Louise Yamada Technical Research Advisors, LLC

Louise Yamada Technical Research Advisors, LLC

February 1998

April 2000

2007  Events      

December 17, 2007: Dylan Ratigan interviews Louise on CNBC TV's Fast Money. Commenting on a chart of the S&P Diversified Financials versus the S&P 500, Louise points out that the indicator has broken a six-year top, giving a message of structural deterioration.

This structural breakdown for Financials can last for years, as a similar breakdown did for Computer Hardware during its lengthy decline in the 1980s. Good rallies and bounces, both in relative strength and absolute price, can occur during the downtrend, (as occurred in Computer Hardware); but the sector then continued downward for another eight years. Although the business fundamentals of Computer Hardware are different from those of the Financials, the structural evidence of supply (stock being sold) in their breakdowns is comparable.

The Financials are currently showing a massive amount of supply. Since the market is a discounting mechanism, this amount of supply indicates market concerns over even as-yet unknown fundamental issues within the Financials; rallies should be used to lighten positions.

The breakdown in Financials is also a problem for the overall market. There is a strong correlation between the price action of the Financials as market leaders, up or down, and overall market performance.

On the upside, strong-looking charts include PepsiCo (PEP), Coca-Cola (KO) and other Consumer Staples companies that participate in the global economy and may prove defensive in this market environment. PepsiCo's chart shows a continuing uptrend without deterioration or distribution. There may be pullbacks in an overall market pullback but the long-term uptrend suggests that PepsiCo may be at least a safe haven in a difficult market.

Consumer Discretionary stocks that are not globally-exposed, being primarily oriented to the domestic market, have suffered in comparison along with the Financial stocks.

Video of the interview is available at: www.cnbc.com/id/15840232?video=610155624

December 6, 2007: Interviewed on CNBC's Squawk Box by Joe Kernen about current market volatility, Louise notes that the Dow Jones Transportation Average has broken a 5-year uptrend and has also broken a support level, putting in place a lower low, which suggests evidence of supply coming into place indicating that there has been selling into strength.

The August 2007 lows are the critical lows for all the indices. The Dow Jones Industrial Average has only ticked below its August low of 12,845, creating a Dow Theory sell signal which would not be reversed until both the Dow and the Transports move to new highs. The Russell 2000 and the S&P 600 have also broken their August lows. Fifty percent of the NYSE stocks are more than 20% below their highs (defining bear markets) as is evident from the Advance-Decline Line. The AD line rose to confirm the 2006 rally, but trended down during the 2007 rally, forming a negative divergence with the equity market new highs. This would indicate internal deterioration in 2007 beneath the surface of the market. First the Homebuilders started to break down (Dec. 2006); then the Financials (March 2007); then the AD line deteriorated and the negative divergence started to widen, signifying underlying weakness.

When the DJIA went through its 2000 peak, the average broke out of a 7-year consolidation with a significant 6-year base. Louise's targets have been at 13,000 and 16,000 but a pullback to its breakout level near 12,000 is possible. The strength shown by the NYSE average, which has moved to new highs, may well be due to the distinction between globally-exposed and domestically-exposed stocks. A global build-out is underway today very similar to 1942-1966 domestic bull market build-out fueled by US housing and related needs of the soldiers returning from World War 2. Stocks that are participating in the global build-out are in bull markets; some stocks that are domestically-exposed, like the Financials, have fallen behind. Thus, Louise has described today's market as a "Bull, Bear, Hybrid".

Louise in 2000 suggested that we might see a pattern like the 1929-42 period. Based on the Elliot Wave concept of alternation of cycles, Louise's bear market expectation in 2000 was that the coming market cycle would be less like the 1966-1982 cycle (which was one of inflation and rising interest rates) and more like the alternate cycle of 1929-42 (with a crash, falling / low rates and deflationary pressures). And that the DJIA could parallel the 1932-37 period, which in fact has occurred identically. What occurred next was a 47% decline. Declines proportionate to the 47% drops experienced in 1937 are possible on a sector by sector basis; some Financials stocks have already suffered 47% declines.

