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Saturday, November 28, 2009

Follow the Leader?

The Nikkie is now only 35 points from breaking the low set back in July, and seems to be in full crash mode now.
Over the last three month period there have been some startling changes happening through-out the markets. To me this is one the most significant, the strongest indexes at the beginning of the rallies peaked first, then have turned into the weakest, and they are starting to accelerate to the downside. These two charts should be very large warning signs complete with blinking lights to the bulls, that things have changed. The leading indexes at the beginning of the rally, are most likely to be the leading indexes in the sell-off. Everyday I have been posting charts of the Russell, comparing it to the SPX trying to showing that gap between the two keeps getting larger. On Friday as the SPX was recouping some of its loses, the Russell ended up closing at the low of the day. Until this trend changes, I will stay bearish!!!
I am working on updating the charts I posted in last weeks, Week-end Updates, and plan on posting them Sunday morning.

4 comments:

  1. Nice job Col. The inevitable might be knocking on the door

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  3. I agree with your bearish stance, and one way to contribute to this dicussion, though, is to add a little social trend analysis. (I tend to look at the bigger picture anyway.) If the market continues to act like Oprah's ratings, then we are in trouble. There seems to be a connection between the TV "star" and the market "star." in regards to social trends. I posted some of the article below and the rest you can find here: http://www.graspthemarket.com/articles/20091125a.php

    An interesting part of the Tribune article was a graph that showed the average daily viewership slipping from approximately 9 million in 2005 to 6.2 million in the beginning of 2009 (the graph only showed 2009 as a single point, not month to month). That is a drop of about 31%. The Dow Jones Industrial Average was trading at about 10,500 at the beginning of 2005, and hit a low of 6,469 in March of 2009. This is a drop of about 38% during that time period. Both percentages are very close to each other. Is there a connection? I think there might be.

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  4. I love how you follow the RUT in a detailed fashion. I do the same, but don't find many bloggers pay much attention to it. It is the leader & always has been.

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