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I had a NYSE buy signal on Thursday's close, NASDAQ sell signal on
Friday's close so it's a mixed bag. Obviously, NASDAQ is extremely
extended and subject to a major reversal at any time, however my daily
and weekly breadth models continue to show a reasonably healthy market.
Although the primary NYSE trend remains down based on 30w MA, the NYSE
daily and weekly breadth models have been improving a bit in health
(especially volume which is often a good early indication) and I suspect
we are seeing some bargain hunting among the old economy stocks. Jury is
still out on whether the recent bottom in the SP and DJ will hold -
momentum at the last low suggests not, however I suspect that there is a
bit more upside to this rally.
Because I have the breadth models, SP is the only market in which my
trading is not based solely on price/volume patterns. Looking solely at
SP price, I see that this rally has lasted longer than the previous 2
rallies and that we have made a higher low and Friday eked out a higher
high. I am looking for a high (Monday?) around 1445 followed by a
decline which will resolve if this rally is an ABC correction or a fresh
impulse structure. If 1367 (June) holds, we are in a w.3 and should see
new highs in SP.
Earl
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