One of the more noteworthy market trends over the past couple of months has been the relative underperformance of the Dow Jones Transportation Index. After a devastating few days that saw both FedEx (FDX) and Norfolk Southern (NSC) collapse on negative guidance, the Transports fell nearly 6% this week. At the same time, the Dow Jones Industrial Average (DJIA) only fell a few points. Below is a chart comparing the performance of the Transports and the Dow over the last six months. The huge divergence between the two over the last couple of weeks stands out.
Over the last six months, the Dow (DJIA) is up 3.47%, while the Transports are down 7.90%. While wide, the 6-month spread in performance between the two is not out of the ordinary, as shown in the chart below. At the same time, peaks and troughs in the performance spread have not really been bullish or bearish for the future direction of the overall market either. While the spread could widen more, it's likely that we'll see a reversal in the relative underperformance of the Transports in the near future, but that doesn't mean the Dow is doomed.
julian ct @joulesmm1
sad state of affairs: http://www.cftc.gov/PressRoom/SpeechesTestimony/genslerstatement092812 … ....this is a global trend of passive aggressive control sposed to benefit the community
The chart below shows the average Rel-to-52 for all the stocks in the S&P 500 (we measure the Rel-to-52 of each stock in the S&P 500 and average the results). We can see that the recent price highs were not confirmed by the Rel-to-52 Index, which means that there are fewer stocks pushing into the high side of the envelope.
The underexposure of hedge funds is one of the reasons I remain bullish on equities,” Michael Strauss, who helps oversee about $26 billion as chief investment strategist at Commonfund in Wilton, Connecticut, said in a phone interview. “It may create forced buying into the market.”
The ISI gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise slipped to 46.5 last week from 48.1 in late August. The level is below the measure’s 10-year average of 50.2, the ISI data show.
“There’s latent buying power in hedge funds which could help push the rally,” Ablin, who helps oversee about $65 billion as chief investment officer at BMO Private Bank in Chicago, said in a phone interview. “I track liquidity looking for where the next dry powder is going to come from and I’m not seeing much in the traditional places.”
Investors expecting stocks to appreciate at the end of the year will be disappointed, according to Jeffrey Sica of SICA Wealth Management. Hedge funds won’t chase returns or accept more risk as the stock market becomes vulnerable to political turmoil in the U.S. where the so-called fiscal cliff looms and as Europe’s debt crisis worsens.
comment ......the worm turns so quicklyso-called fiscal cliff
Some more,
S&P 500 with NYSE ad/dec data,
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Nasdaq with Nas ad/dec data strong!
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the din of "sell the rallies" overnight hit what i think is a small peak, i am buying the dips and selling the highs-to-close as opposed to getting short way too early as that is the very thing that assists these (SPX) distribution periods where shorter are creating the uptrend......Bespoke.com noted that this mornings SPX close saw the first time in several consecutive closes where stocks bought exceeded sales offered......the daily close above 4440 on the XJO that i've been looking for appears on for today however the other big elephant in the boat that US futes pay close attention to is the DAX and that is very close to calling a sell signal in my opinion .....technically, on a 7 day 15 min period there's a subtle inv h/s pattern on the DAX i've been running and a hold above 7270 with move above 7376 would be a very good sign of higher weekly highs.....
even tho Twiggs clearly shows money coming out of US indecies and the TRANS giving off smelly sell signals i think we have higher to go to complete cycles pre-election.....i think the EURO/USD and the TED are signalling higher prices too....
julian ct@joulesmm1
no way Kondratief cycle can play out the way he contended....the speed of innovation couldnt be calc'd back then, tech infl on human activity
MORGAN STANLEY: Here's The Chart That Shows Why Stocks Are Suddenly In A Bunch Of Trouble
Joe Weisenthal|Oct. 24, 2012, 7:02 PM
Read more: http://www.businessinsider.com/morgan-stanley-we-expect-bad-news-2012-10#ixzz2AGtjfhSE
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AKA "Ending Diagonal"?
LOL, sounds ominous...Actually rising wedge patterns only meet their target 46% of the time according to Thomas Bulkowski's pattern site...
So no need to be too bearish...
CanOz
....A “90% down day” is just the opposite – where declining issues and volume must outnumber advancing issues and volume by a 9-to-1 ratio or more. For the purposes of this article, let’s designate this type of “90% day” as a “pure 90% day.”
A less stringent criteria is that of a “90% volume day,” where only the volume component is necessary to register a “90% day.” These are rather rare occurrences, especially in terms of NYSE data....
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