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Sunday, January 09, 2011 1:42:32 PM
Market Update:
Small Caps lead the Market! If the Russell 2000 is trading higher even as the S&P 500 Consolidates that is a good thing for bulls. Unfortunately when the Russell 2000 turns south even as the S&P 500 continues to advance that can be a sell signal. Divergences are most important if they last up to two weeks:
Chinese Stocks Leading the Market? China is currently pulling back even as the S&P 500 advances in early January 2011. Shanghai Stocks have been leading for a couple of years. Is this relationship still valid?
The Market versus the Price of Oil. Short term the market has been moving higher even as the price of oil advances. When oil sells off so too has the S&P 500. Oil down the first week of January 2011 even as the S&P 500 made a small advance:
Of course longer term extreme highs in the price of oil have always had a deleterious effect on the market but the price of oil can continue to rise even as the market falls for an extended period of time:
The U.S. Dollar largely has traded in an inverse fashion to the stock market. Recently the dollar has traded higher even though the market has been advancing. Maybe the relationship is no longer inversely related but if it is then the market may be due for some profit taking:
Finally the Put to Call Ratio has been trading pretty low on its 10 day sma. This usually correlates to a short term market top.
However looking longer term you can see that the $CPC can go much lower before a true long term market top is formed:
Small Caps lead the Market! If the Russell 2000 is trading higher even as the S&P 500 Consolidates that is a good thing for bulls. Unfortunately when the Russell 2000 turns south even as the S&P 500 continues to advance that can be a sell signal. Divergences are most important if they last up to two weeks:
Chinese Stocks Leading the Market? China is currently pulling back even as the S&P 500 advances in early January 2011. Shanghai Stocks have been leading for a couple of years. Is this relationship still valid?
The Market versus the Price of Oil. Short term the market has been moving higher even as the price of oil advances. When oil sells off so too has the S&P 500. Oil down the first week of January 2011 even as the S&P 500 made a small advance:
Of course longer term extreme highs in the price of oil have always had a deleterious effect on the market but the price of oil can continue to rise even as the market falls for an extended period of time:
The U.S. Dollar largely has traded in an inverse fashion to the stock market. Recently the dollar has traded higher even though the market has been advancing. Maybe the relationship is no longer inversely related but if it is then the market may be due for some profit taking:
Finally the Put to Call Ratio has been trading pretty low on its 10 day sma. This usually correlates to a short term market top.
However looking longer term you can see that the $CPC can go much lower before a true long term market top is formed:
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