Technical Watch Cumulative Charts

Cumulative Data
Week Ending 1/7/05

"The bottom line for this week is that the marketplace continues to support very strong internals at this time but where - under "normal" conditions - we now have our best chance for a rest period (or pause) to materialize since mid October. However, because of the high volume and breadth McClellan Summation Index readings, the short term expectation would be to look for a price trading range to develop during this pause for most of the month of December. This same period should also help alleviate the bullish and complacent sentiment that currently nags the trading environment as well. It will be from this next base formation where an exceptionally strong price advance should then take place, so position yourself accordingly." - 11/26/04 update

Though many price patterns continued to scratch and claw their way higher in December exhausting the final fumes of momentum that were generated by the fall rally, the internals took their necessary rest, and like a mightly exhale, have only now begun the corrrectional process that will be needed before the next phase of the price advance can begin.

This weeks comments are annotated on the McClellan charts below, but at this juncture, it appears that we're in the beginning stages of a 4-6 week retest of the price patterns that were violated to the upside over the last couple of months, and where the market will go about its business of convincing those who have become bullish over this same time period that they may not be correct in their forecasts.

Additional comments will be shared on the discussion boards as needed.

The above charts are courtesy of StockCharts.com

Comments provided are for informational purposes only
and not intended for trading purposes.

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