Wednesday, September 19, 2007

More Data On Yesterday's Rally

According to the good folks over at Sentimentrader.com, yesterday's rally showed that upside volume on the NYSE swamped downside volume by a lopsided 25-to-1.

The last time we saw that big of a skew in upside volume was August 20, 1982, just as equities were making their low before the start of a secular bull market.

Now, I am not saying we are about to embark on a multi-year bull rally like we did in the 80s, but this statistic is meaningful to the bulls nonetheless.

There have been only 7 other instances of this type of breadth action since 1950. When they looked at the ensuing 3-month period, in 7 out of 7 instances the SPX was higher by an average of +9.4%. Not too shabby.

Where is Eric from Philly now? Funny how the bears only rear their ugly heads when the market is going through a correction...

1 Comments:

At 10:43 AM, Blogger Eric said...

Congratulations, your spx is up over 8% (close to close) from the lows set in mid August. At the same time, gold is up 12.5%, oil is up 17%, corn is up 15%, wheat is up 26%, soybeans are up 21%, copper is up 16%, etc. No reason to discuss health care costs, education, services, etc because you'd be hard pressed to make an argument that those aren't going up in price. So your great stock market rally is just a total illusion--it's called inflation. Your Fed has just printed money so everything is going up in price (except of course for long term treasuries). It's as if helicopter Ben sent $1 million to every American and then everyone went running around saying that they are rich. The stock market goes up, but by less than cost of living and you are happy? This rally was a total Fed-engineered short squeeze and nothing more. The only way it rallies much from here is at the expense of a falling dollar or rising commodity prices (which may happen, but I'm not quite sure if that's what you should be rooting for). Zimbabwe's stock market hit yet another all time high yesterday--you should send an email to people there to ask them how rich the feel.

 

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