One more clip of interest from "The Trader" column in Barrons this weekend:
* * * * * * * *
The relative lack of panic on display jibes with the overall tone of investor behavior lately. What bulls would deem justified confidence strikes the bears as tantamount to whistling past the graveyard: that is, the blithe disregard for higher interest rates and cloud-skimming stock valuations. For two weeks until Friday, the indexes thumbed their noses at ever-rising rates and marched higher.
A.C. Moore, a strategist at advisory firm Dunvegan Associates, has corralled numerous indicators lately to get a feel for "the internal spirit of the market" and judges investors right now to be harboring a dangerously low level of anxiety, according to a proprietary "complacency" measure.
One somewhat arcane piece of data that tends to shed light on the public mood is the amount of stock that NYSE specialists -- the buyers and sellers of last resort on the exchange floor -- have sold short. The recent numbers show an unusually high short reading, highest in about a year, which tends to indicate that there haven't been enough public sellers to accommodate all the rabid buying interest recently, a gap which is made up by specialists going short to fulfill demand. This tends to occur just before public buying demand peaks.
"Specialists haven't been believers in this move [higher]," says Moore. And their activity has proven a useful turning-point signal in the past. After all, he adds, "Those guys all have lovely homes on Long Island," and they didn't pay for them by consistently losing money to the public investor.
* * * * * * *
Maybe the general public isn't worried but I sure am. However, the prospect of a defined trend emerging, even if it's down, is sort of exciting. Imagine the opportunities on the short side.
|
