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Sunday, August 23, 2009

Sunday Morning Observations

Well after going through all my private charts on a quite and sunny, Sunday morning, this is the one that stuck out in my mind the most. This is a chart of the percent of stocks on the Dow Jones above their 200 DMA, with overlays of 150 DMA's, and 50 DMA's.
The first thing that caught my eye was that we are at extremes levels right now, 96.67% of all stocks on the Dow Jones are above their 200 day moving average, that is extreme in my book!!, and a trend that is impossible to sustain. The second thing that I noticed was the way the 50, 150, and 200 consolidated back in the middle of 2007, just like they have been for the last month, then I noticed the price action and wave structure similarities, that was the shocker and the reason I picked this chart for my Sunday morning observation. Did you noticed what happened with-in a month of that consolidation? A major correction. This is just another reason I believe that this rally from 666 will soon be over, with a major pull-back, and even the possibility of testing, or even breaking the lows of earlier this year.


  1. Col, that is a great chart man. Like we were talking about on Friday, if this C does develop into an ending diagonal. My last two posts looked at some indicators to see what they might show. I have a feeling we might see some divergence here too (the SPX, INDU, etc. all making slightly newer highs while less of the individual stocks do and some start falling behind / those indicators above start dropping). Awesome chart and thanks for sharing it man!

  2. Hi Columbia! No update today? Did I tell you that you rock. First time poster and great admirer of your charts, my brother. May I recommend using NYSE rather than only the 30 DOW. NYSE covers the makret better. You have mine on your blog list. What do you think?