Video of the interview is available at: cnbc.com/id/15840232?video=604587699

November 30, 2007: Interviewed on Bloomberg TV's Final Word by Deirdre Bolton about this week's rise in the Dow Jones Industrial Average, Louise notes that the move may be a kickback rally, particularly in stocks that have been in structural decline, such as the Financials and Consumer Discretionary. The rally may be a good opportunity to lighten positions in groups that have structurally broken down, including Financials and Retail.

This week's strong two-day move upwards in the DJIA should be viewed in the historical context of the frequent occurrence of two percent up-moves during bear market rallies, as was seen in the 1929-1932 and 2000-2002 periods. Similar rally patterns can also be seen in specific sectors, as in Homebuilders, only shortly thereafter to continue their structural declines. Not all market advances are equal. Some are kickback rallies that carry a stock up toward breakdown levels; other advances are continuing an uptrend.

Current levels of resistance are 13,600 for the DJIA and 1510 for the S&P 500. These major market indices have been outperforming the broader, underlying market. Recently over 50% of the New York Stock Exchange stocks are down 20 % or more which qualifies as a bear market.

It is possible that the market may behave as in 1994 when the major averages declined only 9%-10% but many individual stocks suffered bear market declines. Whether today's market will act as in 1994 depends largely upon whether the major indices fall below their August 2007 lows. The Dow Jones Transportation Average has already done so. The DJIA merely ticked below its August low but this nonetheless gave a Dow Theory sell signal which would not be reversed unless both the DJIA and the Transport moved up to new highs. The Transports clearly looks like a kickback rally into the resistance that has been broken.

November 19, 2007: Dylan Ratigan interviews Louise on CNBC TV's Fast Money. On the S&P 500, Louise sees the possibility of the August closing low of 1406 being broken. This would be an important break because for five years the index has put in place a series of higher lows followed by higher highs which defines both an uptrend and aggressive demand. A break below the August low would be the first evidence of aggressive supply coming into the equity market. The Transports have already had such a breakdown, and both the Russell 2000 index and the SD&P 600 index also did so today, leading Louise to remain extremely cautious and risk averse at this time. Caution is also warranted because throughout 2007 there has been deterioration under the market on the new highs. There could be seasonal rallies within the next five or six weeks, even in Retail, but they should be viewed as kickback rallies.

Cisco Systems (CSCO) has come off its recent high but is still putting in place higher lows. Even if CSCO were to pull back another couple of points that might offer a buying opportunity. It is important, however, to remain very selective on Technology. Broadcom (BRCM) previously had a false breakout but has now completely broken its support level. Since BRCM has not followed through on its technical progression it may be best to reduce holdings. Coca Cola (KO) has broken a 5 to 6-year downtrend, has achieved a 6-year base, and has now broken out above the prior highs. KO looks like it is initiating an uptrend and is a candidate to buy even in a market decline. In contrast, Bed Bath & Beyond (BBBY) portrays a 4-year top that appears on the verge of starting to break down under $30. This would complete BBBY’s distribution pattern and may suggest that it could follow the declines of some of the other Retail stocks. Looking at the equity markets in general, their overriding structural deterioration suggests that any seasonal rally is not likely to be strong.

Video of the interview is available at www.cnbc.com.

November 12, 2007: Interviewed on CNBC TV's Street Signs by Erin Burnett about today's drop in commodity prices, Louise placed this market action in the context of the overall structural uptrend for commodities. This is not a bubble bursting but is rather a correction -- paralleling the pullback in the overall market -- in the continuing structural bull market for commodities.

Louise appraised today's up-move in the Financials as a bounce in an ongoing bear market, as opposed to commodities experiencing a pullback, or correction, in an ongoing uptrend. Corrections can last for a period of time and there may be buying opportunities as the commodities pull back and settle, but may need time since copper is breaking down from a six-month consolidation.

