Today's Market
by Dr Invest
One of the major questions is who will take the next step? Who will invest the BIG MONEY? You may ask, "What are you talking about?" Well, the market has rebounded, but with very low volumes of trading. This means that investors are shy. The investors I am really talking about are not speculators or traders, but the "big boys", the institutional investors.
What we are seeing is an uncertainty in the market. There is talk of growth and a robust recovery, but no one really wants to get into the market at these high prices. Mark Hulbert interviewed Hayes Martin and found some very interesting ideas. You can read more about it for yourself at http://www.marketwatch.com/story/why-the-stock-market-is-weaker-than-it-looks-2014-11-07?siteid=yhoof2
Here are some highlights. First point, the market is weaker than it looks; second point, the recent rally is unsustainable; third point, investors are not committing to the market, there is no strong buying conviction. Hulbert writes:
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A most telling weakness, according to Martin, is that the market never exhibited the kind of explosive upside action that is typically seen “early in a strong market advance off important lows.” For example, there has not been even one session in which trading volume for issues rising in price was at least nine times greater than the volume for declining issues — a so-called “9-to-1 up day,” as this phenomenon was dubbed by the late Marty Zweig.
This is noteworthy because, as Zweig wrote in his 1986 investment classic “Winning on Wall Street,” “every bull market in history, and many good intermediate advances, have been launched with a buying stampede that included one or more 9-to-1 up days.”
by Dr InvestOne of the major questions is who will take the next step? Who will invest the BIG MONEY? You may ask, "What are you talking about?" Well, the market has rebounded, but with very low volumes of trading. This means that investors are shy. The investors I am really talking about are not speculators or traders, but the "big boys", the institutional investors.
What we are seeing is an uncertainty in the market. There is talk of growth and a robust recovery, but no one really wants to get into the market at these high prices. Mark Hulbert interviewed Hayes Martin and found some very interesting ideas. You can read more about it for yourself at http://www.marketwatch.com/story/why-the-stock-market-is-weaker-than-it-looks-2014-11-07?siteid=yhoof2
Here are some highlights. First point, the market is weaker than it looks; second point, the recent rally is unsustainable; third point, investors are not committing to the market, there is no strong buying conviction. Hulbert writes:
,
A most telling weakness, according to Martin, is that the market never exhibited the kind of explosive upside action that is typically seen “early in a strong market advance off important lows.” For example, there has not been even one session in which trading volume for issues rising in price was at least nine times greater than the volume for declining issues — a so-called “9-to-1 up day,” as this phenomenon was dubbed by the late Marty Zweig.
This is noteworthy because, as Zweig wrote in his 1986 investment classic “Winning on Wall Street,” “every bull market in history, and many good intermediate advances, have been launched with a buying stampede that included one or more 9-to-1 up days.”
Martin suggest: Martin’s best guess? We’re not at the beginning of an intermediate-term advance that takes the broad market averages to significantly higher levels. Instead, the recent rally is merely “an interim bottom within a longer-developing top.”
I would agree with this idea, Our five-year Bull Market is long in the tooth and likely to collapse; stocks are over bought and over priced; QE is being abandoned because of the small affect on the market and the development of new market bubbles; and the likelihood of near term bear is very near. I have suggested that we could see recessionary pressures return in January, but it could be pushed into April of 2015. Finally, some are pointing to a more positive political climate with the GOP taking power, but since 2012 our market has been like no other. Everything you see in this economy is artificial and without real economic advances, no amount of money printing will produce a vibrant economy.
(Note: the above article is for entertainment purposes only and not to be used in any way for investment advice.)
(Note: the above article is for entertainment purposes only and not to be used in any way for investment advice.)
