By Lawrence G. McMillan
A short-term buy signal was triggered at Friday’s close: the “oscillator differential” buy signal. This occurs when the two breadth oscillators, which had spread far apart in recent weeks, come back within 200 points of each other. Historically, this has been a reliable short-term, one-week buy signal.
For those unfamiliar with this indicator, it’s based on the divergence and convergence of two key market breadth oscillators—the NYSE-based oscillator and the “stocks only” oscillator. These signals have provided strong short-term trading opportunities in the past.
If you want to dive deeper into how these signals work and their historical effectiveness, we have an in-depth article in our archives: Breadth Oscillator Differential Signals. Subscribers to The Option Strategist Newsletter can access the full article here.
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