Wednesday, July 8, 2009
got to be the one of the best and funniest lines I have ever come across, and its from
"HANK HILL" on "KING OF THE HILL". Now lets look at a picture that is at least as useful .
ITEM one is Mr Nasty. Down again, here is why:
Jul 8, 2009
Advancing Issues 1,230 (32%)
Declining Issues 2,456 (65%)
Up Volume 2,329,797,754 (78%)
Down Vol 580,338,414 (19%)
So by 2 to 1, declining issues outnumber advances. BUT volume is channeled into specific stocks.
Now lets look at the PINK line, the OEX stocks, and we see them supported by the LIQUIDITY FLOW.
Now if you wish to analyzed the TIME of the volume, and where it went, you get a different picture. The top chart shows a NECKLINE formed at 415 on the OEX. Superimposing the $VLE unweighted, you would see it clinging to the top of the channel, whereas the DOW, clings to the bottom of the channel.
Money is exiting the equities markets and seeking refuge in other than ordinary common stocks, whether preferred's, bear ETF's or Income securities, Notes [ ETN's] or other securities. There is a shuffle going on here, nad its is NOT into the mature companies, but, IMO, its about two kinds of stocks. One is a stock that is prominent or featured in an INDEX, or a stock that has a critical function, technical or otherwise, in a key economy segment. As much as this has to do with Interventionist Economics, it also has to do with International Finance, which as always points out that conditions are dynamic and forces and events do not happen in a vacum, not bloody likely.... I tell ya what......
It looks confusing because there are more than just one cross current, but if anyone wants to acquire a pivotal position in a given stock, they have no interest in slowing the decline in general markets.....hence the confusing picture.
My guiding concept, is that breadth leads the market. Increasing amounts of money in to fewer and fewer stocks, is not generally interpreted as a bullish picture, or one that precedes bullish activity.
Stay Aware, keep your powder dry,
Here is the clearest pictured relationship I have posted so far, between the Liquidity as manifested by the preference for Corporate over Govt securities. As more and more "MONEY" is ENTERED into the Markets, the higher the SPX 500 goes. As the rate of fund addition slows, the upward movement in the Indexes slackens and starts to trail off.
No funds additions ='s no upward movement in the Indexes.
Very telling is the MACD for the Standard Poors 500 index, a perfect dome as the market turns over. Add in Mr. Nasty's turn down and you have a picture perfect rollover of the markets OUT OF RALLY MODE.
I think that picture is worth a lot more than a thousand words.