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Bailout Ben’s 2007 Time Machine (Graham Summers) PDF Print E-mail
Written by Steve Meyers   
Tuesday, 09 March 2010 10:12

Yesterday we reviewed the employment situation in the US economy. Today, we’re looking into the stock markets.

The first and only thing anyone needs to know about this market rally begun March 2009 is that is was entirely fueled by “funny” money. It was not fundamentals, economic underpinnings, earnings, or even technicals (we’ve seen the markets violate numerous key technical signals only to completely reverse on clear ramp jobs).

No, this market is all about funny money. This is why we had a near perfect 100% inverse correlation between stocks and the dollar for most of 2009. It’s why the correlation between stocks and commodities is at a 20 year high. It’s why most of the market’s action occurs almost entirely at key times (over the weekend, during the futures night session, options expiration). READ MORE

 

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LanceM |2010-03-09 10:53:44
SteveM: With the SOX not making new highs (and is in fact down today) and the Nasdaq making 52 weeks highs - is this considered a negative divergence - Isn't the SOX a major component of the NAS?
SteveM |2010-03-09 11:00:43
Feels like a lot more distribution today. Yes, it could be considered negative divergence. What I would like to see is the Russell start to roll over here.
Ron Rebner |2010-03-09 11:39:06
Incredible. The IWM (ETF for the Russell 2000) was up 6.1% last week and is now up 7% in the last 6 1/2 trading days. It is up 13.8% since the low on Feb 4. As Steve said, it has been up 19 out of the last 22 tading days since the low on Feb 4. Also, volume has been below average during this run. Where are the sellers?
SteveM |2010-03-09 12:04:49
That is what a blowoff looks like. After all the crazies jump in, there will be no one left to prop up prices.
Criticaster |2010-03-09 11:39:53
Pfffff..... Who The F*ck is buying stocks after this bullsh!t rally that ignored a whole lot of bad news and how long can this madness continue It's incredible.
Criticaster  - re: |2010-03-09 11:45:15
Ron Rebner wrote:
Incredible. The IWM (ETF for the Russell 2000) was up 6.1% last week and is now up 7% in the last 6 1/2 trading days. It is up 13.8% since the low on Feb 4. As Steve said, it has been up 19 out of the last 22 tading days since the low on Feb 4. Also, volume has been below average during this run. Where are the sellers?
It is as amazing as frustrating indeed
dimrous |2010-03-09 11:48:40
I've been following the same correlation he mentions of the rally from mid-March 2007 and in the SPX chart the similarities are chilling. I expect a small correction soon but then new highs, over a couple of months, 1230 perhaps. Then it will be the time to short the beast. If price breaks convicingly through the 20 MAE on the daily chart then all above is nulled.
Anonymous  - re: |2010-03-09 12:31:04
SteveM wrote:
That is what a blowoff looks like. After all the crazies jump in, there will be no one left to prop up prices.
Who are the crazies? Retail? Institutional? Hedge Funds? We (for not being long)?
LanceM |2010-03-09 13:09:21
Would like to see some volume spikes on the parabolic move in the Russell to comfirm blow off move
LanceM |2010-03-09 13:20:39
SteveM: I can honestly say that I expected that the mkt would rally into the 1 year Anniversary - which is even more disheartening because it hints of the markets being managed - Everything that I have read on technical analysis and witnessed in the markets over the last 12 years always showed the importance of volume and how volume is the fuel of the markets - higher volume on rallies and lighter volume on pullbacks - I have not seen anything like this that I can remember
no volume on the rallies and heavy volume on the selloff - Just look at the SPY since January 2010.
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Last Updated on Tuesday, 09 March 2010 10:27
 

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