This week I am going to show you a wide range of my favorite indicators and as you will see I often don't show them all because often they say the same thing.
Lets start with the Nasdaq summation index. As I say this thing is twitchy, and not always right, but when it backs off it is a good time to get nervous. Well when this started to fall at the start of August, it gave the perfect heads up, it was the first of my signals to go off. Like a lot of my signals, you can see we are near where it bounced twice before BUT it has not turned around so that means nothing.
OK lets look at the most important indicator of all, I have not put this up for a while because it has not had much to say, but here is the famous YP primary sell indicator, dropping for weeks but now almost about to breach the negative momentum line. This indicator is powered by the Put/|Call ratio, as the real smart money is in the options market, as they favor buing puts (insurance) over calls (going long) it is a great time to pull in your horns.
But I think anyone can see this is no time to go hog wild.
The NYSE above 50 day MA graph is continuing to advise caution as it has since Aug 1. Clearly we have some potential room to go on the downside.
This graph above is called the VIX trick, it seldom says much but when it is RED and growing, we are either at the end of a pull back or the start of a huge sell off. The VIX is the so called market fear indicator and clearly people are getting concerned as the VIX hits highs not seen since June.
This brings us to the famous Green Arrows, clearly still not in an up turn.
So those are my favorite broad market indicators. But I also want to show you some secondary indicators that have me concerned.
First off the USA is the most consumer oriented economy in the world. US consumers are why the factories buzz in the third world and they create much of the first world trade. When the U.S.consumer is exhausted the retailers show it first. Here is XRT the ETF that tracks retailers.
Well this retail weakness better brighten up soon with strong Christmas season predictions or there is not much hope for any ho ho in the market.
Particularly concerning is that spoiled teens are not running out and running up daddy's gold card. Here is hip teen favorite American Eagle -- in a nose dive.
Even Chinese demand for bobbles is softening as Tiffany's is selling a few less 1/4 million dollar diamond rings.
The world of materials and commodities got a little boost last week, it faded this week. Below is Dr. Copper clearly not happy about industrial production.
Gold also is selling off, if you are a Gold bug I will not argue this might be an oversold retrace but I am a bear on gold and so I also could argue this is just a dead cat bounce on the way to $800 gold. Too soon to tell and no time to bet either direction.
One final thing to consider in this mix is that according to Daniel Gamba, head of BlackRock's iShares America, ETF funds are seeing a serious out flow of funds this month. So far this has been a banner year for ETF funds, but the main reasons for ETF holders being bearish on the market is continued interest rate volatility, that puts a pin in the bubble notion that valuations continue to be cheap.
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