Tuesday, March 18, 2008

You might be interested to learn this. Or not.

Is the long correction in the stock market than began early last summer when the NYSE Advance/Decline Line topped out ending?

Some commentators are looking for a resumption of the advance that began in October 2002. A number of market indicators support this view:

(1) The New Low List has been declining as the popular averages move lower, a positive divergence;
(2) The DJ Transportation Index (TRAN), which I utilize as a proxy for cyclical issues, remains well above its January 22, 2008, low setting up a positive divergence with the popular indices;
(3) the NYSE Short Interest Ratio, the number of days average volume represented by the short positions outstanding, rose to 10.0 in mid-February from 9.4 a month earlier, a high level;
(4)Put/Call Ratios Are Rising – The CBOE Put/Call Ratio has been rising for over a week with put buying being about twice its level as in mid-October when the DJIA made its high;
(5) The Financial sector has been under intense selling pressure in what I regard as the final chapter of this drama that began in early 2007. As anticipated in several reports, the “risk premium in the banks” has been significantly reduced with the KBW Bank Index (BKX) of the nation’s 24 largest banks down 21% from its February 1, 2008, close;
(6) My proprietary “Last Hour Indicator” is near a new high with the S&P 500 very close to its low, a bullish divergence and a buy signal;
(7) My proprietary “Diaper Indicator” that measures the difference between advancing and declining volume and its rate of change produced a buy signal at the close last night; and
(8) Leadership remains intact – the charts of the S&P Supercomposite Industrials Index (S15INDU) and the Philadelphia Oil Service Index (OSX) and other energy proxies remain intact despite a ten month correction.
Or, the market could go down. (I flipped a coin to yield that analysis).

I think what I really need to know is this: What's the deal with Kansas State - USC?

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