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Same Question, Three Different Answers


Looking at copper, the yen, and the S&P 500.

At my house we play a game during family dinners. We sit around a 100 year-old table I found for next to nothing, made by hand from Asia. Not really any significance with the history, I simply learned I would never find a tougher wood and with 3 kids under 7 we pretty much work that thing over like a Grand Canyon mule. We pass around a traditional song everybody knows, but then has to add their own twist with their own interpretation and words. Not a lot different than trading the markets really.

Click to enlarge.

The same song sheets, by way of S&P lows on November 21 and then again this week shown above, are being handed out to the technical and fundamental choirs this weekend. Rather than add another call for great set-up for a run to 800, or the obvious precursor to a whoosh to 600, I'd rather share a few things that are different this time. If you have been told that is the most dangerous three words in trading, I'd suggest it therefore is a deliciously un-crowded notion. Because very often it is very different. If not, this would be called winning, not trading.

Click to enlarge.

The number of individual stocks in the entire market making new lows, shown above, compared to the overall market revisiting its own low is dramatically different this time around.

I do not make a market call with this data. I do not even trade the index. I guess that's the whole point in sharing this. Going underneath the market's hood and looking at different parts of the engine has yielded substantially different results. The implications of the chart above, in my view, are significant. Homework and individual selections are making a major difference which for much of last year was not happening.

The Marker

Something else is different this time. One of the better clues, and perhaps a bit overlooked by the investing public was "Marker" as I like to call it. When you take out a marker at a casino to borrow chips it has to be paid back eventually.
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No positions in stocks mentioned.
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