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<A
name=OLE_LINK2><A
name=OLE_LINK5><SPAN
><SPAN
>Technical market report for March 27,
2004The good news is:
<LI class=MsoNormal
><SPAN
><SPAN
><SPAN
>The number of new lows remains
insignificant.
<LI class=MsoNormal
><SPAN
><SPAN
><SPAN
>The secondaries have held up well relative to
the blue chips.
<SPAN
><SPAN
><SPAN
>
<SPAN
><SPAN
><SPAN
>Last week new lows peaked on Monday at 25 on the
NYSE and 38 on the NASDAQ on Friday there were 17 on the NYSE and 11 on the
NASDAQ. The rule of thumb is 3
consecutive days of more than 40 new lows on the NYSE indicates trouble.<SPAN
> So this indicator offers no reason for
alarm.
<SPAN
><SPAN
><SPAN
>The chart below shows the Russell 2000 (R2K) in
red and the S&P 500 (SPX) in green, the indicator in yellow at the bottom of
the screen is a FastTrack relative strength indicator called Accutrack.<SPAN
> The best time to be long is when the
indicator is rising. During the
recent decline the indicator has fallen slowly, but remained above the neutral
line indicating the R2K has held up well relative to the SPX during this recent
period of decline. The indicator
turned upward the middle of last week, although encouraging, day to day readings
of the indicator are unreliable.
<SPAN
><SPAN
><SPAN
><v:shapetype id=_x0000_t75
coordsize="21600,21600" o:spt="75" o:preferrelative="t"
path="m@x@5l@x@11@x@11@x@5xe" filled="f" stroked="f"><v:stroke
joinstyle="miter"><v:f
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eqn="sum 0 0 @1"><v:f
eqn="prod @3 21600 pixelWidth"><v:f
eqn="prod @3 21600 pixelHeight"><v:f
eqn="prod @6 1 2"><v:f
eqn="sum @8 21600 0"><v:f
eqn="sum @10 21600 0"><v:path o:extrusionok="f"
gradientshapeok="t" o:connecttype="rect"><o:lock v:ext="edit"
aspectratio="t"><v:shape id=_x0000_i1025
type="#_x0000_t75"><v:imagedata
src=""
o:title="FT-R2K-SPX"><IMG
src="gif00095.gif">
<SPAN
><SPAN
><SPAN
>Although my longer term outlook is positive,
short term there is little evidence the current period of weakness has
ended.
<SPAN
><SPAN
><SPAN
>The chart below covers the past 1.5 years and
shows an average of 162 junk bond funds in the FastTrack database (BD-Junk.fam)
in red and the percentage of those funds that are above their 50 day EMA in
blue. The percentage of junk bond
funds above their 50 day EMA has remained extremely high over the past 1.5 years
with three exceptions:
<P class=MsoNormal
><SPAN
><SPAN
><SPAN
>1)<SPAN
>
The low of October 2002.
<P class=MsoNormal
><SPAN
><SPAN
><SPAN
>2)<SPAN
>
The period of weakness July-August
2003.
<P class=MsoNormal
><SPAN
><SPAN
><SPAN
>3)<SPAN
>
The current period.
<SPAN
><SPAN
><SPAN
>It will be comforting to see that indicator turn
upward.
<SPAN
><SPAN
><SPAN
><v:shape id=_x0000_i1026
type="#_x0000_t75"><v:imagedata
src=""
o:title="BD-Junk-Pct-EMA"><IMG
src="gif00096.gif">
<SPAN
><SPAN
><SPAN
>If you are suspicious of timing equities with
junk bonds. The chart below is
similar showing an average of the 41 Fidelity select funds in red and the
percentage of them above their 50 day EMA’s in
blue.
<SPAN
><SPAN
><SPAN
><v:shape id=_x0000_i1027
type="#_x0000_t75"><v:imagedata
src=""
o:title="Select-Pct-EMA"><IMG
src="gif00097.gif">
<SPAN
><SPAN
><SPAN
>Summation indexes (SI) are calculated by summing
the values of an oscillator, when the oscillator is above 0 the SI rises, when
it is below 0 the SI falls. The
charts below show SI’s calculated from advancing - declining issues, new highs -
new lows and upside - downside volume.
In the first chart they are calculated from the component issues of the
SPX, in the second chart they are calculated from the component issues of the
R2K. New highs and new lows for
these calculations have been calculated over the trailing 30 trading days rather
than 52 weeks as reported by the
exchanges.
