March 14, 2004 was my last day of public posting at stockcharts.com of selected chart analyses. I've recreated that page here by way of archiving what was a very special period of time in the market and in particular, for small investors.

amg's Studies & Commentary Ana Maria Gallo

Special Announcement from AMG

After over three years and 1000+ days of continuous updates, 'amg's Studies and Commentary' is going offline as of Sunday evening, 14 March. The very best part of posting my charts here for readers and users of stockcharts.com has been the wonderful feedback from visitors, who have come from all over the world and ranged from hedge fund managers to discretionary traders to young folks just learning analysis. My warm appreciation to Chip Anderson who continues to improve an already amazing product, and to all who have sent notes of appreciation and encouragement. Thanks for visiting and the very best to you in your trading and investing!

What a week it has been! Loads of technical carnage, signaling at best a robust consolidation and at worst a shift towards an even stronger decline. I'll go with the former (ed: was later, shame on me) as there is evidence of sufficient oversoldness for a bounce. I was looking for a touch of 1096, may still come Monday, but there is anxiety for a bounce. So that, then retest low before a stronger rally, ie, a W (double bottom) on the daily? Do look at the last chart: Price Relative VIX, which I now include on the daily chart. It has proved one of the most interesting observations. Note too that small caps have remained buoyant, a sign of lack of real fear.

Archives irregular commentary at http://themysterybox.com/amg/notesblog.html. Here are some background notes to the 'amg's Studies and Commentary'.

The following charts are presented as an archive of the last day of posts. Last year I migrated the bulk of my charting to Ensign Software. Even though I no longer post a public list, I continue to use stockcharts.com for a wide variety of scanning, "candle-glance" of comparable stocks, and SCC's wonderful "Perf" tool that allows one to compare performance of a group of stocks, indices, or ETFs. Once the beta phase is complete, the next generation SCC package will include CandleVolume, what Dick Arms calls EquiVolume and an excellent adjunct for reading price action.

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1e SPX PPRO Example

The purpose of this chart is to show that a cross ABOVE the Zero line is a more powerful indicator of a SUSTAINABLE rally. Much is being made of this run to the mid-1990s run. Aside from fundamentals, of which there are more than a few differences, this one difference is, IMO, considerable. Note that the current run was off a cross BELOW Zero, where PPRO (a percentage-based MACD) remains. A reversal below that crucial zero would validate the view that this has been a so-called 'bear market rally'. On the other hand, a continued climb up, of course, sets up a Zero cross, from which continued bullish gains can be made. This already happened on a PPRO using shorter MA settings, where a hook at this point would also signal a correction, albeit on a relatively glacial monthly scale.

2a - OEX -- *Out* of Favor (Monthly)

As various technicians have mentioned, and which you saw unfold here over the past 6 months, the large caps are back in favor. Note, however, that this balance also have a range with support and resistance zones. Given the ratio in the lower part of the range zone, this is rotation out of speculative smaller caps with large gains rather than a 'flight to safety and liquidity'.

2b - SML Small Cap Daily

$SML iShare equivalent is IJR. The 'S&P 600 Value' iShare is IJS, which slightly outperformed IJR. The 'S&P 600 Growth' iShare is IJT, which slightly underperformed IJR. In the PerfChart view, you can enter $SML, IJR, IJS, & IJT to gauge relative performance.

2d - Small Cap Value to Growth Ratio - IJS:IJT

Value has long been percieved as stale in some quarters, but since the demise of the mo-mo bubble, has been momentum driven. And based on the chart above, a harbinger of local bottoms: when value comes into favor, a broader market decline is likely; and when growth returns, a broader market rally is likely. Witness the periodic relative sell off of Small Cap Value (IJS) stocks vs. the Small Cap Growth stocks (IJT). The trend started in late 2001 and got a full head of steam (value overtook growth) during the 2000/2001 'January Effect'. The most recent return to growth was in late July. The market bottom in October, however, appears to have somewhat stalled the move. Should value return to favor, it may be likely the broader market (SPX, NDX) will sell off.