April 29, 2012
I have 38 different large cap stocks that I follow and use as bellweathers. I normally just look at them on a technical basis to get an idea of the strength of the market but somehow when I was looking through the list today I noticed something very interesting when looking at the fundamentals.
Of the 38 bellweather stocks that I follow guess which ones have the highest P/E ratios? BIDU, AMZN, MCD and KO. Okay, I understand why BIDU is trading at 29x projected EPS estimates for FY2012 as they are growing at a very nice clip. AMZN? Don’t get me started on that one. It is trading at about 177x projected EPS for FY2012 and over 60x projected EPS for FY2012. I don’t get it and I never will. Now come the surprises. McDonalds is currently trading at 17x FY2012 EPS estimates and Coke is trading at 19x FY2012 EPS estimates. They are both only growing earnings at 10% annually and pay dividends of less than 3%. Go figure. On the other hand, companies growing much faster such as AAPL and GOOG are much cheaper. AAPL is trading at less than 13x the consensus estimates for their FY ending on 9/30/2012 and GOOG is currently trading at only 14x their FY2012 estimates. This makes no sense to me at all. I can understand why people may be a bit skeptical of AAPL’s ability to continue their torrid growth rates considering that 51% of all American households now have at least one AAPL product under their roof but for the life of me I can’t figure out why mature companies like KO and MCD are trading at P/E’s of 17-19.
Conclusion here: I wouldn’t touch MCD or KO with a 10 foot pole. Way overpriced given their respective growth rates but the dividends should help cushion any downside.
April 29, 2012
I thought this was quite interesting. Very good points in here.
April 24, 2012
When looking at two important measures of the commodity market I am seeing signs that a bottom of some degree should materialize soon. This is based on the technical term known as 8-10 record sessions.
It has been a rough road for commodity bulls since September 2011 and particularly since 2/28/12. Look at the weekly chart of the Reuters $CCI Index. If this week continues as Monday began it would be the 9th week in a row that the CCI index has posted losses. 8-10 record sessions imply that the market is oversold enough and sentiment is poor enough to warrant a bottom of some degree. The same rule can also work on the upside. Too overbought and too bullish after 8-10 up sessions would suggest a retracement on the horizon.
There is a similar pattern on the Canadian Venture Exchange. It has posted lower lows for 9 weeks in a row. It did post one weekly gain but earlier in the week it made a new low so this also fits into the analysis.
The Fed will likely do nothing tomorrow but will likely express concern over unemployment here in the U.S. and potential contagion from Europe’s debt woes. Ultimately I think the market sells off on this news. Nothing big, but towards the 1300-1340 area I have mentioned on the S&P 500. Operation TWIST ends on 6/30/12. Considering that the Fed bought 61% of Treasury issuance in 2011 and the Chinese largely absent from the market it would seem unlikely that the Fed won’t announce some kind of extension of TWIST, QE III, or another program similar to QE III that is simply given some other alphabet soup name at their next meeting on 6/20/12. If they aren’t the buyer, who will be? Also realize that if they don’t step in and buy interest rates will rise and any hope for a recovery will fall apart.
The next round of QE will likely target Mortgage Backed Securities (MBS). They could potentially do nominal GDP targeting. This would be where they say they are targeting 3% nominal economic growth. Then take into account that inflation (in their eyes) is only 2%. If nominal growth is only 2% (with their fairy tale 2% CPI number) that means they need to print another 1% to get the nominal GDP to 3%. In real terms growth is zero but in nominal terms it would be 3%.
I had thought that the CCI made a major low at 546 back in late-December but that prediction is beginning to look a bit iffy. Let’s see how the remainder of the week works out. Oil is big here. Either the correction since the high in late-February has run its course and it is about to run again. Or, if it falls below $100 it wouldn’t be hard to see it coming down to $90.00-$97.00. If the equity market is still in correction mode towards 1300-1340 the positive correlation with oil since March 2009 would suggest that oil is headed lower. As I mentioned above, let’s see which scenario pans out. We should have a pretty good idea by the end of the week.
From a longer term perspective it appears to me as though commodities are setting up for a pretty good run in the second half of the year and into 2013. As you can see from the $CCI and $CDNX charts above the trend has been down for the past year or so but the secular (longer term) trend remains intact from the 2001 lows. In other words this has been a cyclical bear market within the context of a longer term secular bull market.
