George, I agree, I see that Heinz agrees with me on the divergence between trin and tic on the NYSE. I wanted to post a response to his comment and expand on my findings, however, I was surprised to find that I am banned from posting on the CFZ thread (g).To add to these divergence, we still have the naked fact that the late March early April "bottom" had no capitulation what so ever, just one or two days of -1000 tic on the Naz. Furthermore, the number of lows was only half the number of lows in the December lows. The condition of the 10 day average TRIN going to 1.5 is not a very good indicator in bear markets that have post bubble severity, or even less than post bubble severity. A V type reversal in the stock market will have to be associated with a sharp V reversal in the economy, we are going into a non recession U type recovery, not an inventory adjustment situation (some of it, yes), but mostly an over capacity adjustment. Not just over capacity in semi and telecoms and optics, but over capacity in autos, appliances (see Amana folding into Maytag), basic materials (yes, including crude which has been artificially held up), like steel (see the Prez attempt at tarrifs on steel), aluminum (see the deal struck between Russia and Alcoa), copper, silver and even gold. That type of situation is cured when additional capacity is just not being added (thus cap ex companies suffer, see INTC recent comment that next year's capex may not be there).
Yet, I am bullish for later in the year, all these problems are no going to be resolved, but, if we get the late July/August (or October or both) massacres I expect, in combination with the flood of liquidity, we may get a powerful ramp. The real big bad bear, may have to wait for a consumer recession, which I think we might have next year, combined with a weakening dollar (and your precious yellow finally reviving a little <g>).
Zeev |
