>>cannot find the time to organize anything substantiative to support a sudden market correction. <<
Well I'll take a crack at it. According to my charts at the MDA website, the AD should oply have a few days more to stay in a bullish mode before reversing downward, the Cumulative TRIN is nearing it's reversal point about the same time and should start to rise which pulls the market down. My DOW chart shows a pretty clear cut rounding top and most of the sector index charts are threatening to break through the bottoms of their upward forks which is no crisis but will move them downward.
The bullish signs still holding though are that the Banks sector indexes are showing that money is rotating in that direction and the TYX is dropping with the fork projecting 5.6% or so before it should bounce back up. Supporting the theory of the falling TYX is the impression on the Utility charts that they are breaking upwards strongly, very very strongly. This however is a mixed blessing since a move to the Bonds and Utilities could be seen as "flight to quality" and the sudden rise individend paying utilities was the warning I used last summer to see the drop possibly coming.
For a really bearish scenario that I am not calling but am keeping an eye on ... Note the left shoulder on the DOW from 3 March to 24 March, then the first half of the head forming as of now. This is way too early to say that is what is happening but if it did, completion would take us at least down to the 9K area. Like I said, not saying that will happen and a few of the leading indicator stocks I watch haven't shown a hard pull back yet so I am far from sounding any kind of alarm other than saying to be careful. Note how many failed rallies we have had withlower lows and lower highs also despite our "record closing DOW"
I will say one thing, we complained a few months ago that the MMs were advertising their moves and it was getting too simple. I will say that right now, they are being very tricky and are moving money around very quickly and discreetly. Note today how many DOW stocks were falling yet bounced up near the close to become the only gainers on the day. Sector rotation is also changing quickly. I have seen many false breakouts only to reverse a day or two later. Some of the traders that are a bit slow on the trigger have to be getting creamed right now. I know I almost bought one today but something just didn't feel right. It went from up 3% to down 3%. In options that is huge!!!
One other note, if you took IBM and HP out of the market today, the DOW would not have been up by my calculations. Two stocks does not a market make. OK I lied, last point to note - The XAL is nearing the apex of the wedge (see my chart) and should get forced out any day now Judging from the over bought sell signal I have on the trannies, the fact that oil is up, American Airlines is being hit with unfair practice litigation and the investigation will spread to other airlines etc ... I doubt it will be an upwards break out.
EDIT - Lied again, how long is my nose now? A point to ponder as I read Les' post recapping this morning's data. If there was a slow down in purchases last month, how come consumer credit was the highest in history. Are they trading stocks using thier credit cards ????????????
Good Luck,
Lee |
