After all, there are other reasons for this miraculous market rise - moderate p/es (thanks in part to stock buybacks and global profits), the fact that the U.S. market is 33% lower than global markets - thanks to Int'l sales S&P Q1 profits tripling estimates.
Mike Santoli in Barron's states that in the 95 trading days this year, 26 have seen $5B or more in M&A buyouts - on those days, the market rise was double the average - bear in mind that both the NYSE and NASDAQ markets combined only trade @ 3B shares a day.
Still, things seem to be cooling off and warning clouds are starting to appear in the breadth, Volume, and the Sentiment areas:
Divergences are starting to occur - DJIA vs. OTC; price vs. money flow and adv./decl. (1716 vs 1792 on the NYSE despite the huge runup).
Jason Goepfert of sentimentrader.com says that since 1940 this is only the 5th time new highs on the Dow occurred with negative breadth (Advance/Declines, etc.) - and it's happened 4 times this month.
While sentiment stays sluggishly in mid-range, bullish figures are rising slightly; and the Intermediate term signals such as Bullish percent, at 78%, and Market Vane at 72 warn that at least a summer correction is due.
Here are the stats:
Mktsentiment. 5/18/2007......5Yr.HI........ LOW
DJIA ………. 13556...........13556...........7286
Nasdaq………. 2558............2572.............1114
S&P500…….. 1522............1522............776
CBOE Equity put/call .57............87-5/04........46-1/03
VIX ………. 12.7..........44 9/02........10.0-7/05
ISEE-call/put ……. 129...........299-12/04.......58 - 3/9/07
(>200/Bearish)
McClel Osc……………-18...............91-5/04.........(81)-5/04
McClelSum…………… 675..........1568-6/03.......(726)-5/04
Newsletter Surveys:
Inv.Intel -Bull:…..…. ..54.3...........62.9-12/04......35-6/06
Bear:………… 19.6 .........38.2-3/03.......16-6/03
AAII-Bull/Bear ………38.4/36.6....n/a n/a
MarketVane Bulls…. 72......... 74..............24
Birinyi Blogger
Bull/Bear Poll …………29.4/35.2
Bullish%- ……….…78...............88 -2/04...... 46-8/04
SentimentTrader
Short/longtermBL/BR. N(neutral)/N
*Insider corporate sellers 17:1
Sectors: Most Buyers: Tech,Finance
Most Sellers: Tech, Finance
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