Tuesday, October 27, 2009

Bulls' Desperate Attempt to Shift Money Around will be Futile

It's evident that the past couple weeks after earnings reports that money has been moving around. It's mostly been buying up pre-earnings stocks, then either dumping them on earnings day or shortly thereafter. Many of which trade much lower than when the stock announced "blowout" earnings numbers, a clearly bearish sign. Tech has been stronger lately as shown by the Nasdaqs' (Composite and 100) strength the past few days, mainly due to Amazon and Apple, and a few others. So it seemed that people were shifting money out of some stocks and putting them into selected Tech companies in hopes that they will continue the bull run and lead the rest of the market higher.

Today that Tedh hope appears to have faded though. If you look at the stocks above from the Nasdaq Composite that are leading the Nasdaq to much more weakness than the blue chip S&P and Dow, you'll see that the leaders to the downside are some of the stocks that were really that last hope to hold up the Nasdaq. The Dow is stronger today along with the energy sector, so it seems once again the desperate bulls are shifting money around frantically trying to hold onto to some kind of bull market somewhere. Yet despite their efforts, the Nasdaqs and S&P continue to trade in negative territory and the NYSE stocks are trading with a negative bias.

All this "fracturing" of different makrets is very unhealthy for the stock market as a whole, and is signaling a top. With the dollar appearing to have bottomed by breaking through key levels against the euro and the swiss franc, and the very bearish action in the stock market the past few days, I'm looking for lower levels in the near future for the stock market.

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