Summation Indices in a new longterm downtrend?
The NYSE Summation Index may be conforming to a new bearish trending pattern. The prior consolidation triangle broke upside in late 2006 but failed to confirm a new upleg in the market. Instead, a gradual deterioration over the first part of 2007 led to the development of a new downtrending pattern which remains in place as of today.
It is possible we could see this indicator drop to lows of -2,000 as part of the current decline, although historically it tends to zig-zag a little more; however, there is a reasonable chance we could see a new low below -1,577 for 2009. The 2008 low of -1,577 beat out the previous record low of -1,444 posted in 1998.
A similar shift is underway in the Nasdaq Summation Index; the broad uptrend from 1998 reversed to a downtrend, the anchor for the peak was the 2003 high. What will be the anchor low for the next uptrend? Is it in place at -1,668?
Whatever happens, there is a little to suggest the markets will be going up in earnest anytime soon.
Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website
It is possible we could see this indicator drop to lows of -2,000 as part of the current decline, although historically it tends to zig-zag a little more; however, there is a reasonable chance we could see a new low below -1,577 for 2009. The 2008 low of -1,577 beat out the previous record low of -1,444 posted in 1998.
A similar shift is underway in the Nasdaq Summation Index; the broad uptrend from 1998 reversed to a downtrend, the anchor for the peak was the 2003 high. What will be the anchor low for the next uptrend? Is it in place at -1,668?
Whatever happens, there is a little to suggest the markets will be going up in earnest anytime soon.
Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website
