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Strategies & Market Trends : Group Theories
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To: macavity who started this subject1/14/2002 2:04:13 AM
From: macavity  Read Replies (1) of 1017
 
"Whither O Market"

Well if the trend is meant to be your friend, he has been away for a while.
This week may or may not provide some idea of where this market is going.

For the $SPX my Daily and Weekly TrendStrengths are negligible, this suggests that we are going nowhere fast.
On monthly charts the TrendStrength is definitely bearish.
With bearish divergence in 5W ROC and with 13W stochastic overbought then the risk-reward is for the shorts.
I have no idea if we are to go down or how far we may go, all that I know is that sentiment is hoofingly bullish.

My long-term concern is for the financial sector.
They have been the outperformer in monthly charts and at this point have neutral TrendStrengths reading on Monthly, Weekly, and Daily Charts. They have been in one long multi-year sideways motion. From what little I have learnt from looking at sectors, during a move the outperformers and also the 'blue-chips' are the first to rally and the last to fall. The underperformers and also the speculative trash are the last to rally (but more explosive) and the first to fall.
If one looks at this bull run then most sectors have failed trendline support from 1995/4 and 1991/0 (where I have data) the $SPX and $INDU have tested trendline support from 1982/1. The financials are effectively still intact from 1995/4 and 1991/0.
With all this talk about credit quality, defaults etc. there had better not be any financial blow-ups or failures. If the financials go then the market will need serious help. How these behave over the coming months and quarters will be a key to determining the long-term (1-2yr) direction of the market.

-macavity
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