Market notes 10/8/07

Reading through recent remarks in Richard Russell's Dow Theory Letters over the weekend, I saw that the strength in the leading averages is still evident.

The S&P 500 and the Dow Industrials are still working higher from their August lows, and in fact both the Dow and S&P 500 have made record highs in recent days.

Today's action seems to be worrying investors (see Bloomberg link above on option market signalling a stumble), but so far the uptrend in the major averages is intact.

Russell noted that the bullish percentage of shares on NYSE and the S&P are above 60%, and that the BP for the Dow was recently above 86%. He notes that there is nothing bearish about those statistics; if anything they've improved in recent weeks. Got Diamonds (DIA)? Russell and DTL subscribers are watching the action in the DJIA closely.

By the way, if you'd like more of Russell's view of the market, check out his newsletter. He has a very loyal following, and I'm one of his loyal readers myself. Great stuff.

In other market news and views, I'm starting to wonder if leading indices and shares will continue to move higher, or will things fall apart (at least here in the U.S.) and confirm Marc Faber's gloomy view on the U.S. market?

Marc recently forecast a possible 20-30% or greater correction in the leading averages, and said he expects to see a significant correction in leading U.S. tech names, such as AAPL, GOOG, and RIMM in the event of such a drop.

Currently, these leading names are anything but weak, with many of them rocketing to all-time highs. But if weakness starts to show up in these names, perhaps this will signal a coming correction for the U.S. stock market. Or maybe it will signal a pause and a shift in leadership with a rotation to other names? We'll see...