Friday, March 8, 2013
MTU Weekend Ed. - New All Time High (3/8/13)
Broad U.S. stock market indexes broke above their 2007 peaks and made new all time highs (Chart 1, Wilshire 5000), a remarkable achievement.
Stocks are likely in a topping process along the proposed cycle-degree "wave b" advance (Chart 1, red). Note that if we were to label the 2002 bottom as the end of cycle-degree "wave a" decline, senior market
indexes (WLSH, SP500, INDU) and the Nasdaq Composite Index would align in terms of their wave structures since their 2000 tops (Chart 2, COMPQ).
A bullish interpretation would label the rally since 2009 as a nascent supercycle-degree wave (V) advance. However, wave structures associated with the rally to date are far from convincing. Other than the potential of a set of nested 1st and 2nd waves, wave structures over the past four years does not describe an impulse wave. Time will tell.
Regardless the larger count, a five-wave advance since the November 2012 low is approaching its end (Chart 4 and Chart 5). A partial or more likely full retrace is likely to follow.