Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (55122)	6/23/2000 9:29:00 PM
From: GROUND ZERO™	Read Replies (1) \| Respond to of 99985

LG, I think the three major averages are going after the April lows in a hurry..... GZ

To: HairBall who wrote (55122)	6/23/2000 10:30:00 PM
From: pater tenebrarum	Read Replies (2) \| Respond to of 99985

sentiment: predictably, the second day of decline in the NAZ has dented the recently overly bullish sentiment somewhat. the overall CBOE put/call ratio at 0,61 is as Haim as mentioned what's considered to be a neutral/bullish figure. however, the 10-dma of this ratio at 0,52 is still quite low. index p/c ratios produced a very high 2,48 reading today...but the PVI only advanced from the overbought into the higher mid-range region, as volumes remained extremely low. furthermore, a good chunk of the volume in OEX and SPX put options today was due to several large institutional block trades, so it was not a rush by the herd to buy puts, but rather a few large players putting on hedges. the Rydex ratios (MM+bear vs. bull + sector funds=0,35, bear/bull funds=0,13) have moved back to the area that previously defined tops in the market, as they are coming from historically extreme levels. the poll results that have become available today show bearishness rising in the AAII poll (bulls:27%, bears:40%, rest neutral) and falling in the Consensus Inc. poll (bullish consensus 33%, up 2%) which is however at a low level of bullishness anyway. funny enough, the Consensus Inc. poll, which follows futures trading advisors is completely at odds with the actual positioning of most speculators, which have a record net long position in stock index futures per the latest CFTC report. this goes to show as i have mentioned previously, that polls are far less reliable measures of actual sentiment than positioning measures. summary: sentiment data have generally improved in line with the decline of the market, but are a long way from what is considered oversold levels. the sooner the market bounces, the sooner they will be right back at the extremes recently seen - which indicates that upside will continue to be limited from here in the near term. more likely imo the market will zig-zag into a projected July 16/19 cycle low which should help build sentiment for the next advance into an August cycle high. one thing that also bears mentioning is the market's role as a discounting mechanism. if it is true that the economy is undergoing a slowdown (i believe it is - ECRI's leading indicators suggest as much) then the market, or rather the so far unassailable blue chip big caps, will have to reflect the diminishing earnings outlook at some point, before it becomes obvious to all. one only need to look at the ultra-high p/e fringe (fringe is actually a bit exaggerated. is YHOO or RFMD fringe?) to see that there is increasing discomfort with holding these highflyers at current valuations. someone has posted the article by Sy Harding where it was pointed out that institutions were the major sellers of late (and their selling was obviously masked perfectly). this would explain why the NYSE 10-day TRIN went so high in spite of the NYSE index remaining close to a top. imo a truly lasting bottom will involve a taking down of the stocks that are as of yet seemingly invulnerable, a shooting of the generals so to speak. regards, hb