LONG TERM: BULLISH.
What started off as a negative week ended relatively unchanged. And, the main indices did reach an extreme oversold condition, similar to the late October low, and rallied higher. The TRANsports took off making all time new highs in what looks to be the resumption of the intermediate term advance: waves 1 and 2 completed and now in wave 3. We’ve updated all the charts including the ‘bullmkt’ charts for the NAZ/NDX/SPX/DOW/SOX/TRAN.
Our MMI has eased off a bit from the highs which is normal, and suggests a very positive shortened week ahead. If we are indeed in wave 3 of this intermediate uptrend it should be pretty explosive: a third of a third of a third. I’ve also noticed that Bonds continue to trend higher, and the bull market in crude and gold looks done. All very positive for stocks! Refer to the ‘bullmkt’ charts for each index to see the counts we have maintained throughtout the bull market of 2002. We’re still very bullish!
INTERMEDIATE TERM: UPTREND.
The uptrend remains intact. In fact, we anticipate that the next leg up, wave 3, is now underway. We labeled the short term correction in the NAZ/NDX/SOX as an ABC, wave 2, completing on tuesday morning. The TRAN/DOW bottomed last tuesday and have been trending higher ever since. We’re surprised at the quick and shallow short term correction in the SPX. But it kept wanting to go higher, while everything else was correcting, so it can be considered an acceptable wave 2. From the tuesday low, all the indices have been sluggishly moving higher. We’re expecting this week to resume the uptrend in earnest. The volume should be light, and there is end of month, end of quarter, and end of year positioning by mutual funds and money managers alike. I have been noticing cash buying in the indices not effected by the futures market. And, I expect it to continue into friday. All ‘daily’ charts have been updated. Looking for the uptrend to resume!
SHORT TERM: POSITIVE.
After a selloff friday, monday and tuesday. The market bottomed and has started to edge higher. We have been concentrating on the NAZ/NDX since they are the market leaders. They initiated this uptrend a week before the SPX/DOW bottomed in October. And, have led the market lower after making a top in early December. Now they appear ready to resume the uptrend.
We have been observing the EW pivot points during this correction. They were created during the first advance. Usually, after an advance, an index will pull back to one of the pivot points it set up during the advance, find support, and then start taking out the pivot points above it until there is not longer any overhead resistance. Thus far, this is exactly what the NAZ/NDX have been doing. We reiterate the pivots:
NDX: 1639, 1658, 1671, 1690, 1709 and 1717.
NAZ: 2195, 2220, 2230, 2251, 2269 and 2278.
The NDX soldoff on tuesday right into the 1658 pivot and held solid, rallied to 1671, vacillated, and then rallied right into todays high of 1690, before pulling back some. EW pivot 1671 should now be support!
The NAZ soldoff on tuesday to 2214, just below the 2220 pivot, held then rallied to the 2230 pivot, vacillated, and then rallied just above 2251 today before pulling back to close at 2249. Support is at 2230!
Once through the short term pivots, the NAZ/NDX should be well on its way to making new highs for this uptrend and the bull market. We posted these pivots on the 15 minute charts. The DOW/SPX/SOX will follow the lead.
BONDS: The uptrend we recognized a few weeks ago is well underway. We appear to be in the third wave and see higher prices, lower yields, ahead. Posted BOND122305.
cRUDE: It appears from this perspective the bull market is over. We can count five waves up into the Katrina high, early September, and now an AB correctional wave, with C underway. Posted cRUDE122305.
GOLD: It appears cRUDE’s partner is done as well. We have five waves up into the recent high a week or so ago, as noted in another post. Counting a $50 wave A down with a wave B bounce. Posted GOLD122305.
$$$: The uptrend here continues as the index held support at 90 and now appears to be heading to test the 92 pivot again, which it needs to pentrate to keep the advance intact. Posted $$$122305.
Best Wishes to all of YOU and your families in this Holiday Season.
Let’s aim to make 2006 a great year we will always remember. PEACE!