The most important thing the summation is showing now is that we have definitely entered the 4 year cyclical correction phase of the market.
In other words, this is not a typical correction within a bull market,
like 96,97, or early 98.
This can usually be seen by the fact that the summation cracks the
+/- zero line. Take a look at the 84,87,90,94 four year cyclical corrections.
It is very unusual that during this last 4 year bull cycle these corrections within the bull cycle resulted in summation levels below zero, in the -750 range or whatever, yet were only corrections that were still within a bull cycle phase. This probably reflected the
nifty fiftyness of this cycle. This top heavyness may or may not also indicate a more serious correction - time will tell.
Since we took out the summation lows of 96,97,and early 98, we have "slipped" into a bear market. (I call the 4 year cycle corrections bear markets, whether they result in minor or major price corrections,simply because they ain't going up.)
Slipping into a bear market is usually a different phenomenon (weaker
correction) from a triple declining summation peak bear market warning, where the declining peaks can be connected in a symetrical fashion; at the end of 83-84 you had a sort of jagged declining summation, and the decline was rather tepid.
However, I think sheer prudence dictates recognizing the possibility that the 55 day rule may (or may not) apply here, in spite of the above. Any possible upside will be limited, because of the crack in the summation. And who knows what the possible downside may be?
However, since the NYSE % over 200 day MA is down to 20%, I would have to think we are getting close to the bottom. But I am going to wait
and let the market tell us where it wants to stop.
Vitas
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