Monday, June 20, 2005


Although not Indicators themselves, Horizontal Resistance levels constitute a psychological area where previous buying and selling has taken place, either by self-fulfilling technical analysis, automatic stops or computer alerts.
This past week the DJIA stopped just shy of the 10,660 Resistance, closing Friday at 10,623; the Nasdaq closed at 2090, just under the 2100 level; and the SPX right at 1216. Monday then reversed down at the open, which it does frequently after Quadruple Witching when previous price action was rising.
Only a few Sentiment Indicators remain short term Positive this week: Adv/Decs were strong at 2600 to 900, and the New His to Lows were a climactic 9:1. Barron's Panic/Euphoria Index is still in the Panic zone, barely, at -.46; the NAZ to NY Volme is not speculative as yet, and the Specialist shorting is still benign.
What stands out on the topping scenario are the following: my cumulative advance/declines reading hit a new alltime high of 62,015 while the concomitant McClellan Summation also broke the 750 boundary by the Oscillator hitting a high of 45; the survey Bears are receding with the AAIIs at 18.8 and 20.4; Market Vane's Bulls are at 69. Even the U. of Michigan Confidence Index rose to 94.8 from 86.9. While the Bullish percent has seen higher tops, up to 78, it is now at 66, where previous tops have occurred.

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