Monday, May 9, 2005


For years May was the best month of the year for the DJIA; the era before, it was one of the worst, per Yale Hirsch's Almanac. With both the NASDAQ and DJIA below their 200-day MAs and very important Resistance just above, the short term doesn't look that great, after the usual first-of-the-month inflow of money. The SPX (500) of large cap, dividend paying stocks looks healthier, just above its 200-day and resting on the 1163 Resistance-turned-Support. This is also in synch with the NYSE/NAZ Volume ratio, which is at its lower end at 113(non-speculative, ergo Bullish); and, opposable new highs/lows ratios also confirm the buying of large stocks.
One Bullish extreme, rarely cited, is the 52 reading on the UBS Investor Optimism Index, a New low since I've followed it ( 3 years). This could bode well for a big Intermediate term rally later this year. Finally, some other Bullish "tells" are the CBOE put/call ratio at high 74, AAII Bears hitting a huge 44% ( II at 30%), the Nova/Ursa ratio still in a low range at 20, and the Bullish Per cent at a bottoming 52%.

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