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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Logain Ablar who wrote (5399)	1/7/2002 2:56:11 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

Hi Tim, Ed Yardeni's stock cycles report is very good, no question. If you take a look at these 5 weekly charts, you'll see that the the RSI on the DJIA, SPX, NASD etc reached lows in Sept that were similar to those seen at some significant intermediate term lows in years past. Such as Oct 1987, The 1991 Gulf war low. 1994, 1998 etc. marketlogic.netfirms.com marketlogic.netfirms.com marketlogic.netfirms.com marketlogic.netfirms.com marketlogic.netfirms.com My overall problem is the moon shot the techs have had since then. As much as I expect a pull back from an underlying TA perspective there are some pretty impressive looking charts out there indicating we go higher not lower from here. I understand exactly what you mean. There are many people who are not as long as they'd like to be and also many who've been shorting for the past 6 or 8 weeks. When you look at the PE ratio's etc, many stocks have priced in a full blown recovery and a lot more than that in many cases. The Market is having a doppler effect of the Big bull market of the late 1990's, we had waves that increased in amplitude on the way to March 2000 and we've been seeing the waves that look and sound different on the right side of the Pattern. Just like a train horn sounds one way as the train approaches the observer and sounds different but somewhat similar after the train passes by the observer. I continue to be impressed with the performance of the XBD brokerage index and the BKX bank index. They have lead nicely, especially the XBD. The SPX is now above it's 200 dma and we'll need to see it go back under the 200 dma and stay there for 3 days or so to signal a downtrend developing in the averages. The SPX is only a few points above it's 200 dma, so The market will regroup and rally or we'll know that it's breaking down. It would be typical for the market to sell off for a day and a half or two days, and have the SPX looks like it's going to stay below it's 200 dma, and accelerate to the downside but then to have it start to rally, for another few weeks. A minxy Market! John