March 9, 2008 Weekly Report Supplement
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The Dow Transports has endured the most fluttering of the major
indices since early 2007 with five bull/bear signals. Prior to this
fluttering, it enjoyed nearly three years of pure bullish behavior. It
along with several indices are now confined into a tightly constructed
bearish trading range. |
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The Dow Composites
endured no fluttering. It simply peaked, paused, and succumbed to
bearish influences. The recent bear signal was the first signal since the
bull signal on October 25, 2002. That bull leg lasted a little over five
years. As you can see, it is also nestled into a tight bearish trading
range. |
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NASDAQ Secular Lower
Range Limit Threatened. As stated a few weeks ago, the next major
resistance to the bear is a secular lower trading range limit (the orange
line).
The NASDAQ made contact this last Friday. |
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The Dow30 has
contacted its breakdown line for the second time in the current
bearish cycle. The contact in January 2008 was the first such contact
since its October 2002 bottom. The purple lines sloping upward are other
potential technical lows for the bear now underway. There are two
remaining and do not require contact for a Quick-term Bullish Cycle.
However, a secular bull since October 2002 would remain in tact even with
the Dow30 falling to around 11,000. That should not occur until 2009,
based on historical standards. |
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The
NASDAQ continues falling below non-bearish technical resistance
points. Each victory by the bear strengthens it. Eventually, the bear will
become complacent with its successes. It will then expire. Its expiration
will invite the birth of a new bull. An October 2002 stock market
forecaster projecting a 2000-NASDAQ by the year, 2010, would have been
viewed as "attractive" at that time. A mid-2007 forecaster saying the same
thing would be viewed as "unattractive." The success or failure of the
equity markets is not on this chart. It is based on "when you bought." The
October 2002 buyer is okay with his or her wisdom. The late 2007 buyer is
pretty much upset right now. The Quick-term
Indicant is signaling hold for only six of thirty ETF's it tracks on daily
basis. Three of those six are contrarian; energy, gold, and government
bonds. The number of holds became a minority of positions on a quick-term
basis in late 2007. However, several of the Consolidated signals from late
2002 are maintaining their hold position. The timing in buy with respect
to current position is the only source of relevance.
You should notice the increase in Vector Volatility on
both charts. That, coupled with a few more non-bearish resistance points,
should invite some more bullish spurts. One of them should form a
Quick-term indicant Bullish Cycle before the end of this year. It is too
early for the market to be concerned with 2009. Record low interest rates
should invite more money rotation into stock equities. It certainly is not
headed into real estate at this point, although a significant money flow
is directed at commodities and other "hard assets." |
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As stated the past several weeks,
the small cap index
continues confinement to its bearish trading range. The past few
encounters with its upper range limit line have been followed by bearish
behavior. |
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ETF #31-QID
continues as a solid Quick-term Bull. It is up 23.1%, annualizing at
140.9% since the Quick-term Indicant signaled buy on January 8, 2008.
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Conversely, QQQQ is down 12.2%
since the Quick-term Indicant signaled sell on January 9, 2008. |
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