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Feb
28, 2010 Weekly Supplement
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You will notice the March 2009-January 2010 bull leg did not garnish volume
support in both charts below. You should also notice the bearish spurt
beginning in late January 2010 was accompanied with a surge in the IVI
(Indicant Volume Indicator), albeit at depressed levels. You may have to
squint your eyes a bit, but on the lower right hand of both charts, you
should notice the recent bullish bounce in early February 2010 was
accompanied with a declining IVI. With these views you should now understand
why the daily stock market report is suggesting volume support for bearish
behavior. These small movements do not mean bearish behavior will be
aggressive. That is yet to be determined but can be measured by the
Short-term Indicant.
Bullish spurts with little volume support are typically a function of some
forms of manipulation. "Teasers" may be an appropriate term. The big money
is looking for buyers before the inevitable transpires. Sometimes big money
institutions fool each other, but their primary target is the individual
investor. As you can see from the charts, the individual investor has not
yet participated. That suggests their will be few to "tease" and thus a bit
more bearish than normal. There is nothing worse for the big money
institutions than mass individual investors in a distrusting mode of
consciousness. When buyers remain absent, watch out. |
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Following the 2000-2002 stock market bear, a new bull was born. It coincided
with the war in Iraq. That was strategically significant. The West will now
have troops surrounding a major source of petro. With that, OPEC's power
diminished. Big money and especially oil companies have clamored for unrest
in the Middle East for years. That desire is contained in numerous strategic
plans. Finally Tony Blair of Great Britain and George W. Bush of the U.S.
executed on those plans. The bull roared with delight. You will notice the
IVI, Indicant Volume Indicator, rose in conjunction with that initial bull
leg beginning in March 2003. Although volume rose, it remained absent of
extraordinarily high volume. That suggests much of the buying on that
initial bull leg was by major institutions, including energy related Fortune
500 Companies. Even though the the NYSE volume during the early stages of
the 2003 bull leg was unimpressive, you will notice on the next chart
(scroll down), the NASDAQ's volume was indeed impressive. |
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Many of you recall the meandering bear of 2004. Such configured bears are
not threatening to longer term hold positions when accompanied by a
decreasing IVI (Indicant Volume Indicator). Volume surged along with the
second leg of the bear in late 2004 in perfect harmony of the heart and soul
of bullish seasonality. Another meandering bear with reduced volume again
developed in 2005. Another bearish spurt occurred during mid-July 2006, but
again on declining volume. Although a bit scary at the time, the IVI was
accurately indicating a temporary pause in bullish action. The late 2006
bull leg maintained relatively mild volume until Alan Greenspan scared the
market in early 2007. His comments caused a brief surge in volume, but was
quickly followed with a resumption of solid bullish expressions.
The first sign of "significant" trouble occurred in July 2007. Notice
#1 on the below chart. The IVI shot solidly north, paralleling a brief, but
dynamic bearish spurt to the south. That was quickly followed by a solid
bullish rally, but on declining volume. The Quants and major banks lost all
the profits they had ever made, plus some, just after #1 and during several
days in August 2007. Your tax money bailed them out from their mistakes.
Since then profits have resumed and bonuses paid, accordingly.
As you can see from the chart, even the NASDAQ's March 2009-January 2010
bull leg was absent of volume support. The bearish expression in late
January 2010 was accompanied with a volume surge and the bullish bounce
since then is not supported with volume. That combination, at best, is
non-bullish and at worse, bearish. |
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