INDEX UPDATE
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My SHORT-TERM CYCLE anaysis shows a slight shortening in this upswing. Previously I stated that this upswing would last 4-6 days, but now I am reducing it to 3-5 days; therefore this specific short-term top/decline should arrive WED/THU/FRI of next week. The previous downswing lasted 7 days starting on NOV 24 - this downswing was faster and stronger than I had originally expected. Originally I did expect a 5% pullback in DEC, based on the NEW HIGH/NEW LOW premise, and we got it in the DOW - but I felt that it should have taken 2 mini cycles to achieve that, but we got it in one cycle and only in 7 days.
Here are my SHORT-TERM READINGS(OVERSOLD IS <20, OVERBOUGHT is >80, CLASS SELLS are >85, but also subject to other criteria/checks)
DOW = 30
SPX = 51
OEX = 43
NAZ = 69
NDX = 80
RUT = 50
BKX = 54
drg = 71
MU = 90
DELL = 72
AMAT = 81
After Fridays performance, the overall market is basicly in the mid-range with some divergence. Please keep in mind, as I have always stated - whenever they are in the mid-range, it can go either way and that is when they are most susceptible to news/fundamental changes and that SIGNIFICANT NEWS/FUNDAMENTALS OVER-RIDE SHORT-TERM TECHNICALS.
I am still suspecting a STAIR STEP which would take the form of a ZIG-ZAG(up/down pattern). If the ZIG-ZAG occurs then this immediate short-term TOP would arrive closer to FRI and could extend 1-2 days into the following week. If there is no ZIG-ZAG, then this top could arrive closer to WED.
If this specific upswing does not meet or exceed 9380, then it would produce the first LOWER HIGH since the rally started. Such would imply that the following cycle could produce a LOWER LOW, but of course, requires further confirmation. Frankly stated, it would not be a healthy signal.
Applying the ANDREW'S PITCHFORK to the 15 and 30 minute charts, the UPPER TRENDLINE of the PITCHFORK targets slightly above 9100 for next week. Also there is strong resistance around the 9150 range.
The DOW was up strong, 134 points, on Friday and the market internals did improve some, but not substantially. As Jim Strauss observed the NEW LOWs are starting to increase even though the NEW HIGHs got above 100 again. I checked the last 10 years(bull run period) on the NEW HIGHs/NEW LOWs chart: decisionpoint.com
In the strong majority of cases, whenever the NEW LOWs surpassed 50, regardless of how high the NEW HIGHs were. the market was either flat or dipped. And if the NEW HIGHS got greater, the market did worse. In light of that, I am making the conclusion that if the the NEW LOWs do not improve quickly and significantly below 50, weakness in the market should continue. I belive the Jim Strauss, previously has brought up the figure of staying below 40, as safe for the market - Jim, correct me if Im wrong about that.
For a longer-term view, the last 3 years the DOW has had significant bottoms in OCT, and rebounded in NOV and declined into DEC/JAN (there are partial overlaps in the months). Then there was a strong 1st quarter rally. The question is whether we will get that strong 1st quarter rally this time. Im quoting a passage from an article from DECISIONPOINT which was mentioned previously:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
I periodically do a market forecast chart and post it to the Chart Spotlite
area of the web site. On each of these charts I highlight the 9-Month Cycle,
and you can clearly see that it has been a reliable market forecasting tool
since 1994. In fact, all the 9-Month Cycles since 1994 have been bull cycles,
meaning that they top late in the cycle, perhaps in month six, seven, or
eight. In a bear market, the reverse occurs and the cycle can possibly top in
month two, three, or four.
The last 9-Month Cycle bottomed on October 8, and now eight weeks later we
have retraced the entire decline on the S&P 500 and have hit new, all-time
highs -- quite an unusual situation. It is also a situation that has us double
topping only two months into the current 9-Month Cycle, and we have to wonder
if maybe the bears are right this time.
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I strongly believe it is time to show strong caution.
Seeya |
