Graphite here.
Although it’s easy for this kind of contrarianism to turn into unhelpful navel gazing, on Friday the level of despondency seemed to hit a new high (or is it low?) on the bear blogs. Posts and message boards are chock full of buzz about perpetual asset inflation powered by the Fed’s magical money machine [...]

I’m attending a convention from now through Wednesday, so expect a lot less activity here than has been the norm lately.
Regarding the markets, it is still my strong belief that we are in the process of making a top to last for many years, on a weekly as well as yearly and even decadal scale, [...]

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SPX has now retraced through it’s breakaway area from January. This is a common stopping point for countertrend rallies — basically the area of fastest decline when the crowd had its moment of recognition.
Of course, hourly RSI is still strong, with higher troughs during successive bottoms.

(First published 3.3.10, 1:27PM EST)
I’ve noticed lately how well the 60-min RSI (relative strength index — a measure of oomph in price movement) has been doing, so today I decided to quantify it. The result is simply spectacular, even with a mechanical buy/sell decision that always had you in the market either long or short.
Here is [...]

These two have the furthest to fall, and are really still in the process of making an historic secular bull market top.
The Russell looks like it’s forming a giant head and shoulders:

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See those RSI trends on the bottom? This is a market that’s running out of steam. We know from mutual fund reports that managers [...]

The Russell 2000 rocketed up this morning, just when it looked like it might roll over:

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With no confirmation from the Dow and unimpressive short-term internals, plus a stubbornly strong dollar and bid on bonds, I’m not too concerned here.

Reports indicate copper mines and ports are in good shape. The futures market seems to be overreacting.
Copper futures just opened an hour ago with a 6% pop from Friday’s close, up to just under $3.50 per pound. Traders are concerned about a supply pinch, since Chile produces 36% of the world’s copper. Bloomberg reports that [...]

Continuing the top series…
Be sure to look at the lines on these charts, including RSI trends. If you gave Paul Tudor Jones nothing but graph paper and a ruler and he would still be a star. With price and RSI, you have all you need technique-wise. The rest is all emotional.

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Here’s something I find interesting. [...]

This would be a pretty good way for a 3rd wave decline to start:

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See how the 30-min RSI called both the ramp off Monday’s low and the turn down yesterday? We’ve got a nice channel line break, too, and RSI has plenty of room to run today.

Will we challenge 1112 again or peter out somewhere short of it? Would be very bearish if 30-min RSI does not violate that downtrend. At any rate, 1114-ish remains a solid stop for any shorts.

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