April 20, 2012
Of my proprietary mix of 6 different internal indicators on http://www.decisionpoint.com 3 are on sell, one remains on a buy, and 2 are on buys but are very close to sell signals. These are intermediate term signals. In other words they are flashing caution here. As I mentioned in my update on 4/9/12 many other internal indicators began to roll over as early as February.
The T2118 from TC-2000 rolled over in early February although the moving average didn’t officially roll over until early-March. Still no signs of a bottom yet.
The cumulative advance/decline line of the Russell 2000 also remains in a downtrend. This is bearish until the 15 day EMA begins to turn to the upside.
The cumulative 4 week new high/low hasn’t rolled over with authority yet but appears to be close.
As you can see the 15 day EMA of the T2106 rolled over in early February which was a sign that market internals began to deteriorate. That was basically the momentum peak of the rally off of the late-December lows. It has recently turned up from very oversold levels that often mark important market bottoms. Any reading here of -150 or lower for the 15 day EMA is very oversold. The recent turn to the upside is encouraging and this signal will be the first to bottom but since it is the most volatile I don’t trust it just yet. It can still get more oversold as it did in May 2010 or August 2011 but I have my doubts. I tend to think it may be in the process of bottoming. Just as this rolled over in early-February, 2 months before the market hit its peak, we may have already seen the bottom here. However, we could still be a while away from the low in price. When looking for a bottom I want to see the kind of action we saw in August/October 2011 and November/December 2011. Positive divergences in absolute readings as well as positive divergences in the 15 day EMA.
I’m still of the belief that the S&P 500 is likely headed down to 1300-1340. There are some big events coming up. There is an IMF meeting over the weekend. Then next Wednesday will be big as there will be an FOMC meeting and AAPL will report earnings after the market close on Tuesday.
April 19, 2012
It seems that people are increasingly becoming aware of the burdens that come along with student loan debt. What shocks me is that people still don’t understand why this is happening.
Here is the key phrase from the article:
“Steep increases in college costs are to blame for the student-loan debt burden, and most student loans are now made by the government, says Richard Hunt, president of the Consumer Bankers Association, a private lenders’ industry group.:
Steep increases in college costs are to blame for the student loan debt burden? Really? The fact is that cheap money fuels all bubbles and the easy availability of student loans is the reason that colleges have been able to increase their tuitions at such insane rates over the past 15 years. As James Dines has stated regarding the great depression, “Stating that the Federal Reserve’s actions in the 1930′s were responsible for the Great Depression is akin to saying that wet sidewalks cause rain”. High debt burdens owed by students don’t come from high tuition costs. They come from the student loans that fuel the ability to raise tuition costs.
There have been many bubbles in the past but let’s just look at the recent ones. Tech stocks leading up to the 2000 peak. Then we had the housing bubble. Note the similarities between student loans and housing. Back in 2005 or so the government decided that everyone should be able to own a house. Freddie Mac and Fannie Mae were loaning to anyone with a pulse. The result? People were buying houses they can’t afford with leverage. Prices were going through the roof but it really didn’t matter. As long as you got the loan and got into the house you would win because prices would go up. Wrong.
Now look at where we are today with college and student loans. It seems as if we are in the same spot as we were with the housing bubble. “Everyone deserves to be able to buy a house” has now turned into “everyone deserves to be able to get an education” (regardless of the cost). But students and their parents don’t have the money. No problem. They can simply borrow the money.
It is amazing to me that people still don’t realize that the problem isn’t skyrocketing tuition costs. The problem is student loans. What would happen to college tuition if student loans were no longer available tomorrow? I think you get the picture.
What this article also points out is that the private sector has largely stepped out of the student loan market and now the government is making the majority of the loans. Hmmmm…..so why has the private sector stepped aside? Because they see the bubble and the inability of students to repay the loans. But now the government has stepped in to help. Great. Isn’t this exactly what Freddie Mac and Fannie Mae did?
Here is the biggest difference in my view. If one gets way under water on their home or debt in general they can legally declare bankruptcy and start over. It isn’t easy but it can be done. On the other hand when it comes to student loans the government passed a law within the past 5-10 years saying that even if students declare bankruptcy, they still can’t escape student loans. So let me get this straight. Kids coming out of college are already facing enormous debt burdens on the Federal level which has been racked up by previous generations. At the same time the government now effectively has mortgages on everyone that has a student loan. These kids did nothing more than go to school like they were told to do. And now they have a mortgage on their lives with no physical asset to show for it. They have an education, but what if they can’t find a job that can remotely come close to paying back the loan? Unfortunately this is an increasing trend.
