BOB'S WEEKLY STOCK MARKET COMMENTARY - 02/09/96
Bob McCullough
http://www.libertyresearch.com/
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Peering Into the Market's Future - Week Ending February 9, 1996
The stock market continued to amaze last week. Inflation fears receded as the
price of gold and commodity prices consolidated. The economy still seems weak
enough that the Fed is expected to ease short term interest rates again in a
month or two. The market seems to have forgotten about difficulties associated
with the budget fight. A huge Treasury refunding was handled fairly
successfully. Lots of cash is flowing into individual stocks and mutual funds.
The preferred place for cash seems to be in equities.
The dollar dropped last Monday and then recovered nicely through Friday to
finish slightly down for the week (Hot link here for U.S. Dollar Chart in
original). Its 26 week Formula Y dropped further from overbought territory.
However, price action last week indicated that the dollar could push back up
for one last drive, before the next majot pullback.
Commodity prices consolidated last week (Hot link here for Commodities Chart in
original). The 20 week Formula Y oscillator for the CRB is now slightly below
overbought territory. However, there is still room for commodity prices to
move up and stay within current trend channels.
Short term interest rates flattened out last week (Eurodollar prices rise when
short term interest rates decrease.) (Hot link here for Eurodollar Chart in
original). The Eurodollar's 26 week oscillator is entrenched in overbought
territory. The Eurodollar still has some room for upward price movement within
trend channels however. This is consistent with expectations of further Fed
reductions in short term interest rates.
Bond prices held above current trend channels last week (Hot link here for Bond
Chart in original). The 26 week Formula Y for bonds just completed a double
bottom pattern to set up a buy signal. If commodity prices don't move up too
fast and gold prices are contained, expect bond prices to reach prices that
will bring 30 year interest rates below 6% soon.
The S&P 500 index continued to climb and actually blew through it's current
trend channel (Hot link here for S&P500 Chart in original). Its 13 week
Formula X oscillator is now well into overbought territory. The 13 week Least
Squares Momentum is still very positive, but could be setting up a negative
divergence with prices. These oscillators are ready for a pullback but that
can happen with sideways market movement since prices have moved up so rapidly.
When the 13 week Formula X finally drops, that will probably be a signal that
stock prices will enter a trading range for several months.
You have to be long the stock market right now, because the "trend is your
friend". However, the stock indices are technically overextended. It's going
to be a market for the nimble trader and astute stock picker during the rest of
1996.
(Scroll down to get weekly S&P500 Chart in original.)
Bob McCullough
Liberty Research Corporation
Investograph Plus
Email: inv...@libertyresearch.com
Web Site: http://www.libertyresearch.com/
mike haas
macintosh? Thanks, Mike H.
lebr...@nbnet.nb.ca
<squ...@deskmedia.com> wrote:
> Help, does anyone know where to get stock chaarting software for the
> macintosh? Thanks, Mike H.
If you ever find one, would you please let me know?
Thanks.
Marcel
Bob Weaver
>
> Help, does anyone know where to get stock chaarting software for the
> macintosh? Thanks, Mike H.
Trendsetter is the best, both for performance, price and support. Run, don't
walk, call Jeff now!
Mr. Jeff Borowitz - 800-825-1852
Trendsetter Software
2020 N Broadway, Suite 102
Santa Ana, California 92706 714-547-5063 Fax