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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: P.Prazeres who wrote (18277)	5/10/1998 9:39:00 AM
From: donald sew	Respond to of 94695

Paulo, >>> which indeces are diverging??? am I missing something? They've all seem to have put in some sort of top in the past few weeks (short or long term is the real question). <<<< A simple, although not complete way to identify trends, is to look for higher highs and higher lows for uptrends and lower highs and lower lows for downtrends. Basically for the major indexes the trend is still higher with higher lows; however some important indexes like the XAL, TRANSPORTS, BANKS, DRUGS, PHONE, RETAIL are starting to show lower lows and lower highs and of course some more pronounced than others. This does not mean that DOW, SPX, NDX or other indexes cannot set new highs, but if such action continues it will limit the upside. If once looks at the short/mid -term trends (5-30days) one can notice that the trend channels are slanted to the downside. If one use a much longer time-frame of lets say 2-3 months, such could argue and discount such totally. I am not saying that this is conclusive: However I am taking it as a early warning. So you had the DOW set a new high recently, while other smaller indexes were setting lower lows - theres the divergence. However, although these indexes are smaller they are still important indexes. By the time everyone agrees that the trend has changed to the downside, the DOW would probably have to drop 2000 points, and then there will be those who were able to identify the top with the early warning signals. Again, I am not saying it is conclusive, just that these are warning signals which should not be discounted. Seeya