Outlook for Selected Markets. DJIA - S&P 500 February 12/05
by Bill Voeten
February 12/05
Summary for Week Ending 12th February 2005
The market continued on its merry way again this week, after
faltering early , the recovery on Friday was spectacular. This was in
keeping with the current trend, and now its just a matter of time to see
if and when we manage to make it to new highs
For the past few months I have been pressing that its important to watch
how the market behaves following on from a counter trend movement. This
week we saw the market creep its way to higher highs on Monday and Tuesday
although nothing compared to the action of the previous Friday. The market
then put in a 2 day decline on Wednesday and Thursday which can be considered
a normal reaction and then recovered all of the decline and more in 1
day on Friday. What is noticeable about this movement is the fact that
the decline on Tuesday and Wednesday cut into the space of the previous
swing high, meaning that there is no 'air gap' with this pattern, which
would indicate that the level of energy behind it may be dissipating.
Looking at this weeks chart the swing levels are highlighted as well as
the time ranges for the last major decline at 21 days. Monday the 14th
Feb marks the 21st day of the rally, so it should be interesting to see
if it can meet at the level of the previous high. If it does the we would
have a price and time square as well as a double top. The first point
is important however the second is less so. It is very rare indeed for
a double top to end a run upwards, and a false break is always a far more
likely event to watch for. Saying this I don't hold much expectation for
the market to 'Square out' on Monday but I do expect the run to continue.
Looking ahead there is not too much to say, except that last weeks scenario
is still in play.
Looking at the All Ords, we are coming up to the requisite
time zone on Monday. Again I would have been looking for the market to
rally strongly into the event, something that isn't really apparent. I
have included a chart of the 50 Leaders as its worth a look.
Charts
S&P 500 See
Chart
50 Leaders See Chart
Bill Voeten
gannalyst.com