You are viewing an obsolete version of the DU website which is no longer supported by the Administrators. Visit The New DU.
Democratic Underground Latest Greatest Lobby Journals Search Options Help Login

Reply #1: WrapUp by Ike Iossif [View All]

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Latest Breaking News Donate to DU
ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-28-04 07:11 AM
Response to Original message
1. WrapUp by Ike Iossif
Market Internals Vs. Price

Over the past few weeks we have had a rather peculiar development in the equity markets. All three major indices have moved sideways while remaining below resistance, but above support! From a price-only-based point of view, the action has been consistent with the type of price behavior that we see during consolidation periods, which precede successful break-outs. However during the same period, the internals have been more consistent with failed consolidations, which precede break-downs. Consequently, the end result has been a bifurcated and choppy market characterized by lack of follow-thru in either direction.


The current pattern of the McClellan Volume Summation Indexes at point #3 looks very similar to the pattern at point #2 and at point #1. Point#1 marked the beginning of a horrendous decline, while point #2 marked the beginning of a spectacular rally. Even if we didn't bother to do any further analysis, the very fact that the current pattern is almost identical to a pattern that in the past preceded both a substantial decline and a substantial advance should be enough of a reason for rational investors to consider both outcomes and devise their investment and trading strategy accordingly.


In addition, we have observed a rotation by institutional investors out of high beta stocks, and into low beta and more defensive issues such as health care, food, energy and even pharmaceuticals. In other words, investors are no longer exhibiting a robust preference to take on risk. In fact it's quite the opposite, as they have become more risk-averse. A robust appetite for risk is not only an essential element of every bull market, but also a sudden shift in the level of risk tolerance, which almost invariably results in above-average market declines.

