You still look positive and I would love to believe your positive forecast. But said that doesn't the 50 day ema on nasdaq below the 200 day ema worry you. Doesn't it warn a market crash. Or is it the fact that the terror alert got factored in, else we should have seen a rally last week. Anyway I am skeptic about the rally now unless something happens soon to move nasdaq above the ema's soon.
Zeev, looking over things the past couple of days, I have made a few mental notes I'd like to share.
-Tim Ord, who does some nice volume studies on the markets, has pointed out in Jan. 2004 we took out the Jan. 2001 COMP 2100 high on significantly higher volume, implying a bullish break that should continue after a pullback to test underlying support.
-If you look at the OBV on the COMP weekly chart, you'll notice an inverse H&S formation on that indicator. Often times these patterns in the indicators play out. The left shoulder in this pattern is in the area of the Sept. 2001 low at 1387 COMP. While we do not have to move down that far, I think even a move down to 1750-1795 COMP would still have bullish implications going forward based upon this pattern. The measurement of this pattern is about COMP 3142, which seems excessive, but I'm just passing along the information.
-My Happy Family Theory of Markets is still waiting for the SPX and Dow to take out their May lows. We may need that to occur before a solid low is in place. There is a cycle low later this month around August 25 that would fit that bill.
-Option open interest - The open interest this month is quite bearish, but September looks fairly bullish. That also plays into the theory of a weak end to August to find a solid low.
-F/A - Events We've got the Elephants meeting in NYC in the end of August and the Olympics around that time frame as well. We also have the 3rd anniversary of 9-11 coming up. It would not be surprising to have weakness in the markets and light volume in light of those very important and very visible events.
-T/A - We've got weekly 3-black crow targets on the NDX and COMP that have not yet been met. The NDX target is around 1325-1335, depending on your views on e-wave.
-E-Wave - An A=C drop from the Jan high to the March low would be about 1332 NDX, which would line up with the cycle low in the end of August and the trendlines that were tagged last week.
-The COMP 3-black crow target is 1796 COMP. The A=C drop on the COMP (with the drop from June 30 equal to the drop from the 2154 high) is 1797 COMP. 1795 is the top of an old gap. 1795 also matches up with the NDX targets of 1325-1335.
-If the COMP and NDX hit their respective underlying targets, the SPX and Dow ought to take out their May lows, satisfying the Happy Family Theory of Markets.
-The 5-day and 10-day TRINs reached levels 4-weeks ago that historically kick of strong rallies. The last time we had levels like this there was a 5-week lag between the TRIN extremes in early February 2003 and the March 12, 2003 lows. Due to the high level of program trading, the lag time between the high trins and the kickoff of a new rally may have increased.
-The drop from the January highs to the March lows was 9-weeks. The drop into the August 25 cycle low will also be 9-weeks from the June 30 high. That satisfies the A=C time aspect. If the price aspect comes in at COMP 1795 and NDX 1335 during that time frame, we'll have a good indication that is a good turn, especially when combined with the convergence with the support lines during that time frame.
-The 1935-1936 comparison chart still has a 94% correlation to the price of the S&P, which is still the highest correlation of historic charts I've seen.
Note that both of these charts end the year quite strong, which is in line with what many of us were expecting.
Anyway, I guess what prompted me to summarize these things in this post was the 8-15 date you have for moving above 1940 COMP. I think the date could actually be 9-15 and we'd still be OK. We'll see.
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