Thread: Ralph's Fearless Forecast

http://bigpicture.typepad.com/commen..._fearless.html



All of Wall Street makes year out predictions (present company included), and by definition, they are problematic at best. What I found most impressive in Ralph's Fearless Forecasts for 2005 was buried towards the end. It was his short list of “anticipatory technical indicators that materialize before the cyclical bull comes to an end.� These are Ralph’s signs that can warn you the end is nigh:

Code:

     •  NYSE Advance/Decline Line usually peaks 
       several months before the leading averages 
       score their final highs; 
     •  The DJ Utility avg usually rolls over 6 months 
       before the other leading averages score their 
       bull market highs; 
     •  The number of 52 week new highs will stop 
       expanding as the leading averages push into new 
       high ground; 
     •  The relative strength line of value stocks 
       versus growth issues will transition back in 
       favor of value; 
     •  The price action on individual stock charts 
       will begin developing top (distribution) 
       patterns; 
     •  Noticeable contraction in volume while prices 
       expand; 
     •  The Lowry Selling Pressure line trends up for 
       several months.

Good stuff. Ralph's insights are always well worth noting.