Stock Market -- Technical

S&P500: 1275

Well, the market has rallied a little off the 1260 level
of the recent post, as anticipated. As well, I have not
tried to play it, either.

When trading a bull market, I like to go long on deep
oversolds with a significant $ commitment. No such
event occured this time. In fact, when I look at the
broader market viewed weekly, to include small and mid
caps, I see a market that's still overbought when put on
an equal $ dollar weighted basis. The same holds true for the
cumulative NYSE A/D line. So, I am on the sideline for
now.

I keep a proprietary index of the cumulative NYSE A/D line
which I adjust econometrically for the daily TRIN. I feel
it gives me a good picture of internal supply and demand.
Like most of the indices, the proprietary one also features
an ascending triangle, with the base extending back to the
July, 2004 lows. Advancing this triangle gives me an apex
in April, 2006, which will automatically close this chapter
of the market's more recent history. I see that as an
important heads up for all as it may well be make or break time
for 2006.