In other words -in my view- the equity markets at the moment are not "firing on all cylinders." The price action exhibited by the indices is positive, but it is due to positive price action by a small number of stocks with high capitalization, which disproportionately affects the price of the index itself.
Printer Friendly | Permalink |  | Top
  -STOCK MARKET WATCH, Wednesday 28 April ozymandius  Apr-28-04 07:08 AM   #0 
  - WrapUp by Ike Iossif  ozymandius   Apr-28-04 07:11 AM   #1 
  - Dollar Fails to Find Needed Momentum, Stock Futures Fall  54anickel   Apr-28-04 07:22 AM   #2 
  - Question? Why not make a list of arms makers?  izzie   Apr-28-04 07:26 AM   #3 
  - Lots of makers.  ozymandius   Apr-28-04 11:27 AM   #35 
  - Will the assault on Fallujah affect the markets?  revcarol   Apr-28-04 07:29 AM   #4 
  - The markets have been reacting to bad news lately.  ozymandius   Apr-28-04 11:26 AM   #34 
  - Something just pushed silver & gold down the staircase. Big drops in  54anickel   Apr-28-04 07:38 AM   #5 
  - Must have read that other post of mine on the dollar going up?  Frodo   Apr-28-04 07:50 AM   #8 
  - Big volume discount? HA! I have no idea what's going on. See that  54anickel   Apr-28-04 08:01 AM   #11 
     - Interesting that my take is so similar to the paste KoKo put up.  Frodo   Apr-28-04 08:21 AM   #13 
  - Iossef's comment from the end of his article might be an explanation?  KoKo01   Apr-28-04 07:52 AM   #9 
  - Did he get the secret flyer that they're having a huge sale? Blue-light  54anickel   Apr-28-04 08:03 AM   #12 
  - It looks like somebody just propped up the dollar.  TahitiNut   Apr-28-04 08:42 AM   #15 
     - Gold is plunging faster than the dollar is rising...  Frodo   Apr-28-04 09:40 AM   #21 
        - So, is somebody dumping dollar-denominated gold?  TahitiNut   Apr-28-04 09:44 AM   #22 
           - Well, if you believe in market manipulation and gold cartels, then it's  54anickel   Apr-28-04 10:29 AM   #26 
              - Harder to come up with a reason?  Frodo   Apr-28-04 11:27 AM   #36 
                 - Seems like to big of a drop for a penny rise in the buck.  54anickel   Apr-28-04 11:53 AM   #40 
                    - Since mid-February...  Frodo   Apr-28-04 12:01 PM   #41 
                       - Hmmm, That's taking only 2 months worth of movement in each into  54anickel   Apr-28-04 12:03 PM   #42 
                       - #43 should have been to you. Sorry.  Frodo   Apr-28-04 12:44 PM   #44 
                       - Ok, how long do you want????  Frodo   Apr-28-04 12:11 PM   #43 
  - Riggs May Be Fined More Than $25 Million  54anickel   Apr-28-04 07:45 AM   #6 
  - Janus Settles Charges of Market Timing  54anickel   Apr-28-04 07:47 AM   #7 
  - Global Crossing overstated profits by $80m  54anickel   Apr-28-04 07:53 AM   #10 
  - Splash of blather on the futures charts  54anickel   Apr-28-04 08:23 AM   #14 
  - NO DEFLATION, MAYBE WORSE  54anickel   Apr-28-04 08:42 AM   #16 
  - Retreat of The Golden Bull: What's all the Fuss About?  54anickel   Apr-28-04 08:54 AM   #17 
  - 9:47 Markets open  54anickel   Apr-28-04 08:56 AM   #18 
  - Janus and Marvin Bush's Riggs Bank  Sven77   Apr-28-04 09:17 AM   #19 
  - Thanks for the additional links Sven77! n/t  54anickel   Apr-28-04 10:10 AM   #25 
  - Fidelity now advertising no transaction fees  teryang   Apr-28-04 10:42 AM   #28 
  - US Mint ups coin set prices due to metal cost rise  54anickel   Apr-28-04 09:18 AM   #20 
  - Gold's Indian rope trick to the rescue?  54anickel   Apr-28-04 10:04 AM   #23 
  - I don't think there really is inflation,  ozone_man   Apr-28-04 12:50 PM   #45 
     - Good question on the money supply.  54anickel   Apr-28-04 12:55 PM   #46 
     - Like the "unemployement rate" it depends on which measure you use.  Frodo   Apr-28-04 01:02 PM   #48 
     - Agreed. What I've seen quoted most in articles tend to lean toward  54anickel   Apr-28-04 01:10 PM   #50 
        - I'd need a reference to what he's said... but  Frodo   Apr-28-04 01:33 PM   #52 
           - Can't find what I was looking for, but came across this gem  54anickel   Apr-28-04 02:16 PM   #53 
     - No, just heard that some indicators are there  ozone_man   Apr-28-04 01:10 PM   #51 
     - Actually when you look at the ROC for M3 it is declining.  54anickel   Apr-28-04 02:42 PM   #54 
  - Harmony to look at Avgold hedge book  54anickel   Apr-28-04 10:07 AM   #24 
  - 11:29 update  54anickel   Apr-28-04 10:33 AM   #27 
  - EXCLUSIVE: China's Wen Tough on Economy  54anickel   Apr-28-04 10:51 AM   #29 
  - Richard Russell On the US Dollar & Gold  54anickel   Apr-28-04 11:13 AM   #30 
  - I step out for a few hours and - just look at this mess!  ozymandius   Apr-28-04 11:20 AM   #31 
  - Hi Ozy!  54anickel   Apr-28-04 11:22 AM   #33 
     - stunning dent in the gold price  ozymandius   Apr-28-04 11:33 AM   #37 
        - Wasn't gold at about $415 about two weeks ago? Wha' hoppen??  Media_Lies_Daily   Apr-28-04 06:06 PM   #58 
  - U.S. stock losses deepen mid-day  54anickel   Apr-28-04 11:20 AM   #32 
  - Shell to cut up to 2,800 jobs  54anickel   Apr-28-04 11:38 AM   #38 
  - Dollar Watch  54anickel   Apr-28-04 11:51 AM   #39 
  - "You really need a daily close below that level to classify it as a break"  Frodo   Apr-28-04 12:56 PM   #47 
     - Yep, sets things up for what was mentioned in the wrap up.  54anickel   Apr-28-04 01:03 PM   #49 
  - U.S. Treasuries Drop as Growth Signs, Debt Auction Cut Demand  54anickel   Apr-28-04 03:10 PM   #55 
  - Close  54anickel   Apr-28-04 03:26 PM   #56 
  - The CBC was trying to blame everything on Nortel  TrogL   Apr-28-04 03:39 PM   #57 

Home » Discuss » Latest Breaking News Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002
Software has been extensively modified by the DU administrators

Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC