Stock Market Technical

S&P 500:1288

Well, it's spring break for school kids this week and it is
quiet.My work shows another extended period of compression in
the market based on my momentum and A/D indicators, with the
latter adjusted daily for TRIN. The compression period extends
back to mid - December, '05. This suggests to me that the market
is setting up for another significant move, although the current
period of frustration could last until the end of this month.

It is so tempting to say that we'll see a sharp break to the
downside this time, especially since a traditionally weak seasonal
period lies ahead. Moreover, the broader market still looks
overbought to me. One measure I like is the Value Line Arithmetic
Index ($VLE). It is not capitalization weighted
and besides the SP500 stocks includes the majority of popular
midcaps as well as top smaller caps. The weekly is here.
The trend is strong (ADX black line) but the MACD below is starting
to weaken. You will note the index has made a big move since last
spring.

But, happily, I find it easier to avoid certain temptations at my
tender age. So, I merely note that we seem due for some tradable action
up or down soon.