Yes, I Hear Talk…
So…what do you get when sentiment gets too bullish?
(Bullish advisors are now at 51.1%)…froth and excessive speculation occur just
seven weeks off of a six-year low (even ENRON went up 25%)…and everyone
calling this rally a new bull market…well at least the donutheads. It’s
simple…you get stalling action and a potential rolling over, as we have
started to see.
Let me say this. I don’t know how bad things get. I just know this rally has had
all the same characteristics of previous bear market rallies. I am watching
several things.
BROKERAGES are breaking down. Here are charts of
(
GS |
Quote |
Chart |
News |
PowerRating),
(
BSC |
Quote |
Chart |
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PowerRating) and
(
LEH |
Quote |
Chart |
News |
PowerRating). This is not typical of a new bull market.
WATCH THE SEMIS. The market has been following the
Semis on a leash. Semis are pulling back at this point but…I am now starting
to see some cracks…and the
(
$SOX.X |
Quote |
Chart |
News |
PowerRating)…as of this writing…is now below
its breakout of Nov. 21.
The Nasdaq and Nasdaq 100
have also penetrated through their Nov. 21 cup and handle, high volume
breakouts.
As I said in
my last report, go slow here. Yes, I hear talk of seasonal strength in
December. Yes, I have heard talk that the market will rally into the holidays.
But, we all heard the talk about how the market would not be down three years in
a row…we all heard when the FED lowers rates, the market will go up…we all
heard when the economy comes back, the market will come back…lower hemlines,
Super Bowl winners, the moon in conjunction with Mars…
Until next time,
Gary