Wednesday, June 10, 2009

Speculative Bubble in the Making and More

* From the excellent Market Tells service comes this interesting perspective that fit with an earlier TraderFeed post:

"Speculative-fueled rallies invariably end badly...but the kind of NASDAQ/NYSE Volume Ratio that was registered Tuesday suggests we could be in the early stages of a speculative frenzy. If true, we should see two things… the Nasdaq/NYSE Volume Ratio should remain generally above 1.50 on a daily basis, and the NDX/SPX ratio should continue to trend higher as high-beta stocks continue to outperform blue chips. The latter was a particularly good indication when it began making lower lows for the first time in months at the end of March 2000, signaling a pop in the speculative bubble."

My take is that, if there's any such bubble, we might be able to track it quite well with the relative performance of emerging market stocks. Note also the upward trend in commodity prices, particularly oil.

* Every morning I put out market indicators for the latest day of trading. Here's what I posted to Twitter this AM:

steenbab4:43 AM CT - Tues: 1131 20-day highs, 209 lows; Demand 55, Supply 28; Basket: 27 stks uptrend, 5 neutral, 8 dn; 80% SPX stks > 20 dma.

The trend status of the 40 stocks in my basket has been quite good at keeping the focus on market strength even as we've been chopping around in a range. These tweets are a nice, quick way to see if the market is showing short-term strength or weakness; subscription via RSS is free, or you can follow the latest five tweets on the blog page.

* Thanks to Andrew Horowitz for posting a podcast of our recent market conversation. Many excellent podcasts on his Disciplined Investor site.