DJUA and Nasdaq Indexes..."Canaries in the coal mine"?

Sometimes one market index will lead the others in or out of a longer term trend. At this point in time the Dow Jones Utility Average has broken below its lower channel line. The Nasdaq Index has also done the same thing.

The other main US Indexes and the Canadian TSX Composite are close to doing the same. This may or may not turn out to be an important market turn but it is a heads up and the evidence is accumulating to support this conclusion. These two breakouts are consistent with other market price action I am following.

Important Market Downturn today? Feb. 18, 2010

Short Term Forecast

A number of signals are suggesting that the recent market rally from the lows on February 5, 2010 for the TSX Composite and SP500 Indexes may have ended and the downtrend that began at the peak of the 10 month rally off the March 2009 lows will continue.

Dow Jones Ind Aver...February 12, 2010

The DJIA appears to be doing the same thing as the TSX Composite Index north of the US/Can boarder. A well defined narrowing triangle pattern followed by a break out to the downside.

If I'm reading this correctly...the buy and holders on both sides of the US/Canada border are in for a very unwelcome surprise over the next number of months.

I won't speculate on the ultimate bear low or how long it might take to get there. Just that I'm expecting an ultimate bear low somewhere below the March lows.

TSX Composite Index Short-Term Expectation...February 11, 2010

Every once in a while I stick my neck out and make a short-term market forecast. The TSX Composite Index has a short-term wave pattern that has the earmarks of an index that will be making new short-term lows. The rising, so far, triangle shaped pattern with overlapping waves... suggests that the buyers are losing ground to the sellers. The probabilities favour the index dropping below Friday's low near 11,000.

TSX Composite Index February 1, 2010

An update on my last post.

The TSX index continues to look like the 10 month rally ended on January 11 at 12,070. The US SP500 is similar. The details of the waves since the possible end of the rally are consistent with what one expects following an important downturn. Now...the market can always do something different but so far it continues to look like the longer term trend has changed from up to down.