About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Monday, December 08, 2008

Stock Market -- Technical

Short Term
Well, here we are again. Another potent rebound from severely
distressed levels, although not quite a rocket. At 910, the SP 500
is overbought short term for just the second day in nearly 2
months at 3.8% above the 25 day m/a. Not only have such
overboughts been rare over the past 3 months, but have been
quickly crushed as well. Good rally durability test straight ahead.

I would like to see the market and its 10 day m/a above the 25 m/a
and see the 25 m/a turn up as well. I would also like to see the +D1
on the Wilder ADX rise above the -D1 as well. Chart here.

Intermediate Term
The NYSE breadth flame index -- runs back 12 weeks -- hit a deep
oversold at -154 on 10/24 and is now just a tad oversold at -20. The
14 week stochastic will need a strong close this week to turn positive.
It has been on a "sell" trend since 5/16/ 08. The smoothed 40 week
price oscillator has been on a "sell" since 7/4/08 and is now just
slightly below the last cyclical bear market low registered in late
2002. That's interesting in itself. When the market turns truly
bullish, the NYSE breadth flame mentioned above can run on
overbought for weeks -- a healthy sign indeed. We have not seen
that since late 2006.

Most contrarian measures I follow show bearish sentiment. It is
curious that Market Vane 's advisory sentiment is still at 40%
bulls compared to readings in the low to mid 20's during 2002
and early 2003. Market Vane's Treasury bond bullish sentiment
hit a rare 89% bullish last week. You see that only at market
tops. A sell-off in Treasuries might help the stock market as it
would suggest a flight from quality back toward riskier assets.

Bernanke, Paulson, W. and Obama have all been furiously
"painting" the tape green over the past two weeks. they have the
sheep and the dogies a' runnin' with a continuous stream of
supportive comments. I don't blame them and, as mentioned
last Friday, it would be nice for all players to take a time out to
think on whether the economy is truly headed off the cliff.


Unknown said...

I'm interested in advertising on your blog http://capmarketline.blogspot.com/. At the moment, I'm looking for intext links. Do you write paid posts? How much does it cost?
My website provides information on credit deals and ways to manage one's finances.
Waiting for your reply.

StarIndia Equity Tips said...

This capital market economic analysis gives a better training and solutions for a stock to understand better and invest according to match with the market run.

Nifty Trading Tips

MCX Market Tips

StarIndia Equity Tips said...

Making a good strategy gives a perfect solution in the market to serve better.

Stock Cash Tips
Free Commodity Market Tips

admin said...

Great Article it its really informative and innovative keep us posted with new updates. tri identities

Notepad++ said...

Unlike other blogs I have read which are really not that good.Thanks alot! descargar notepad++