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Your analysis is well taken and certainly accounts for the downward bias but
the regular NYSE AD line did give a clear warning before the top that was made
in July, 1998. It had peaked April 3, 1998. If the S&P was to make a new high
in the next few few weeks it would be the second new high giving a lower AD
peak since the January 6th peak in the AD line. However, according to Ned
Davis research, the average lead time between a peak in the AD line and a peak
in the market was 23 weeks! So it would appear that the bull will work it's
way higher despite the warning signs.
Howard
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