Transcendental Market Truths (Fragments):
The Market:
This is a mixed market, with some sectors, like Semiconductors and Mining Stocks, being held up in price while insiders sell out to the rubes. Other sectors remain very strong, such as the MidCap Index, along with the S&P 500. This coming week should see a resumption of the uptrend in the stronger indices after that steep fall last Friday, while the weaker indices are likely to lag even further behind.
Dow Industrials:
The lack of selling pressure Friday suggests that the decline was a bear trap designed to get the bears short and then rally the market next week. Certainly, longer term, I'm seeing bearish divergence in money flow, but if Friday's decline were the first wave down in a new, big bear decline, I should have seen much more selling pressure than I saw. Instead, it appears there were buyers waiting for lower prices to buy. That's not the way big bear moves normally begin (I'm always open to the possibility, though).
Mining Stocks:
Intense selling pressure manifests itself into a declining money flow line.
SemiConductor Index:
Selling pressure in the semiconductor leader stocks is confirmation that the depression continues despite higher stock prices.
Intel:
Intel was the leader on the downside Friday. Just as it did at the last earnings report, it formed a high in price on the day of the release. Bearish divergence shows that the bears are selling into rallies.
When I see a stock which should be a leader looking bearish, I just have to conclude that the "recoveryless" recovery is still on track to dip back down.
Russell 2000:
The Russell 2000 is very close to what appears to be a significant top. Once the top is complete, I'll be looking to sell this index short, making a nice spread trade between the strong indices and this weak one.
S&P Midcap 400:
Money Flow only dipped slightly on Friday's decline. The acceleration of money flow in recent weeks confirms the intermediate term trend. The Midcap Index continues on track toward a new all-time high this year. |
