US stock market nears important bottom ?

Discussion in 'Technical Analysis' started by serg007, May 14, 2005.

  1. serg007


    Historically, the ratio of Nasdaq to S&P has served as a reliable indicator of the broad market's trend direction. Now it looks like broken out and starting the new uptrend.
    That might mean all negative economic info is priced in, and market is just starting the new upleg...
    Any commentaries please ? [/B][/QUOTE]
  2. cool chart

    someone would call the lower low on may 2005 compare to aug 2004 a divergence, because the QQQQ & SPY is considerably higher in may 2005, compare to aug 2004.

  3. I would have to agree that this appears to be bullish

    The trend looks well defined on the QQQQ\IWM chart
  4. serg007


    I guess you're right and I am playing the market from the long side right now... But I'd have to admit that the long-term pattern is scary :(

    Actually, May close might be the moment of truth. If the bullish implications of the NDX/SPX ratio were enough to move NDX back above its middle Bollinger on the monthly closing basis- that might result in the failure downside break and massive rally ahead :cool:
    But if it were not able to do so... :eek: :(
  5. No doubt about it--June 1st the picture should be much clearer. If we close over 10400 on the dow by the end of May, we're headed higher--if we stay about where we are........................... LOOK OUT BELOW
  6. You think a few months of data makes a "reliable indicator"? The market is getting to be like the fucking weather.
  7. serg007


    I would not think so if this few-months-long picture did not fit the long-term multiyear relationship. But look at this monthly chart of NDX: [/B][/QUOTE]

    Every little swing in the NDX/SPX ratio coincides in time with the similar swing in NDX itself. Actually I am not opening America, this idea is well described in John Murphy's Intermarket Analysis :)

    That is why am I so intrigued. From the one hand, almost everything (including seasonality in April-October) is against bulls right now. But from the other, this upside breakout in technology stocks :eek:
  8. Looks more convincing in the longer view. But I think the Fed is choking the economy before it could fully recover from the last throttling (all we got was a little mini-orgasm), so I am down on equities. In fact I am down on everything except the dollar. I think that cash soon will be king, especially in real estate. I am even thinking of shorting gold, though I'd rather eat a snake.
  9. serg007


    I am down on equity market "mentally"...Probably sometime in the long-term it will be down. But taking into account the current technology outperformance, I'm bullish on the market in the shorter-term, actually holding some longs in QQQQ and SPY...
    But only time will tell ! :) Good luck to all of us, both bulls and bears, if it only were possible :D