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Tuesday, July 31, 2007
In the 1980’s and 1990s at the end of a sell off we would often see a huge selling climax coupled with a big bounce up ward ,but since 2000 we noticed a new phenomenon ,its what I call the rolling slow take off rally ,characterized by slow momentum building turn around . Like earlier this year this looks to be another example of a slow rolling takeoff.
Monday, July 30, 2007
Thursday, July 26, 2007
In some positive news outflows on mutual funds a bullish contrarian indicator have reached the second highest level of out flows so far this year and like the previous out flow high on February 27th may signal the next advance in equity markets .
Sub prime lending …another contagion? Some how I find it hard to believe that mortgage defaults of the high risk variety in the USA are having a similar impact to Russia defaulting on it sovereign debt in 1998 and the contagion that soon followed? Sub Prime lending has a bigger impact than Hurricane Katrina, the global war on terror, famine in Africa or the latest tsunami. It’s amazing the power of the American consumer don’t you think. Despite the sell off many equities are trading well with in there trading range ,I think it pays well to heed the lesson of 1998 ,that these ‘crisis’s” seem to reverse them selves(some where around 13200 on the DOW)and when they do often lead to new market highs rather quickly.
Wednesday, July 25, 2007
Increases in volatility goes hand in hand with market rallies. Remember we have been living with some very very low levels of volatility since the sell off in 2000, volatility will increase significantly in the early stages of bull markets and I would look at this sell down or any other as a buying opportunity. Unlike most market commentators my view has been that we were in a major bear market since March 2000 and we are in the process of a long over due catching up.
Friday, July 20, 2007
Sub prime lending takes the hit once again for Wall Street woes add that to a let down from Google and a Caterpillar that’s slightly off track and you had the recipe for a sell off ,giving up the gains for the entire week ,but this bloger wonders if news reports of a rocket launcher that was found in Jersey City in the flight path of Newark Airport had anything to do with market weakness?
Tuesday, July 17, 2007
The DOW Hits 14000 ,but its just physiological? All mile stones and new highs are physiological lets face it, after all according to the Elliot Wave Theory everything is physiological. So yes it is physiological for the DOW to hit 14000 just as it was when it hit 1000 or 12000. The important issues is that the catch up game is underway traders know it harder and longer to get even ,once your even momentum builds and the velocity of change begins to heat up.
Friday, July 13, 2007
Another interesting positive development is the huge amount of company buy backs of there own stock. The gross volume of money spent buy companies buying there own stock is staggering. Folks lets face it US companies feel their own stock is cheap and a good investment. The huge amount of these programs at this time implies the many companies feel there stock is undervalued and there for implies US equity markets are undervalued.
Thursday, July 12, 2007
Tuesday, July 03, 2007
Important to notice a very positive development the market continues to push higher in strong last minute day end rallies. This is a very positive development these last minute leg ups are symptomatic of future advances in equity markets and often signal large investors are buying.