Skip to main content

Market notes 10/8/07

Reading through recent remarks in Richard Russell's Dow Theory Letters over the weekend, I saw that the strength in the leading averages is still evident.

The S&P 500 and the Dow Industrials are still working higher from their August lows, and in fact both the Dow and S&P 500 have made record highs in recent days.

Today's action seems to be worrying investors (see Bloomberg link above on option market signalling a stumble), but so far the uptrend in the major averages is intact.

Russell noted that the bullish percentage of shares on NYSE and the S&P are above 60%, and that the BP for the Dow was recently above 86%. He notes that there is nothing bearish about those statistics; if anything they've improved in recent weeks. Got Diamonds (DIA)? Russell and DTL subscribers are watching the action in the DJIA closely.

By the way, if you'd like more of Russell's view of the market, check out his newsletter. He has a very loyal following, and I'm one of his loyal readers myself. Great stuff.

In other market news and views, I'm starting to wonder if leading indices and shares will continue to move higher, or will things fall apart (at least here in the U.S.) and confirm Marc Faber's gloomy view on the U.S. market?

Marc recently forecast a possible 20-30% or greater correction in the leading averages, and said he expects to see a significant correction in leading U.S. tech names, such as AAPL, GOOG, and RIMM in the event of such a drop.

Currently, these leading names are anything but weak, with many of them rocketing to all-time highs. But if weakness starts to show up in these names, perhaps this will signal a coming correction for the U.S. stock market. Or maybe it will signal a pause and a shift in leadership with a rotation to other names? We'll see...

Popular posts from this blog

Nasdaq credit rating junked.

S&P cut Nasdaq's credit rating to junk status citing debt burdens and its questionable strategy to buy a controlling interest in the London Stock Exchange. Financial Times reported that the exchange's counterparty credit & bank loan rating were lowered fromm BBB- (lowest investment grade rating) to BB+. The change will increase Nasdaq's borrowing costs should it wish to pursue aquisition targets. For an earlier look at the exchange consolidation trend that brought about Nasdaq's push for a stake in the LSE, please see "Exchange fever" .

Clean Money - John Rubino: Book review

Clean Money by John Rubino 274 pages. Hoboken, New Jersey John Wiley & Sons. 2009. 1st Edition. The bouyant stock market environment of the past several years is gone, and the financial wreckage of 2008 is still sharp in our minds as a new year starts to unfold. Given the recent across-the-board-declines in global stock markets (and most asset classes) that have left many investors shell-shocked, you might wonder if there is any good reason to consider the merits of a hot new investment theme, such as clean energy. However, we shouldn't be too hasty to write off all future stock investments. After all, the market declines of 2008 may continue into 2009, but they may also leave interesting investment opportunities in their wake. Which brings us to the subject of this review. John Rubino, author and editor of GreenStockInvesting.com , recently released a new book on renewable energy and clean-tech investing entitled, Clean Money: Picking Winners in the Green Tech Boom . In Clean ...

Jesse Livermore: How to Trade in Stocks (1940 Ed. E-book)

If you've been around markets for any length of time, you've probably heard of 20th century supertrader, Jesse Livermore . Today we're highlighting his rare 1940 work, How to Trade in Stocks (ebook, pdf). But first, a brief overview of Livermore's life and trading career (bio from Jesse Livermore's Wikipedia entry). "During his lifetime, Livermore gained and lost several multi-million dollar fortunes. Most notably, he was worth $3 million and $100 million after the 1907 and 1929 market crashes, respectively. He subsequently lost both fortunes. Apart from his success as a securities speculator, Livermore left traders a working philosophy for trading securities that emphasizes increasing the size of one's position as it goes in the right direction and cutting losses quickly. Ironically, Livermore sometimes did not follow his rules strictly. He claimed that lack of adherence to his own rules was the main reason for his losses after making his 1907 and...