From Hays last Friday AM.
If I am right, the next week will probably see a buying opportunity. It might take two weeks, I’m not sure, but we now are getting close. The repair to the Wall of Worry was the most important “missing link” to this short-term bottom, but the still neutral McClellan oscillator was also not quite right to fulfill the conditions that I would have expected for this expected juncture. Remember, the McClellan chart is updated every morning on our website haysmarketfocus.com. I would expect that the NASDAQ’s McClellan oscillator would drop at least to –150 before the bottom is made on this retesting of that previous low.
From EWI Friday Feb 16 update.
The [March S&P 500] gapped open to the downside, near Wednesday's lows. In quick order these lows were violated. Today's 1296.50 low in futures was just above the 1295 support we cited, the 78.6% retracement of the advance from the late December low. It remains an important level, because if violated, it means that prices are on their way below the December lows (1270 in futures, 1254.07 in cash). The wave labels within the decline from the January 31 high (1390 futures, 1383.37 in cash) are not clear. The decline continues in stair-step fashion, with down legs tracing out fives and up legs tracing out threes. As long as this signature remains in place, the trend is down. The clearest picture we see is the three-wave rally from late December to late January. This tells us in unmistakable terms that the main trend of the market remains lower. We fully expect this low to eventually be violated. Near term, as long as lower lows and lower highs is the order, we'll remain bearish. That means that prices cannot rally above Wednesday's highs [he prob. means Thursday's - ak], now key short-term resistance. These highs are 1335.90 in futures and 1331.29 in the cash. A push above these resistance levels would alter the pattern that has been in force for all of this month and indicates that a change in the short-term trend has occurred. |