<SPAN
><SPAN
><SPAN
><v:shape id=_x0000_i1028
type="#_x0000_t75"><v:imagedata
src=""
o:title="SPX-All-SI"><IMG
src="gif00098.gif">
<SPAN
><SPAN
><SPAN
><v:shape id=_x0000_i1029
type="#_x0000_t75"><v:imagedata
src=""
o:title="R2K-All-SI"><IMG
src="gif00099.gif">
<SPAN
><SPAN
><SPAN
>I have mentioned before, when these indicators
are all going in the same direction it is imprudent to bet against them and as
of Friday they are all heading downward.
Although both the volume and AD oscillators are near 0 and
rising.
<SPAN
><SPAN
><SPAN
>End of month – beginning of month seasonality
doesn’t help much next week. Over
the past 15 years both the R2K and SPX have averaged losses over period.<SPAN
>
<SPAN
><SPAN
><SPAN
><SPAN
>Last
3 days of March and first<SPAN
> 2 days of April.The number
following the daily return represents the day of the week;1 =
Monday, 2 = Tuesday etc.The number following the year represents
its position in the presidential cycle.R2K<SPAN
>
Day3
Day2
Day1
Day1
Day2
Totals1989-1<SPAN
> 0.15%
3 -0.03% 4<SPAN
> 0.73% 5<SPAN
> 0.25% 1<SPAN
> -0.20% 2<SPAN
> 0.89%<BR
clear=all>1990-2
-0.16% 3 -0.24% 4<SPAN
> 0.14% 5<SPAN
> -0.79% 1<SPAN
> 0.65% 2<SPAN
> -0.41%<BR
clear=all>1991-3<SPAN
> 1.15%
2 0.70% 3<SPAN
> 0.70% 4<SPAN
> -0.41% 1<SPAN
> 1.35% 2<SPAN
> 3.49%<BR
clear=all>1992-4
-1.16% 5 -0.44% 1<SPAN
> 0.37% 2<SPAN
> -0.65% 3<SPAN
> -0.93% 4<SPAN
> -2.81%<BR
clear=all>1993-1<SPAN
> 0.08%
1 0.24% 2<SPAN
> 0.67% 3<SPAN
> -0.24% 4<SPAN
> -1.71% 5<SPAN
> -0.96%<BR
clear=all>1994-2
-2.08% 2 -1.79% 3<SPAN
> -0.55% 4<SPAN
> -1.60% 1<SPAN
> 2.80% 2<SPAN
> -3.22%<BR
clear=all>1995-3
-0.14% 3 0.15% 4<SPAN
> 0.19% 5<SPAN
> 0.02% 1<SPAN
> -0.02% 2<SPAN
> 0.18%<BR
clear=all>1996-4<SPAN
> 0.24%
3 0.10% 4<SPAN
> 0.59% 5<SPAN
> 0.50% 1<SPAN
> 0.24% 2<SPAN
> 1.67%<BR
clear=all>1997-1<SPAN
> 0.46% 3
-0.95% 4<SPAN
> -1.83% 1<SPAN
> -0.49% 2<SPAN
> -0.91% 3<SPAN
> -3.72%<BR
clear=all>1998-2
-0.14% 5 -0.19% 1<SPAN
> 0.94% 2<SPAN
> 0.88% 3<SPAN
> 0.31% 4<SPAN
> 1.80%<BR
clear=all>1999-3<SPAN
> 1.48%
1 -0.25% 2<SPAN
> -0.29% 3<SPAN
> 0.28% 4<SPAN
> 0.89% 1<SPAN
> 2.12%<BR
clear=all>2000-4
-2.87% 3 -2.10% 4<SPAN
> 1.41% 5<SPAN
> -4.28% 1<SPAN
> -1.92% 2<SPAN
> -9.76%<BR
clear=all>2001-1
-2.36% 3 -0.15% 4<SPAN
> 2.04% 5<SPAN
> -2.39% 1<SPAN
> -2.91% 2<SPAN
> -5.77%<BR
clear=all>2002-2<SPAN
> 1.06%
2 0.84% 3<SPAN
> 0.12% 4<SPAN
> -0.39% 1<SPAN
> -0.79% 2<SPAN
> 0.84%<BR
clear=all>2003-3<SPAN
> 0.36%
4 -0.22% 5<SPAN
> -1.12% 1<SPAN
> 1.14% 2<SPAN
> 2.06% 3<SPAN
> 2.22%<BR
clear=all>Averages
-0.26%
-0.29%
0.27%
-0.54%
-0.07%
-0.90%% Winners<SPAN
> 53%<SPAN
