If the recent indicators are not climactic, I don't know what are - the Bullish per cent, based on number of stocks on Buy signals, reached a record +2!; the McClellan Summation hit -1500 while its concomitant Oscillator dropped to -100 at one point; finally, the VIX hit an intraday record high of 85.
There are probably several reasons for stocks circling the drain, foremost among them are the Sept. redemptions from the 8,000 hedge funds, the seasonal Oct. lows, which normally end in rallies, especially with a non-incumbent election on the horizon, with the Nov.-Jan. optimal market window to follow. On top of these is the mutual fund selling, larger than last January's huge market selloff of $13B for the week. This is also the time of year that these mutual funds do their tax loss selling.
Both the crashes of 1834 and 1929 saw "Echo" busts within a decade (1973's and 1987's were a milder echo as the economy wasn't as much in jeopardy) , so the current downturn was not exactly a Black Swan.
Although Barron's reports many insiders actually buying their companys' stock, others, such as in housing, etc. are getting margin calls to liquidate. Stocks such as GM, etc. that fall below $5 are no longer marginable and must be paid in full, like an option.
To wrap up, although many indicators were climactic, they can remain in the zone, much like oversold oscillators, until other technical indicators forecast a move up or down out of the new accumulation or re-distribution trading range.
Here are the numbers for the past two weeks, plus the 5-year highs and lows:
MktSentiment. 10/17/2008 Prev. Week.....5Yr.HI......LOW
DJIA ………. 8852…………8451………..14093............7286
Nasdaq………. 1711…………1649…………2810.............1114
S&P500…….. 940…………..899………….1561………..776
CBOE Eq. put/call …83…………..96nh……..…..96-10/08….....46-1/03
VIX ………. 70………….70nh…….…….70..-10/08bull….10.0-7/05 bear
McClellan Osc………25……….-100……………..91 -5 /04 bear...(-100)-10/08bull
McClelSum……….…-1500nl……-1200……..…....1568-6/03.......-1500
Newsletter Surveys:
Inv.Intel -Bull:…..…22.4nl………25.3 ……….…63 (12/04bear)......22.4-10/08bull
Bear:………… 52.9………..53nh…..………… 53.10/08.......16-6/03
AAII-Bull/Bear ……40.9/39.8…..31.5/60.8..……..n/a n/a
Public/NYSE Spec.-…14.1………15… …….……18.5…………14.1
Bullish%- ………18…………2nl………….…88 -2/04bear.....2-10/08bull
*Insider corporate sellers.7:1……n/a…. ………..97………….4
Mutual Fund Inflows (14.2B)……(9.4B)
ETF InflowsL……….4.3B………3.8B……
Money Market Inflows: .58B…….47B… ………144B
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