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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: John Pitera who wrote (56523)1/10/2001 7:37:04 PM
From: pater tenebrarum  Read Replies (2) of 436258
 
the longer term TRINs (10,21,55 day) still look very oversold...in fact the 10 day has been moving higher (i.e. into 'oversold' status) WHILE the NYA rallied - a bad sign imo. high TRIN coupled with high TICK, coupled with non-confirmation of breadth measure break-outs by major indices is imo a potentially very negative combination. it lures buyers into the market in the short term, because the TRIN measure tells them 'selling exhaustion' and the improving internals spell 'stealth bull'. HOWEVER, the other way of looking at it is what Crash Lewis writes in his market summary today, namely, big caps are sold (as they are liquid, the selling produces high volume, which accounts for the TRIN) and the proceeds go into the beaten down broad market lifting the mortally wounded for a last hurrah. it's as if what money remains in the market just finds itself unable to actually exit it. but over time, every sector gets destroyed, as the recent crash in the utilities showed: several MONTHS of price action erased in the space of three days!
i believe the potential for a ST rally aside, the market could easily succumb to a confidence crisis at some point, where similarly several months of trading range in the industrials get wiped out in the space of two or three days...there is still extraordinary complacency while the fundamental backdrop continues to deteriorate.
not saying this WILL happen, but the potential is clearly there.
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