Last weekend I had a bad chest cold and I may have been a little bit too gloomy when looking at the SP500 index charts. I have been looking at the ValueLine Arithmetic Index (VLE) charts this week and the total market does not look in bad shape. Price dropped about 5/8 of the 1987-2007 range but is back near the 1/8 line. I expect resistance at the 1×1 angle but long term the total market does not look as bad as the SPX charts do.
The 2007-2009 bear market has been retraced about 3/4 of the range in less than 50% of the time. I will not be surprised to finally see a correction back to the 50/50 point from here.
The VLE swing chart shows some topping action since September. It is possible the VLE will make a new high here but I do not think it is going much higher without a 90 day correction.
The action in bonds showed a big spike up in yields on Friday after a surprisingly good jobs report. Two things to note here – 1) yield remains in a down trend, and 2) the 1/8 time cycle has changed the trend. Because the 1/8 time cycle is up in a couple weeks, it is possible that yields have hit a low for some period of time.
The US Dollar (USD) also bounced on Friday. But keep in mind that it remains in a downtrend until there are swings higher.
And finally, the S&P Banking Index (BIX) remains near the 1994 level and has shown no real strength during this bounce. I suspect there are a couple more years of pain in the banking sector.
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Tags: Banks-Financials · Bonds · Market Outlook · US Dollar (USD) · Value Line Arithmetic Index (VLE)1 Comment
where I can get like above s/wave