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05/21/04 A few things have changed over the last week. The market is still at a critical juncture. The NASDAQ Composite continues to flirt perilously with its Head and Shoulders neck line and is below its 200 day Simple Moving Average. The current cycles positions are what may be the biggest change. The action on 5/17/04 may represent the short term 13 Trading-day, the 39 Trading-day, 13 week and 19 week low. They were all due within this time frame but it is still too soon to tell. The NYSE and OTC New Lows have moved considerably off their highs. May 17 also showed a stronger (higher) Relative Strength reading as compared to the low on May 12. OTC Composite
NFA's Master System, based on the Value Line Geometric, issued a Cover Short and the Minor Russell 2000 system issued its first buy since 2/24/04 . The Russell 2000's RSI has broken above its declining tops line. If the rally can move above the 200 day moving average there may be a run back to the 600 level resistance. Russell 2000
Bonds continued to show bottoming action with the RSI and Stochastic moving up from their oversold positions. No new signal here but it should be comming. 30-Year Treasury Bond
This move could be a rally for traders. The risk is still high. Conservative investors should remain on the sidelines until either the Bond system or Master Value Line system issues a new buy signal. Garry Graham, CMT, CFP
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