Stcgg,
There is a big divergence between the different indices.
The weakest index is IMO the Russel 2000.
It topped 4/98 and the rally from 10/98 to 7/99 looks like a big bear market rally (also showing a clear corrective ABC pattern). It should now start 3 of 3 of C, whereas 1 of C was from the July high to 8/10. 2 of C - a clear corrective to 9/10, and 1 of 3 from 9/10 to 9/23.
Next is the NYSE composite - From the October '98 low, it created an ending diagonal - 1 to 1/8, 2 to 2/9, 3 to 5/12, 4 to 5/26 and 5 to 7/16. On its way down from the high in July it already overlapped on its 7/98 high.
The NYA also broke its very strong rising trendline (touching 12/11, 2/9, 3/2, 5/26, 6/10 and 6/25). After breaking it very decisively on 7/29, it rose to meet the broken line from below on 8/25 and sold off from there.
Next is the Dow - It topped in August, broke its respective trendline on 9/20, and rose to meet it as a resistance last Friday and today.
The COMPX and esp. the NDX are the strongest. They are in a big rising wedge and testing its higher bound right now.
The SPX is a composition of the weak NYA and strong NDX, and therefore it is moving sideways since April, and waiting for either breaking the neckline or failing the big H&S it created in the last six months.
I belive that the next two days are down to the 1305-1310 area, but will need further weakness (under 1298) to believe in a longer term bear.
However if we drop to 1280 area again I strongly believe it will be in the purpose of breaking it, and the minimal target for the H&S is 1140.
ATG |
