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Pastimes : The Philosophical Porch
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From: Rarebird6/11/2010 8:50:58 AM
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Transcendental Market Truths:

The Market:

Yesterday's point gain was not so impressive when viewed from a money flow perspective on the various indices. On a macro scale this is evident from the low volume characteristic of the advance, which casts doubt upon the significance of the rally.

Furthermore, virtually all stocks advanced and upside volume was huge in comparison to downside volume. That's actually not bullish because when I look over the record of bear market rallies and compare them to bull market rallies, the lopsided advance-decline statistics actually favor bear market rallies - this is likely due to the fact that these rallies are short-covering affairs, which means the short sellers are simply buying to take profits and are planning to re-sell the market at a higher level.

Russell 2000:

The fact that money flow is heading south while prices remain above the February low indicates insiders are bailing out of their shares ahead of big trouble....

The banks which received trillions of dollars of taxpayer money may be levitating prices, but will suffer huge losses (and many will fail) after the February low is broken. This will be the "Point of Recognition" where the average investor hits the market with sell orders all together and causes a tsunami.
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