Jim,
I see this market correction has just about run its course. My analysis is a little rough, but here it goes anyway.
1. The Treasury Bonds have rallied, breaking out on Tuesday from nearly six weeks of being stuck in the mud. Yields are now 6.34 for the 30 year bond.
2. I track mortgage loan interest rates for the real estate market and my rate watch program now has 30 year fixed rate @ 0 points, 7.25% interest, the lowest I've seen for a long time.
3.The ^RUT has been going up the past five weeks,
4.The ^IXIC has now logged in a three week uptrend.
5. On Tuesday of last week when the bond was rallying, both ^SPX and ^OEX broke out of their downtrends and are now heading north.
6. Both ^SOXX and ^DJI went up last week. If ^SOXX closes above 395 and ^DJI closes above 8000 by Thrusday of this week, then all eight of the indicators I track will be pointing up. Six are aready heading north and if the other two fall in line, then I will be willing to say that the six week party is over for the Bears. They got an overall 8.4% correction out of the market, and that may be all the market is willing to give at this point.
Some stocks including DELL and CPQ have already broken out of the pack. As I am writing, DELL has positioned itself around 96 1/2, CPQ at 78 1/2, and the ^DJI right below 8000. It seems as if both stocks are waiting for the big boy to make the first move, then they will follow. We may trade sideways until we know for sure if AG is cool next Tuesday. If he gives us the green light, then both DELL and CPQ rockets have clearance for blast off.
LET THE RACE BEGIN!! |
