For Monday, November 25, 2002
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Stocks: A Clear Path for Stocks Ahead
There are times when the path ahead in the stock market is clearly marked. And, there are many
more times when that path is shrouded in fog. Fortunately, we are at a time when the path ahead
is clear.
Reviewing the bear market rally: The market bottom in early October (8 Oct in NASDAQ, 10 Oct in
the Dow), kicked off wave A of an A-B-C rally phase. Wave B consolidated the gains from the 6
Nov top and we are now within the final rally, wave C. Within wave C, the market is tracing out
an impulsive five-wave move with wave 3 complete and wave 4 in progress. Wave 3 was relatively
weak as third waves go, falling short of the net advance in wave 1. Since wave 5s are usually
the weakest wave, it's very possible that we've seen the high price of the entire bear market
rally already. Normally, wave 5 will move the market to a higher high, though, so it's more
likely that we'll see a higher high this week, but don't count on it.
Timing. A tremendous confluence of timing indicators point to a turn this week. And, there is a
very important behavior in the market which will help pinpoint the top as we discuss further in
our Detailed Comments Page . . .
http://www.marketclues.net/cgi-bin/myclues?trading=20&member;[email protected] or
http://clues.dhs.org:777/cgi-bin/myclues?trading=20&member;[email protected]
Euro Currency: http://www.marketclues.net/cgi-bin/myclues?chart=/:/futures/d/ec_a0.4903.html&member;[email protected]
The Euro remains close to its recent highs, but, fundamentally, there is no reason for the Euro
to be so overvalued. Interest rates are relatively high for a zone with such poor economic
prospects, but appear to be the only thread holding this currency up.
U.S. Dollar Index:
http://www.marketclues.net/cgi-bin/myclues?chart=/:/futures/d/dx_a0.4903.html&member;[email protected]
The US Dollar Index has held within a narrow trading range for months, but given the potential
for a rally in gold prices, is likely to break down soon.
Canadian Dollar: http://www.marketclues.net/cgi-bin/myclues?chart=/:/futures/d/cd_a0.4903.html&member;[email protected]
The rangebound trading continues with a likely steep decline ahead once the bottom falls out.
S&P; Toronto Stock Exchange
http://www.marketclues.net/cgi-bin/myclues?chart=/:/indices/d/_sptse.4903.html&member;[email protected]
The TSE should find strong resistance at the August high (380.33) and turn down.
Australian Dollar:
http://www.marketclues.net/cgi-bin/myclues?chart=/:/futures/d/ad_a0.4903.html&member;[email protected]
The A$ continues to struggle at the resistance line on the Weekly Cash Chart. The yellow
polytrendline suggests some upward pressure could potentially continue for up to two more
months, but the trend should turn down strongly at some point, relieving pressure on the
Australian stock market and Australian exporters. It's very likely that the government is
artificially levitating the A$ due to some unwise investments they made on the future course of
the currency.
Australian All Ordinaries:
http://www.marketclues.net/cgi-bin/myclues?chart=/:/indices/d/_aord.4903.html&member;[email protected]
The market is closing in on resistance at the brown polytrendline (just above 3000), which
should provide a ceiling this week. Although the Australian market tends to be a follower of
Wall Street, its recent relative underperformance may be a leading indicator if it turns down
alongside NASDAQ, rather than the Dow.
Australia Business News http://www.abc.net.au/news/business/default.htm
Yahoo! Australia Business News http://au.dailynews.yahoo.com/Full_Coverage/Australian_Economy/
London Financial-Times 100:
http://www.marketclues.net/cgi-bin/myclues?chart=/:/indices/d/_ftse.4903.html&member;[email protected]
All of the stock markets are in basically the same shape this week: topping. In the case of the
London market, the high is likely to be below the August high of 4466.4. This is an important
market for all investors to watch: the London market often tops out before the blue chip US
indices.
Bonds / Interest Rates:
Bonds continue in a long term bull market with corrections mostly due to strength in the stock
market. With the stock market trend changing this week, the bond market should benefit from
flight-to-quality buying. Note: extended comments will be found on our Extended Comments Page .
. . http://www.marketclues.net/cgi-bin/myclues?trading=20&member;[email protected] or
http://clues.dhs.org:777/cgi-bin/myclues?trading=20&member;[email protected]
Target 2030 Zero Coupon Bond Fund Quote
Sectors and Individual Stocks (Subscribers Only)
For tables ranking sectors and individual stocks, and links to charts of 3500 individual stocks
and sectors, please visit your very own MyClues Home Page
[http://www.marketclues.net/cgi-bin/myclues?myhome=yes&member;[email protected]] -- in the CHARTS & RESEARCH
section of the page, you will find a wealth of tools for selecting top sectors and stocks,
including access to our exclusive realtime, intraday indicators.
For a 3-4 month free trial subscription, click here.
Commodities (Subscribers Only) For complete charts of commodities, please visit your very own MyClues
Home Page [http://www.marketclues.net/cgi-bin/myclues?myhome=yes&member;[email protected]] -- in the CHARTS & RESEARCH
section of the page, you will find links to webpages containing links to the following:
* Daily Indices, charts of sector and popular stock and bond market indices on a daily basis
* Quarter-Hourly Indices, charts of selected indices on a 15-minute basis
* Daily Futures, charts of futures markets on a daily basis
* Quarter-Hourly Futures, charts of those same futures markets on a 15-minute basis
For a 3-4 month free trial subscription, click here.
CRB Index: http://www.marketclues.net/cgi-bin/myclues?chart=/:/futures/d/cr_a0.4903.html&member;[email protected]
The pattern in the CRB is a broadening top formation. Although this implies volatility, it also
implies a significnat long term top is forming. This is bad news for the economy as it implies
a return of the deflationary trend and recession/depression ahead.
Copper: http://www.marketclues.net/cgi-bin/myclues?chart=/:/futures/d/hg_z2.4903.html&member;[email protected]
Copper continued up last week and appears headed for the 62% retracement price of 74.67 basis
December. Copper is a great leading indicator for the economy: if the 62% retracement price is
exceeded, it indicates a strengthening economy.
Gold Stocks: http://www.marketclues.net/cgi-bin/myclues?chart=/:/indices/d/_hui.4903.html&member;[email protected]
The contracting triangle is nearing completion. Is gold gearing up for a flight-to-quality
rally due to some future event? It certainly looks that way. We shall soon see the outcome of
this formation.
For an up to date list of the stocks in the Gold BUGS Index, see
"http://www.amex.com/othProd/prodInf/OpPiIndComp.jsp?Product_Symbol=HUI".
And, for charts of -- and ratings for -- those stocks, visit your MyClues Home Page (links at
the top of this page).