I want to go back and describe what this was like when I was in college. I attended UT-Austin from 1997-2001. Of course when I got there the U.S. economy was approaching its pinnacle but tuition and books were nowhere close to the burden that they are today. Every credit card company in the world was set up around campus offering free T-shirts for applying for a credit card. They even had really cool looking Longhorns on the card to make it more physically appealing. When it came to loans it seemed as though the process was pretty easy. If you wanted money for something, it wasn’t hard to get it. By the time I left in 4 years I would say (based on memory) that tuition was up more than 50%. That set the stage for the big increase in the cost of tuition that we have seen in the past 10+ years since I left.
Now why can’t students default on loans? I will tell some stories that I have heard over the years that will blow your mind. These stories typically came from brothers or sisters of the person that was responsible. Frankly I didn’t associate directly with anyone that did this but here is the general story of why people can no longer default on student loans.
Back in the 1990′s students took out massive amounts of loans to go to medical and law school. I mean $100-$200k or more. That is still a lot of money today but it was A LOT of money back then. What did they do with the money? Most used it to pay for tuition but some others did something else. They used the money to take lavish trips to Las Vegas or the Bahamas. Some went shark cage diving in Hawaii or South Africa. So what happened when the tuition bill came up to be paid? They filed for bankruptcy. $100-$200k is gone. Irresponsibly blown by kids. So if you wonder why a law was passed so students couldn’t default on student loans, this is why.
The bottom line here is that easy money has fueled the bubble in student loans, which has caused a bubble in tuition. The current regulations regarding filing for bankruptcy on student loans came from a small number of individuals that were either dishonest or weren’t mature enough to handle the situation. At some point this will end in tears. I can’t put a time on it but when the American people finally realize that the government they are paying taxes to is responsible for the easy money policy fueling the tuition bubble that they are now paying to send their kids to school they are going to be a wee bit pissed.
April 12, 2012
President Obama seems to intent on the “rich paying their fair share”. He seems to think this is going to fix the deficit problem. I have long said that the problem is spending, not revenue. Rick Santelli does some interesting math here. Based on various sources the number of tax filers that made over $1 million in 2010 was anywhere from 22,000 to 225,000. Santelli proposes the drastic measure of taxing each one of those filers by $1 million. Guess what? That is only going to bring in revenues of $22-$225 billion. Our deficit for the first 6 months of this year alone was almost $800 million. So on an annualized basis using a best case scenario (for Obama) of taxing $1 million from 225,000 people, it would only cover 1/8 ($200 billion/$1.6 Trillion) of the deficit.
April 10, 2012
There is an old Wall Street saying, “sell in May and go away”. Over the past two years this theory has worked VERY well. Had one sold on the first trading day in May and done nothing until September/October in both 2010 and 2011, one would have avoided some big market slides and a lot of volatility. So the big question is will “sell in May and go away” work for the third year in a row? Seems too predictable so I decided to go back to the beginning of the secular bear market in 2000 and see how well “sell in May and go away” has worked. What I found is that a better way to view things is that March/April seem to be a major turning point for the market every single year. Let me run through each year and you will understand where I am coming from. I will be using the S&P 500 as my barometer and one must take into account the cyclical trend heading into each year.
2000- The key to remember here is that this was a major market top and the beginning of the secular bear market that has lasted to this day. The S&P 500 hit its bull market peak of 1553 in March 2000 while the Nasdaq was in the process of topping out above 5000. It then had a sharp fall into April. Note that the market meandered sideways to higher until September, making a lower high at 1530, then turning down into the end of the year. Key turning point in March/April. Transition to secular and cyclical bear market. No net progress for 6 months from March high.
2001- Keep in mind that the market entered 2001 in a cyclical bear market so the trend was down from September 2000 until March 2001. Once again an important bottom in March/April. This bottom led to a pretty sharp rally into May before the market declined sharply into the 9/11 low. Despite a sharp end of year rally the cyclical bear remains intact heading into 2002.
