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 !!!

Friday, October 05, 2012

Stock Market -- Weekly

This week I show the SPX along with the NYSE weekly index of net new highs. $NYHILO
This can be a rich comparison, and I leave you to retain my settings or add your own.

The hi - lo index is another way to measure buying pressure in the market because it shows
player willingness to buy stocks at or near new 52 wk highs. So, you see a cross - section
of momentum players and not too smart players who are chasing stocks. Note the chart is
showing the hi - lo is up near resistance and very far above attractive levels. You will
observe that the market can keep rising even as the index gets toppy but that when the
momentum of the chase turns south as measured by breaks below 50 in RSI and reversals to
MACD, well then you need to pay more careful attention (RSI and MACD are now still
positive but extended).

With a three day weekend ahead, and with Syria and Turkey exchanging light artillery fire,
you cannot blame traders for taking some profits off the table as they did today. Folks will
also want to check how restive the guys are in Tehran after the wholesale traders torched
the rial this week.

I thought I might do some more extensive posting on both stock and bond market fundamentals
in the days ahead. We are right on the cusp of when QE 3 is to begin. The markets have been
discounting the new liquidity injection process, especially the stock market. Still, it is
perhaps a good time to look in more detail at governing fundamentals.

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