Now, consider these points which I posted yesterday:
This is the chart that originally caught my attention a few weeks ago. It led me to believe we may be in the middle of a turnaround. Notice the following:
-- Prices have increased almost 10% since mid-March
-- Prices are above the shorter SMAs
-- The shorter SMAs are above the longer SMAs
-- All the shorter SMAs (10, 20 and 50) are moving higher.
There is one problem with the rally theory. Market breadth on the NASDAQ stinks:
Market breadth hasn't moved higher with the market, and
The new highs/new low number has been decreasing as well.
Why isn't NASDAQ breadth improving? Fundamentally it should be.
2 comments:
No, it shouldn't be. The issue right now is that with the economy looking pretty lousy right now, it's reasonable to expect that those earnings are not going to continue to do well. People are picking the companies that seem more likely to weather the storm, but I don't see any reason to feel that the market is in a good position more broadly.
People spending $4-5/gallon for gas , paying much higher prices for basic necessities, and unable to draw more credit from the value of their homes do not buy lots of iPods.
what up bonddad, to say that something in the markets should or should not be happening is misleading. the way i see it, market participants and observers are presented with a bunch of clues that can be used to speculate on various things. i am sure there is a perfectly logical explaination for the divergence in the data set youve presented today. sweet blog i read it daily
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