Zeev's Turnips Patch-No Politics (ZEEV)

[MyHunch]

Elliott Wave musings from Thom Calandra of CBSMW (today's news letter):

ELLIOTT WAVE'S HOCHBERG: NO BULL

"The more I examine this market, peel back the veneer of the headlines, dig into the technical underpinnings, look at the internal strength of this move, the more bearish I get," Steve Hochberg tells me. Hochberg is chief market analyst at Prechter's Elliott Wave International. (http://www.elliottwave.com/) "Not only has the rally from the October low unfolded in a clear Elliott wave corrective pattern, but technical measures such as breadth and up volume have lagged and bullish sentiment has quickly pushed toward an extreme."

Hochberg says 10-day breadth (or the percentage of New York Stock Exchange stocks participating in the autumn rally) topped on Oct. 23 "and has recorded a series of lower highs against rising price." The strategist says 10-day NYSE up volume topped on Oct. 21 "and has also lagged the rally."

He also points to Investors Intelligence surveys showing twice as many bulls as bears. The spread is even greater in a survey by the American Association of Individual Investors, Hochberg says about the willingness of Americans to throw their money at stocks in this, a third consecutive losing year for equity markets.

We have two sets of distinct turn dates coming in the next two weeks and odds are strong that the market will record a high then," says Hochberg, who relies on Elliott Wave patterns for his forecasts. "I've heard talk today of the market breaking out. Sorry, but that just doesn't hold water. The blue-chip indexes have not even pushed to their August highs, and under Elliott Wave analysis, that would be normal for a bear market correction."

Hochberg sees a parallel between the autumn rally and the one that followed the Sept. 11 attacks. "It feels to me much like it did in January-March of this year, as the market was putting the finishing touches on the bear market rally from the Sept. 21, 2001, low. Everyone was relieved that the terrorist attack did not lead to something worse. Economists were talking up the economy. Fund managers were telling everyone that there was little chance that we would see three straight down years in the market. It's a bear market, and it's not over." See Elliott Wave International. (http://www.elliottwave.com/)