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By Lawrence G. McMillan

The recent sharp, 3-day decline in stocks produced very divergent readings in the breadth oscillators that we follow.  Such divergences  are rare – occurring about twice per year.  When they do occur, though, they are generally a good buy signal for both the short- and intermediate-term.  

In this article, we’ll examine these signals in some amount of detail, beginning with the definition and computation of both breadth oscillators.  There will also be some background on the parameters influencing this study – specifically, the determination of what differentials between the two actually represents an oversold condition and the eventual buy signal. 

Read the entire "An Infrequent Buy Signal" article (published 7/27/12) by subscribing toThe Option Strategist Newsletter.

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