Here are the complacency indexes. They don't reflect CSCO's "squishy" report, as Cramer puts it, because they're based on closing prices. But we needn't be concerned with the fact that CSCO's net profit was down 99 percent from a year ago, and that "sales were on the low side of expectations." siliconinvestor.com
Funnily enough, the theme on CNBC before the close seemed to be: "Well, so what if CSCO has a disappointing outlook? It wouldn't affect the market that much, would it?" And then after the conference call, when they were noting the fallout in all the related tech companies in after-hours trading, this view was quickly abandoned.
"Come on in -- the water's fine" seems to be the general theme on what some might view as an analyst infomercial channel. (While the analysts deliver their spiels, they should show traders being broiled in rotisseries.)
Another popular theme among the pundits seems to be the low volume. "Well, the market was down another 100 points today, but don't be alarmed. It was on low volume. You're all losing your life savings on low volume. Double up. We've hit bottom." And along with this one is the idea that it's risky to short a low-volume market. "Don't go short. The volume's low. The market's drifting." I've been seeing that all over the place -- even in IBD. No matter that the market has been drifting down for the past year. Don't short? Since the market is trending down, albeit on "low volume," why not? I guess they want to keep the shorting action for the big boys.
But ranting aside:
ST Naz CI: 85.8, down from 89.1. Trending down and overbought: bearish. (Analysts: I'm sorry I said that. I'll load up on volatile techs first thing in the morning. Ramp them up for me at the open, will ya?)
LT Naz CI: 86.1, down from 86.9. No real movement. There's a chance it could go higher, making for even better shorting opportunities in the near future. Or it could start to trend down. (Good deduction, huh -- that it could up or down?) The real point is that it's showing that the market is overbought, too high, with too much complacency. (CNBC analysts: I retract that. I'm going to buy everything in sight at the open. Happy?)
ST S&P CI: 94, up from 78.5. Trending up again, but overbought. A possible shorting opportunity real soon.
LT S&P CI: 89, up from 84.3. Trending up again, but overbought. A possible shorting opportunity real soon. (Is there an echo in here?) The point of the echo is that both the ST and LT S&P CI are overbought, too high, too complacent. Maybe the market can rally to new highs on all this complacency. I wouldn't bet on it. But don't listen to me. It's all speculation. These indexes look back, not forward, so they have no predictive value. They can turn on a dime. |
