In the beginning of June, the rally continued and it brought the market indexes
to higher levels.
Is there a possible problem that investors are not seeing?
Yes ... the market strength has been getting weaker since May. In fact, when
you look at our C-RSI levels (zero based Relative Strength Indicator), you
can clearly see that the S&P 500's Relative Strength has been moving lower
and lower.
Not just lower, but making lower tops and lower bottoms ... a definition of
a downtrend. The market's rally isn't dead yet, because the C-RSI is still
positive. But ... unless this down trend in the Relative Strength changes into
an up trend fairly soon, the market will find itself in a correction.
Many analysts are counting on Earning Announcements for the 2nd. Quarter to
be positive and push the market up. Right now, our C-RSI charts are saying
that the market is "cautiously concerned" about the possibility of disappointing
earnings. (For more information on the C-RSI please see this link: An
explanation of the C-RSI.)
Marty Chenard is an Advanced Stock Market Technical Analyst that has developed
his own proprietary analytical tools and stock market models. As a result,
he was out of the market two weeks before the 1987 Crash in the most recent
Bear Market he faxed his Members in March 2000 telling them all to SELL. He
is an advanced technical analyst and not an investment advisor, nor a securities
broker.
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