To: IceShark who wrote (20220 ) 2/17/1999 11:54:00 PM From: John Pitera Read Replies (2) | Respond to
Peter Eliades' Stockmarket Cycles update for Wednesday, February 17, 1999. Tomorrow is an important market day for us. We have to tell you , that as of today, it is not a strong argument for the bearish case to see the daily advance-decline line almost falling apart, very close to the October lows of last year, but the Dow and the S&P continuing to stay above their January lows. While we are on that subject, we should point out a interpretation of the February 5 newsletter. In the final few lines on page we write about the chart shown on that page which points to the highest high, and the lowest low in January. It has been our contention that a convincing close above or below the January high or low respectively, would be strong evidence of a top or bottom in that time period. In the newsletter we mention the low of 9063.26 on January 25, and the high of January 8, which we did not note specifically, but was 9759.44 on a theoretical intra-day basis. The numbers that we did specifically mention were numbers that were 3% above the January highs and 3% below the January lows or 9933 and 8791. We used a 3% break because that is generally the accepted technical number for a convincing break. Some subscribers were confused by the 9933 and 8791 numbers as they related to the chart. Perhaps the most important technical observation of the past several days is the break by both the Value Line Arithmetic Cash Index and the Wilshire small cap index below their declining 200 day moving averages. It is the first time since their April of '98 highs, that these indices have moved below a declining 200 day moving average. When they moved below their 200 day moving averages in July of 1998, the 200 day was just flattening out from a strong upward move on both the Value Line and the Wilshire. Now that the 200 day moving average is in a definite down trend, and the close back below them now should be a distinct technical negative for the market.
