The weekly NYSE A-D line still shows a head and shoulders pattern and the
daily NYSE A-D line is tracing out a minor downward a-b-c pattern. The decline
could easily terminate soon and the A-D uptrend could quickly resume, but the
beginning stages of amplified declines look like the pattern currently
manifesting. Or, of course, a moderate correction could occur over a period of a couple of
weeks.
In Jan. 1999 the A-D ratio made a top but the SPX, Dow, and Nasdaq (price
dominated by large-cap members) continued up until March 2000. So the large cap
sector can continue much higher without support from the A-D line, but that does
not usually occur until the later stages of a bull market. The risk is that any
steep correction in the later phases of the bull cycle can turn out to be the
beginning of a primary bear market.
Since this bull market lost it's A-D and R2K leadership early in 2014, it
has experienced much more volatile behavior than the steady rise of 2013, with
net annual price gains appearing and disappearing repeatedly.
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