Even Lemmings Have Leaders ~ The Risk Averse Alert

Monday, May 03, 2010

Even Lemmings Have Leaders

Today's positive trade, start to finish, offers an opportunity to put an exclamation point on that negative take toward new 52-week highs registering on the NYSE put forward here over the past couple weeks...


At present the NYSE Composite index trades a minuscule 2% below its best intra-day print since March '09 bottom (which, itself, is well over 70% above that bottom).


Then, at the conclusion of today's trade, there were more than three NYSE-listed issues advancing for every issue that declined on the day. Fully 74% of NYSE issues traded higher today!


Yet the number of issues hitting new 52-week highs not only fell, but registered only about one-third their number of a week ago?

If a growing bullish interest were underlying the bid for U.S. equities, then should not those issues leading the way higher maintain a relatively constant presence, particularly on a day like today?

Likewise, degradation in the NYSE high-low differential, April versus late-March — this while the NYSE Composite traded at a higher level — reveals leadership is more rapidly fading than sustaining its charge. One wonders if this is something like lemmings heading for cliff's edge recognizing their approaching peril...

Fast Money
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Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

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