Monday, July 26, 2004


Most Indicators are still coming down off Bullish/Contrary readings, so the downtrend is probably not quite over for the market as a whole. Exceptions are the VIX, which soared over 15% last week to 16.5 -@ 20 was the previous recent level for tops which provoked serious rallies both in mid-March and mid-May. Also, the Public to NYSE Specialist ratio jumped to 2.52,a 17-year high which, if you do the math, was 1987, a year of Infamy. The Dow dividend is at a recent high of 3.09%, also Bullish for stocks; and the SPX stocks are sitting on a high $1/2T of CASH. Some feel that spending this money ( on cash dividends, etc.)would lower credit ratings of the companies, hurting stocks. The IBD cites the SPX p/e ratio (operating earnings) at 17.7, just like March of '03. The 70-year average is 15.6, just below current.
Also hurting our markets are the lessening of Money Supply and the slowdown in Asian (especially Japan) investment here in recent months, probably due to similar worries of the Election, terrorism and interest rate creep.

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