I Don’t Know What Tomorrow Brings
HEY! I don’t know what
tomorrow brings. Maybe by noon tomorrow the Dow
will be down 300, 70 on the Nasdaq
and 30 on the S&P 500…and by the close of the
day, volume on the NYSE will be 2.2 billion.
Volume on the Nasdaq will be 3 billion.
Maybe at 2:00 PM, the markets reverse and all major indices are up.
Maybe the put/calls spike to 1.20, while the VIX and
VXN spike to levels we haven’t seen
since late September 2001…and we are off to the races again. Maybe!
But I’m sorry. I can’t predict things like that. I can
only evaluate and react to it as
it happens and after it happens. I am bringing this up because in
my opinion, this is the only way the market can snap out of what I am
seeing…and what I am seeing is ominous.
And what do I mean by ominous? 734…that’s the number I
am concentrating on…and it has
nothing to do with home runs. Very simply, in the past five weeks,
approximately 734 stocks broke their 50-day moving averages…and this is just
from O’Neil’s Printed Product Index. 734 out of 2807…and that does
not include all the names that broke their 50
DMA before the last five weeks.
So, when you hear some buzzardhead telling you that the
market is fine, the market will go higher, and that we are in a new bull
market…just tell them about
734.
The 50-day average is normally a place where institutions
step up to support stocks. Looks
like the institutions are already going on summer vacation.
Continue to play the long side close to the vest. The
market is losing any leadership
it has had. There are areas that can still be exploited, like HOSPITALS,
GOLD…on pullbacks, REITs,
HMOs, TOBACCO…but
not much else is breaking out. Please
notice the defensiveness of these sectors…and pray for that
big, giant reversal.