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Each week I analyze all the stocks in the DJIA and NDX 100 as well as the
major stock indexes, sector ETF's, current markets, bond and T-Bill markets.
The analysis gives me a perspective of what to expect in the coming week,
when to expect significant reversals and what sectors of the market will be
the best trading vehicles for the week. The methodology has proven it's
worth over the years providing an 80% win/loss ratio and ROI's far above the
norm. For the coming week I see some tradable cross-currents emerging.
First, my longer term market models are signaling a reduction in the risk of
a substantial decline which I first warned about several weeks ago. The
composite market model first warned of a decline on 1/10 and reversed itself
on 1/25. The second warning came on 2/25 and was reversed on 3/10.
My NDX model has been bearish for awhile but first indicated a change in
sentiment last weekend and despite the four day decline this past week, the
underlying structure continued to strengthen. Friday's outside day was
bearish and we could see 1482 before the turn. Also the last Pivot low of
1490 should provide support. The next Near Impulse forecast date is
Thursday, 3/17 so my guess is we see some decline and sideways
consolidation before the up swing emerges.
Many of you trade the S&P 500 and attached is a chart with previous
forecasted reversal points indicated by the ellipses. As you can see Friday
was a forecast reversal day but the morning attempt failed and we closed
near the bottom channel of the current Andrew's channel. If we can hold 1200
it will be bullish but there is risk of decline to 1186 to 1190 before a
full reversal.
My analysis of individual stocks in the NDX shows a two to one ratio of
expected advancing to declining stocks and thus signals to trade the long
side next week whereas last week it was strongly favoring the short side.
The areas to expect the best moves are in Communication Services, Computer
Equipment, Internet, Retail and Transportation while the weakest are the
semi's and Biotech's.
All in all, the mix is not right yet for a strong advance but I believe it
is coming.
Regarding Gold and the Dollar, I see a strong prospect for an advance in the
Dollar and Bonds and a decline in gold.
Best Regards,
Jim White
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