04/28/12 – Bob’s Saturday Update © ™
WHAT’S ON MY MIND?
For me there were no sales, no buys, no nuthin’, just holdin’ on.
I’m waiting for a significant new high above the April 2nd peak. This will be the proof that we have embarked on another step upward in Large Step #3 since March 2009. A rise to SPX 1470 wouldn’t seem unreasonable. A rally to 1470 would equal the rise of the October 2011 rally.
When I post a possibility, this is only me thinking what “could be” not what “will be”. Please remember to make the distinction.
One Possibility:
The market “could” rise and make a token new high and then turn down. That would qualify as step 3 counting from the November 2011 bottom. If that happened, the November count would be complete and the correction that I had originally foreseen on April 3rd would come into play on the token peak. Just a thought.
WHAT’S HAPPENING?
The news wasn’t good Friday morning with disappointing GDP numbers and the downgrade of Spanish debt, but the market shook it off and advanced. How the market reacts to news can be an important indicator to the trend and today was a positive sign. The only problem was late in the day the market began another correction and lost half of its gains. We’ll see how next week goes, but a 1-3 day breather wouldn’t be out of the question.
We also have the ADX indicator signalling a correction. This indicator can be very useful showing reversals. The rules for the ADX are in the notes below chart #40.2 on Page 3.
04-27-12 ADX INDICATOR
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Below are a few of the indicators from MY CHARTS
The new highs have been advancing consistently since the recent bottom. Today the indexes had a meager advance but the new highs had lots of pep. Sometimes we get a day of non-confirmation from the new highs before a correction begins and that didn’t take place today.
We want to see the new highs surpass the February figures as that would be a very good confirming sign.
04-27-12 NYSE NET NEW HIGHS
The cumulative volume line is advancing and its oscillator is in the neutral zone. Lots of room for advance in the oscillator before anything meaningful take place.
04-27-12 NYSE CUMULATIVE UP-DN VOLUME LINE
The advance-decline line is nearing a new high and its oscillator isn’t overbought.
04-27-12 NYSE CUMULATIVE ADV-DEC LINE
None of the oscillators on the McClellan chart are overbought. But the old style McClellan oscillator is close to the overbought line. It’s the only one of 4 oscillators in the chart below that is near overbought.
04-27-12 McCLELLAN SUMMATION INDEX & OSCILLATORS
The economy as portrayed in the chart below is a mixed bag. Copper bottomed in October 2011 and has completed two steps up and presently has a smart rally for the beginnings of a third step up. I would like to see silver follow copper higher. Some think of silver as a precious commodity but it’s much like copper and plays a vital role in our industrial economy.
Long term rates (TNX) aren’t moving up, which they normally do in an improving economy. Now that the FED is getting out of the bond manipulation business, rates may rise.
The CRB has two feeble steps up.
The dollar put in a strong rally off of a September 2011 bottom.
04-27-12 The Economy
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Stock-Market-Observations 
April 29, 2012 at 3:15 PM
No gold for me (yet).
Bob
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April 28, 2012 at 10:31 PM
Bob do you trade Gold and Silver? Your thoughts on the miners?
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April 28, 2012 at 3:54 PM
Hi,
I can’t be a big bear until we finish the bull market that began March 2009. Taking out a significant low like October 2011 is a very big deal in my method.
I would have a difficult time (but not impossible) making the count work if we had a 25% correction this year (below Oct 2011). For me, that would probably signal the end of Large Step #3. Since I don’t believe we are in a bull market like the 80s and 90s, wave extensions like a 4th and 5th step up would be difficult to visualize at this time. Only a 4th and 5th step scenario would fit Terry’s thinking and I’m skeptical.
In addition to the megaphone formation, I have shown the possibility of a massive head and shoulders. We could be forming a right shoulder in this time frame. I have always favored the megaphone but I can’t tell the market what to do, it tells me.
Since nothing is impossible and the stock market loves to keep me awake at night, I would suspect that lies somewhere ahead.
Bob
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April 28, 2012 at 3:13 PM
A chart that plays out to Terry’s predictions.(Japan) We would bottom sometime in 2013 have a 4 year rally than the last leg down in 2018. I think this fits your long tern outlook?
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