[kero]

the recent swing high has defined the top of the developing Stage 1 range, and now the market is pulling back as it digests the recent move. So, as we are in a potential developing Stage 1, the method suggests it's time to be looking for new emerging leadership groups, and adding them to your watchlist, so that you are positioned to react at the appropriate time.

If I may give my opinion on this...

The US major indices (DJIA, SP500), are indeed quite bullish, giving a strong feeling that what could be seen as a stage 3, actually is becoming a stage 1, building foundations for a new bull trend.

But.

For myself, being invested on European market, I consider mostly european indices. Watching at several world indices gives the feeling that there is a strong divergence between those US indices and the rest of the world. France, Germany, Japan, among a lot of others, are in a bearer shape. Il also often have a look on world indices (particularly MSCI world, MSCI emerging).

Here MSCI World (ex USA):
   

On this level, we are clearly in a stage 4. Note that - for studying the indices - I prefer to use the weekly MA50 than the MA30, since it appears to me a better way to capture major trends.

Here MSCI Emerging.
   

Note that the indice built an extremely long trading range, lasting several years. The support having been broken, its strength lets think that it will not be that easy to come over again.

Now, I know that this website is more about US stocks (I am actually right about this ?), but Weinstein himself also points out the importance on watching at other international stocks to have an insight about future evolution. And this leads to conclude that the global move is quite clearly bear. The Russell 2000 also is. Nasdaq is in an intermediary situation.

As a sidenote: there was a similar divergence in october 2007. The SP500 was trying to go on a new high (aborting some days later), while the french CAC40 where building the second shoulder of a (really pretty) head-and-shoulders structure.