2002- Cyclical bear market remains intact. Market retests January 2002 high in March 2002, then plunges for the remainder of the year. Cyclical bear market remains intact heading into 2003.
2003- Cyclical bear market ends in March 2003. New cyclical bull market begins. Market trends higher for the remainder of the year and into 2004.
2004- After a very strong 12 month rally off of the March 2003 low the market peaks in March 2004. It then consolidates the 12 months of gains and bottoms 5 months later in August 2004. There was no net progress from the March 2004 high until November, 8 months later. Cyclical bull market remains intact heading into 2005.
2005- Cyclical bull market remains intact. Market makes a high in March and a low in April. A bit ambiguous like 2000 but defer to the prior trend which is a cyclical bull market. However, unlike 2000 the market takes out the March high later in the year keeping the cyclical bull alive heading into 2007.
2006- This is the one year that seems to deviate from the pattern of a major high or low in March/April. After rallying almost non-stop for 7 months the market finally puts in a high two weeks into May. It then declines about 8% over the next month and puts in a major low. The low is successfully retested in July. Market takes out May high in October. Cyclical bull market continues into 2007.
2007- Cyclical bull market is alive and well heading into 2007. Similar to 2006, the market has rallied for 7-8 months off of the prior lows before a quick 6.7% correction (2006 correction was 8%) from the high in February to the low in March. The market then rallied for 4 months straight to make new highs before becoming extremely volatile for the remainder of the year. I would also point out that despite making new highs in July and October, the market ended the year only 7 points higher than the high made in February (These are circled). This was a warning of things to come. A bear market was confirmed in January 2008. 2007 was a transition year just like 2000.
2008- Cyclical bear market is confirmed early in the year. Market makes a major low in March. Then it rallies for two months and falls apart. This is almost a mirror image of 2001. Incidentally, these are the first years following the major tops of the prior bull markets.
2009- Major low in March 2009. End of the cyclical bear market and the beginning of a new cyclical bull. Market rallies virtually non-stop for the next 12 months. VERY similar to March 2003-March 2004. Cyclical bull market heading into 2010.
2010- After 10 months straight on the upside the market suffers a 9% correction from January into February. It then rebounds strongly and puts in a major high in April. This is very similar to the run from March 2003- March 2004 in terms of time. Market then bottoms 2 months later. Market narrowly missed confirming new cyclical bear market. It wasn’t until 4 months later (late-August/early-September) that an uptrend was confirmed. The high from April wasn’t seen again until November. Cyclical bull continues into 2011.
2011-This was a very complex and the most volatile year I have ever seen in my 14 years of trading. There was a normal correction from the February high to the March low. At this peak the market had been trending up strongly for 6 months and this was also 9 months from the 2010 low at 1011. The market then took one more run to a new high and peaked on the 1st trading session in May. After that it didn’t bottom until early-October, over 5 months later. This high (1371) wasn’t seen again until 10 months later in late-February 2012. I saw major caution signs in the market in July. I then got a confirmed bear market in early-September. This analysis held up until 1/10/12 when it was proven to be a false signal despite the fact that it came from multiple measures. Coming into 2012 the 10dma of the OEX put/call ratio was sky high, Treasuries were suggesting a bear market had begun, and my bear signals were still intact. In review I thought 2011 looked a lot like 2007. Third years of the presidential cycle are supposed to be strong. However, when the second years are stronger than normal it tends to create weak third years. This happened in 1986-1987, 2006-2007, and 2010-2011. As you can see from my circles, despite massive volatility the market ended the year right where it began. Very similar to 2007 and 1987. So I came into 2012 bearish but by 1/10/12 I determined that I had a false signal and that the cyclical bull market remained intact despite a very nasty correction.
So what can be determined from this detailed look at the market since 2000?
* Sell in May and go away has worked very well in some years but not so well in others. Selling in May would have cost one huge gains in both 2003 and 2009.
* Based on my work it seem the optimal time to focus on is March/April instead of May. The prevailing trend for the prior 3-6 months tends to reverse in March/April. The only time it has pushed out to May was in 2006 and 2011. 2011 topped on the first trading session of May and 2006 topped about two weeks into May.
* When up into March/April (typical during bull markets) the market had a tendency to bottom 1-5 months later. Peaks in March/April in bull markets often weren’t surpassed again for 5-10 months. Examples include 2004, 2006, 2010, and 2011. The later the signal the better. For instance, if there was a bottom in February/March and a top in April, the top in April tends to be a better barometer to focus on.
