Hi Michael,
Found the following at CBS news web site:
"There's two markets out there," said Phil Roth, chief
technical market analyst at Morgan Stanley Dean Witter.
"One is the market for the S&P 500 and glamour and
blue-chip stocks, which is best described as a mature
bull market.
"Everything else you could describe as being in a
mature bear market, or a rally in a bear market, if you
looked at the Value Line index, the Russell 2000 index,
or the advance-decline line," he said. "We're at a
blow-off type move in things like Internet stocks and
some of the financials that have attracted deal players.
The rest of the market is sort of following along
grudgingly.
One of the many "key indicators" of stock market top, as defined by various gurus, is the relative progress of "secondary market" compared to the DOW 30. Of course, the definition for "secondary market" varies among the gurus but general consensus is that at the very top of pre-bear market the secondary stocks will outperform DOW 30. If this indicator is accurate and if we define the "secondary market" as the ones in Russel 2000 or Value Line index, then we haven't reached the market top yet even with DOW 30 at all time high. Do you place any value on this type of relative progress indicator? Or am I rambling some nonsense here?
BTW, I was at local brokerage offices again and met an investor who has taken out home equity line of credit to buy stocks (home values increased over 30% in Silicon Valley this year). He used up over 6 figure of credit during last 3 months to purchase various chip maker stocks and was very happy with the result so far. I believe this qualifies as an act of wanton speculation and is another market top indicator. Aside from him, others were all pleased with today's market action; one investor, presumably TA type, told me today's all time high breaks the "head and shoulder" pattern and is a beginning of another bull run; I didn't ask what the "head and shoulder pattern" is but he definitely should have used the shampoo. I still did not see complete euphoria there since many of them are planning to sell all they have when DOW hits 10000. I did ask why is the number 10000 so special but all I got back was sort of a blank stare.
NI |
