KB, I suspect the money is coming out of bonds and the rally is camouflaging a further outflow from equities, and the resulting cash is quietly leaving the country. It isn't happening now, but it will most likely be evident before too long. Look at the US$ and the way it is hovering just below the 200 week ma:
stockcharts.com[e,a]whclyyay[pd20,2!a112,108!a108!b200!f][vc60][iut!La12,26,9!Lb9!Ll14][J4669125,Y]&pref=G
A couple of charts I have been looking at include:
Nasdaq McLellan oscillator:
stockcharts.com[g,a]dhllnnay[pb20!b50][ilp14,3,3!lah12,26,9][J4304660,Y]&pref=G
NDX: note the similarity of the current rally's pattern to that of the August rally.
stockcharts.com[g,a]dbclyiay[dc][pb20!b50][vc60][iut!ue12,26,9!ub14!ud20!uo28!ll14!lh39,1][J6738366,Y]&pref=G
Thirdly, I was looking at the vix this morning and it struck me that if this were a stock you would be thinking seriously of buying it. See how it seems to be putting in a low here at 38 which is higher than the August low of 30:
stockcharts.com[g,a]dbclyyay[pd20,2!b20!b50!f][vc60][iut!Ue12,26,9!Ub14!Ud20!Ll14!Lp14,3,3!Lah12,26,9!Lo14!Lh39,1]&pref=G
Lastly, the ECRI weekly leading index has been falling weekly, thereby not signalling any kind of economic rebound which might confirm the bullishness of a rising market. In the absence of a positive leading economic indicator, I can only conclude that the economy is going down further, and that in turn must be bearish for the market.
PVZ
PS: As for the CPC:Vix, I have given up on that one, lol. It stayed on an apparent buy signal even as the indices fell to new lows. I might just check in on it from time to time, but for now, I haven't a clue what it might be saying. |
