"Hefty Correction"
I got a bit of email and a couple of posts wondering what insanity
possessed me to make the statement about a 'hefty correction' looming.
So, I figured I would post some my reasoning. We need to take a longer look.
I have three custom indicators that look at larger market movements and
conditions. Mathematically it is best described as a Stochastic/Exp MA/TRIX
crossover. I won't discuss it other than to say that it now is warning of a
poteentially major market reversal. The crossover occurred today
for the DJIA (Actual Hi/Low), the S&P 2000, and the DJIA itself. Additionally,
it is approaching crossover for the NASDAQ (NCM) and Commodity Research Bureau
Index (CRY). The last two times this occurred was between 10/13-10/27 (just
prior to th October tanking), and again between 1/3-1/7 this year. Also, the six
Market leading mutual funds I follow (but don't own), all leveled stochastically
for the last 10 days and the Oil Index improved along with the XAU Gold/Silver
Index. Also, the DJ Utilities and Transportations has similar stabilization.
The latter indices stabilization implies a shift in money and attention to
less volatile equities, and the accumulation in the Bond market I see as
confirmation.
Now, the market has been moving bullishly for some time, but for the most
part all the Most Actives are the industry leaders in their sectors, although
they have not made substantial $ gains. Also, the Most Up lists don't usually show
anything remotely recognizeable other than some obvious news/story stocks.
The same is true for Most Down lists. The market is quiet, and money is shifting
but its not going anywhere encouraging. That implies a bearish sentiment so I am
quietly exiting my speculative positions and watching attentively.
But hey, I'm wrong a lot. It may not happen for a week if at all.
Although, I'd rather be wrong and out of the market than right and broke.
SYMBOL CLOSE CHANGE CHANGE % NAME
NCM 1,751.760 23.630 1.37% NASDAQ Composite Index
TRN 3,497.510 45.090 1.31% Dow Jones Transportation Avg
RUT 456.290 2.300 0.51% Russell 2000 Stock Index
SPX 1,038.140 3.930 0.38% S&P 500 Index
DJIA 8,410.200 -3.740 (0.04%) DJ Industrial Avg (Actual H/L)
IND 8,410.200 -3.740 (0.04%) Dow Jones Industrial Average
UTL 268.800 -1.230 (0.46%) Dow Jones Utilities Index
CRY 226.100 -2.340 (1.02%) Commodity Research Bureau Indx
XAU 69.600 -1.370 (1.93%) PHLX Gold/Silver Index
XOI 442.800 -10.210 (2.25%) AMEX Oil Index
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