Stock Market -- Weekly

It remains a cyclical bull with a third wave up from autumn 2011 still intact. The market
continues in a consolidation period, although a head and shoulders top could form as well as
a low momentum secondary top up near SPX 1890. Volume has been fading as has momentum
although NYSE  breadth is holding up well. The SPX is 4.8% above its 40 wk m/a which indicates
a moderate but not worrisome overbought. My intermediate term momentum oscillator turned
bearish at year's end, but there has been no break of consequence yet in the SPX. The
attached chart shows that both RSI and MACD have also been trending down without any
serious result, either. SPX Weekly

The SPX is fully valued and some players no doubt do not care for the Fed's QE taper down
program. The local fundamentals remain positive save for the taper. The situation in Ukraine
has not blown up yet, but both sides have been injecting more troops and hardware along
the potential "hot zone" in the far east of the country. A Russian invasion in and of itself
could disturb risk capital and there could be a wider disturbance if an invasion were to
introduce stronger economic warfare against Russia with retaliation likely. Russia's
credibility is shot, so traders will be focusing primarily on ground action if any in the days
ahead.