Friday March 18, 2011
Regular readers are aware that we prefer to examine the internals of the market to the actual prices reported in the popular media. This chart shows why. We frequently cite the NYSE Summation Index so here is an update. The NYSI formed a large triangle and then fell completely out of it to the downside.
Our first target was the 1200 area. The internal action suggests that lower numbers lie ahead. We had shown this chart prior to the big sell off and suggested that the internals did not support the price advance in the averages, Whatever, the next major low should provide a fairly low risk buying opportunity, short term, just as last July did.
Friday Morning 7:07 CST
The UN finally slumbers into a vague threat of a French ( a first since the Suez Conflict against Nasser in the late 1950s in my memory) air strike, but not until Sunday. Perhaps this assumes the Colonel will fold on that announcement. At any rate things look better at the Japanese nuclear plant. US stock futures are up a bit pre market opening.
Bill Griffith was bonkers on CNBC over a new high in the Yen/Dollar relation. He never of course bothered to explain it. No doubt the carry trade has been encouraged by our Fed’s no interest rate policy is unwinding. Dollars are being sold to buy yen necessary for rebuilding Japan. Despite what you hear the Dollar is only back to its November lows.
The correction may extend into next week giving another opportunity to pick up some Government bonds.
More updates this weekend.
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