INDEX UPDATE
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The market internals are still not getting stronger, and could be considered weakening on a relative basis.
So the question is how much longer can the market continue to runup.
The weak/mediocre market internals are limiting the runup for now, and if they were stronger the DOW would have already set new highs.
The main factors keeping this market up is liquidity and interest rates(good economy/low inflation/etc). As I posted yesterday, from AMG data, the money inflows for the last week jumped up substantially but the weekly average is about 20% below last years and the cost of the SPX is 20-30% higher than last year(same time period).
I am concluding that the key to this summer rally is liqidity, and I believe that we may have seen a hint yesterday of what may happen soon.
Yesterday, RUSSIA and JAPAN came out with good news, at least their stock markets thought so since they were both up nicely. At the same time our bond market dropped significantly, keeping in mind that on the surface many would feel that the good news in RUSSIA & JAPAN should have had a positive effect on our market.
Just heard that the economic news this morning came in at a level that should be a possitive for the bond market. The key now is how does the bond market react - will it go up which on the surface it should. Or will it stay flat or dip since money is being pulled out and reinvested in foreign markets.
I just checked and the interest rates are down .005% which is nothing. Subjectively with the good economic numbers, feel it should be down more. So was yesterday a hint that money is starting to be pulled out of our markets and possibly shifting back to ASIA and other down markets.
I am not a fundamentalist, so would like to hear comments concerning this assumption.
From what I have read from other technical analyst it appears the the time frame for a top should be from next week to August. Jerry Favors indicated a top on JULY 24 per an analysis that was based on astrology and he also indicated that per the Lindsey analysis(non-astrological) the top to occur mid August.
I do believe that the top is very close and I am leaning more towards next week. If not a major top, at least a short-term top. As for a short-term top it could happen as early as today but I would bet the ranch on it with all this HELIUM or HYDROGEN.
Seeya |
