Oct 11, 2015 Weekend Market Comments

I have noticed all the publicity and controversy about the Zweig Breadth Thrust. But don't confuse that with the McClellan Summation Index. The SI only exhibits a strong uptrend when the McClellan Oscillator stays positive, and preferably at or above 30, for a sustained period of time. And that is hard to do because, by it's construction, the McOs loses points easily when it is at a high level. The McClellan Oscillator, having risen to a high of 95.5 on Thurs, Oct 8, declined to 88.73 on Friday even though the A-D line posted a +419. The Summation Index has risen to it’s highest point since early June, 2015. The ZBT can just burn out like a shooting star and fail to sustain it's upward momentum. That is why I have said to watch the SI to see if it enters a real medium-term uptrend.
Also significant was the strength of the DJ Transports Friday and for the past week as a whole, The weekly gain of The DJT was 4.82%. The SPX has cleared it's 50-day MA convincingly, but the small and mid-cap indexes, especially the growth indexes, have not done so.

http://stockcharts.com/freecharts/gallery.html?$TRAN
http://stockcharts.com/h-sc/ui?s=$NYA&p=D&yr=3&mn=0&dy=0&id=p83733137120