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The Sound of Hammers

The Last Nail

Last week we wrote of the continuing strength in the bond market ("Bonds, James, Bonds"), and the puzzlement it was causing bond market pros and others. This week, in testimony before House and Senate committees, Fed Chairman Alan Greenspan added his name to the list of puzzled pundits when he referred to the continuing bond market strength as a "conundrum." This belated capitulation by the biggest wig of all just might be the last nail in the coffin for bonds. If so, this will be a week to remember - and regret.

The First Nails

Stock market momentum has waned in recent months. Now, there are technical signs of an intermediate-term top. In the charts that follow, the 1-year charts on the left show the intermediate-term picture, while the charts on the right show the long-term view.

The Dow

Double-top trouble, as shown. Indicated support at ~ 1400 and its 200-day moving average (200 DMA) is important.

   

Bullish, but struggling.

 

S&P 500

Double-top trouble, as shown.

 

Bullish, but ~1160 support and its rapidly approaching 200 DMA are critically important.

 

NASDAQ

Failure to attain the recent high. Faltering at resistance.

 

Bearish unless/until it can breach the major double-top indicated. 200 DMA and rising trendline support are critical, long-term.

 

NASDAQ 100

Failure to attain the recent high. Faltering at ~ 1550 resistance, the importance of which is shown to the right.

 

Failure of the breakout to new highs is a bad sign. The rapidly approaching 200 DMA and trendline are critical.

Stay tuned!

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