Charts and Commentary

By: Marty Chenard | Fri, Mar 31, 2006
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Can you safely ignore this? And if so, for how long?

The market has short term, medium term, and long term trends.

Many investors are delighted with the short term action. What might the medium to longer term trend bring?

I offer today's chart as "food for thought" and introspection this weekend about the stock market.

Below is a 5 year chart that focuses on the divergences that occurred between the NASDAQ 100 and the Russell 2000.

I labeled these large divergences 1 through 8. Take the time to observe what happened after these huge divergences.

After observing where we are at label 8, you have to wonder how much longer can this divergence continue.

Is there anything that can change or delay the historical down move that happens after such a huge divergence?

There is ... if the NASDAQ 100 were to trend up, then that would lower the rate increase of the divergence and support a longer time frame for the divergent action to continue.

If that doesn't happen, you have to wonder will happen to the market this Summer.

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Marty Chenard

Author: Marty Chenard

Marty Chenard
StockTiming.com
Asheville, NC 28805
Tel: 828-296-1200

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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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/