Stocks are Going to Great Valuations by Bob Hoye

Signs of The Times

Stock Markets

The late Richard Russell used to observe, "Stocks are going to great valuations."

Have always enjoyed the line, especially when nicely timed. The Transports had been declining in the first part of 2015 when we used the old Dow Theory for the first time. The non-confirming signal occurred in May and we concluded that the bull market was ending. Our research on the curve and spreads indicated trouble after July. In July we concluded that the bear market had begun.

The hit into January accomplished all of the right technical readings and we thought the rebound could run to around March. That the likely leaders would be base metal miners helped with the March seasonality. And the materials sector became very overbought. We have been taking money off the hot tables.

As we have been noting, the NYA set the big Rounded Top last year. This year's rebound has been looking somewhat like the second rebound in the 2008 bear market. Our March 17th Pivot concluded that the rally had a couple of weeks to go.

The NYA reached the 200-Day ma at 10281 on March 30. This has been the high for the move and the broad index has been following the moving average down.

Adding to the measures of exuberance, the NYA has registered a Weekly Inverse Springboard - similar to that on the big rebound into May 2008. The Inverse Springboard is a sell in a generally declining market. The Springboard is a buy on a dip in a rising market. The last one on the bull market registered in October 2014.

We like the symmetry and yesterday's ChartWorks noted the Inverse Springboard Sell in a number of important indexes.

Of considerable importance, this rally has been similar to the key rebounds that failed and formally confirmed a bear market. Outstanding examples completed in October 1973, August 1937 and April 1929.

As the ChartWorks noted, the first week with a lower low marks the completion of this rally.

This week, the Sensational Season is shining upon the Biotechs as the IBB jumped out of the dull trading range. Yesterday's 6 percent pop has moved the Daily RSI up 9 points to 67, which is accomplishing an outstanding swing in momentum. The limit could be found at the 70 level.

Credit spreads have resumed widening, which could curb further advances in the banks and financials.

Used Car Prices

The price index did not make new highs on the rally to December 2007.
And then took out the previous low.
The latest rally barely made a new high for the move.
It has taken out the recent low.
Quite likely, the index does not include Ferraris.

Auto Inventories

Car dealers seem unusually optimistic.
For how long?

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	Signs of The Times Stock Markets The late Richard Russell used to observe, *"Stocks are going to great valuations."* Have always enjoyed the line, especially when nicely timed. The Transports had been declining in the first part of 2015 when we used the old Dow Theory for the first time. The non-confirming signal occurred in May and we concluded that the bull market was ending. Our research on the curve and spreads indicated trouble after July. In July we concluded that the bear market had begun. The hit into January accomplished all of the right technical readings and we thought the rebound could run to around March. That the likely leaders would be base metal miners helped with the March seasonality. And the materials sector became very overbought. We have been taking money off the hot tables. As we have been noting, the NYA set the big Rounded Top last year. This year's rebound has been looking somewhat like the second rebound in the 2008 bear market. Our March 17th Pivot concluded that the rally had a couple of weeks to go. The NYA reached the 200-Day ma at 10281 on March 30. This has been the high for the move and the broad index has been following the moving average down. Adding to the measures of exuberance, the NYA has registered a Weekly Inverse Springboard - similar to that on the big rebound into May 2008. The Inverse Springboard is a sell in a generally declining market. The Springboard is a buy on a dip in a rising market. The last one on the bull market registered in October 2014. We like the symmetry and yesterday's ChartWorks noted the Inverse Springboard Sell in a number of important indexes. Of considerable importance, this rally has been similar to the key rebounds that failed and formally confirmed a bear market. Outstanding examples completed in October 1973, August 1937 and April 1929. As the ChartWorks noted, the first week with a lower low marks the completion of this rally. This week, the Sensational Season is shining upon the Biotechs as the IBB jumped out of the dull trading range. Yesterday's 6 percent pop has moved the Daily RSI up 9 points to 67, which is accomplishing an outstanding swing in momentum. The limit could be found at the 70 level. Credit spreads have resumed widening, which could curb further advances in the banks and financials. Used Car Prices The price index did not make new highs on the rally to December 2007. And then took out the previous low. The latest rally barely made a new high for the move. It has taken out the recent low. Quite likely, the index does not include Ferraris. Auto Inventories Car dealers seem unusually optimistic. For how long?