"Good Cause for Jitters"

[NVMojo]

May 14, 2006

--The market tanked again on Friday, adding to the declines of Thursday. Bloomberg headlines today that "US Stops drop this week; S&P 500 Falls the Most in 7 Months".


Sorry to tell you this, but the nearness of the all-time-high weekly close (11,723) is a more serious problem for the market than you might realize. The reason has to do with Elliott Wave action. Under "Elliott rules" if the US market's all time high really was early 2000's 11,723 (weekly) then in order to technically argue for another series of bullish peaks requires that the Bulls take out the old all time high. This would have the effect of opening up technical charts for an additional advance.


Sounds simple enough? But there is a catch. All the major indices that we track have failed to push through to new highs yet. With the Dow's close last week (11,577.74) intact, the market could be on the verge of faltering.


On a "not-adjusted-for-inflation basis, the Dow retraced 96.5% of the all time high, while the NASDAQ Composite has managed a 30.8% retracement

more...

http://www.urbansurvival.com/week.htm