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FUTURES  MARKET  TIMING  SIGNALS:  STOCK INDICES

Last updated 8-5-04

SYM TECH - LT TECH - ST SEAS POWER OI VOLAT
SP: Look to at least take out May lows Likely to break May lows. Target 1050 ? Bearish Sep/Oct ahead Slightly supportive or unclear Unc Very low

ND:

Weak appearance Sideways with downside drift. Targeting 1300? Ditto Unc Avg to high Very low

RU:

Needs to take out May low before any rally Slight downside likely Ditto Very supportive Avg. to high. Rising w/ selloff  
   

NOTES:

Stocks are currently digesting an unpopular July EPS season, forward earnings growth questions, a treacherous early Fall season, and national elections. July EPS was especially disappointing given the number of "busted" uptrends. While valuations are not cheap, many of the other classic "topping" signs are not present (IPO's, A/D divergence, high corporate bond spreads, etc.) and pullbacks from early 2004 highs have to this point been relatively shallow given the long uptrends from the Oct. '02 and Mar. '03 lows. We recommend a few weeks of patience on the sidelines here.
   

LEGEND

TECH - LT: Long-term technical picture, usually based on weekly charts
TECH - ST: Short-term technical picture, usually based on daily charts
POWER: Interpretation of internal market power
OI: Open interest analysis
VOLAT: Volatility analysis
Unc: Unclear or unremarkable
NA: Not applicable