Rick, even during the last three months of "trading range", P/C ratios under .5 where more often than not, associated with local tops rather than bottoms. Of course, rules are made to be broken, but when you consider the fact that the volume today was even lower than yesterday, and there were more new lows today than yesterdays, and only few more new highs, despite the fact that for a short time, we breached 2100, it just does not "smell" right, real rallies are characterized by expanding volume and expanding New highs/New lows differentials. Stocks like KLAC and NVLS are now drawing a major multiple top (respectively above and below $60). The bullish pattern has often been strong buying from 2:30 to at least 3:30 in the past, but in the last three days of this rally, the pattern is inverted, a possible indication that the rally is used for distribution rather than additional accumulation. The price action (the short term channel Larry has in his chart) is positive, but that almost the only technical indicator in the bull column (together with the fundamental liquidity argument). The absence of a capitulation phase worries me as well. It just does not "feel right" to me, so I am not making major commitments.
By the way, I think that the new lows list would be much larger if we still had in the Naz the few hundred issues that were simply eliminated in the last six month. Does anyone knows where to track the total number of Naz issues as function of time?
Zeev |
