Jerry,
First, thanks for the great posts.
But I will take issue with your comment:
>> I wouldn't give all the weight based on just that A/D line...it takes a lot more than that to sell these markets off...
Actually, it means that the market <<is>> "selling off" and has been selling off -- for most stocks -- since last April.
We're in (the last stages of, imo) an "index bull market" with fewer and fewer stocks raising the indexes.
Many of us try to find a "meaningful" trend, from the universe of "pick one" indicators. Some indicator charts strike me as linear poetry and feel completely "intuitively right."
This one does to me:
decisionpoint.com
and I defy any ta-enabled investor/trader to look at this chart and refrain from mentally drawing a descending line along the tops of those "green guys" making lower highs -- not to mention that cute head-and-shoulders in there.
I'd also take exception to the "growth in Internet stocks" being "infinite." I love'em; I've had some (yahoo, amazn, abov) since IPO until recently...but I don't buy infinite growth. Ebay's PE today is 7,897. That's not a PE that a stock can "grow into," no matter how cheery your outlook is.
World-changing industries aren't a carte blanche for silly valuations. Railroads, electricity, telephones, radio, all had their "mania" valuation phase, but eventually retreated to more reasonable valuations. I have few firm beliefs, but I do believe that ebay won't have a PE of 7,897 in two years :-)
doug |
