Saturday, January 22, 2011

ADVANCE DECLINE FOR CLUES. Weekend Post

ADvance decline for NYSE gallery view

No market has ever topped with ADV/DECL also reaching new highs? according to Lowrys in past 78 years that is true.....

The stock market in SIMPLE terms is NOTHING more then flow, and fear to greed and back again....but basely it is supply and demand. Again in past 78 years NO TOP has formed under current supply and demand data.

The wrinkle for me, and sure always a first time, is the intervention....the FED, the games, that said I think all THAT WILL come into play down the road.

My GUESS if its OK and the weekend, is we will FIND THE TOP right where it normally occurs...IN march-April or OCT.....and the normal signs of deterioration will then be there....NO DOUBT this is NOT another GREAT BULL......valuations no longer attractive, so when MOMO is proven to have topped, then its only a matter of time.......the greater degree trend play will be at hand .

That greater trend IMHO, is resumption of the Secular Bear Market, why? because at no bottom in the last 10 years did we reach the avg valuations or dividend yield found at any other secular bear bottom......It's that simple.

If this rally follows a 100 years of market data, where those betting against the grain are confounded and seperated from their money because the market data does not support their fundamental opinions and emotions....the market doesn't care what we think.......and the backdrop doesn't matter either.....unemployed or housing data blah blah.....

We are corecting from perhaps a near generational selling spree and oversold condition. HISTORIC measures have been taken to stimulate stock market and FORCE investors into risk......choices? 0% on savings...a travesty....a HUGE disfunction.

These gimmicks work for awhile, but in the process, like 2003-2007 they build up worse imbalances and build even greater bubbles.

We've come a long way, but I see warning signs, I see people spending $40 plus to fill tanks, things we need fuel and food are at or near inflated highs and several countries are moving to control inflation, could slow growth.

ENGINE to world economies is not USA anymore, it is CHINA, their stock market TOPPED in AUG of 2009 !! food for thought

D

1 comment:

JW said...

Perhaps we will experience a short term correction of 3-5% in the next week or two, followed by a resumption of the bull