09/16/2009 Market Recap: A few historical extremes


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Summary:

INDU new high but COMPQ is close to 2200 resistance.

A few historical extremes so still expect a short-term pullback.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Up    
Intermediate Up Overbought*  
Short-term Up Overbought*  
My Emotion Wait   Could repeat what happened after 8/17, so be careful bears.

INTERMEDIATE-TERM: COMPQ IS CLOSE TO 2200 RESISTANCE

Nothing new to say, SPX has no serious resistance until 1200ish. However 1.1.1 Nasdaq Composite (Weekly), COMPQ is not far away from the 2200 resistance now.

COMPQWeekly

Just a follow up: 1.2.0 INDU Leads Market, high above the last Oct high 9794 finally, but need to close above it to confirm. 1.2.1 Dow Theory: Averages Must Confirm, TRAN still didn’t confirm the INDU new high, it could catch up later though. My guess is “big caps lag” is actually bullish as people are not afraid of taking more risks. From chart 7.5.5 US Market Relative Strength, we can see, apparently RUT > NDX > INDU.

 USMarketRS

SHORT-TERM: EXPECT A PULLBACK 

Market is very bullish that apparently nobody believes my indicators anymore, so today let’s just take a look at a few historical extremes. Hopefully they could give us some clues. I put SPX in blue in the following charts so that you can see clearly what happened whenever those historical extremes were reached. My conclusion is a short-term pullback is due but intermediate-term is bullish.

T2111 from Telechart, NYSE percent of stocks 2 standard deviation above MA200, continues to all time high. Pay attention to the 2nd chart on what happened when the previous all time high was reached.

T2111 T2111Hist

T2112 from Telechart, NYSE percent of stocks 2 standard deviation above MA40, all time high. The 2nd chart is the “Zoom in”. Pay attention to the blue curves, the pullback seemed 2 days away the most.

T2112 T2112ZoomIn

T2103 from Telechart,Zweig Breadth Thrust, all time new high. Pay attention to the 2nd chart on what happened when the previous all time high was reached.

T2103 T2103Hist

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