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The TO is declining, but it is also at support. If support holds, the result will be a reversal to the upside this week.
SUMMARY Last week (4-21-06) we said, "We got the rally, and the price pattern points to another 15-20 points of rally in the SP. However, there are a couple of things that we ought to be aware of: the NYSE McClellan Oscillator has yet to turn positive, and the Quantifiers--although they turned positive--they have yet to make it above 15. Usually such combination indicates a rally that is internally weak, and thus, it can be terminated abruptly. Stay long, but with tight stops below last Thursday's lows." This week the McClellan Oscillators as well as the Quantifiers have turned negative and they are declining. That means in the short-term the path of least resistance is to the downside. However, most indicators are near support, and price itself is not all that far from its support (see table below). Therefore, it is rather likely that the indices will continue lower, but they will bounce from the zone between support and first downside targets.
Ike Iossif
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