1 reply to this topic

[arbman]

This is looking like trending to me, if you compare this chart to the mid 2004 or early 2005, you will see that this kind of aggressive rotation into the utilities generally led to more correction or trading range in the weeks/monhts ahead.

The new highs are certainly possible here similar to the energy led marginal highs in March 2005 or a last pop toward the second standard deviation of the 20dma and decline like the early 2004 analogy I posted.

But this wide range should persist at least until the summer, I do not believe this is the beginning of another IT advance higher. In fact, I am bearish given the bullish speculation turn around, yet the inability of the open interest to bounce meaningfully for the net calls despite the rally...

http://stockcharts.com/c-sc/sc?s=$IXT:$IXU&p=W&yr=3&mn=0&dy=0&i=p14479298365&r=6029&.png

- kisa

Edited by kisacik, 23 March 2007 - 03:15 PM.

[arbman]

A typical such rotation lasted about 4-5 months over the past 4-5 yrs, so far this is only month #3 and the worst is probably dead ahead after a possible EOQ mark up. I have some more disturbing stats for you though...

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

There could be a meaning to this, the relief squeeze we witnessed came after some of the insiders sold late in panic, or they really think this is their best exit chance.

IMHO, the evidence piles up, especially if you consider that the liquidity growth picture is still not so great and all of the existing liquidity is getting wasted on other than the growth issues such as the energy and resources...

- kisa