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So Much Liquidity


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#1 arbman

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Posted 18 February 2007 - 07:19 PM

So much that the market makes new highs with the utilities and materials leading... :lol:

Posted Image


The industrial type stocks moved up a bit this week and you get the new highs right away, I think we should see a bounce in the energy next, I am not convinced with the downtrend with the recent sell off in the drillers much...

I wonder what the insiders are doing with all this dumb liquidity trying to buy anything, well they are dumping since they know their companies are not worth this much and abusing the liquidity thrown at them as much undeservedly as they can, because the fools and their money will be soon parted...

http://www.secform4.com/insider/filingchart.php?width=580&height=400&daily=true&avgweek=true&avgmonth=true&.png


In the mean time, the liquidity continues to dry at a fast pace in the not too far future while the prices are being pushed higher to the edge of the cliff...

Posted Image


Good luck,
- kisa

#2 TradeMark

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Posted 19 February 2007 - 01:07 AM

Kisa, What makes you conclude: "In the mean time, the liquidity continues to dry at a fast pace in the not too far future." ?? Does it have something to do with the last chart shown? What is the last chart a chart of? Thanks TM

#3 arbman

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Posted 19 February 2007 - 05:06 AM

It is the commercial bank credits, this is not a perfect indicator for timing, it tells about the liquidity out there though in terms of its compounding effect. It was part of the discontinued M3. There is a divergent top in this indicator, probably because of the problems in the mortgage sector... So, I guess I expect a 3-4 months of wide trading range and then a 10-12% correction in summer. My bias is bearish because the market barely rose last year when the credit growth peaked from a stronger level and the RUT was clearly leading, but I will follow the market. The seasonally unadjusted figures peaked later (not on this chart), so probably still sometime to go for a large correction... To be clear, I don't think a big top (of several months) has the highest odds until May or so, but certainly I do not expect a big rise either, however I do expect an increase in the volatility, also evident in the VIX. So, get ready for a long roller coaster... - kisa

#4 TradeMark

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Posted 19 February 2007 - 01:35 PM

Kisa,

Thanks for explanation. You might want to take a look at this chart:



http://www.nowandfut.../key_stats.html



These guys have put M3 back together again (estimate). It shows the same pattern, but is still really up there in terms of growth.



Best

TM

#5 SemiBizz

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Posted 19 February 2007 - 01:43 PM

My bias is bearish because the market barely rose last year when the credit growth peaked from a stronger level and the RUT was clearly leading, but I will follow the market




http://bigcharts.mar...&mocktick=1.gif



And I'm bearish because all that volume generated by the liqudity resulted in a flattening of the uptrend. Then we had strong volume selloff, followed by light volume steeper uptrend... and now stronger volume is coming in and we're moving sideways.
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