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Recently I posted that the DJUI broke to a new high. It is interesting to
note that at the last three market peaks, 1987,1990 and 1994, that the DJUI
topped out at least six months before the DJIA. This would seem to imply
market strength into 1998 at least.
The NYSE trading index (30 day average) remains in the 1.30 area. Above 1.10
is an indication of an oversold market. This is the biggest oversold reading
on this indicator since 1987. Very interesting.....
A potential fly in the ointment could be small caps. They have lagged the
recent rally. Most likely this was a result of a flight to quality caused by
overseas markets. If we do not get the "January Effect" soon, it will more
than likely be a weak small cap rally and could peter out in January. We
should know as soon as the tax loss selling lets up.
Whatever, it is all very, very interesting!! No predictions, however......
Jerry
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