AI
Saturday, April 24, 2004 4:03:48 AM
CYCLE Turn on/around April 26th
Whipsaw City! I don't know what better way to describe this past week although as I had mentioned in my last cycle post with which this post replies, I was looking for a Bradley turn on/around the 16th and was not quite sure if we had got it. Well as stealth of a turn as it was I think we can justify that it did indeed occur. You wouldn't know it from watching the daily action throughout the week, but when it was all said and done we closed out the week nearly 55 points higher on the COMPQ than where we started. As ominous as it might look, this does put us in an uptrend. It is quite possible that this type of volatility we experienced this week could become much more common as we move ahead, but before I get into that let's review the Economic #'s for the week.
For anyone that may read my posts you probably know by now that I always watch the Economic #'s. The reason for this is that it gives me a glimpse into the pschye of the market and with news becoming more and more prevalent as of late I like to watch these even more closely. Doctored numbers or not, these are what the masses see and react to. So with that said, let's review... This week we did not have a lot of numbers, but all of the numbers given actually aligned this week. The LEI was slightly up, Jobless Claims slightly down and Durable Orders were strong. Add a dose of FedSpeak with the tightening of the belt rate talk and we had ourselves some roller coaster of a ride.
This coming week promises to be busier on the the Economic #'s front. On deck we have Existing and New Home Sales, Consumer Confidence, GDP, Initial Jobless Claims, Personal Income and the Chicago PMI. Should be an interesting week ahead.
While earnings are and have been important, I think we are seeing a shift in dynamics within the market in which news is taking the front seat. While company's are beating YoY reports from last March handily and should be expected after coming off of a year like we had in 2003, it is what's to come that may be creeping into investors minds. Inflation is beginning to become more prevalent and rising rates are pretty much a given (it's not about "if", just a matter of "when"). Then we have geo-political issues which are in the headlines day after day, elections still to come, seasonality and the uncertainty of what the terrain will look like a year from now that is taking over. I am beginning to believe that what we have here is a recipe for some very volatile range bound activity. Where the range will be established is still to come I believe, but new highs are looking less likely at this juncture.
So what can we expect for the week to come? Well I believe the April 26th turn date is a very important one and if it is a high then we have some down coming. Could very well end up being a continuation pattern, but we need to break through COMPQ 2050 and 2080 in fairly short order. The window that I am looking at is beginning to close and my feelings are that by mid-May that window will be shut. With no earnings we are basically looking at a dead zone with news and various issues to be brewd upon. While I had thought that from the cycle turn of March 24th we would see new highs, unless we get our tails in gear that may not happen for 3-6 months if at all this year. I guess you can say I have excercised the right to change my mind, I am not liking what I am seeing at the moment.
Last week the A/D issues and new lows were as high as I have seen them in quite some time and on heavy volume too, but to not get to far ahead of myself I will continue to watch closely for continuing signs of weakness. While I have not written off this rally yet (and for what appeared to be a 5th wave up) it is starting to look like an extended 4th wave down. The good and bad of that is that if this does turn out to be the continuation of the 4th wave down, then sometime in the not too distant future we have a 5th wave up to come and look forward to. If this does indeed turn out to be the 5th wave up, then the top is in and we probably twist and turn for a better part of the year.
Now, a couple of quick charts that I find intriguing...
Gap up Island Reversal possibility in play, does not look bullish
55 looks like the next target to me, if we breakthrough that doubletop resistance look out below
Whipsaw City! I don't know what better way to describe this past week although as I had mentioned in my last cycle post with which this post replies, I was looking for a Bradley turn on/around the 16th and was not quite sure if we had got it. Well as stealth of a turn as it was I think we can justify that it did indeed occur. You wouldn't know it from watching the daily action throughout the week, but when it was all said and done we closed out the week nearly 55 points higher on the COMPQ than where we started. As ominous as it might look, this does put us in an uptrend. It is quite possible that this type of volatility we experienced this week could become much more common as we move ahead, but before I get into that let's review the Economic #'s for the week.
For anyone that may read my posts you probably know by now that I always watch the Economic #'s. The reason for this is that it gives me a glimpse into the pschye of the market and with news becoming more and more prevalent as of late I like to watch these even more closely. Doctored numbers or not, these are what the masses see and react to. So with that said, let's review... This week we did not have a lot of numbers, but all of the numbers given actually aligned this week. The LEI was slightly up, Jobless Claims slightly down and Durable Orders were strong. Add a dose of FedSpeak with the tightening of the belt rate talk and we had ourselves some roller coaster of a ride.
This coming week promises to be busier on the the Economic #'s front. On deck we have Existing and New Home Sales, Consumer Confidence, GDP, Initial Jobless Claims, Personal Income and the Chicago PMI. Should be an interesting week ahead.
While earnings are and have been important, I think we are seeing a shift in dynamics within the market in which news is taking the front seat. While company's are beating YoY reports from last March handily and should be expected after coming off of a year like we had in 2003, it is what's to come that may be creeping into investors minds. Inflation is beginning to become more prevalent and rising rates are pretty much a given (it's not about "if", just a matter of "when"). Then we have geo-political issues which are in the headlines day after day, elections still to come, seasonality and the uncertainty of what the terrain will look like a year from now that is taking over. I am beginning to believe that what we have here is a recipe for some very volatile range bound activity. Where the range will be established is still to come I believe, but new highs are looking less likely at this juncture.
So what can we expect for the week to come? Well I believe the April 26th turn date is a very important one and if it is a high then we have some down coming. Could very well end up being a continuation pattern, but we need to break through COMPQ 2050 and 2080 in fairly short order. The window that I am looking at is beginning to close and my feelings are that by mid-May that window will be shut. With no earnings we are basically looking at a dead zone with news and various issues to be brewd upon. While I had thought that from the cycle turn of March 24th we would see new highs, unless we get our tails in gear that may not happen for 3-6 months if at all this year. I guess you can say I have excercised the right to change my mind, I am not liking what I am seeing at the moment.
Last week the A/D issues and new lows were as high as I have seen them in quite some time and on heavy volume too, but to not get to far ahead of myself I will continue to watch closely for continuing signs of weakness. While I have not written off this rally yet (and for what appeared to be a 5th wave up) it is starting to look like an extended 4th wave down. The good and bad of that is that if this does turn out to be the continuation of the 4th wave down, then sometime in the not too distant future we have a 5th wave up to come and look forward to. If this does indeed turn out to be the 5th wave up, then the top is in and we probably twist and turn for a better part of the year.
Now, a couple of quick charts that I find intriguing...
Gap up Island Reversal possibility in play, does not look bullish
55 looks like the next target to me, if we breakthrough that doubletop resistance look out below
**Happy Trading**
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