|
PureBytes Links
Trading Reference Links
|
JW wrote:
> This from Tuesday's TheStreet.com email...
>
> JW
It seems Helene gets paid by the word.....could have done the same in one
paragraph. This means
she doesn't trade.....as traders appreciate quickness & conciseness.
Briefly,
Norman
>
> -------------
> The Chartist: Get Out the Hammock, It's Time for a Summer Slowdown
>
> By Helene Meisler
> Special to TheStreet.com
> 7/18/00 9:09 AM ET
>
> July 18, 2000
>
> After a few days off, I expected to come back and see something
> different in the charts and statistics. After not checking the market
> for three trading days, it doesn't look much different than it did when
> I left it last Thursday morning. It needed a rest then; now it looks
> like it needs a good night's sleep. Sure the S&P is now almost 20
> points higher, but the indicator that contributed to its improvement
> and recent rally, the breadth of the market, managed to gain a measly
> 47 issues during that same period. That's not what makes the foundation
> for further rallying on the NYSE.
>
> I view the market and its indicators as a set of old-fashioned balance
> scales, those that have a dish on either side. If one of those dishes
> is weighted down more than the other side, I tend to give more credence
> to the side with more weight. Last week the dishes, which had been
> skewed toward bullish since June 23, were becoming more even,
> suggesting a period of rest or consolidation for the NYSE. Now I find
> the weight shifting further toward that side, with fewer reasons to buy
> stocks right now.
>
> As explained above, the breadth of the market, which really has shown a
> great deal of improvement in the past few weeks, has begun to
> underperform the S&P once again. That is not a near-term plus. In
> addition to that indicator, the market remains overbought. In fact, the
> latest surge of almost 20 points on the S&P hasn't budged this
> indicator, suggesting there is little oomph left on the upside. The
> oscillator has yet to surpass its high of early June, despite this
> upward move in the S&P.
>
> You've probably also noticed that the number of stocks making new highs
> on the NYSE has fallen by more than 20% in the past five trading
> sessions. This tells us the recent winners are already having a rest.
> Let's add to this the fact that cumulative volume on the NYSE has still
> not made a new high vs. its previous highs. That tells us there is
> still a lot of volume on the downside relative to the upside, and that
> needs to change for this market to rise with ease.
>
> Then there's sentiment. It's by no means wildly bullish, but it's also
> no longer in a place that supports a rally. Four weeks ago I began
> talking about the specialist short ratio as having come down far
> enough, to a reading of 42%. It stayed in this range (42%-43%) for
> three weeks, suggesting there was still room to rally. However, the
> reading from this past weekend has shot up to 48%. Now, 48% is not
> bearish (a reading over 50% is like throwing up a red flag) but at 48%
> we are no longer looking at sentiment being too bearish (and thus
> bullish for the market), so that weight must be removed from the
> bullish side of the scale.
>
> Another sentiment measure, the put/call ratio, has also moved away from
> the bullish side of the scale. A few weeks ago, this ratio was
> providing readings in the 50s and 60s, telling us there weren't many
> believers in the rally. Now the readings are in the 30s and 40s,
> telling us there are too many believers.
>
> By now everyone is convinced that the economy is slowing down, and
> statistical evidence points in that direction. , but I am forced to
> wonder if the economy is slowing down, why then is the yield on both
> the 10-year and 30-year bonds rising? Perhaps it's because we have now
> seen numerous articles written about how the Fed is done, and if
> they're not, then August will be the last time, so we no longer need to
> worry about rates. But if that's true, then why is the yield on the
> ten-year note back to the same level it was at on June 2nd, the day we
> got the employment data for May, and looking like it can get back to
> 6.25%? Maybe Mr. Greenspan is not going to be very market friendly when
> he addresses Congress later this week.
>
> The market is now acting tired and the statistics are telling us it's
> going to be hard for the majority of stocks to make much progress
> without some consolidation first. As always, I vote for a consolidation
> or correction to give the market a chance to catch its breath and shake
> out the weak holders. If it keeps going without a rest, the market
> becomes overextended and narrow, and you don't need me to remind you
> what happens to markets that become overextended and narrow. Let's hope
> we get that much needed rest soon.
>
> Helene Meisler, based in Singapore, writes a technical analysis column
> on the U.S. equity markets on Tuesdays and Fridays, and updates her
> charts daily on TheStreet.com. Meisler trained at several Wall Street
> firms, including Goldman Sachs and Cowen, and has worked with the
> equity trading department at Cargill. At time of publication, she held
> no positions in any securities mentioned in this column, although
> holdings can change at any time. Under no circumstances does the
> information in this column represent a recommendation to buy or sell
> stocks. She appreciates your feedback at KPMHSM@xxxxxxxx
|