Right now they are paling, but they still state a bullish case if we hold 8650 on the DOW and 310 on the SOX. They do not like the breadth (the Naz goes against the Generals, but the breadth stinks, and both the NYSE and the NAZ register almost 100 new lows and a ratio of .3 or so in the NH/(NH+NL), typically a turn around on the way up and on the way down. Furthermore, we had a tick at -1000 or worst almost every day last week, and to add insult on injury, these reading where not extreme, just indicating a change of "mood" from bullish to bearish, but no extreme bearishness. Add to that the paucity of puts buying in the OEX and that spells troubles. The only bullish point is the seasonal strength to be expected during the last week in Dec and the first week in Jan. Because of the rapid advance until about two weeks ago, I am not sure we will have such seasonal strength, but we may end up with a rel;atively flat market until the end of the first week in Jan. Then the drama evolves, if we correct in the next three weeks some of the negative internal momentum readings, we could have a very nice rally (The turnips had a target of about 2150 on the NAZ and about 9400 to 9450 on the DOW). If the internal momentum indicators do not improve, I am afraid that this year's Summer/Autumn debacle could be viewed as a party as compared to what we might have next year, but the visibility is still poor past January.
Zeev |
