There has been an upswing within the erratic trading range in stocks around the world. This made new local highs (i.e. highs for this leg of the rally) in many markets yesterday, which was the day we expect the biggest turn of this month - see the current turn schedule on the main page or here. Our view has been that the main up-move in stocks finished at the end of January and that period of churning would ensue that would lead eventually to a drop. We wrote in the February 26th edition that selected indices might even make new highs during this time, but that these would not exceed the old highs by much. This is hard to quantify (and there is always the possibility that a sector bubble might inflate) but Nasdaq futures did make a new high yesterday by about 100 points or 1.5% above the late January highs. That is the sort of thing we had in mind.
The strongest elements of the 'tech sector' in recent days have been internet stocks. There have been daily and weekly-scale top extensions in the index of this sub-group, which tends to confirm our idea that it is time for this upswing to end and for a down move to start hereabouts:
As usual, when selecting candidates for short-selling, we usually don't pick the strongest - instead try selling something that hasn't risen much in recent days. The Dow seems a better bet than the Nasdaq, for example.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com