All of these down-moves, technically, appear to be taking place in longer-term structural uptrends. Nevertheless, copper could go as low as 250 or 240 and gold could go all the way to 750. These moves would be normal expectations within normal technical parameters within an ongoing uptrend. Gold broke out through a year-plus consolidation at 690 and then went up over 100 points very quickly. To have it pull back here would be a normal expectation. Oil could go to 85 or 80 but this "worst case scenario" would also be a normal expectation and still be within the ongoing structural uptrend.

Concerning the strength of the global economy and whether the completion of the Beijing Olympics will occasion a bursting of the global bubble in commodities, Louise described a potential "Y2K Olympics" effect in which China has been stockpiling and increasing production in advance of the Olympics so that production could be suspended a few months before the Games in order to mitigate air pollution. Since markets tend to discount events about six months in advance, the current pullback in commodities prices may be tied to this phenomenon of "slower aggressive growth" in China as part of the Y2K Olympics run-up.

Video of the interview is available at www.cnbc.com.

November 2, 2007: In an interview by Becky Quick on CNBC TV’s Squawk Box, Louise points out that the charts have been saying for most of the year that there has been deterioration under the surface of the rally that has been taking place. In June, Louise and her team started looking for the potential for a cyclical decline; there was a drop in August but on the major indices it wasn’t more than ten percent which is nothing more than a consolidation. Thinking, however, in terms of the Financials or the Consumer Discretionary, which perhaps do reflect the domestic economy and the consumer, these sectors have been in underperforming modes for most of the year and Louise has been recommending avoiding and selling them.

The market at this point is really a question of in what sectors you position yourself. Technology has been one area, very selectively though, you have to look for the new New-Tech names - not across the board - in which some stocks have been emerging from 6-year bases. Many investors who have been very discouraged since 2000 may not be aware that some of those Technology stocks are starting to finally complete their repair processes and are moving up nicely.

Video of the interview is available from CNBC TV. See Futures, Technicals & Volatility.

October 19, 2007: On the day on which the Dow Jones Industrial Average marked the 20th anniversary of the 1987 market crash by falling 367 points, Louise is interviewed on CNBC TV’s Fast Money by Dylan Ratigan. Assessing a chart of the S&P 500, Louise states that the day’s action is a normal pullback to the September breakout levels, with the DJIA also coming within 22 points of its September breakout level. Of the Dow’s total decline, 200 points were caused by only seven of its component stocks.

While the day’s pullbacks to the September breakout levels are normal, the market must be watched as there are divergences still in place and the down-move may develop into more of a corrective trend before it’s over. The underlying profile, however, remains the same with the weak groups moving to new lows; secondary breakdowns in Financials and Consumer Discretionary, particularly Retail, all within their downtrends; and with the strong groups and stocks, like the selective Technology names that are just pulling back in uptrends, providing a chance to buy these stronger names.

The result is money is being freed up to come into the stronger new leaders. Crucial support levels are the July and March lows that must be watched for the S&P 500, the Dow, and all the major indices and stocks. If those supports are violated then we have something more serious ahead of us.

Concerning the recent rise in the volatility index from 18 to 23, Louise notes that as the VIX gets into higher levels this has generally been associated with a more unsettled market environment, as was seen from 2000 to 2002. When the market started to rise, the VIX moved down and traded in a saucer bottom. That the VIX is now picking up again may mean that there could be a little bit more corrective activity ahead of us.

Concerning whether one should buy or sell at this time, Louise states that all declines are not equal. One should buy stocks that are pulling back in strong uptrends with good relative performance, including Technology, and should continue to sell stocks, particularly the Financials and Retail, that have broken secondary support levels in new declines.

Video of the interview is available at: www.cnbc.com/id/15840232?video=568306292&play=1.

