Keep your eyes to yourself!
Our ol' pal Snoop Tone swung by the 'Ville for a little schnitzel and some observations. Once he picked his tongue up off the floor (Daisy was doing her aerobics in the back of the room), we chatted up the current state of the tape and its internal dynamic.
He started, "Despite the Elmer oops, the percentage of overbought vs. oversold readings does not suggest the corrective period is over. Typically, overbought readings need to be below 20% (preferably 10%) and oversold readings need to surge for indications that the corrective process is at an end. Of course, that's simply my opinion and offered with pure educational intent." Smart, Dogg...
Today's internal overbought/oversold readings:
OEX: OB=42%, OS=20%
NDX: OB=32%, OS=28%
" I would also point out that the overbought readings have been moving down (from above 70%) since the first week of January, Toddo" He said as his eyes fixated on the Dairy Diva, "and...uh, also, as I said earlier in the week, the Dow Jones Utilities, PHLX Bank Stock Index and NYSE Advance/Decline line typically peak at least 6 months BEFORE the rest of the market. All three made new highs on Monday--just something to chew on when you're done with that schnitzel." I thanked him for his input--as always--and turned my attention to the tape.
Keep your eyes on the F-Troop today. Freddie Mac (FRE:NYSE) is painting the tape regarding new regulations from the OFHEO (reserve requirements, preapprovals, weekly capital report). Just a heads up for those involved and the ongoing saga that is the Government Sponsored Entities. Anyone gotta light?
And finally, will somebody PLEASE tell the teletubbies that marginally green futures don't mean that investors are clearly piling back into the market? It's starting to piss off Boo.
Fare ye well in thy muck!
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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