Saturday, January 28, 2012

28 Jan 2012

 The peaks in the WLI in Jan 2000 and April 2007 occurred a few months before a noticeable stock market top. This time, the WLI has not really responded like the stock market nor like it responded during the 2010 rally.
 Ratio of SIL, the miner index in terms of SLV (a dubious proxy for silver, but it is the best I have) shows that the miners have recently outperformed the metal. 
The same for GDX in terms of GLD, but this time the metal has significantly outperformed the miners.  In fact, the ratio is headed back towards all time lows found in 2008.  I do not know why.

My composite indicator (shows percentage of stocks with various shorter term moving averages over various longer term moving averages...e.g. 1 over 2... 33 over 55, 55 over 88, etc) has had quite a rally off lows.  The yellow line shows its current value is one of the highest in the last 7 years.  The red boxes show the moving average crossovers. 

The short term indicators are above it, and I am frankly tired of saying they are overbought like a broken record.  However, like all things, this too shall pass.

Now the McClellan Summation Index, its RSI and TSV show us the same thing.  However, this shows there is some room to the upside still on the RSI, but only about 10 points.

"The Wheels of Justice turn slowly but exceedingly fine."
Sun Tzu

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