October 15, 2007: Interviewed by Dylan Ratigan on CNBC TV's Fast Money on the 20th anniversary of the October 1987 stock market crash, Louise reviews the DJIA chart leading up to the October 19, 1987 sell-off. While the technical indicators at that time did not presage a crash, there were slight negative divergences in the daily Advance/Decline (but not the weekly) and negative divergences in the new highs vs. new lows (which condition exists again today). The work of Louise’s team in 1987 yielded a weekly momentum sell signal on October 8th but this indicated the underpinnings of a market correction or deterioration, not a crash. What was different from today was that interest rates were lifted with the Federal Reserve Board raising rates three times into the peak.

Turning to a DJIA chart for 2006-2007, a momentum sell signal was received in connection with the 340+ point up/down reversal but the signal then changed to a buy. There are some continuing negative divergences today in the high/lows and a minimal divergence in the A/Ds—plus volume has been unsatisfactory. While not immediately concerned about the market, Louise will be watching for signs of progressive negative divergences over the next two months.

Comparing the 1987 chart overlaid on the 2006-2007 chart, Louise noted a similar pattern in both charts leading up to October. A potentially crucial difference is that in 2007 the Federal Reserve Board intervened earlier with interest rates cuts, thereby possibly averting a more serious decline.

Looking forward, there is market rotation occurring under the surface where Technology is starting to outperform and Consumer Discretionary and Financials continue to deteriorate, so it’s a question of selling the deteriorating stocks into the rally. The chart of Broadcom (BRCM) shows higher lows and a one-year breakout, and BRCM appears to have further room to move up. As a result of the rotation into Technology, the NASDAQ is now outperforming the other major indexes. Louise noted, however, that Technology is very selective and one cannot buy across the board.

Video of the interview is available at: cnbc.com/id/21309972.

September 28, 2007: Interviewed by Dylan Ratigan on CNBC TV's Fast Money, Louise discusses the recent rise in the S&P 500 index and notes the need for additional volume. Reviewing the chart for Cisco Systems (CSCO) she describes the price life cycle of the stock as it passes through an accumulation phase or the Basing process; the Uptrend representing aggressive demand (buying); the Distribution phase or creation of the top; the Downtrend representing aggressive supply (selling); and enters the 6-year Repair process from which it is now emerging as a "pounding buy." In contrast, the chart of Centex Corp. (CTX) shows that it is still in the distribution phase and any rallies could be used as opportunities to sell. One final word of caution: "Bottom fishing can be dangerous to your wealth." Video of the interview is available at: cnbc.com/id/21036111.

September 12, 2007: Interviewed about the rise in the price of gold by Sue Herera on CNBC TV's Power Lunch, Louise said that gold remains in a structural bull market, as does oil. Structural bull markets can last one or even two decades and gold's rise from its breakout at 300 and now through 690 can be considered the first or second step of a long-term rise. Current projected targets are 750, 830 and 900 as gold moves up from the consolidation it has been in since its decline of 2006.

The recent mortgage market problems that have brought about what may be the first cyclical decline in the equity market's four and one-half year advance may have an indirect connection to the price of gold. The apparent selling of equities into rallies over the last several weeks may have resulted in money migrating to gold, thereby fueling its rise.

Also, the weak dollar, now just breaking through a 34-year support at 80, carries an inverse relationship to gold and has broken into uncharted waters. Looked at from a broad, trade-weighted perspective, the dollar has broken a 25-year uptrend and recently broke a 6-year top. We are concerned that the dollar may now be in a structural bear market and we have lower targets.

Each pullback that gold has experienced during its consolidation after the June 2006 low has been "beautifully orderly" with the price holding each time at higher lows, representing demand. Any pullbacks from the current price of gold toward 690, which can now be considered support, can be viewed as opportunities to add to positions.

The interview is available in streaming video at the CNBC TV web site.

August 16, 2007: In an interview in an article by Ellis Mnyandu at reuters.com, Louise discussed the drop in the Russell 2000 index of small-capitalization stocks from its 52-week high. She noted that "this is definitely a cyclical correction taking place" and that, in contrast, the S&P 500 index did not experience a ten percent correction during its bull phase that followed the bursting of the Internet bubble in March 2000. Even more significant, "the next level which I think will be broken are the market's February-March lows." That will be the first time "that supply will be overcoming demand in the duration of this up-trend that started in 2003."

