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Pastimes : The Philosophical Porch -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (4155)	6/10/2009 9:30:53 AM
From: Rarebird	Respond to of 26251

Transcendental Market Fragments: The Market: The oversold bounce in the Dollar Index retraced yesterday. I like to see bullish divergence and I have not gotten that yet. Normally, when the dollar is weak, stocks are strong. But, Tuesday's weakness in the dollar did not produce much enthusiasm among the buyers of equities. That's a bearish sign, but the market may not have seen the final high just yet in equities. S&P Midcap 400: I've been watching the MidCap Index closely, (along with the Nasdaq-100), for signs of weakness. These are both leading indices and I do not have confirmation of tops in either one of them just yet. The MidCap Index may have made its wave iv low, but has yet to make a higher high and still has room to do so (around 618-626) before invalidating the diagonal triangle pattern I've been following. This pattern began in mid-May. The index closed at 598.17 and is now in a period of seasonal weakness for the broad market, which it represents. It has risen 200 points since the early March low. If I make the generous assumption that the Midcaps are in a new cyclical bull market, a 50% retracement (par for the bull market course) would shave 100 points off the index if it started here. Clearly, the risks are on the downside. Hourly June 2009 E-Mini Nasdaq 100: It's very clear that the rally is not healthy with negative money flow into this high. Quarter-Hourly Dow Industrials: The Dow is not exhibiting negative money flow yet, so that's a point in the favor of the argument that the high isn't yet in. The market is likely waiting for some catalyst to trigger the next big move. If the narrow trading range in the Dow is indicative, it's warning that the market could get a rally out of the range which exhausts the trend and leads to a reversal to the downside. S&P 500: The SPX has been holding in a narrow trading range just like the Dow and if the pattern is wave 4 of a diagonal triangle like the MidCaps, one last burst of strength, may be on tap.