>>That the market bounces off a moving average does not mean it will not retest it again and not break through it the next time.
You're right, of course. I felt (and still feel) that last Thursday was a re-test of 4/27, and the broad averages held during the worst of it Thursday afternoon.
>>If you look at individual blue chip stocks you will see many have broken down under their 50 day averages. I believe it is only a matter of time (and I do mean a very short time) before the market completely breaks down.
You could be right, but I'm still hanging on. As a matter of fact I had an up-day today. I don't see your 50-day sample, and only two of the Dow Industrials are below their 50-day (MO, BA), and several have just broken above it, which is bullish.
Interest rates are the key, IMO. I'm one of the more bond-yield-obsessed men on earth, but 6% isn't enough to kill the advance, IMO. Gimme 6.7 and I'll joining you in the shelter with canned goods.
Yahoo is acting very well. Hasn't even closed the gap up off of 4/27, let alone the earnings gap.
I'm not worried about the mutual-fund cash levels like Zebra is. Mutual funds can sell futures instantly to hedge their bets (just like they have been buying futures before stock-picking on the way up). It won't help the market advance, of course, but at least it will hit the S&P first!
>>I believe we are about to see one of the greatest transfers of wealth of all time, from the unsuspecting boomers to a relatively few large traders and institutions. The game never changes, only the players.
I think you're beeng too pessimistic. The markets are mre stable than that, and I doubt it would happen that way.
Firstly, in a severe bear market most of the money simply evaporates. There are few "bad guys".
Secondly, fund flows don't reverse suddenly, and they have been very strong. Folks don't run down to human resources en masse to stop their 401K contributions. |
