Monday, March 20, 2006


Talk about a Wall of Worry! The mid-East is falling apart with Iran's nukes, Iraq's uncivil war, Israel now has Avian Flu, Bush and his policies have the lowest ratings yet, we're ending the Green semi-annual market cycle of plus returns, and even the planets are aligning against us - similar to 1929 and the 1989 Real Estate bust.
After 15 rate hikes and an extended bull rally, the Economy seems healthy despite the enormous deficits we pay interest on (mostly to ourselves), at least for now.Yet the triple-witching expiry ends the week with 5-year record highs. NYSE Margin debt, at $232B, is almost back to the 2000 record level of $275, mutual fund cash (per Ned Davis) is below 4% (a different number than IBD posts).
The Indicators still seem in a rut except for a couple outliers: The Advance/Decline was very positive (net 1941), as were the New Highs/New Lows, with REITs displacing Medical stocks from first place.
Inv.Intell. Bears moved up to 33%, as did the AAII. However, Market Vane's survey Bulls climbed to 70% and the Barrons Panic/Euphoria Master Indicator pulled up to the -.30 line, out of the Panic area, for only the 3rd time in many months.
Still no consensus of either extreme to act upon, just plenty of onemy out there. The number of millionaires in the U.S. is up 50% in the past 2 years, and the oil producers aren't exactly hurting either. Wyckoff might call this an UpThrust After Distribution.

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