Anxiety Deficit
If you look through the American Heritage Dictionary, you will find the
following entry —
Bejesus – (n) Exclamative; The
bear scared the bejesus out of us.
Has this bear market scared the bejesus out of (enough of
us) yet? Has it produced the kind
of fear and panic required to hammer out a sturdy bottom from which to launch
a sustainable rally? Note:
“Sustainable rally” at this point means anything more than two back-to-back
days of price gains in the indexes. Â
I would feel more comfortable saying “yes” to this
question if the CBOE Volatility Index (VIX) were to either equal or exceed the
levels we saw last September. Even
though the indexes have been threatening to fall beneath their September lows,
the VIX is still a good 20 points away from where it was at the September low.Â
I’m not suggesting we still can’t see a rally in this
market, even a strong rally. However,
as each day passes without producing any upside of substance, it becomes more
difficult to believe we’ve hit bottom.Â
Sector action this past week has been ho-hum with no real
standout performances. Some of
the momentum divergences I pointed out in my previous two columns have failed
to produce the kinds of strong rallies that would be necessary to confirm a
bottom reversal. Defense
(
DFX.X |
Quote |
Chart |
News |
PowerRating)
and Healthcare
(
HMO.X |
Quote |
Chart |
News |
PowerRating) are the only two sectors of the 25 I follow that are
still trading above their respective 50-day moving averages. Even
Gold
(
XAU.X |
Quote |
Chart |
News |
PowerRating) is below its average today, though just barely. And as if we didn’t have enough ugly charts from our own country to
look at, just for kicks how about we take a look at some of the other
countries? In case you didn’t
know, there are Exchange Traded Funds (ETFs) that represent baskets of leading
stocks from a number of major European and Asian countries. The chart of
Taiwan (EWT) appears to be making a long-term weekly top. Maybe someone can tell me what the broader implications are, if any,
for a fall in the Taiwan stock market. I
just study the charts.
Have a good weekend.