August 2, 2007: Appearing on PBS's Nightly Business Report in an interview by Suzanne Pratt, Louise noted that there are very oversold conditions in the advance-decline data, in volume, and in up-down volume and until those conditions are alleviated there could be further downside. She noted also that financials have always accompanied a rising market and that, unfortunately, a market has always followed the financials down. The decline in financials might have implications for larger portions of this market.

July 27, 2007: Interviewed on Bloomberg TV's Morning Call by Matt Miller, Louise discussed that several weeks of declining indicators, at the same time as the markets rose to new highs, suggested that a cyclical decline might be brewing. Deep oversold levels, empirical evidence of selling, indicate weakness. Rallies could carry into resistance of recently violated support level. Financials are particularly weak and for the most part represent sell-on-strength.

June 12, 2007: For the second year in a row, Louise is a guest speaker at the Reuters Investment Outlook Summit. Reuters describes this conference as "a direct link to top business leaders, investors and regulators." Louise discussed trends currently affecting the major stock market indexes as well as trends impacting the U.S. dollar.

June 12, 2007: Louise Yamada Technical Research Advisors, LLC (LYA) has become Research Consultant to the new equity portfolio management strategy of MB Investment Partners, Inc. (MB), a New York-based wealth management firm. This new Enhanced Technical Sector Model Portfolio combines LYA's proprietary technical research with MB's portfolio management expertise and experience. As Research Consultant, LYA provides sub-industry, sector and other technical recommendations. Inquiries for further information on Enhanced Technical Sector Strategy or new accounts should be directed to MB: Christine Munn at 212.370.7300 Ext.231 or cmunn@mbipinc.com.

June 7, 2007: Interviewed by Erin Burnett on CNBC TV's Street Signs about the recent decline in the Dow Jones Industrial Average, Louise notes that even a further 600 point selloff would still be within the context of the current bull market. Such a decline would be well within the definition of a consolidation (a decline off the highs of up to 10%) within a continuing bull market. Thus, conceptually the DJIA could come all the way back to 12,300 and the S&P 500 to 1385 and still be within the confines of a consolidation.

More important support, however, would be around 12,800 for the Dow and 1460 for the S&P which would be the support of the old highs back in February of this year. While the market is extended over the short term, and there have been negative divergences on a daily basis over the past month, until proven otherwise the intermediate- and long-term trends are still intact.

Regarding the rise in the interest rate on 10-year Treasury bonds to 5.1%, Louise does not feel that there is a "magic number" for interest rates that would necessarily trigger an end to the bull market -- as long as we maintain the liquidity that we have been seeing globally. The bond has been in a trading range from 3.5% to 5.5% that has been the transition from the 25-year, or 26-year, bull market in bonds towards the next bear market in bonds. The last bear market in bonds began in 1946 and the equities markets continued up until 1966 -- along with rising interest rates.

May 30, 2007: Louise is interviewed by Bill Griffeth on CNBC TV's Power Lunch about her bull market thesis that was discussed in the May 23 Wall Street Journal article by E.S. Browning. In response to Griffeth's questions, Louise distinguished long-term structural trends (ten years or more -- such as the structural bull market from 1982 to 2000) as opposed to the cyclical pullbacks or moves in the opposite direction that periodically interrupt structural trends. The global markets began a powerful move in 2002, corresponding to the initiation of a new 20-year cycle. Thus far, the foreign markets have vastly outperformed the U.S. market.

Louise noted that "it really is different this time," with the qualifier that the psychology of the market is not different, but rather the environment. There are now 2 billion people in the world who are moving into the mainstream and toward the middle class during the next couple of decades, constituting a once-in-a-lifetime trend. The global infrastructure build-out of homes and infrastructure in support of this demographic trend corresponds to the 1942 to 1966 domestic infrastructure build-out in the post-war U.S., with road and highway infrastructure, homes and appliances purchased, except this time the global build-out is much larger. This bull market should be viewed not in terms of any particular target price but rather in terms of duration, of number of years.

