Squiggles

Always hesitant to make market 'predictions', I nonetheless have done so during the past 4 months. (Fortunately, each one has been spot-on, even though it seems self-aggrandizing to make such a claim.) I did this to show a methodology for aligning the market's (many) oscillations with your expectations for individual securities.

This post, however, will mark my last 'prediction' re the market's squiggles. By now, you should have noted that the stocks I select trade stronger than the market -- they are leaders. This means they rise more and faster than the market when it rises and they decline less and slower than the market when it declines. Moreover, you should be able to make this differentiation on your own. Thus, you can view the specific recommendations as distinct from the market's oscillations. (What remains are your own vacillations. ;-)

This post also should align with a short-term (intra-day) downside completion to this phase of the decline (more intermediate term weakness likely during the next 4-8 weeks). I expect a reversal up and back into the sideways trend, as early as mid-day today or tomorrow. Yesterday's session has the appearance of a short term selling climax due to:

● Intermarket analysis: bonds rising, yields falling, oil looking short term toppy, and the $'s attempt to reverse up,
● Heavy downside volume,
● A low NYSE TICK Index reading of -1024,
● A relatively high closing NYSE ARMS Index reading of 2.17
● A possible positive divergence between price and the McClellan Oscillator.

I seek a downside opening,followed by a reversal higher. Should that upside reversal occur, I expect it to endure for several days - weeks before selling returns. I also would look for a continued fracturing of the market; for example, former leadership groups such as the homebuilders continue to have the appearance of heading lower, much lower in price. New leaders, however, counter-balance such weakness.

Comments and questions are welcome...