Heyer Capital, LLC

investment management and timely advice from a local CPA (Fox Valley, Wisc.)

Market thoughts

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The downturn the past couple days has given the bears a little to whet their appetite. Toss in some rather high AAII bull poll numbers (contrarian), and we looking at a reversal or failed test of the new highs?

Interestingly, trading volume on these down days has been well below average. Gentle distribution, waiting for a rebound? That goes in the bullish column.

Stocks on the Move list has remained fully populated lately (though the stocks moving up list has several stocks barely making the cut.) Mildly bullish.

Distribution day count is low. Mildly bullish.

IBD 100 and other market leaders getting creamed. Bearish.

Avg market fall between Oct 3 and Nov 6 in years ending in a 7, since 1897: 16%: Bearish.

Commodity markets and China under pressue. Aren’t they the same thing? Bearish.

Volatility (inverse of liquidity) much much lower that the summer swings. Either way.

Credit spreads screaming tighter. Depends if we’re just returning to normal, or throwing cares to the wind and dollars to the bond market.

On balance, we’re near all-time highs (in dollar-denominated prices) and your “worried” level is high and your personal trading desk is a DEFCON 3?

Filter out the noise. Let your prices show you where to lean.

By the way, I’ve closed out my TRAK position, but an up day in an ugly market means I need to stay ready to dive back in. Besides, I need to give you yet another opportunity to laugh at all the money I leave on the table for the other guys.

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Written by heyercapital

October 3, 2007 at 3:48 pm

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