Here are my thoughts. The tech bubble for certain people did not happen. If you were trading value oriented small/mid cap stocks back then, well, you came out just fine. If you were holding $RUJ equities back then, things would have been very profitable. In fact, the $RUJ is up 2.5 times since the end of 2000. However, the $RUO just kept falling and then bottomed out and now it has only recently run over its all time high. My thought is that there is a doomsday scenario forming, but this time around the bubble is in the $RUJ. Value is overvalued and growth is the place to be. Look at the Russell growth and value charts both recently and "all data". You will see the same pattern that I speak of. Now the composition of the $SPX is determined by a small group of people. Prior to 1996, there were about 14 different changes made per year and the small group did not bother with it so much. Then they came in and tried to mold the $SPX and thats when the trouble began. By the year 2000, the molded the $SPX into this super-growth model of prosperity. Then when growth was finally dead, they tried to change it back to value. Now its a value index once again, but value is going out the window. The $SPX will pull back and that I am certain of, however, that does not mean I am bearish on the entire market. Small/mid cap growth is the word of today, the $SPX value fund is the word of yesterday.
Here is the safe haven for your loot: <!-- Start of Yahoo! Finance code --> <iframe allowtransparency="true" marginwidth="0" marginheight="0" hspace="0" vspace="0" frameborder="0" scrolling="no" src="http://api.finance.yahoo.com/instrument/1.0/UKW/badge;chart=3m;quote/HTML/f.white?AppID=p.UYGEexs3GL4larVdilQftPiCM-&sig=_4tjUrHICWgkk4tWR9ZsmryJDno-&t=1184005987576" width="300px" height="454px"><a href="http://finance.yahoo.com">Yahoo! Finance</a><br/><a href="http://finance.yahoo.com/q?s=UKW/">Quote for UKW/</a></iframe> <!-- End of Yahoo! Finance code -->
There will come a point here where people will realize that if they lock in 10% gains now and go long short term treasuries for another 5% WELL.... DO THE MATH! When greed sets in this will be the trade... but when? ~ stoney
This chart shows you the big picture. The Russell 2000 Growth is about to flip and the target price is about 650 meaning 59% up room to go! As for value, it will probably take a chair for a while and probably for quite a few years.
Back in 2000, we didnt have as many indexes as we did today. So when the market tanked, we thought it tanked, but did it really tank back in 2000? Believe it or not, there were two stock markets in 2000. The growth market in which people rode down and the value market which people rode up. These two charts paint a different picture of our current market. Russell Mid-Cap Growth http://www.prophet.net/analyze/sc.jsp?symbol=$rdg At the very end you can see that chart is actually making higher highs and higher lows. The pullback today was to the neckline of the old range indicating a support. A bullish chart Nasdaq-100 http://www.prophet.net/analyze/sc.jsp?symbol=$ndx The most bullish chart. Higher highs and higher lows. Always moving up in a 45 degree angle. Russell Mid-Cap Value Lower lows and lower highs for the last month. Not good, very bearish. http://www.prophet.net/analyze/sc.jsp?symbol=$RMV Finally, our good friend, SPY: http://www.prophet.net/analyze/sc.jsp?symbol=spy This looks to me like its breaking down. We are now at the end of the business cycle where growth stocks are being embraced...especially **mid-cap growth stocks** In the mid-late 90s, there was switch from value to growth. We were at the end of the business cycle. Value stocks chopped and sold-off from 1997 to 2000. One good example is ALL. Go to the prophet chart and look at the 50 year chart of ALL. Look at how it dumped from 98 to March 2000. In March 2000, thats when ALL started taking off. I would bet on growth right now and buy it on any pullback. Get rid of value.
Always Michael in a slowing earnings environment the great irony to everyone who has fled to cereal stocks is that high PE tech does the best. I couldn't agree more. Did you notice the Russell 80% down day today? That could be a nice quick cleanse in the big picture. Embrace Me Black Sun. HC
Woke up this morning wondering just What The F Was Going On and Where The H We Were... sound familiar? It looks like on the weekly bar chart that the S&P 500 Index is still trending higher inside a rising trend channel. However, at the present time it is moving down after having reached the top of the channel. While this could very well be the last top before a major decline, we are in a bull market and we are in earnings season... I have to assume any decline will be stopped by the rising trend line despite this huge scare over sub prime mortgages. Indeed if we step back and just take a breath a couple things come to light. (1) prices have been consolidating for more than a month. (2) As we went UP this last time the VIX climbed as well! I saw that but didn't connect the dots. Usually the VIX goes DOWN as the market climbs and people get complacent. Just before the last break in the market THE SAME THING HAPPENED! Interesting and something to look for in the future... but what else does that tell us? The selling is primarily some big institutional money raising cash after big gains and maybe they aren't that smart after all. I think for a tragic free fall here we would have to be sailing into ecstasy and making hand over fist easy money with a LOW VIX not " Climbing A Wall Of worry. ' -A 20 Week Cycle Support?- This is complicated stuff and I'm sure I have this wrong, but some smart investors look to 20 week cycles and the March low was a 9-Month Cycle trough. They are 2 cycles within the 9-Month Cycle those are the "20-Week Cycles" and they tend to be inflection points, flipping the market's direction from up market to down and vice versa-- there are two of them in a 9-Month Cycle. It appears that the market is now in the process of cresting in preparation for a decline into the next 20-Week Cycle trough, which is projected to arrive at the end of this month. Could things be happening a little bit quicker though?, pushed ahead by headline news, terrorism, aircraft carrier in the Gulf, sub Prime meltdown, The Fed speaking? I think so and so we have to be prepared for that rally at end of month to happen a little quicker like early next week. Any quick sell off here in the next few days that appears to break important support levels at the bottom of the consolidation range would be near that important 20 week cycle turn... and as such a dangerous time for shorts>>Such a breakdown would likely prove to be a bear trap. ~ stoney
Wow what can I say one of the all time great calls on ET with one foot out the door an a vacation week, if I wasn't such a small fry punk and had bought more than a thousand damn shares. That's right folks I've entered the greed would have should have phase i should probably sell now.> IMMR breaks out of mini bull flag & runs to more new session & 7 year highs, now +$1.10 today. Up 10 sessions in a row. I've had a limit sell all day in look and you will find me I think it's about 40 cents away..... Here's my question. If stocks can rally from here into the aforementioned beginning of next month cycle turn... then the turn is to the neg? Or is the next turn up no matter what the prices are at simply because the last 20 week turn was a flip to the down? You see you can tweak this 2 ways... Does any of this make any sense? ~ stoney