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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Peach who wrote (51336)	3/21/2004 11:41:20 PM
From: PuddleGlum	Read Replies (3) \| Respond to of 57110

Just in case anyone's interested, here are my Market Direction Thoughts $COMPQ has made two lower highs and two lower lows. It is presently at a level from which it should (must?) bounce. The lower tops, with respect to the end of January, in mid-February and in early March were confirmed by weakening bull strength. Weekly oscillator shows oversold, but just turning up. Resistance is at 2000, and again around 2070. There are a few levels of weak support down to 1850, with next support at 1775. $COMPQ is on a high pole warning: stockcharts.com[PA][D][F1!3!1.5!!2!20]&pref=G $SPX has a triple top at 1155-1160, followed by a lower bottom. A previous bottom occurred at 1120-1125, but the last 7 days of trading have seen that level become resistance. The low on 2/24 was breached on 3/11 with bearish confirmation. The tops at the end of January, mid-February, and in early March showed bearish divergence with respect to bull strength. Weekly oscillator is mid-range and declining. Support can be expected at 1060 and 1030. P&F chart looks strong: stockcharts.com[PA][D][F1!3!1.5!!2!20]&pref=G General: Bull strength during the early March peak was exceeded by bear strength last week. This leans in favor of continued market weakness. The high fear-factor measurements last week can often mark market bottoms, but they frequently hunt in pairs and the previous such occurrence was 3/12/03, so we need another one within the next few weeks or months in order to wash out all weak hands. P&F BP’s BPINDU is within a hair of reversing down, but remains at very high levels: stockcharts.com[PA][D][F1!3!1.5!!2!20]&pref=G VIX - Daily: Stochastic-like oscillator looks over-extended, meaning the market looks ripe for a move up. March 10 and 11 were high “fear-factor” days, meaning that a bounce is in order. A home-brewed oscillator shows likely short term (several days) upside, but indicates that the market is approaching over-bought. - Weekly: Stochastic-like oscillator looks like we’re having a bull market dip. Weekly view of home-brewed oscillator shows that a significant downturn has begun. The notes above lean in favor of continued decline, but I don’t see this analysis as clear-cut. By some measures the decline began in late January and is still in force until the $COMPQ takes out some levels of resistance, or the $SPX takes out the triple top. If one takes the position that the decline in fact began in January, then we haven’t yet, to my satisfaction, seen a bottom. Some of the P&F indicators haven‘t confirmed a top, but I am inclined to believe that the $SPX triple top on declining bull strength is sufficient to mark the end of the bull. The market needs to rise within the next few days, or else we’ll be rolling off the high shelf that we’re on and falling to a new lower level. I am uncomfortable with the ambiguity of these technical indicators, but nevertheless take a slightly bearish view of matters. The Taiwan election will be seen as sufficient explanation for any decline over the next few days, but it will merely be a smoke screen. High oil prices are taking their toll on world economies, but they are still high, being an advertisement of some underlying strength. My own commute has worsened considerably in recent weeks, leading me to believe that Silicon Valley at least is on the mend with respect to employment. Now, you may ask, why type all of those keystrokes without telling anybody what I really think is going on? Answer: I'm practicing. Ask Libby what it is that I might be practicing. :-)