Stan Weinstein...commentary

Coming in this morning and seeing that there are a number of prominent analysts that are sounding some warnings, I have decided to put some snippits of their commentary into this blog.

.....we're getting an increasingly "bad feeling in our stomach" (and we long ago learned to always trust our gut). In addition to the many short term negatives that we focused your attention on last time, we now see additional near term warnings being flashed. First of all, it's a cause for short term concern that yet another "negative divergence" was registered this past Monday (4/2), when the S&P 500 Index (SPX, cash) edged above its 1420 "goal line" (on an intraday basis), but none of the other popular averages confirmed (the Dow couldn't get above 13,300; the NASDAQ Composite Index

- COMP - failed beneath its level of 3135; and the Russell 2000 Index - RUT - didn't get close to its 849 level). Then, for "good luck," the SPX closed slightly back below that 1420 level on Monday (4/2). And, to make matters worse, this "increasingly selective" rally has become even more "selective" (it's never a good sign when the only stocks that are moving up are extended issues, such as Apple Inc.,priceline.com, etc.). And this selectivity can also be seen when you examine the readings that are being flashed by the Investors Intelligence Overbought/Oversold Oscillator (the percentage of stocks on the New York Exchange that are above their respective 10 week moving averages).

In the meantime, an additional sign that a more serious near term correction is getting underway will also be flashed if the following short term danger levels

all give way (on a closing basis): SPX (cash) 1390 and Dow 13,000; and COMP 3052 and RUT 816 (which are both

new short term levels). Conversely, if one or two levels break, and the others don't confirm,

that will be another "positive divergence," but with the short term technical indicators weakening, even if that does turn out to be the case, we wouldn't expect a rally at this point to take the popular averages above their recent highs.


Stan Weinstein