> 33%<SPAN
> 73%<SPAN
> 40%<SPAN
>
47%
<SPAN
><SPAN
><SPAN
><SPAN
>SPX<SPAN
>
Day3
Day2
Day1
Day1
Day2
Totals1989-1<SPAN
> 0.26%
3 0.06% 4<SPAN
> 0.80% 5<SPAN
> 0.52% 1<SPAN
> -0.36% 2<SPAN
> 1.27%<BR
clear=all>1990-2<SPAN
> 0.15%
3 -0.35% 4<SPAN
> -0.25% 5<SPAN
> -0.36% 1<SPAN
> 1.46% 2<SPAN
> 0.64%<BR
clear=all>1991-3<SPAN
> 1.75%
2 -0.25% 3<SPAN
> -0.03% 4<SPAN
> -1.04% 1<SPAN
> 2.21% 2<SPAN
> 2.63%<BR
clear=all>1992-4
-1.07% 5 -0.12% 1<SPAN
> 0.17% 2<SPAN
> 0.13% 3<SPAN
> -0.92% 4<SPAN
> -1.81%<BR
clear=all>1993-1<SPAN
> 0.67%
1 0.27% 2<SPAN
> -0.07% 3<SPAN
> -0.30% 4<SPAN
> -1.98% 5<SPAN
> <SPAN
> -1.41%1994-2<SPAN
> -1.63% 2<SPAN
> -1.53% 3<SPAN
> 0.05% 4<SPAN
> -1.54% 1<SPAN
> 2.13% 2<SPAN
> -2.52%<BR
clear=all>1995-3
-0.15% 3 -0.18% 4<SPAN
> -0.30% 5<SPAN
> 0.23% 1<SPAN
> 0.68% 2<SPAN
> 0.27%<BR
clear=all>1996-4
-0.62% 3 0.00% 4<SPAN
> -0.53% 5<SPAN
> 1.27% 1<SPAN
> 0.23% 2<SPAN
> 0.36%<BR
clear=all>1997-1<SPAN
> 0.18%
3 -2.10% 4<SPAN
> -2.17% 1<SPAN
> 0.33% 2<SPAN
> -1.25% 3<SPAN
> -5.01%<BR
clear=all>1998-2
-0.49% 5 -0.17% 1<SPAN
> 0.75% 2<SPAN
> 0.58% 3<SPAN
> 1.07% 4<SPAN
> 1.74%<BR
clear=all>1999-3<SPAN
> 2.13%
1 -0.72% 2<SPAN
> -1.11% 3<SPAN
> 0.57% 4<SPAN
> 2.12% 1<SPAN
> 3.00%<BR
clear=all>2000-4<SPAN
> 0.05%
3 -1.37% 4<SPAN
> 0.72% 5<SPAN
> 0.49% 1<SPAN
> -0.75% 2<SPAN
> -0.85%<BR
clear=all>2001-1
-2.44% 3 -0.46% 4<SPAN
> 1.08% 5<SPAN
> -1.25% 1<SPAN
> -3.44% 2<SPAN
> -6.51%<BR
clear=all>2002-2<SPAN
> 0.58%
2 0.53% 3<SPAN
> 0.25% 4<SPAN
> -0.07% 1<SPAN
> -0.85% 2<SPAN
> 0.44%<BR
clear=all>2003-3
-0.16% 4 -0.58% 5<SPAN
> -1.77% 1<SPAN
> 1.21% 2<SPAN
> 2.61% 3<SPAN
> 1.31%<BR
clear=all>Averages
-0.05%
-0.47%
-0.16%
0.05% <SPAN
> 0.20%<SPAN
> -0.43%<BR
clear=all>% Winners<SPAN
> 53%<SPAN
> 27%<SPAN
> 47%<SPAN
> 60%<SPAN
>
53%
<SPAN
><SPAN
><SPAN
>You have to look pretty hard to find evidence
that the recent decline has ended, on the bright side there is every reason to
believe the current weakness is nothing more than a necessary interruption of
the bull market that began in March 2003.
<SPAN
><SPAN
><SPAN
>I expect the major indices will be lower on
Friday April 2 than they were on Friday March
26.
<SPAN
><SPAN
><SPAN
>Last week the R2K was up slightly while the SPX
was down slightly so I am calling last weeks forecast a
tie.
<SPAN
><SPAN
><SPAN
>This report is free to anyone who wants it, so
please tell your friends.They can sign up
at:http://www.guaranteed-profits.comIf it is not for you, reply with
REMOVE in the subject line.Thank you,Mike Burk W5/L5/T2<BR
><BR
>
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