Ralph Acampora ^[1] is the Chief Technical Strategist for Prudential Equity Group (part of Wachovia). Too many years ago, I took Ralph’s Advanced Technical Analysis class at the New York Institute of Finance ^[2]. He’s a terrific guy, and I highly recommend his class.

Every year, Ralph puts out his “Fearless Forecast.” For 2005, Ralph is rather Bullish. He’s looking for a cyclical bull market with targets of:

• SPX 1450-1475
• Nasdaq 2700-2800
• DJIA 13,000 – 13,300

All of Wall Street makes year out predictions (present company included), and by definition, they are problematic at best. What I found most impressive in Ralph’s Fearless Forecasts for 2005 was buried towards the end. It was his short list of “anticipatory technical indicators that materialize before the cyclical bull comes to an end.” These are Ralph’s signs that can warn you the end is nigh:

• NYSE Advance/Decline Line usually peaks several months before the leading averages score their final highs;
• The DJ Utility avg usually rolls over 6 months before the other leading averages score their bull market highs;
• The number of 52 week new highs will stop expanding as the leading averages push into new high ground;
• The relative strength line of value stocks versus growth issues will transition back in favor of value;
• The price action on individual stock charts will begin developing top (distribution) patterns;
• Noticeable contraction in volume while prices expand;
• The Lowry Selling Pressure line trends up for several months.

Good stuff. Ralph’s insights are always well worth noting.