(6-30-04) The markets got what they were expecting, and rallied modestly afterwards. The charts are telling us that there is more room to the upside, and the positive Quantifiers support it. However, we do believe that a pullback between resistance and the first upside targets (see table below) is almost certain.

(6-29-04) We got the up we suspected that was coming, and in the case of NASDAQ it came with 2-1 positive breadth and up/down volume, which is supportive of further upside action, however, the opposite holds true for the SP. Consequently, the overall picture remains neutral, but given that the indices remain above support, a modest positive bias is still warranted. If the FED's action tomorrow is to the market's liking, then we can see a further advance above resistance and on to the first upside targets, but if it comes on low volume, it would be an opportunity to short, and/or take profits on longs.

(6-25-04)  The indices tested  yesterday's break-out point, which is quite normal after a break-out. The test -at least today- was successful and the Quantifiers acted in tandem, which means the bulls are firmly in control. We do need to keep in mind yesterday's comment about the negative divergences between internals and price, however, the truth is price has overwritten internals for the past 18 months, consequently, in the interest of objectivity, until prices begins to act in tandem, the bulls don't have much to worry about, but when it does, that's a different story. 

(6-24-04)  The bulls came thru with  a break-out.  There is still  room for higher prices, and we ought to look for them as long as support at the break out point for each index continues to hold. One thing that needs to be kept in mind is the action but the Thrust Oscillators. The steep positive divergence resulted in the latest rally, it could very well be that the current steep negative divergence will result in an analogous decline, which will start in a matter of a few trading days. In any case traders will to deal with that when it happens, in the mean time the indices remain in a bullish mode, and capable of reaching higher levels, see upside targets in the table below.

(6-23-04) The Dow traded below support briefly, but the SP,  NASDAQ, the Utilities, and the Transports  never threatened to violate their respective support levels. All indices reversed and closed at the highs of the day and on increased volume. Today's action was bullish, but we have yet to break out. Given how choppy the market has been, we strongly urge you to avoid jumping into premature conclusions, let the market show  you its colors. There are times when the probability of getting faked out is considerably higher than normal, this is one of those times.

(6-17-04) The indices fell slightly, but the ascending triangles are still intact. The Utilities were the only index to break on the upside, but we are not sure how much weight to put on it. The Thrust Oscillators continued lower, and given that price also  moved  lower, we have to conclude that the odds are better than even that tomorrow we'll see a test of support at the low boundary of the ascending triangle.

(6-16-04) All the major indices have formed "ascending triangle" patterns. At the same time the Quantifiers indicate internal coiling, confirming that we will get a move of modest significance in the next few trading days ranging between  2.5% and 4.0%. The chart pattern is bullish, but most indicator readings are bearish, rendering an overall NEUTRAL rating on the market's immediate prospects. Given that price has overruled technical readings for the past 12 months, we would use a break above, or, below resistance as a more valid indication of the market's short term direction. 

(6-15-04) The indices gapped up and seemingly reversed yesterday's violation of support, by closing above it today. The real story is told  by the pattern in the Quantifiers. The circled pattern is one that indicates internal "coiling." If the Quantifiers continue to stay positive, the "coiling" will be resolved with  a move to the upside, however, if they penetrate the zero line  by 10-15 points, the "coiling" will be resolved with a move to the downside. Moves resulting from this type of formation have usually a magnitude of 2.5% to 4.0%. Thus, over the next 1-2 trading days we ought to pay attention a) to the action by the Quantifiers, and b) support/resistance levels.  Another violation of support by the indices, with a simultaneous decline by the Quantifiers below zero, would mean that in all likelihood the SP would decline at least to 1110. On the other hand, a close above resistance while the Quantifiers remain above zero, would mean that in all likelihood the SP will advance at least back up to 1155 level.

(6-9-04)The indices pulled back unable to move higher without alleviating the overbought condition, which is quite normal. Notice that all indices are still within rising channels, and holding above declining tops line they overcame a  couple of days ago. Consequently, it would be a bit premature to expect, and to bet, that the rally is over. It may be, but it isn't, as long as the indices are still within rising channels, and holding above support, which happens to be the case at the present time. For tomorrow, and for next week, the key level to pay attention to, is 1113-1110 for the SP. We ought to  be bullish above it, and bearish below it.

(6-8-04) Despite the early gap to the downside, most of the indices  held their ground,  moved higher later in the day, and finally managed to end the day unchanged, or, with minor gains. There was little desire to sell, which means investors are confident that the market is  going higher, thus, there is no need to sell  prematurely, and end up living money on the table. It also means, that as long as sellers are not in a hurry to sell,  a few buyers can push the markets higher on low volume. Having said that, we don't think the indices can overcome  the upcoming resistance and move on to the next upside target without alleviating some of the existing overbought condition. 

(6-7-04)The indices closed marginally above resistance,  on low volume. Is it for real? As long as today's lows are not violated in the coming days, the move is valid by definition. However, given that the McClellan Oscillators are at the top of their range, in all likelihood, the most we can expect for the near term is making contact with  the next resistance targets (see table below) PLEASE READ THE WEEKLY REPORT