LES; That's really a Great POST, it says a lot to me maybe more than
I can explain back.
I wish it had a 100 MDA in it as well as the SPX and while I'm
wishing being the OEX is such a hybird type index ( cap wise )
I sure would like to be able to track the MDA numbers of the purest
of the TOP 50 BIG caps or nifty fifty so to speak.
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Here is the heart of what I understand from the numbers.
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Breadth: percent of stocks over moving averages
10-day MA 21-day MA 50-day MA 200-day MA
OEX 63% 71% 73% 79%
NDX 30% 36% 42% 66%
WISH SPX were here
The OEX & NDX are showing the 10, 21, 50, & 200 all going the wrong
direction ( the shorter terms are less than the longer terms )
Thats a negitive AND it represents mostly the BIG money stocks
except the NDX is just about MID cap in average size to the S&P
and it's just about pure tech. However tech has been a leader
in the market , and when leaders turn the rest of the market
tends to follow.
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Breadth of the broader market has been improving, but since the broad
market lagged the indexes up, this could lag in the opposite direction
also:
CORRECT AND RIGHT NOW IT DOES
10-day MA 21-day MA 50-day MA 200-day MA
04/12 58% 50% 44% 40%
04/16 64% 63% 56% 48%
04/19 67% 67% 59% 50%
OK this shows the broad market getting better BUT and a big BUT
noting that the BIG OEX is not going this way it says this
positive is the results of smaller caps ...Taht would not in itself
be bad IF the bigger caps were showing even a small improvement,
as it is The smaller ones are stepping up to bat at the Expense of
the BIG ones, and that don't work ( not over time, ) in fact they
do this towards market tops.
( ALSO note the RUT and SML , and MID cap indexes can toss you a curve ball as they do not work the same as the S&P, OEX or NDX .
Comparing them you don't get apples to apples I won't get into the
details at this time but it's better to compare the broad market
to the heavy hitters then extrapolate from taht as to what the
Smaller caps are doing than to compare the indexes themselves
( to many changes in them and the RUT SML MID are passing their
best runners up to the others ) so they have a built in handicap.
Thats why over a long period of time the MDY can't beat the SPY,
SHORT MDY , LONG SPY will always produce a profit if you give them
time ( you won't get rich off it but with that hedge you can go to sea and come back a year later & be confident that you will be
ahead some.
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The advance-decline of the broad market showed only improvement short
term:
Percent of stocks up over the period
1-week 1-month 3-months 12-
04/19 64% 59% 45% 30%
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THe above also shows the numbers going the right way for
a positive market EXCEPT that the BIG caps don't confirm it..
so it must be in the smaller ones.
The problem is Crossed swords happen when the Small ones go up
at the EXPENSE of the big ones ( It takes NEW money for the
market to make an adjustment that will hold , not just the
rotation of money ) For the above to be truly positive the
Big caps must be at least NOT be going down..
Nothing wrong with sml caps out doing them as long as it's not
at their expence..when it is it spells T R O U B L E.
Right now I don't see a "lot" of trouble to close , but I don't
know that it's not., I do see some more correcting.
And problems later when we see interest rates go up, and I think
they dam sure will. And that's when the other shoe will drop.
Thanx again as I have a hard time keeping up with all the
data I would like to watch, and your MDA thing sure confirms
what I thought I was seeing.
Getting ahead of the curve is looking at the MONEY flow
( and the BIG caps control that )
Jim
PS A real short term daily money flow ( sort of quick and dirty )
that I came up with.
quote.yahoo.com^XMT+xlp+xlk+^SPX&d=1d
The ^XMT is falling hard ( I will not bet long that when it does
that )
However XLP & XLK are big caps & about 50% of the ^SPX and they
(at time of post) are positive (XLP up 2.31& + XLK up 1.54%) /2
= 1.92% and the ^SPX up only .79% so the money flow into stocks
is positive to the big caps ( head now up/tail down )
However the ^XMT ( top cooperate bond market is not good; as it's
falling and that means rates are going up or will go up )
SO this results in a MIXED or crossed signal..
If I were to play anything at this point it would be a short
on the XLB , and I think I might if XLP & XLK start to weaken.
Jim
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