Monday, August 8, 2005


The Summer rally, which was suspect due to lack of Volume and the few number of stocks leading it, finally came to at least a short term end last week. Many of the Sentiment Indicators foretold it the last week or so:
The CBOE put/call ratio reached 60 the previous week (and 61 last week); and the ISEE call/put ratio hit its alarm of over 200 (206) - 205 two weeks ago. My cumulative Advance/Decline number hit a stratospheric 66,465 before backing off last week; and the McClellan Oscillator reached a minus 47 this past week (-50 seems to be the normal turnaround level), and the Summation had hit 940 the previous week (+1,000 serves as its upper limit).
Bullish surveys were hitting high levels of 57 (I.I.,AAII, and Market Vane) with AAII Bears at only 17.7%; the new Barron's Panic/Euphoria chart also broke above the Panic line of -.30 for the first time at -.27, followed by -.29. And most importantly, the Bullish Percent topped out at its usual range of 74-75 stocks on Buy signals.
Technically, the Industrials also reached its Resistance level just under 10,700. Hopefully the correction will take a breather at minor Support levels of 10,420 (DJIA); 2160 (Nasdaq); and 1215-20 SPX, while the largerr stocks sit on the 200-day MA.

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