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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 !!!

Tuesday, March 16, 2010

Stock Market -- More On The Technicals

After the market broke down in mid-Jan., I argued we would get
ourselves a tradeable rally. We got it. I also argued that a quick
breakout to a new cyclical high was an against-the-house bet. I
figured we would see a good several months of go-no-where action.
But, the long odds bet came through nonetheless. From a technical
perspective, I find this strong a rally to be odd from a timing
perspective. Odd doings are hardly bad or dangerous doings in the
market, but, for a guy like me, they are not comforting doings.

So, I am observing now not with skepticism but with wariness.
In cases like this I go strictly by the book. Right now, the book says
the market is overbought based on indicators of up to six weeks
duration and that the trend of momentum is starting to flag. The
market calls the next move.
Chris E. of Red Dirt Trader inquired about ways to capture the
action of the Value Line Arithmetic equal weighted index other than
playing the KC future contract. The main problems with offering
equal dollar weighted index funds are cost and lack of consistent
interest. Value Line itself offers only actively managed funds that
do not have the breadth of their indices. There are SP 500 EW
ETFs and index funds and there might be a Russell 2000 offering.

Valuing small / mid caps against the large cap stocks is not an
easy proposition because of data accessibility regarding earnings
especially. But, I am due to look at this issue and will post on it

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