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US Equities Showing Signs of an "Exhaustion Top" Amidst Rumours, Hype, and Shenanigans (Jesse's Cafe PDF Print E-mail
Written by Steve Meyers   
Tuesday, 09 March 2010 15:55

The US stock market seems to be getting rather tired after what can only be described as a remarkable rally on light volumes and program trading.

The market is trying to rise here, with announcements like the Cisco backbone router and the AIG unit sales being hyped incessantly on financial media.

It has also been reported by Adam Johnson on Bloomberg television that J.P. Morgan, a major broker dealer, stopped lending shares in AIG and Citi today "on rumours that the US government might ban short selling in stocks in which it has a financial interest." This squeezed the shorts and helped give an artificial boost to financial stocks over all.

The company has since stopped this arbitrary ban on short selling and stocks are falling off their highs.

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PatrickM |2010-03-09 17:43:13
Another enlightening post from Jesse. Always a good read.

He was commenting the other day on your market update video (http://jessescrossroadscafe.blogspot.com/2010/03/blog-post.html) saying:

Quote:
I have taken my portfolio into a 'defensive' posture once again. But I am definitely not net short.


I wasn't all clear to me then if he was referring to his equity/stock position only or if this was regarding his full portfolio including his precious metals and such.

Do you read his view as not to be net short stocks yet, or just not net short period?
SteveM |2010-03-09 18:39:07
Jesse has made a conscious decision to not short after witnessing the Fed starting in 2003 to the present. He is a very savvy technician and knows his stuff.
Mars  - X marks the spot |2010-03-10 01:53:58
The McClellan Oscillator and Indicator "X"

In the time period June 2002 to present (March 9, 2010 close) the McClellan Oscillator, as analyzed through Indicator "X", has reached an extreme overbought level for now the sixth time. In the prior five instances, the indicator remained in this overbought zone for an average of 8 trading days before breaking downward. Presently, March 9 marks the fifth day in the overbought zone.

Enter zone Break downward
8-19-02 8-28 w/SP500 @ 917.87
6-1-04 6-14 w/SP500 @ 1125.29
12-8-08 12-22 w/SP500 @ 871.63
1-5-09 1-9 w/SP500 @ 890.35
3-23-09 4-14 w/SP500 @ 841.50
3-3-10 **est. March 12-15

You may check the above dates to see that in 4 of the 5 cases the SP500 proceeded to demonstrate weakness going forward.
The only way is up |2010-03-10 11:08:13
Again, our GREAT financials lead the way. What do you make of today's action Steve? The volume is very high, who is buying?
SteveM |2010-03-10 11:19:58
The Dow is lagging which is what you want to see. I believe we are witnessing a climax buying spree. This will not be the case if the Dow joins in to new high ground. Industrials also would be a non confirmation for the Trannies.
LanceM |2010-03-10 11:15:39
SteveM: how would you interpret the volume flows of yesterday and today - Is this potential blow off top price/volume action? Or confirmation of the up move - How do you read it?
LanceM |2010-03-10 11:17:38
I am referring to the Russell
SteveM |2010-03-10 12:09:21
I would give you a different answer if all indices were in sync, however, if the Dow does not join in then I think it is a mindless blow off top just like we had in 2000. The Nas and S&P peaked 2 months after the Dow in typical blowoff fashion. More mindless today 9(IMHO)
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Last Updated on Tuesday, 09 March 2010 15:56
 

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