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The NYSE breadth models have continued to expand the bearish divergence.
Noticeable bearish divergence has crept into the NASDAQ breadth models
even as new highs have been made in this rally. Looks to me like we are
much closer to a decline. Given the overall condition of the models, I
would expect any decline to be relatively modest while improving the
odds for a good rally later this year.
Earl
----- Original Message -----
From: "Earl Adamy" <eadamy@xxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Sunday, June 18, 2000 6:34 AM
Subject: [RT] Re: Market Outlook
> Equities: NASDAQ breadth models show strong bullish divergence to
price,
> however the wave structure suggests another decline is required to
> resolve a bottom - watch for possible H&S bottom to complete w.5
> (attached) - 3200-3400 range includes two possible left shoulders.
NYSE
> daily breadth models are rolling over showing bearish divergence while
> weekly models still in good shape - major indexes have expended energy
> without breaking out - looking for S&P pullback to 1460 area (Sep),
1442
> area (cash). This appears to suggest that the trading range market
will
> continue for a bit however the intermediate term appears to be
preparing
> for a major bullish move.
>
> Debt: TBill rates have dropped by only .25, not enough to fuel a major
> rally. Fed Funds Jun-Dec futures spread (attached) appears to be
> completing a 5th wave decline with little more than a quarter point
Fed
> Funds increase priced into the market through year-end - rebound to
half
> point increase appears likely which will put pressure on equities and
> short end of yield curve. Like equities, bonds (10's and 30's) have
> labored hard to breakout above recent highs - looking tired with not
> much more upside. Another market likely to remain in a trading range
> 96-99 for the 30.
>
> Currency: US$ decline has been long and steep without a significant
> retracement - some support at 105 which could/should give a bounce
here,
> better support at 102. Likely to remain in corrective range between
> 102-112 for some months. Near-term failure of 102 would suggest longer
> term decline is in the cards. Eventual dollar bottom should complete
> at/above 96 in Sep-Oct time frame. This is likely to provide room for
> non-US currencies to trend somewhat higher subject to pressure from
> higher US rates fears.
>
> Earl
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