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Since my post of this weekend, all 3 of my NASDAQ breadth models (a/d
issues, a/d volume, and hi/lo) have shown extremely serious deterioration
while the NASDAQ and S&P indexes are close to once again reaching new highs.
I had been looking for a correction followed by new highs but the more
serious these divergences become, the greater the risk in the market. If we
don't get a good correction very, very soon, the Christmas turning point I
referred to earlier is likely to be the beginning of a major correction
rather than the beginning of another leg in the bull market.
Earl
> S&P (futures) longer term: I think the weekly has a good symetrical look
to
> it. I like the AGet 10/70 with long term counts: w.4 completing Oct98 and
> w.5 under construction.with initial target just shy of 1700. The counts
for
> w.5 also subdivide nicely showing w.4.5 completing Oct99 with w5.5 under
> construction. MOB resistance is nearby at 1505 Last magor Turning Point
> (AGet Time Clusters) displayed was 26Nov and next on 14Apr. W.5 should
> subdivide and price and time appears propitious for a correction - w.2.5
> (w.1.5 may be the last TP). On the monthly I see a big w.3 under
> construction and a Dec99 turning point suggesting a w.4 could be due.
> Looking to my weekly breadth studies, I'm showing serious
non-confirmations
> and bearish divergences in the weekly studies (using weekly a/d and h/l
from
> Barron's) - not much of a basis for an immediate major advance from here.
> Conclusion - trend is up, seasonality is strong, could be due for a w.2
> correction. Ball game on the weekly could be over if the Oct99 lows are
> taken out.
>
> S&P shorter term: the rally from the 18Oct low (w.5 on the weekly) is the
> first from a significant correction, has managed to surpass the previous
> Jul99 high, and appears to be somewhere in it's 5th wave. I'm using the
5/17
> oscillator to obtain the required w.4 pullback. I'm showing strong MOB
> resistance at 1468 and initial w.5 target at 1485. Looking to my daily
NYSE
> breadth studies, I see nothing but non-confirmations and bearish
> divergences. The last major daily TP seems to have conincided with the w.4
> bottom and the next TP is shown for 24Dec (anyone remember Tim's post re "
> the year's lowest sun and longest night, also has the closest moon" on
> 22Dec). Also appears ready for a correction with a w.2 target of 1335-65.
>
> ND100 (futures) long and short term: not a lot of history here so not much
> help but I like Aug99 as a starting point with 18Oct as a w.2 low (I'm
> adapting from 10/70 and Long Term counts in AGet). I see a strong w.3
under
> construction with most likely target at 3400. Weekly breadth on the NASDAQ
> looks quite strong however the new highs have not been confirmed - a
warning
> since price has made an extremely strong move. confirming the entire move.
> Daily breadth strongly confirmed the move into midNov, however it has been
> diverging more recently and issues a sell signal on 06Dec. And did I
mention
> a Turning Point on the daily on 24Dec?
>
> RU2000 (futures): without going into a lot of detail, I note what appears
to
> be shaping up as a very nice cup and handle bottom. My S&P500/Ru2000 ratio
> chart has turned up nicely suggesting the small caps should outperform
> (could mean go up faster or go down less). Seasonality is very strong. And
> did I mention a Turning Point on the both the daily and weekly on 24Dec?
>
> DJ Averages (weekly) - the transports and utilities have been heading
south
> big time with the transports in what looks like a strong w.5 and the
> utilities in a w.3 with the Sep98 lows only a couple of points away.
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