Mixed and inconsistent price action of the past couple of weeks turned to very poor price action this past week. For the second week running, support levels were decisively broken in the SPY (S&P500 proxy) and DIA (Dow Industrial proxy); the IWM (Russell 2000 proxy) broke its most immediate support level. Only the QQQQ (NASDAQ [...]
Investor Sentiment: January 20, 2009 The “dumb money” sentiment indicator remains neutral on the equity markets, and the “smart money” has turned more bearish. It should be noted that this is the sixth week in a row where the “dumb money” is neutral, and this is not a scenario that is generally supportive of higher [...]
When I wrote last night’s article, I really had no idea that the CEO of McDonald’s Corporation (symbol: MCD) would be on CNBC this morning. Of course, CNBC was out touting the stock as the Dow’s best performer last year. If I was an investor, this would make me nervous as CNBC has a way [...]
Take about 20 minutes and review the charts of the component stocks that make up the Dow Jones Industrial Index. The financials (AXP, BAC, C, JPM) are in a free fall. Only JPM remains above its 2002 lows. The industrials (AA, DD) are basing after the fourth quarter free fall and are trading at their [...]
In a previous post on long term Treasury bonds, I reviewed some of the technical factors that have me bearish. “So it is highly likely, from this perspective, that Treasury bonds will be an under performing asset class over the next 12 months. But more importantly, will this market top lead to an investing opportunity [...]
What is it going to take before we see a bottom in stocks leading to a new bull market? Time. Time is the only thing that will heal this economy and heal the markets. Until sufficient time has passed, the markets are just treading water. The markets are likely to remain in a range between [...]
As suggested in the previous articles on sentiment, selling pressure materialized last week as none of the major indices could clear resistance levels. The SPY (S&P500 proxy) and DIA (Dow Industrial proxy) broke supports levels suggesting weakness; the QQQQ (NASDAQ 100 proxy) and IWM (Russell 2000 proxy) held at support levels. To review the methodology [...]
Investor Sentiment: January 12, 2009 The “dumb money” and “smart money” sentiment indicators are neutral on the equity markets. While a neutral reading is not particularly telling regarding market direction, it should be noted that this is the fifth week in a row where the “dumb money” is neutral, and this is not a scenario [...]
I have presented a lot of data recently suggesting an intermediate term top for equities, and the weakness in prices this past week seems to be consistent with that view. Just as investors begin to embrace the hope that better times are coming, it’s “bam” back to reality. This is still a bear market – [...]
Two videos discussing the obvious to all bubble in the long term Treasury bond.The first is from Barron’s. The next video is from CNBC and can be found by following this link.
I have been bearish on long term Treasury bonds long before it was fashionable, and this past week, Barron’s has a cover story on Treasuries entitled, “Get Out Now!” It is their belief that “the bubble in Treasuries looks ready to pop, sending prices on government debt sharply lower.” More on the Barron’s “call” below, [...]
As stated in this week’s commentary on market sentiment: “The most bullish thing about the price action has been the price action. All the secondary indicators such as sentiment, volume or market internals have not mattered…. The Russell 2000 and NASDAQ Composite have broken through resistance levels (albeit on sub par volume), and the S&P500 [...]
In my most recent post on investor sentiment, I suggested selling into strength and I suggested that the optimal time to do this was during this week. An astute reader asked the question: what do I mean by strength? This is a great question because all too often market commentators make a “call” without the [...]
This is the fourth week in a row where the “dumb money” is neutral and the “smart money” is bearish, and this is not a scenario that is generally supportive of higher prices especially with prices on the S&P500 under their 40 week moving average. The ideal situation for higher equity prices would be for [...]
Back in August, 2008, I wrote an article about gold essentially stating that the biggest threat to price appreciation in gold was price appreciation in the US Dollar Index. At that time, that was a good “call” as the the US Dollar Index is up about 10% from the July 31, 2008 close and gold [...]
Figure 1 is a daily chart of the S&P Deposit Receipts (symbol: SPY), and the composite indicator in the bottom panel is an oscillator constructed from the following data: 1) $VIX; 2) Put Call ratio; 3) NYSE advance decline; 4) NYSE volume. Figure 1. SPY/ short term oscillator The indicator value is in over bought [...]
