Heinz,
>>>> there is another strong contrary signal in the form of the industry's unbridled optimism. it often marks peaks in the cycle. currently the earnings of the group are actually still below the '95 level, though improving. the stocks of course, are two to five times higher.... <<<<
Yeah, that was also mentioned with others Im discussing this issue with.
Firstly the DOT is lagging today and if it continues, I will interpret that as a leading indicator that a short-term top in the NAZ is around the corner. Heck, if I was a real gambler, I would take a chance at a long-term PUT on the SOX right now. But since Im not a real gambler, I will wait for some topping signals first.
Here's a thought. So far there are no signs that sector rotation is gone, and few will argue that sector rotations is still alive and well. Lets not talk in terms of a crash, but lets say that if the NAZ pullsback then the DOW/SPX should bounce up. This was common since MARCH. However, lets say that if the NAZ pullsback and the DOW/SPX also pulls back, such would be breaking the pattern, which may mean nothing or may mean we see the selling intensify.
Im more inclined to say that if the NAZ pulls back the DOW/SPX should bounce to the upside.
seeya |
