Tuesday, January 17, 2012

Update - 17th January 2012

Seems like the final topping out process is in place. The divergence is evident between Dow and SnP 500 right now. Previous 2 sessions took on 12450 on Dow and 1300 posed a challenge on SnP500.

Today Dow almost took out 12550 [may try for 12600] but SnP is still struggling to take out 1300 [a reflection of poor market breadth IMHO]. Any further uspide will be a boon for bulls whilst bears need to be patient.

No change to outlook; first sign of weakness with a weekly close below 12200; complete weakness to be confirmed only after 2 consecutive closes below 11500 and then bulls can say good bye to 12k levels for a long time to come.

[Please note that the market capitalization is significantly lower even though the indices are just about 5% to 8% lower than the May 2011 highs!]

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