* When the latter signal (of March and April as just discussed) is a low within the context of a cyclical bull market it is also best to go with the latter signal. These examples would include 2000 and 2005. The latter signal in 2000 was a low in April and the market chopped sideways to higher into September before rolling over into March 2001. The latter March/April signal in 2005 was a low and the market trended higher for the remainder of the year.
* When down into March/April it either confirmed a bear market bottom (2003, 2009) or at least tended to bounce for a few months following declines that had lasted ~6 months (2001, 2008). This is when viewed within the context of a cyclical bear market.
* Any time the market ends below where it started the year or below its high point of March/April had a tendency to be the beginning of a new cyclical bear market. These years typically see tremendous volatility without much progress. Examples include 2000 and 2007. 2011 was right up there as well but I’m convinced that central bank intervention (specifically the LTRO in Europe) is what prevented 2011 from being the beginning of another cyclical bear market.
Taking into account all of the above and adding in sentiment and market internals what could this mean for 2012? While Q4 2011 was extremely choppy it was up big. Q1 2012 was also up big but there was very little volatility. In fact, the largest retracement in Q1 was ~3% on the S&P 500 (1378-1340). So there is no doubt that the prevailing trend heading into March/April was higher. At this point it appears as though the first trading day in April (1422 on the S&P 500) was an important high. Taken at face value the study above would suggest that the market will likely see a bottom in 1-5 months and shouldn’t surpass this high for 5-10 months. This would suggest a bottom as early as May or as late as September. It would also suggest that 1422 will not be broken to the upside until as early as September or as late as February 2013.
Now I want to take sentiment and other charts into account. I have pointed out recently that sentiment as per Investor’s Intelligence is not what one would expect to see at a major market high. The bull/bear ratio just got close to the key 2.50 level last week and bears still remain high at over 20%. I would also point out the Nasdaq Composite has broken out of an 11 year base. Previous highs were 2862 in 2007 and 2888 in 2011. Those now become support. The index closed today at 2991 so those levels are only about 3.4-4.3% below current levels. The early-March 2012 low at 2900 could also provide support. In my eyes this is a retracement within a cyclical bull market. If the October high of 2753 was overlapped it would be cause for concern.
Based on sentiment and the duration of bull markets since 2000 I tend to see the current market as being very similar to the summer of 2006. 2006 saw a quick 8% correction that lasted one month from high to low. One month later the low was successfully retested and the market began to move higher again eventually taking out the May high in September. I suspect we could see something similar here. As I stated late last week I believe that 1300-1340 should provide a bottom for this correction. If this is an 8% correction as we saw in 2006 the S&P 500 would bottom at 1308.
So how is this view possible given that we just saw a high in April after a huge 6 month uptrend? Doesn’t that go against the data above? To a degree. At this point the high came on the first trading day of the month and today was only April 10th and the S&P 500 has already fallen from 1422 to 1357. If we get a bottom by the end of April or the very beginning of May my data suggests that one should go with the signal from the latter. In that case it would suggest that the signal from late-April or even early-May could be a major low. Given my timing cycles looking for turns in April 2012 and July 2012 this could work. April 2012 could end up being a high and a low (this happened with my July 2011 and October 2011 cycles as well) and July could very well be the retest of that low. I would then be looking for the market to break above 1422 in August/September if this does indeed play out like 2006. My next timing cycles are January 2013, April 2013, and October 2013. Given that I believe this bull market is in its latter stages I tend to believe that January or April will provide the initial bull market high and April or October will be the secondary high. This would fit in quite well with the highs of 2000 and 2007. Remember that topping is a process and bottoming is an event.
So to sum everything up we need to see how this market plays out for the remainder of April and into early-May before definitively declaring that April was a high and that a steep correction lies ahead. Sentiment and technicals just don’t seem to support 2012 being a repeat of 2010 and 2011. As I have said in the past week I am cautious, but I’m not bearish. I’m looking for support on the Nasdaq Composite between 2862 and 2900. If that is broken it is okay but not preferred. If the October 2011 high of 2753 is breached that would be cause for concern.
April 9, 2012
Here is some insight as to why I don’t believe that this summer will be a repeat of 2010 and 2011.
