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Point & Go Figure: Nasdaq-100, S&P 500, AMEX Drug Index

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Am I about to get the ball back?

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Market Overview:

The 50-day indicators for the NYSE and the S&P 500 remain in Xs (short-term positive), having reversed up from deep oversold conditions. The short-term High-Low Indexes for the NYSE and Nasdaq are in Os (negative), however, and have moved to deep oversold conditions - 13.31% for the NYSE and 21.24% for the Nasdaq according to Investors Intelligence.

The conditions are right for relief as we near the July 4th holiday in terms of both PnF and DeMark price exhaustion techniques, but such relief will occur in a broader negative long-term context (weekly and monthly DeMark sell signals) that simply was not present in October or April 2005, the last time we were dealt this kind of field position.

Further example of the negative longer-term weekly context (negative bullish percent charts notwithstanding) are the weekly high low index charts that Investors Intelligence produces. Since January 2005 the NYSE Weekly high-Low Index has made lower highs and lower lows, but at 38.37% is still nowhere near the significant lows it made below 30% in 1998, 1999 and 2002.

Charts of Interest:

Are we nearing a tradable low? Below are two charts that have registered daily DeMark TD-Sequential buy signals.

Nasdaq-100
(Chart courtesy Thomson Financial)

Nasdaq Composite
(Chart courtesy Thomson Financial)



Meanwhile, here are the long-term monthly charts of the same two indexes with the negative long-term context in place.

Nasdaq-100
(Chart courtesy Thomson Financial)

Nasdaq Composite
(Chart courtesy Thomson Financial)

Yesterday on the Buzz and Banter we noted significant PnF support at SPX 1240, with 1235 a potential new breakdown. Note the trend is negative on the chart below, and the index was already turned away once at the trendline.

S&P 500 (SPX)
(Chart courtesy StockCharts.com)

Toddo noted on the Buzz this morning the significance of the 320 level for the DRG. the PnF levels are clear. A move to 315 breaks a triple bottom and violates trendlines support from the 2004 lows. On the upside, a move to 340 would be a rather large breakout.

AMEX Drug Index (DRG)
(Chart courtesy StockCharts.com)

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