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Monday, January 07, 2013 1:02:40 PM
“White Noise?”
By Jeffrey Saut
* Monday, January 7, 2013
The call for this week: We now have two conflicting mantras. First, “If the bulls fail to call, the bears may roam on Broad and Wall” (we got no Santa rally last year). Second, “So goes the first week of the new year, so goes the month, and so goes the year” (the SPX was up 4.57% last week). Of course I really like the “December Low Indicator” that I related to the folks at the Stock Trader’s Almanac years ago, and still graces that publication. To wit, “Pay attention to the December low. If that low is violated during the first quarter of the New Year, watch out.” For the record, last December’s closing “low” was 12938.11. Then there are the plethora of questions I have received about Dow Theory given the recent strength of the Transports. While the D-J Transports (TRAN/5534.06) have tagged a new reaction high, so far it has not been confirmed by a like move from the D-J Industrials (INDU/13435.21) to a new reaction high (read: upside non-confirmation). This could also prove to be a short-term negative when combined with all the other short-term negatives mentioned in this report. That said, if the Industrials confirm the Trannies by breaking above their October 5, 2012 reaction high of 13610.15 that would be a Dow Theory “buy signal.” However, if you want to think about a new secular bull market (as stated, I think there is a 25% possibility we are already in one), a break by the Trannies to new all-time highs above their July 7, 2011 high of 5618.25, confirmed by a new all-time closing high in the Dow above its October 9, 2007 high of 14164.53, would imply we are indeed in a new secular “bull market.
http://www.raymondjames.com/inv_strat.htm
George.
Click on "In reply to", for Authors past commentaries.
By Jeffrey Saut
* Monday, January 7, 2013
The call for this week: We now have two conflicting mantras. First, “If the bulls fail to call, the bears may roam on Broad and Wall” (we got no Santa rally last year). Second, “So goes the first week of the new year, so goes the month, and so goes the year” (the SPX was up 4.57% last week). Of course I really like the “December Low Indicator” that I related to the folks at the Stock Trader’s Almanac years ago, and still graces that publication. To wit, “Pay attention to the December low. If that low is violated during the first quarter of the New Year, watch out.” For the record, last December’s closing “low” was 12938.11. Then there are the plethora of questions I have received about Dow Theory given the recent strength of the Transports. While the D-J Transports (TRAN/5534.06) have tagged a new reaction high, so far it has not been confirmed by a like move from the D-J Industrials (INDU/13435.21) to a new reaction high (read: upside non-confirmation). This could also prove to be a short-term negative when combined with all the other short-term negatives mentioned in this report. That said, if the Industrials confirm the Trannies by breaking above their October 5, 2012 reaction high of 13610.15 that would be a Dow Theory “buy signal.” However, if you want to think about a new secular bull market (as stated, I think there is a 25% possibility we are already in one), a break by the Trannies to new all-time highs above their July 7, 2011 high of 5618.25, confirmed by a new all-time closing high in the Dow above its October 9, 2007 high of 14164.53, would imply we are indeed in a new secular “bull market.
http://www.raymondjames.com/inv_strat.htm
George.
Click on "In reply to", for Authors past commentaries.
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