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One of my big red flags


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#1 eminimee

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Posted 25 January 2007 - 08:14 AM

http://stockcharts.com/c-sc/sc?s=$RUO:$RLV&p=W&yr=7&mn=8&dy=0&i=p13155850662&a=95951415&r=1751.png

#2 eminimee

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Posted 25 January 2007 - 08:32 AM

http://stockcharts.com/c-sc/sc?s=$RUO:$RLV&p=D&yr=4&mn=6&dy=0&i=p16412147650&a=92210315&r=5857.png

#3 arbman

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Posted 25 January 2007 - 08:43 AM

This is the same thing I pointed out about the RUT:SPX ratio, this last large cap rally is a typical flight to quality at the end of liquidity wave. The question is when will it end? The large cap tech index NDX should not continue higher, it is the large cap growth component (for the most part). We should then see the industrial and energy issues top last, this is actually the case, so it could be the top right here, or the NDX might propel one more time higher and delay the topping phase 4-5 wks more as the later issues complete the topping... Honestly, there is no reason why the market should not top here, but then I guess there is valid reasons to expect an end of January run up after all this consolidation one more time... - kisa

#4 arbman

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Posted 25 January 2007 - 08:54 AM

PS. btw there was one time in the early 90s where the divergence actually resolved to the upside without further downside correction. If the liquidity in the larger time frames is so much, there is a chance for that to happen, but it is like 1:12 or so chance if not less...

#5 Cirrus

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Posted 25 January 2007 - 10:18 AM

This is the same thing I pointed out about the RUT:SPX ratio, this last large cap rally is a typical flight to quality at the end of liquidity wave. The question is when will it end? The large cap tech index NDX should not continue higher, it is the large cap growth component (for the most part). We should then see the industrial and energy issues top last, this is actually the case, so it could be the top right here, or the NDX might propel one more time higher and delay the topping phase 4-5 wks more as the later issues complete the topping... Honestly, there is no reason why the market should not top here, but then I guess there is valid reasons to expect an end of January run up after all this consolidation one more time...

- kisa



kisa...

We are thinking along the same lines. The Rut2k/SPX is a ratio chart I keep a close eye on. It has deteriorated suggesting that money is moving away from higher beta, less liquid issues into larger cap, lower beta issues. Nothing immediately wrong there suggesting a dramatic turn but it does give 'investors' a LT warning sign--along with some continued deterioration in the NH/NL levels of a few important indexes. Internals are really no longer keeping up with price--for now.

I have chosen to play along in the large caps but I have a quick trigger finger despite the record low levels on the VXO.

#6 jawndissedi

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Posted 25 January 2007 - 10:28 AM

TP:

Re appetite for risk, keep your eye on EEM:

Posted Image
Da nile is more than a river in Egypt.

#7 eminimee

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Posted 25 January 2007 - 11:10 AM

Jaw...I do actually but in a similar format to the inverted SOPIX chart I posted earlier......watch for a breakout after a possible double bottom....

...dont ask me why I like the inverted thing.....I suppose it just suits my eye better....like the 7th at Pebble Beach.. :)

http://stockcharts.com/c-sc/sc?s=$ONE:EEM&p=W&yr=5&mn=7&dy=0&i=p77263871742&a=95960328&r=9145.png



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