Preliminary review of the charts this weekend is turning up the bad and the
ugly without much good. The weekly DJIA chart (last bastion of the bulls)
shows the trendline across the 94-98 pivot lows was penetrated for the first
time this week with the close barely above. Ditto for the weekly NASDAQ
Composite which, in the bigger scheme of things managed a paltry rally and
has also returned to the trendline which runs across the 94-96-98 lows. Even
the Ru2000, the small cap index widely touted by bulls as a refuges, appears
to have rolled over to continue its trip south from 614 (the other perennial
favorite of the bulls, the SP Mid Caps appears equally disposed.
One of the tools I use widely in my work is what I refer to as a bull
(regression on close) channel which primary and secondary closing lows. One
of the most disturbing observations is the number of bull channels in
indexes and stocks which have been negated by this week's declines.
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