Technical Grounds for Rumor Mill Troubles ~ The Risk Averse Alert

Monday, September 17, 2012

Technical Grounds for Rumor Mill Troubles

Some time spent forming a top appears likely on deck. Working NYSE McClellan data from the bottom up, you should get the picture...

NYSE McClellan

5% and 10% Index peaks (bottom panel) suggest a pause of some sort is likely at hand. Most notably, the Summation Index is badly diverging from the NYSE Composite Index's surge to a new 2012 peak. This is rather unlike mid-January. So, a seemingly imminent pause could bring considerable pressure, as the stable of ponies driving the market higher is dwindling. This is much like January and February this year (see McClellan Oscillator), yet in that prior instance, despite the same diminishing participation in the market's rally, the Summation Index was confirming the move, whereas presently it is not. Then, an emboldening conviction was displayed with money lifting a proportionately increasing swath of NYSE-listed issues as the NYSE Composite eclipsed its October 2011 peak. Now, contrarily, there are but many relative laggards in the midst of March 2012 peak being exceeded.

So, how does Team Fraud work the rumor mill to sucker higher these relatively trailing issues now that the promise of hyperinflationary juice from now to eternity is fulfilled? There's no more hope which to play up! The Fed has seized the gears of the rumor mill with its commitment to open-ended QE. This leaves today's mass psychosis ignoring hyperinflation's devastating effect in position to be rudely awakened, then. Shutdown—ever more dislocation—is all Bernice can deliver. Has risk of meltdown done anything but become more acute throughout the trans-Atlantic these past several years? Then there you have it. That's all the Fed is good for now. The legacy of the Greenspan era soldiers on.

Fast Money
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