Just as the East Coast and Mid West freeze up into the New Year halting air travel, so the stock market hits Stall Speed after a record setting 2013. Close to 1 in every four trading days last year was a record high, especially the Nasdaq (speculative tech) market.
So far, the battles in the contest between the Fed's QE liquidity and danger signals from Sentiment have been won by the strong Bull market, with few alternatives to positive returns. As my blog shows:
http://mktsentiment.blogspot.com/, complacency continues to escalate. On holiday-shortened Volume last week, the NAS reached 2.77 times the NYSE; NAS new highs again hit 10:1. Nearing the record of December 2004, the Investors Intelligence Bulls broke through the 60% mark with the Bears at near record lows.
Margin Debt again increased to record highs with a jump in inflows to Equity ETFs for the month of November - bonds stayed exactly the same. Probably the most outstanding extreme, which needs some statistical research, is the huge number of Insider Sales - whether it is symptomatic for year end activity. As with last week, it jumped to 300 to 1 sellers over buyers. As was pointed out last week, Insider Trading is comprised of both Officers and Board members as well as 10% stock holders - who are the less informed. T The above number is the "smart money", pointed out to me by Finviz.com.
One of the great reads this weekend was the Up & Down Wall Street column by Barron's Kopin Tan; actionable statistics and insights to make a technician weep with joy! Not the headline redundancies found elsewhere.
Over the weekend I had coffee with an fellow ex-Schwab stockbroker who writes a daily blog for tradetrekker: http://tradetrekker.wordpress.com/. He reminded me of the offset correlation that Tom McClellan of the McClellan Market Letter ( the famed Oscillator) came up with, with the Euro currency preceding the S&P 500 by one year. Somehow the prescience is predictive in a tight correlation. If so, we could repeat last year's decline from the end of February to the end of July in our stock market. This coincides with what the Sentiment and breadth indicators are revealing.
This Saturday is the annual Martin Pring Outlook held by the TSAA at Golden Gate University:
Golden Gate University, Room 2202
536 Mission Street, San Francisco, CA
Saturday, January 11th
9:00am - 12:00pm
This event is historically one of the most well attended of the year, so be sure to register early! Cost is only $10 for TSAA-SF Members if you register through the website, $20 for non-members.