Wednesday, February 8, 2012

8 Feb 2012

Update:  9 Feb 2012
 Saw the London FTSE resistance line and thought I would post.

This is a two-day view of my favorite chart going back to 1997.  You can see the latest reading blows away all other readings - including those while the US was coming out of a recession in 2002/3 and 2009.  I thought we were at risk of entering one, but stocks are saying something totally different.  Maybe this is how hyperinflation starts and people mistake it for growth at first?

On the flip side, RSI on the two day chart still is not near overbought.  In fact, it is showing an incredible divergence from price.

I really don't know any more.  However, I do know that I will try to no longer make decisions until indexes turn instead of trying to anticipate the turns based on historically high levels.  It is clear that we are dead set on making history in everything lately.

 Short and medium term time frames along with a combination of all at the bottom.
 A longer term time frame.  Percent of stocks with 34 day moving average over 89.  A pretty strong historical number but still down from the last few peaks.  You can see a smaller version of this in 2006 and 2007.

"Few things are more irritating than when someone who is wrong is also very effective in making his point.”
Mark Twain

1 comment:

  1. Scott,

    Isn't the huge amount of current and anticipated "sugar" from the central banks responsible for driving stock prices up 20% from their October lows? On the "bubble vision" TV programs, these financial journalists are almost as euphoric as they were in Spring 2000. Does the market believe the "Bernanke & Draghi Put" will prevent the market from ever going down again? Perhaps we should capitulate and go 100% back into stocks like Larry Fink of Blackrock recommends. Another sign of a top?