Thursday, December 04, 2003
New highs and a pullback...looking for early indications of "what next"
The pullback, after having *made new highs* (relative, of course, to recent performance) looks like the beginning of something big...but what? May be part of a complex topping, but there are signs of at least a rebound here (60 minute chart).
Please review the weekly and monthly charts, both of which indicate 'time is running out', ie, price has not yet accelerated within the forks and stands the chance of moving out of them, most likely as a consolidation prior to the next move, be it up or down.
The Growth/Value ratio chart continues in its channel. With the recent downturn in the Small Caps, the ratio is curling up, indicating a move back into the 'liquidity safety' of big caps. This counts as a bearish indicator, but is not a load-up-the-shorts-truck signal. This ratio has been a harbinger of broader market direction. Note that it is a weekly chart.
1 Nov: Bullish outcome targets 1050, 1065, and 1106 (on *monthly*, change from 1138). 5 Dec: Note that 1068 is the All Time High to recent low 38% retracement (see the monthly chart).
Keep in mind the 'handy' rule of thumb: Watch MACD. When above the zero line, bias is long, below zero, bias short. Hopefully this has helped some folks using the daily chart from shorting too early. It gave a buy signal (as shown on the chart), but with considerable intraday volatility.
135m chart ES :::
Daily SPX :::
65m SPX :::
Weekly SPXLabels: chart-analysis
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
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