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Great mail Thomas. I completely agree that the S&P500 and DJIA are
approaching key resistance levels at their old highs. Here are the
reasons I believe these upcoming tests will fail (he says bravely
sprinting towards the end of the limb ;-):
* The divergence with the NASDAQ - techs continue to be very weak and
are not supporting this blue chip rally.
* The divergence with the Russell 2000 - R2000 is going sideways.
* The divergence with the Utilities - the Utilities have been fading
for the past 2 days and are down again this morning.
The wildcard that might cause these upcoming tests to succeed:
"Irrational Exuberance" breaks out when the long bond breaks below 6%
FWIW: I'll be updating http://coolhistory.com/ChipsCharts at the end
of the day today with charts that show what I'm seeing.
Finally, this is a short term opinion. I'm long term very bullish on
things, but feel that the markets aren't _yet_ positioned for a strong
long-term breakout to the upside.
---Simianer <Simianer@xxxxxxxxxxx> wrote:
> Hi all,
> it seems to me, that again we are in a decision phase. While the
> approaching itīs old highs, there are hints for both versions, the
> and the "fall back" version:
> - The S$P is only less than 1% below the highs, but the DOW needs
> to work to reach August tops. This non-confirmation seems to be a
> - But: The Utility Index made significant new highs. It is very
> ahead of the DOW, so this could be a hint for a further climb.
> The Tranportation Index is also in a short term uptrend, but
> old highs (= resistance).
> - Negative Divergences btw. momentum indicators and DOW/S&P show
> of the present upmove. Shows some probability for a pullback
starting at the
> old tops of the S&P500. Same is indicated by several resistance
lines in the
> indicators which couldnīt be broken until now.
> - On the other hand there are some indicators in buy-modes
> - Broader market indicators donīt know what they want: Value Line and
> Russell 2000 are presently figthing with their resistances. As
well as NASDAQ.
> Conclusion: I see about same chances for new highs or a pullback for
> sectors. So everybody should watch all signs very carefully and not
be too sure
> about one direction.
> The markets should show their mood within the next few days. ;-)
> Greetings from germany
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