what the Fed officials are going to think about it. 

Like most economists, the ones at the Federal Reserve seem to think that better jobs data means more inflation, and thus... Read More

The VIX Index is telling us that there are problems in the stock market.  To read that message, one must look at more than just the VIX's numerical value.

Years ago I did some tinkering with using Bollinger Bands on the VIX, and naturally started with the default parameters that almost everyone uses, which are a 20-day lookback period, and bands set 2 standard deviations above and below the 20-day moving average.  These settings are known by chartists as "20-2".  I started tinkering because... Read More

This week's chart is one that I show in almost every issue of our twice month McClellan Market Report.  It shows how the movements of gold prices tend to get echoed again (imperfectly) 20-1/2 months later in the movements of long term interest rates.

The Treasury Yield Index represents the current yield to maturity on whichever is the most recently issued 30-year Treasury bond series.  I could substitute the 20-year yield in this chart, and it would look similar.  The key point is that... Read More

The Ratio-Adjusted Summation Index (RASI) for NYSE A-D got up to +471 on May 8, 2026 and then turned down.  Failing to get up above about the +500 level is a sign that a rebound does not have enough energy to achieve "escape velocity", and it invites the market to go back and at least retest the last price low.

We have not gotten that outcome this time, at least not yet.  And the RASI is still below +500, now making a divergent lower high at +366 (for the moment), which disagrees with the... Read More

I wrote last week about how the very quiet breadth data were producing a low reading on the Fosback Absolute Breadth Indicator.  That low reading is consistent with a topping condition for prices.

The same message appears in a different way in this week's chart.  The NYSE's McClellan A-D Oscillator has been hanging around very close to the zero level, producing the lowest reading in years for its 15-day range.  This too is consistent with a topping condition for prices, although this... Read More

Years ago, analyst Norman Fosback hatched the idea of looking at the absolute value of the daily breadth (A-D) numbers.  He discarded the direction, i.e. whether it was positive or negative, to just look at how big the numbers were in recent days.  That is what this week's chart shows, employing a 21-day simple moving average for smoothing the data.

The principle behind this is that at market bottoms, things get loud and hectic, both upward and downward.  So high readings for absolute... Read More

When oil prices turned upward from their January 2026 low, that upturn was roughly on schedule.  But the magnitude of the up move we have seen was overdone because of the shutdown of shipping out of the Persian Gulf.  Oil prices are normalizing now, but the uptrend should resume.

I say all of this because of the longstanding leading indication relationship gold prices have with oil prices.  In this week's chart, the plot of gold prices is shifted forward by just under 20 months to reveal... Read More