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I've been looking for an eventual high of 1500-1600 in the S&P as this
bubble market expands, however I am quite cautious on the intermediate term
outlook. While the long term (monthly) price charts are still looking
healthy, the weekly charts are looking a bit sick. Weekly S&P futures has
broken the bull channel from last fall indicating we are likely to see more
to downside. My daily breadth charts (NYSE & NASDAQ( need (at a minimum) a
rally and another decline to build a base not to mention the fact that they
look worse than they did last fall. My weekly breadth charts (NYSE & NASDAQ)
never did confirm the last rally and have remained in sell mode. My ratio
chart of the Amex Broker/Dealer index vs S&P gave a clear non-confirm almost
two months ago. My historical bond charts are challenging a trend reversal
of the bull trend which began in 1982. My S&P TBond/EarningsRatio chart went
into the stratosphere indicating that the market is way over valued i.e.
bubble mode and that's in spite of some of the most creative earnings
accounting ever.
One should never try to predict when a bubble market will end, however the
bubble leadership is getting hammered and that's a warning sign which should
not be ignored. Nor should the eventual impact on this market of rising
interest rates. As an investor, I've considered US equities unattractive for
some time, much preferring Asia. As a trader, however I've turned cautious
on Asia. I consider any rally in the S&P an opportunity to re-enter the
trend south for at least one more leg down. The problem with holding long in
a major bull trend in such an extended market is that one never knows which
intermediate term bear will turn into a major bear.
Earl
----- Original Message -----
From: BobsKC <bobskc@xxxxxxxxxxxx>
To: Jim White <jwhite43@xxxxxxx>; Steve Walker <Steve@xxxxxxxxxxxx>;
<realtraders@xxxxxxxxxxxx>
Sent: Thursday, August 05, 1999 11:58 PM
Subject: Re: GEN: Near a turning point?
>
> People been projecting a major down turn for 12 years. Bottom line is
that
> there is *still* no reason to sell off the market. It's the "best game in
> town" and the baby boomers know no fear. Oh, I can see it back to 10K or
> so .. maybe. The more that believe in a severe downturn, the less likely
> it becomes. We've had no real damage to the market place. To the
Internet
> bubble, yes but totally expected. Profits flowing out of T and LU .. all
> normal corrective action. The players are returning a bit now.. vacations
> over with.. (although still on vacations in Europe). If we do retrace to
> 10K, the doomsayers will come out of the woodwork which is required to
pump
> life into the bull. I'm playing this thing on a day to day basis now.
> Investment money is out and trading money is on a "show me the way"
program.
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