Critical Mass

July 5, 2021

In this article, we’ll tackle these urgent questions:

  1. How does the McClellan Oscillator vs. SPX identify critical mass

  2. What are the unmistakable warnings each time we get there?

  3. Are there additional warnings in July 2021?

  4. And the all-important question: Are we there yet?

McClellan Oscillator Warns of critical mass in the following manner:

  • SPX closes at ATH

  • McClellan Oscillator Simultaneously Closes Below Zero

  • 13 Day MA of McO drops below the 34 DMA

January 2018                                                                                   February 2020:

Now July 2021:

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The Unmistakable Warnings are identified via Negative Divergences by the whole array.

January 2018                                                                     February 2020

Now July 2021:

Note regarding the NYSE ADL-this registered a negative divergence on six of the last eight sessions, each an ATH SPX.

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The Following are additional top warnings right here, right now.

  • NASDAQ Summation spent part of March and all of April and May 2021, Below Zero

  • NASDAQ McO is also now Below Zero and falling fast. (added to 2021 array above, -10.8)

The CBOE SKEW has not just reached record levels; It has in June 2021…:

  • Closed above 160 for the first time in history

  • closed above 160 for the only 15 TIMES in all of recorded history

  • set four new ATH Records

  • closed above 170 for the only time in history

  • produced its highest statistical probability of a 30-day> 2-sigma decline EVER

VIX on Friday surged from its lows despite a 30 point SPX advance to an ATH

{Added at 11:45 AM, July 7, 2021:}

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Finally, as to the question: “Are We There Yet?”

This much we know:

The infrastructure of this rally is rotten. The steel supports are rusted away; there are serious cracks in the concrete. The warnings are screaming out. As the rally tries to set new records in all sorts of categories and has so far managed to do so- we know what’s ultimately coming in days ahead.

When it does, it will happen quickly, and the destruction will be dramatic- just as we saw in February 2018 and in February 2020.

Will that be tomorrow? Will it be the following day or the one after that? Or later yet?

We cannot know with certainty which day or which hour the collapse begins. But sadly, there will be far too many victims. We desperately wish that those in its pathway were seeing and heeding these warnings. They are not.

But we, at least, will not be among them. And we stand ready to act just as soon as the rout begins.

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*The Stock Market Trading Secrets of the Late Jesse Livermore, 1965 by Carlo Maria Flumiani

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