I first want to take a look at Investor’s Intelligence. Over time this has proven to be one of the better gauges of sentiment that I have seen. Here is a look over the past 7 years. The keys to look for when looking for a major top are bulls at less than 20% and bull/bear ratios over 2.50 for at least a few weeks. While one shouldn’t rely on this indicator alone it has been quite useful. I want to start with mid-2007 and work forward. The market made an initial peak in July 2007 before a nasty correction into August. The bull/bear ratio was over 2.50 for close to 3 months straight and bearish readings were below 20%. In October 2007 the bull/bear ratio had a big two week spike and bulls moved below 20% once again. That ended up being the top of the bull run from March 2003-October 2007. After the peak sentiment fell off a cliff and never really recovered until late-2009. The bull/bear ratio spent about 2 months up near 3.00 and bearish readings were clearly under 20%. The market then saw a correction in January 2010 of 8% or so. Now look to April 2010 ahead of the “flash crash”. Bull/bear readings were up near 3.00 and bearish sentiment was under 20%. Now look at the peak in April 2011. The bull/bear ratio was over 2.50 for the better part of 6 months before that high and actually spiked up to 3.00-3.50 right before the peak. At that time bearish sentiment was once again under 20%. Now look at where we are today. Last week was the first time since April 2011 that the bull/bear ratio came close to 2.50 and bearish sentiment is still 21.5%. These are not the kind of numbers one would expect near a major market peak with regard to sentiment.
Now I want to take a look at the internal indicators that I follow closely on TC-2000 beginning with the McClellan Oscillator. Note that the 15 day exponential moving average (neon green line), or the 3 week moving average rolled over at the beginning of February while the market continued to move to new highs. It has now reached oversold territory on two different metrics. First of all today’s reading is -290. Look back over the past 3 years and you can see that when it reached -300 or lower the market was usually within days of a bottom. Also note that aside from May 2010 and August 2010 that the 15 day EMA has generally bottomed at -100 to -175 before turning up. It is currently around -125. Once again this implies that some kind of bottom is likely within days.
Now I want to move on to the Summation Index. Note that it too rolled over in early February 2012. It went from an extremely overbought +4000 reading and has now come down quite a bit suggesting that the market has been correcting internally since early-February. The 15 day EMA remains above zero which is bullish (below consistently is bearish and would imply a larger correction).
Here is another indicator that I have found to be quite reliable. The cumulative advance/decline line of the Russell 2000. Once again I am using a 3 week exponential moving average here. When it begins to hook to the upside that is generally a pretty good sign of a bottom. Note that it turned down in late-July 2011, up in early-October 2011, up again in late-December 2011, and turned down again in February 2012. I suspect that when this begins to turn up again the market will likely be at an important low.
Here is the cumulative measure of 4 week highs/lows with a 3 week EMA. This too does a pretty good job of hitting the bigger picture. It turned down in late-July 2011, up in mid-October 2011, down modestly in mid-November 2011, and has been moving higher since late-December 2011. It just now seems to be in the process of rolling over. So the question here is will this be a consolidation or a bigger correction? Hard to say at the moment but I’m leaning towards the former.
When looking at all of these sentiment and internal indicators together it is hard to see a big decline developing here (like we saw in 2010 and 2011). It is possible that the market may be seeing a bottom here (very short term) and then may have one more push higher before putting in a top. Or, we could be setting up for a consolidation period that could last 2-3 months. In other words, we may not see a breakout above the recent high in the S&P 500 (1422) until somewhere in the June-August timeframe. This latter conclusion would fit in with my cycle analysis of July 2012 being a key turning point for the market as well as the significant market turns in March/April that I referenced earlier.
So the market could be putting in a bottom here with one more push up to 1440 or so. Or, it could move down to 1300-1340. It already made it down to 1378 this morning so based on my metrics this correction is likely already 1/3 to 1/2 way done in terms of price (from 1422) and is very oversold near term. Keep an eye on Apple Computer (AAPL). As long as it continues to hold up I don’t think we will see much of a correction. If it breaks, that would suggest that people are being forced to sell what they have to and not what they want to which is typical when the market gets into capitulation mode. Thus far we aren’t there.
Watch 1371 on the S&P 500. That is the 62% retracement of the recent run from 1340-1422 and the high from 5/2/11. Above 1371 is bullish, below is bearish. When it is all said and done I am cautious here but not bearish.