What am I missing?
Gold. Nice bottoming formation in the XAU and a number of individual stocks, ABX and HM as well as others, are beginning to rise in a series of higher highs and higher lows. A pure technician would not care that these are gold stocks, only that the price pattern is bullish. Now the P&F Gold charts are not as bullish, but I have found that my normal bar chart patterns often lead P&F patterns, so we shall see.
As for other equities, I am troubled by the decline this week of the NYSE Advance-Decline line. It had been tracing
out a series of higher highs and higher lows from the March 14 and April 17 double bottom, but that pattern is now in jeopardy. The next few days will tell that tale. One caveat though: The A/D line has been falling since April of 1998 without overtly tempering the "bull market." Right? Not exactly. Looking at a monthly chart, the A/D line has been falling from at least February of 1987 (my A/D data only goes back to Jan '87). There was a counter-trend rally from December 1994 to April, 1998, but on the monthly A/D chart, this 3 year rally is dwarfed by the massive 13+ year decline. So my conclusion on the A/D line? Don't conclude much from it, it appears not to have much to do with making money in the market.
Sentiment. I agree with your assessment, bearish sentiment seems pervasive. I mean, come on, "I am troubled by the decline this week of the NYSE Advance-Decline line," what kind of crapola is that?
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