Announcement

Announcement: Our website (www.wminsights.com) has been launched. It is a soft launch. In other words it is still a bit of a work in progress, but it is ready to play with. We urge you to explore and see what the site (and we) will offer. We also encourage feedback; let us know what you like and don’t like. Before long much (though not all) of the site will be available only to subscribers. If, after viewing the site, you are interested in becoming a “charter subscriber,” or would like more information, please send an e-mail to WMGALLC@gmail.com.

We had hoped to release our monthly Insights today, but finalizing the website and working on our ability to provide webinars and teleconferences was time consuming. The report will be released tomorrow to those who have expressed the desire to be added to our “charter subscriber” list.

On Thursday, the S&P posted its fourth straight gain with a rally of 1.9%. Breadth was positive by better than 9:1 while the up/down ratio was better by a bit less than 5:1. However, total volume fell by 12%. The daily Coppock Curve has a bullish bias for 13 of the 24 S&P industry groups.

Despite all the excitement by the media, the action of recent days is normal. We have made the case that, while the decline from October’s high is impulsive, we could see a decent rally this week. The rally of recent days certainly has been “decent,” but it is still only a normal Fibonacci retracement – and, so far, it is corrective. As a result, the risk is that this four day rally is only a second or “B” wave within a larger decline.

Fibonacci resistance is in the 1065-1074 and the second wave of prior degree is at 1096, so this rally has its work cut out for it. Moreover, almost 40% of the stocks in the S&P are at least 10% below their ytd high. All of this, plus the fact that non-Elliott evidence is poor, e.g., poor on-balance volume, a 22-week cycle top, overbought and deteriorating momentum, and excessively bullish sentiment, suggests lower lows in the weeks ahead. This background suggests that, even if the S&P challenges its recent highs, there will be more and greater divergence than have been recently apparent.

Our main support focus is still on the October 2 low at 1020 is fragile support. That is important because a break of that level will signal that the rally from the July lows is over. Below that, 1013 is a 38.2% retrace of the July-October rally and 985 is a 50% retracement. But, as explained in recent posts, more important support may be seen at 958-935 and 884-869.