The Bear Case

Last week I wrote a lot about sentiment and how it would take a few more days of giddiness early this week to get the sentiment indicators to where they were at previous tops. That still remains the case but there are other indicators that would support immediate downside.

A week ago, on Monday the 8th, the NYSE saw 470 new 52 week highs. By Friday, with the S&P 500 11 points higher there were only 436 new 52 week highs. That is a divergence that shows that some stock are starting to sputter. In addition, the market is very overbought. I use a 10 day moving average of NYSE Advancers - Decliners and below is the raw data that goes into the calculation. We will be dropping a string of 10 positive numbers starting with two very large numbers today and tomorrow.
While it would make for a much easier short trade if we saw a couple more days of giddiness and everything lined up, there is certainly a case to be made for an immediate decline.

5 comments:

Random Thoughts said...

Mammary Monday

Anonymous said...

In your opinion, is it worth it to do an MBA (from a top 20 school)?

Tsachy Mishal said...

It depends what your goal is. It would certainly be easier to get a job.

The most useful part of my MBA was accounting classes because my undergraduate degree was in Computer Science and I had no accounting experience, which is essential for analyzing companies.

As far as investing is concerned there is no subsitute fo experience and there are excellent books that are better than what is taught in most MBA classes.

Anonymous said...

It would be nice to get a nice low six figure job and sock away half of that every year and then return 25% at least of that every year. In a matter of years I think I would have a million. From that point, I can see myself having another million or two in a few years.

I know it sounds rosy, but I think the markets will just continue to be a huge bubble blowing and popping blowing and popping.

I hate the corporate world actually. It's a retarded way to make a living. I wouldn't mind doing it for around 10 more years just to support my trading.

Anonymous said...

Excellent Mammary Monday this week!