It's tough to be an Legend in your own time -vbg-
here is some interesting stuff for you.....did you notice that the VIX
had it's lowest close of the year on Friday?
Peter Eliades' Stockmarket Cycles update for Friday, June 18, 1999.
The market is at or fast approaching what we believe will be a critical
juncture. Note that today the New York Composite Index still did not
surpass our guideline price of 637.80. The Dow, however, did surpass the
upper window of its projection but not by more than .2%. So far not
significant. There is much to discuss tonight, however.
The S&P Coppock daily equivalent closed at 45.50. The two benchmark
bottoms which define the ledge that is close to breaking below and mind
you, this is a two year support ledge. Those two defining points are 45.41
on November 13, 1998 and 45.33 on May 11 and 12 of 1997. Unless there is a
60 point S&P rally next week, it will almost surely break below the 45.41
reading. In our latest newsletter we showed the close comparison between
the Coppock daily Dow in July of 1998 and the Coppock daily S&P presently.
What we did not tell you was that the Dow daily had two benchmark figures
to break below in July of 1998 to confirm a breaking of the ledge. It broke
below the first number on July 13, 1998 and confirmed by breaking below the
second number on July 14, 1998. The surprise is as the Dow broke just below
the ledge on July 14, it rallied 1.6% to close to new highs that day, so an
upside price break-out was accompanied by a downside momentum break down.
Three market days later and 1% higher than the July 14 new high, the market
began its significant decline. We don't know if something similar will
happen here, but if a new high is seen in the next few days, it will most
likely be accompanied by new momentum lows as it was in July of 1998.
Another reason we could be in critical territory is that in both 1929
and 1987, the number of calendar days between the final price high,
September 3, 1929 and August 25, 1987 and the secondary price highs on
October 11, 1929 and October 2, 1987, was 38 calendar days. Counting out 38
calendar days from the May 13 high of this year takes you to Sunday, June
20, bounded by the nearest market days of today, June 18, and Monday, June
21. Mind you, there are several arguments against the highs having being
seen already. Two of them are, that we never got oversold enough to qualify
May 13 as an important top, at least not yet and time is running out or has
run out to do so and number 2, we have to stay alert to the 39 week cycle,
which even if it does prove to be a top rather than a bottom, would not be
due until at the earliest June 25. Based on that, we should either see a
decline into late June, early July for a cycle low, or if there is an
inversion, where it becomes a top rather than a bottom the market should
hold up until at least June 25 based on the cycle of the past several
years. As you can see the interpretations here are difficult. One clue
could be coming from the options based VIX volatility index which moves up
as market bottoms and declines as markets top. Today's VIX readings were
the lowest of the year, both on a closing and intra-day basis.
Mutual fund switchers, Rydex switchers are in Ursa. Fidelity Select
switcher are in cash. All mutual fund switchers call daily after 3:20 p.m.
ET and call each market evening.
Stock Index futures traders, there were no trades triggered today. On
Monday, sell short the September S&P at the opening with a stop at 1364.40.
There are no new projections on bonds or the XAU. Have a great weekend.
We'll talk to you on Monday.
|