Along with the bull market in equities, the price of gold can continue to rise because the influence of the U.S. dollar is the key. A falling or devalued dollar inflates other assets and the potential rise in our markets, as an inflationary advance, may be tied to the dollar's decline. Last October/November the Dow Jones Industrial Average broke out through a reconsolidation leading LY Advisors to put in place a target of 13,000 which has now been raised to 16,000. Global markets, however, will continue to outperform U.S. equity markets, interim pullbacks notwithstanding.

May 23, 2007: In The Wall Street Journal's lead, front-page article by E.S. Browning -- "Why Market Optimists Say This Bull Has Legs" -- Louise compares today's global industrial build-out with the post-World War II boom and sees the current bull market in the Dow Jones Industrial Average continuing to 16,000. The current industrial expansion in Europe, Russia, China (including preparations for the 2008 Summer Olympics), and the developing world compares to the U.S. domestic build-out of roads, bridges and factories from 1942 to 1966. This strong global economy has kept the U.S. economy out of recession and has bolstered the profits of U.S. companies. If the analogy to the post-war boom holds, Louise posits potentially a 10-year continuation of the bull market but cautions about the possibility of interim, cyclical bear markets, as occurred in the course of 1942 to 1966 and from 1982 to 2000.

May 7, 2007: At the Annual Conference of the National Association of Active Investment Managers, held in Orlando, Florida, Louise is the Keynote Speaker. Her Featured Presentation topic is "The Evolution of Structural Trends".

May 3, 2007: At the Bloomberg Educational Panel in New York City, Louise discusses commodities, bonds and the dollar.

April 24, 2007: In a wide-ranging interview on Bloomberg Radio's "Countdown", Louise noted that the 4-year uptrend in equity prices continues, with momentum being sustained despite some rotation under the surface. Relative Strength of the Financials and of Retail has deteriorated but RS has strengthened for other groups including Pharmaceuticals, and for some select Technology. There is a degree of profit-taking from the former, with the proceeds rotating to new sectors.

Among the indicators, Advance/Decline continues to confirm on the upside but more volume would be needed to sustain the rally, and an expansion of new highs is desirable. It is important to stay in the outperforming sectors. The Financial sector, which has undergone a 1-year Relative Strength breakdown, remains a concern. Selectivity is essential in both Consumer Discretionary and the Financials.

The market has enjoyed a 4-year advance, and a fifth year would be rare, but the market seems to continue to benefit from the global buildout. A slow and steady, rather than a dramatic advance, might be ahead, notwithstanding periodic pullbacks; but one should stay alert for any deterioration or any negative divergences in the indicators.

April 23, 2007: A Bloomberg News Marketplace article by Elizabeth Stanton -- published online by the International Herald Tribune -- surveys several technical analysts and bond traders respecting the possible end of the almost 26-year bull market in U.S. Treasury bonds. In the article, Louise summarizes the historical background of interest rate cycles. The article notes that "Yamada in 2001 correctly predicted 10-year Treasury yields would range between 3.5 percent and 5.5 percent for several years and has been right so far this year in forecasting that gold prices would rise."

April 20, 2007: On CNBC TV's Closing Bell, Louise is interviewed by Melissa Francis about today's all-time high in the Dow Jones Industrial Average. Louise noted that in October 2006 the DJIA lifted out of the right shoulder of a continuation head and shoulders pattern and that the only piece missing in the current record rally is volume, an increase in which would further fuel the upmove. On financials, currently 21% of the S&P 500 index, Louise expressed caution on certain of the sub-industries. Asset managers look positive but the Financial index Relative Strength broke down from a year-long consolidation. With respect to pharmaceutical stocks, their Relative Strength has finally moved up after a three-year downtrend, and price is also up from a two-year consolidation; selective stocks look attractive. Energy stocks may continue to move sideways although a recent study done by Jonathan Lin of LY Advisors indicates that energy and materials may be benefiting as an offset to the falling dollar.

