Saturday, October 22, 2011

22 Oct 2011

 Dividend yield is slowly rising.  I hinted at traditional buy / sell signals.  Clearly, it was different in the 90s and this recent rally.
 Three descending peaks?

 No room for TSV or Stoch in the fastest oscillators I use.
 Could this be similar to early August 2010?  Advance decline was a bit more bullish then (flat compared to previous peak).
 McClellan Summation index has negative divergence on MACD for the last three peaks.  Fast RSI is overbought.  Another view of the RSI of this:  NYSI nearing 90

 TSV still has a bit room in the longest term.  Not much.  This RSI is slower than the previous as well.  Not as overbought, but it still is.
 My short term indicator also looks similar to early August 2010 along with the Dow.  We will have to see if we get a negative divergence on its peaks - might not matter as it didn't last fall though.
 Not quite overbought in my medium term indicator. 
 Is this similar to May 2008?  Either way, we have moved 3000 pts from the bottom which is similar to most other moves.  TSV still not overbought at this oscillation rate (medium).  If it stops soon, peak is still negatively divergent from previous peaks.
 McClellan oscillator still hanging out at extreme levels as marked by my white line.
Dow in terms of VIX (still hasn't made new recent lows despite new highs in the indexes) has a negative divergence when compared to its price.  I looked for a few other times where price exceeded its recent peak or came close and Dow:VIX was clearly heading lower.  They are marked.

So, in summary, it looks like we may have a little time before a selling cycle starts.  However, we do seem to be past the sweet spot of this bull cycle.

The TED Spread seems to be overbought, but it is still at levels that existed right before the Greece crisis really hit the front pages in May 2010.  I honestly don't know if it was just causation or correlation.  I don't know much about credit markets.$TED&p=D&yr=3&mn=0&dy=0&id=p22308049328

"Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth."

"...By combining a popular hatred of the class of entrepreneurs with the blow already given to social security by the violent and arbitrary disturbance of contract….governments are fast rendering impossible a continuance of the social and economic order of the nineteenth century."
John Maynard Keynes - The Economic Consequences of the Peace, 1919. pp. 235-248.

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