THE ELEPHANT IN THE (CONVENTION) ROOM:

Monday, August 30, 2004

THE ELEPHANT IN THE (CONVENTION) ROOM:

Even though the market seems brain dead the last few days of August, several surprising statistics are appearing: my cumulative NYSE Adv./Dec. total is at an all time high, although all markets have been in a Downtrend (lower highs and lows) since Jan. and Mar. And although there are some REITS, Closed-End Funds, etc. in the mix, most of these are on the AMEX, not NYSE. Leading New Highs are Banks and Finance stocks -REITs and CEFs, also a Bullish sign.
Also Bullish is the newsletter survey ratio, with the Investor's Intelligence Bulls down to 39.6 and the Bears up to 30.2 (Barron's Alan Abelson points out that these numbers were 38.9 in Oct.'02 and 34.8 in April '03, respectively). The VIX is at 14.7, a near term low, with its historic low at 8.8. Finally, the Rydex ratio is at a Bullish near term low of 17, a very accurate indicator recently.
The real fly in the ointment is that the esteemed Ned Davis has seen his indicators point to an imminent Bear market - hopefully we'll have a summer rally first!

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