Dow Jones Industrial Average   10,549
Value Line Arithmetic Index   1715
30-Year Treasury Index   4.84%

The Big Picture for Stocks
The bull market is mature.

Technical Trendicator (1-4 month trend):
Stock Prices   Down
Bond Prices   Down

Most major averages had a potential "one-day reversal" today. This pattern is best seen on a candlestick chart, where it is sometimes referred to as a "shooting star" pattern. If you look at the chart below, notice the "tail" at the top of the daily chart. This "tail" sticks up on top of the "body" of the structure.

If you are not familiar with candlestick charts, here is how to read them. The top of the entire structure is the high for the day (or whatever other time period you are using), and the bottom is the low. The thicker part (the box) in the middle brackets the opening and closing prices. If the box is white, the top of the box is the closing price. If the box is black, the bottom of the box is the closing price.

Some technicians would say that one requirement was not met with today's pattern. A perfect shooting star would have a closing price below its opening price. In other words, the box is white rather than black as it should be to be a perfect shooting star. But my experience is that this requirement is not crucial to indicate a top, especially when you see the pattern after an extended upward move.

Sometimes after such a pattern, you have couple (or a few) days of pullback, then a rally to a very modest new high, then the correction begins in honest.

Because the market is overbought, sentiment figures show too much optimism, the bull market is two years old, and stock prices are generally expensive - there is a good chance that this signal is significant. How significant? Well, it is possible that you may not see these prices again for 4 years. I would put the odds of this at perhaps 60%.

I also would call your attention to a comment by Rich Bernstein of Merrill Lynch. Rich is a terrific market strategist. He is quoted in the "Wall Street Journal" on Monday November 8 as saying, "We expect a virtual tsunami of downward estimate revisions over the next several quarters (it seems to have already started!)"

Accordingly, I am adding 2 short sales to the Special Situations list. Sell short at tomorrow's opening (November 18) the Midcap Index ETF (symbol MDY, 116.38) and the S&P 500 Index ETF (symbol SPY, 118.58).