All Clowns Must Be Destroyed Message Board

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Pastimes : All Clowns Must Be Destroyed

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To: Jorj X Mckie who wrote (21141)	3/29/2000 9:23:00 PM
From: pater tenebrarum	Read Replies (2) of 42523

i know...P&F tries to capture the WHOLE market's disposition. i only look at the big stocks driving the indices. i don't know if you've read my comments on the a/d line on MDD. i think i pretty much nailed the problem. the money stock, although it has expanded vastly due to Al's incessant printing in the last decade, is at an extremely low, in fact a multi decade low versus total market capitalization. this is the real reason for the collapse in the a/d line...to buy up the big-cap, high p/e mega stocks, more and more other stocks need to be sold. thus every rally , the higher the indices go, is getting narrower and narrower. in the end, the remaining stocks driving the indices will end up as extremely crowded trades... therefore, in P&F terms the market (i'm referring to the bullish percent) will never really look extremely overbought again. and yet, that's exactly what it is. because it's not THE market anymore, but the narrow circle of big caps plus the occasional manic subsector that is the market nowadays. just imho of course...interestingly, the recent printing extravaganza by the Fed immediately revived the a/d line for a while. that revival seems over already....

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