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Thursday, March 28, 2013

A Changed Market

Normally on Good Friday I would post the normal Friday charts, but since I am going to be traveling tomorrow, I included the pivot points in today's chart. For the second time in 3 months, we have cleared the R2 pivot point, although this time not by much, but it does prove that January was not a fluke. We are in a very strong bull market right now, with severely weakening internals that, so far, have been barely reflected in price. Tbe SPX has hit a new all time high, so that is now over with, and the market seems to be in the process of setting a bull trap, but so far, it hasn't been sprung. Markets never ring a bell att he top, so we will have to be paying attention here, because things can get quite treacherous, but for now, we have just fnished about the best quarter I have ever seen in the market, and it really isn't showing signs of stopping.

One thing you can say about the Nasdaq 100 is that, despite being a laggard, it is operating pretty mjuch as you would expect, staying withing the bounds the pivot points predicted for it. It is building some upward momentum, but not really moving up.

The Russell 2000 finish the month dead n it's R2 pivot point. It is starting to lag, which will ultimately be a major drag on the market, but for now it does not seem to be.

The percentage of stocks on the NYSE above the 50dma is still showing a lot of weakness for a market that is at an all time high. Notice how this high is lower than the one before it, which is lower than the one before that. There are 3 possible scenarios: a move above 75, which should be good for at least another 2 or 3 month bull move;a move below 55, leading to a substantial correction; or we stay right here, and the market keeps dribbling up or down for a few more weeks. At this point it is not tipping it's hand, although he odds are, with the down trend it is in, be going down. I just don't know what hose odds are.
The same indicator on the Nasdaq, which, in recent months, had stopped lagging. Now it is starting to lag again. Whether that has any real significance or not remains to be seen; it probably does, but on Planet Bernanke I don't know what.

Other than being at an all time high, nothing much has changed since last week. However, the market at least seems to have made a big change in character since the first of this year. SInce I have never seen the beginning of a secular bull market up close, I can't say that that is what is happening here, but we are clearly in a different market than we were even in late 2012. I think things could get pretty interesting in April and May.

I will have the new highs update shortly.

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