To: Lucretius who wrote (20980 ) 2/23/1999 12:41:00 AM From: John Pitera Respond to
Peter Eliades' Stockmarket Cycles update for Monday, February 22, 1999. This is not exactly what we expected to see today. On the other hand, it could end up being just what the doctor ordered to turn this market down. Remember Friday was due to be a 28 day market day turning point pattern plus or minus one day. On rare occasions it has even been plus or minus two days. That means one more day of leeway for new highs. If a new high is made beyond tomorrow, especially if the Dow surpasses its all time high and the S&P Cash significantly surpasses our prior target level of 1282.89, which it met almost exactly on February 1, then we will be forced to look for higher prices, perhaps even significantly higher prices. Until or unless that occurs, however, we should look upon today as a potential last ditch hope of the buy every dip bulls. What we must continue to look at in analyzing the market is the market internals and they continue to look miserable, some of the worst market internals in history. We devised another method of looking at market internals over the past 70-75 years, but it would take too long to describe it here. We save it for sometime soon, perhaps in the newsletter going out this weekend. The results are simple and they confirm that this is indeed the worst breadth divergence in the stock market since 1929. Unfortunately, as with all of such prior confirmations that we have spoken about in the last several weeks, we have not yet devised a way to signal when the final record breaking divergence will occur. In other words the exact day of the final top. So far, mind you, until or unless the S&P Cash goes to new all time highs, it has formed a potential head and shoulders formation. Remember also that we felt whichever January extreme on the Dow, its high or its low, would be broken first, will be a potential signal that the 108-109 week cycle due in January was a top or a bottom. Decisive new lows would suggest it was a top. Decisive new highs on the Dow would suggest the January cycle resolution was a bottom. So far, we have neither.
