MARKET INDEX TECHNICAL ANALYSIS - MITA Message Board

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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA

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To: fut_trade who wrote (1403)	11/19/1999 6:24:00 PM
From: pater tenebrarum	Read Replies (3) of 19219

Peter, i would have to agree with J.T. that one shouldn't turn one's back on the a/d line...<g> i regard the rally to the NH/NL peaks and the a/d line peaks (97/98) as part of wave 3 of this bull market. the current rally is in all likelihood part of the final fifth wave, since neither a/d nor NH/NL are confirming it. the recent broadening is imo more of a factor of the end of tax-loss selling and the massive Y2K related liquidity injections by the Fed. note that the Fed began with it's repo operations related to Y2K on 10/20, within one day of the recent market bottom. the Russel is also partly driven by big advances in it's more speculative, internet related components. on the NYSE a full 65% of all listed stocks remain under their 200-dma in spite of the new highs in the SPX and the a/d line has once again begun to diverge from the market's direction and is currently falling. another sign that we are probably in a late stage of this bull market is the extreme speculation in certain stocks. it is in no way different from past bubbles with the sole exception of being more intense than anything seen before. invariably this kind of behavior coupled with near parabolic high volume advances in the most speculative indices (Nasdaq and R2K) are hallmarks of a bull at a late stage. however, it is very difficult to really pick the top...it could be as much as half a year away, or we may have seen it today. but in 1997, with all the internal market indicators confirming the rally, it was at least possible to say that a top was still quite a bit away. not anymore. the day of the final top is definitely drawing nearer. here are some interesting statistics supporting the 'late stage' argument (ignore the polemic...just take in the statistical facts) cross-currents.net regards, hb

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