Don, good points on market internals and new highs and new lows.
The divergences in this market are staggering...as pointed out by John Murphy
1997 mkt high 500 new highs
1998 April high 300 new highs
1999 Jan high 100 new highs
Bulls up to 61.2 higher than last week (highest since Jan 1987)
Bears down to 25.9 lower than last week
Peter E has some great observations on the the weak breath and technical nature of the market and he has important price parameters that will signal a major move out of this trading range
9053.26---below breakdown of range
9650--above breakout to 10K and more likely 10400- 11200
Peter Eliades' Stockmarket Cycles update for Wednesday, February 10, 1999. This is
truly a unique market in terms of the technical action. A few times over the past six
weeks, the S&P 500 Index has closed at new all time highs accompanied by our own
CI-NCI ratio readings of below .96. We have pointed out that, that had literally not
happened since 1929 in this whole century --in other words, to see a new all time S&P
high accompanied by such horrible breadth readings. We did not tell you how horrible
those breadth readings were however. The January 29 all time high on the S&P was
accompanied by a CI-NCI reading (for those of you who are unfamiliar with that
terminology, see your introductory material that comes along with the subscription) the
CI-NCI reading that day was .957, just slightly higher than today's .952 reading. If you
are curious as to when the last time the ratio was as low as .952, the answer is
December 21, 1994 at that low just before this last phase of the bull market exploded
to the upside in a series of new highs that lasted at least into January of this year on the
S&P Cash. That is over four years later. In fact, the only readings lower than today's
.952 reading over the past eight years, was November-December of 1994, when that
bottom was being formed and January of 1991, when that important low was being
formed. The fact that some indices are making new highs with these readings being in
oversold condition is truly remarkable, but the fact that the only other time this century
has the coincidence occurred, was 1929, is quite ominous. The one part of the '29
analogy that we cannot do away with yet, is whether there remains one final move to the
upside which could possibly last as long as several weeks. That is why we are watching
the parameters of the January 8 high on the Dow and the January 25 low. Our 108-109
week cycle tells us that the time window in January is important enough to tell us
whether breaking the high or the low of that month would mean that we saw an
important cycle top or an important cycle bottom. The low that we are watching was
9063.26 on January 26 and the high that we are watching, of course is around 9650 or
so on the Dow.
Mutual fund switchers, Rydex switchers are in the Ursa fund. Fidelity Select switchers
are in cash. All mutual fund switchers should call daily after 3:20 p.m. ET and each
market evening.
Stock Index futures traders, you are short the March S&P. Place your initial stops at
1243.00. Attempt to cover your short sale at 1213.50. If you are stopped out, or if you
do cover at 1213.50, you may reshort on any move below 1209.80 with a stop at
1215.90.
The March bonds appear to be one or two down days away from giving significantly
lower projections down to around 114, but that has not occurred as yet. No new
projections on the XAU or gold. Have a great day. We'll talk to you tomorrow. |
