Market Breadth Data******************************

Saturday, December 23, 2006

Merry Christmas
and
Happy New Year


This is the last update for this year.
There are no CIT dates the first week of January 2007.

Saturday, December 16, 2006



Time for the half-monthly update.
By now it should not come as a surprise how well the CIT dates correspond to market turns.

A new target on the SPX was hit, and the picture continues to be bullish, although the negative divergence with $ flow, discussed a few days ago, still persists.

I’ve mentioned before the Zero lines which originated from the Summer 2003 down swing, and which have contained the current rally pretty well so far.
The 2003 swing lasted 58 days. 58*2.618 = 152.
7/18/2006 + 152 = 12/16/2006

Tuesday, December 12, 2006




Here’s a chart that warns of trouble ahead. It tracks the actual inflow and outflow of money from the SPX.

Also notice the high correlation with the Overbought/Oversold indicator.
Which is quite remarkable, since they measure two completely different sets of data.


Saturday, December 09, 2006

Today I would like to experiment with isolating the short-term cycles. This leaves the following CIT dates for December: 7, 13, 18, 26 & 29. I’ll leave the CIT calendar unchanged, though, for comparative reasons.

If my assumptions are correct, then the close on January 2nd should be below 1400.

Thursday, December 07, 2006

Looking at the SPX today reminded me of a chicken who's head has been chopped-off, but that keeps on running.

There will be some changes made to the CIT calendar over the week-end.

Tuesday, December 05, 2006



The SPX didn’t want to wait until Tuesday and promptly made new highs, getting overbought in the process.

Not all indices made new highs, however, so there is still room for concern about the downside.

Since today is a CIT day, I can only paraphrase my comment from last week and venture that today’s highs will provide a reasonable short swing entry point.

Sunday, December 03, 2006




Have we reached the end of the rainbow ?

The charts above and the correlation charts from last month seem to suggest so.All of the correlation charts point out to either a sizeable correction or choppy trading in December.

Judging by the high number of CIT dates I would opt for a choppy market environment.

From a classical TA point of view the trend is still intact, and there are many support lines below the current close, the most important being 1388 and 1369.
The Overbought/Oversold indicator is not of much help right now, being stuck mid-range. It is a day or two away from reaching overbought levels once again, but I think we’ll need to wait until Tuesday before the market regains its strength.

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