Re: [RT] MKT: Where its heading

["Gitanshu Buch" <onwingsofeagles@xxxxxxxxxxxxx>]

>an analysis of the DAILY 
DOW
 
Worth a lot. 
 
Looking at a bottom-up formation of the (so-far) 2 day rally:
 
a/ Mostly retail buying in INTC, Banks, Brokers, 
QQQ.
 
b/ Institutions huge participants in MSFT, TXN.
 
c/ Generally across the board rallies on significantly lower 
volume.
 
d/ 2:1 NYSE new lows over new highs, 3.5:1 Nasdaq in favor of 
new lows even though up/down ratios are hugely biased long side (10:2 Nasdaq 
up:down vol) and 6:2 NYSE up:down volume). As recounted here few weeks ago, 
which one is predictor of the turn being here? Don't know.... all I know is that 
the new lows yesterday expanded despite yesterday's action.
 
e/ The 3 E's everyone was talking about in the media recently 
(but conveniently has now forgotten):
 
Euro: Looking at persistent 
Euro-sensitivity for the McDonalds and Gillettes of the world. Just overlay the 
charts and train your trading system to make you $$ in the Euro to make $$ in 
these stocks.
 
Energy: still high. Lowest inventory levels in 20+ years for 
both CL and NG. Of course, NG having sold off inspite of this news indicates 
that NG may have put in its seasonal peak... and CL shouldn't be far behind. 

 
Earnings? from today's IBD: 81 SPX components have reported 
warnings this year so far into the qtr, v/s 46 components last year - with same 
# reporting.
 
f/ # of stocks located in top/bottom decile of their 
annual range on the major indices:
 
Top 10% of 52 week range:
DJIA = 2 (SBC, MO)
SPX =  36
NDX = 4 (CEFT, CIEN, LNCR, and the hitherto lowly 
PSFT)
Midcap 400 = 38 (this is where its all at this year - just 
like last year was NDX)
 
Bottom 10% of 52 week range:
DJIA = 11 (5 times more than top decile)
NDX = 28 (7 times more than top decile)
SPX = 103 (3 times more than the top decile)
Midcap 400 = 44 (about even with the top 10 
decile)
 
This picture was virtually reversed at this stage last year. 
Last year, we had 554 Nasdaq stocks AVERAGING returns above the 300% mark for 
the year. At this stage, we had ALL of those in the top 10% of their annual 
range. 
 
Last year at this time we had 32 names in the SPX up 100% 
or more YTD. This year we have 29. So we know in an obviously managed index that 
rewards growth... where is the performance?
 
There were complaints of narrow market heard in the media last 
year when it was really widespread buying.
 
Now that nobody's complaining about a narrow market, guess 
what.
 
Its a bear market, only this time, its not a stealth bear. Its 
writ large across all the benchmark indices, save 2. The small caps and the mid 
caps. But most mutual funds, of course, benchmark the SPX - even though 97% of 
their holdings are NDX components (3% being cash or EMC).
 
Intraday 20% rallies make you happy, well, good for you! 
What's an annualized 50% return when you can make 40% of that in one 
hour?
 
Doesn't matter if we call it stealth bear or bull in bear's 
clothes or some such anti-Animals Anonymous politically incorrect term - as 
usual, its still a game of owning that what's going up and shorting that what's 
going down.
 
Gitanshu






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