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I'm currently in the "I don't think it's over but it isn't going to crash
camp". My weekly breadth charts which use week a/d and h/l stats from
Barron's remain quite negative (comparable to 66, 73, and 87) and suggest
considerably more repair work is needed. My Tbill/(S&PEarnings/S&PCash))
model indicates further significant declines are required in both interest
rates and S&P prices before equilibrium is reached. My weekly S&P price
chart suggests further base building is needed to sustain any rally. My
yield curve charts indicate we are facing a recession. My monthly S&P cash
log chart shows very strong support at 6300 which I don't expect to see
violated until we have a real blow-off to upside.
This leads me to believe that any meaningful advance can not be sustained,
that we will likely retest or make new lows, that any further declines will
be contained by 6300, and that we may likely see an extended base building
period lasting 6-12 months before we resume the move to significant new
highs at S&P 1600 or higher. I continue to expect US long rates to reach the
4% level providing excellent bond returns while stocks correct. I am
watching the weekly and monthly US$ charts especially closely for any signs
of a reversal which would indicate a) rising commodity prices, b) reversal
of overseas capital inflows, c) pressure on stocks and bonds.
Earl
-----Original Message-----
From: Ron Augustine <RonAug@xxxxxxxx>
To: omega-list@xxxxxxxxxxxxxx <omega-list@xxxxxxxxxxxxxx>
Date: Wednesday, September 23, 1998 10:01 PM
Subject: Current Market TA - any interest?
>
>Don't mean to detract from the current bashing fest, but I was wondering if
>anyone might be interested in commenting on their perspective of the
current
>Market?
>
>1. Largest correction in quite some time -- over or not?
>
>2. Dow theorists say the bear has arrived based on Daily and Weekly signals
>and they are waiting for the Quarterly Signal shoe to drop in 7 days --
>valid or not?
>
>3. Market has been contained by a very well defined by an ascending trading
>channel with four accurate tops and bottoms since Sept. 1 -- today's Up
>Volume (9/23) was impressive -- Breakout to new highs, or another fizzle?
>
>Any and all comments welcome.
>
>
>
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