Eye,10/5 Phi turn date setting up perfectly.Analysis follows,Cheers and stay nimble.
Although the wait is akin to watching grass grow, a turn date was identified a while ago, that window finally starting tomorrow, and lasting a couple of weeks, with an ideal fit of October 5th, next Friday, +/- a few days. Since prices are rising into this turn window, we believe the major stock averages are in the process of putting in another important top. End of month and end of quarter window dressing, whereby Wall Street pushes prices higher so that portfolio statements look good to wealth management clients, is coincident with the coming phi mate turn date, and suggests more upside to flat price movement is possible tomorrow. Volume has lagged as this rally matures, with NYSE volume coming in at only 71 percent of its 10! day average on Thursday's 35 point DJIA rise, which is Bearish. Weighing heavy against this recent rally is a Bearish Divergence between the 10 day average Advance/Decline Line and prices in both the NASDAQ 100 and the S&P 500. Such divergences should not be taken lightly. They inevitably lead to declines as there are fewer and fewer stocks advancing, index prices being lifted by a narrowing breadth of stocks. In other words, the underlying strength of the market is weakening. The key point tonight is that volume is drying up on this rally - Bearish.
We would not be surprised to see another Hindenburg Omen observation over the next week or two, perhaps several observations, as conditions are ripening for another signal. What is the big deal with Hindenburg Omens? It means underlying weakness is occurring in the market, to a severe degree, a forerunner to significant declines. The recent price strength in the NASDAQ 100, which exceeded its July highs this week, is not being confirmed by breadth. In other words, a few issues are doing the heavy lifting, AAPL in particular, along with GOOG, GRMN, RIMM, and WYNN doing the heavy lifting. Not much to brag about from the other 90 some stocks.
Other conditions warning of an approaching top are the PPT indicator sitting within the range where declines can occur, and the weekly Bollinger Band analysis, where tonight the DJIA and NDX sit at the top of their respective upper BB, where declines often start within a week or so. Bears may need to be patient another few days or so. Bulls, your day is coming after the next leg down, and it could be sweet for you.