April 12, 2007: On Bloomberg TV's Morning Call, Louise is interviewed by Matt Nestor about the recent rally in stocks.
Financials: Financial stocks, currently 21% of the S&P 500, are underperforming the index and undergoing distribution.
Utilities: The strength of utilities, currently leading the rally, may reflect their new role as the basic materials for the new high tech and emerging industrialized world.
Energy: The consolidation in energy over the past year is coming to an end and the energy stocks are in the initial stage of a new advance. Oil may be getting ready to lift out of a reverse head and shoulders bottom pattern.
Overall: Money leaving the fincial stocks appears to be moving into these smaller capitalization groups. And the market is becoming more stock selective, even within the outperforming groups.

March 6, 2007: On CNBC TV's Street Signs, Louise is interviewed by Erin Burnett concerning last week's market decline. Louise has noted over the years that the market’s multi-year advance off the 2002 low bears a parallel with a similar upmove in 1937. In 1937 the advance then turned, without any technical warnings, into a decline. Today’s market remains oversold and any rally should be monitored for divergences that may presage another drop. Areas that look positive include utilities and the DJIA, the latter of which has underperformed other averages over the last few years and may offer relative protection.

March 5, 2007: At the Securities Industry Institute (SII) Annual Program in Philadelphia, Louise is a Panelist for "Wall Street Comes To Wharton" discussing, among other topics, current trends for interest rates and the Commodity Research Bureau Index (CRB Price Index), as well as population trends.

March 4, 2007: In an extended interview by Conrad de Aenlle in the Market Week column of the New York Times Sunday Business section, Louise discussed that the best form of recovery from the preceding week's sharp decline in market averages would not be for the market to run up again. Such a quick recovery might encourage selling into the rally. It would be better to see accumulation at the lower levels allowing the market to consolidate sideways for an extended period. She also noted, among other things, that last week's market decline did some technical damage. The first signs of repair could come from evidence of demand such as "more stocks advancing than declining, even in a flat market, and modestly greater volume in advancing stocks than declining stocks." See Get Well, But Not Too Quickly.

February 7, 2007: On PBS's Nightly Business Report, Louise was interviewed by Suzanne Pratt concerning Dow Theory.

February 2, 2007: On CNBC's Power Lunch, Bill Griffeth interviewed Louise on prospects for gold. Louise noted that gold remains in a structural bull market and that structural bull markets can last more than a decade or even two decades. Gold enjoyed a 76% runup to its high in May and then experienced a 25% cyclical bear decline. A slow and steady process through its old high and to higher levels can be anticipated. Gold is affected by the dollar, currently holding at a 17-year support level of 80, which, if broken, would lead to an anticipated increase in the price of gold. The broad trade-weighted dollar has already completed a top and broken a 25-year uptrend. As governments consider conversion of reserves out of dollars, gold is one of the options.

January 23, 2007: Interviewed by Erin Burnett on CNBC's Street Signs, Louise discussed the Dow Jones Transportation Average noting that since its May 2006 high, which confirmed a 3 1/2 year uptrend, the DJTA had put in place a series of higher lows and may be poised to move higher. At the same time, the October 2006 breakout of the Dow Jones Industrial Average had effected a head-and-shoulders continuation pattern with the possibility of advancing further to 13,000 and even 16,000. Both Averages are now moving in a bullish direction. Under Dow Theory there is no requirement as to which Average should move to a new high first which, in this case, the DJTA did last May, with the DJIA confirming in October.

On Bloomberg TV's Market Pulse, Pimm Fox interviewed Louise about commodities. Specifically, with respect to gold, Louise noted that it is undergoing a 6 to 7 month consolidation and that a move through 650 would begin a new upleg in gold's continuing structural bull market.

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Louise Yamada Technical Research Advisors, LLC
P.O. Box 286829
New York, NY 10128

Phone: (212) 944-6200
Louise Yamada Technical Research Advisors, LLC
P.O. Box 286829
New York, NY 10128

Phone: (212) 944-6200
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