Monday, May 4, 2009
The Healing Continues
The credit market index that I have created just had its 8th straight week of positive results (positive = getting incrementally better and negative incrementally worse). That is against a backdrop in the previous 12 weeks where the index was only positive 2/12 weeks. Additionally the weighted average score this week was a .61, the highest result since I began tracking this back in the beginning of December (0 = no change, 1 = incrementally better and 3 = incrementally much better). The average weekly total in the past 20 weeks has been -.06. Net/net the green shoots that Obama loves to talk about continue to show up in my credit market index. This supports not going back to the previous lows we hit, but I still think we are overbought. However momentum works both ways and until we get items that knock this index as well as broader market datapoins the market will remain robust. 2010 outlooks will be really thought about over the next quarter and that could be one of the bigger catalysts to push sentiment back down, but we’ll see.
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Thst is awesome. I am totally going to use this to help my IT trades. For instance normally a pullback after a run up of this magnitude will correct 50-62.8% an even 100% for a double bottom is not out of the question. However sometimes they only correct 38.2%. Since the bullishness is high and your report indicate better days ahead I will look for a shallower retrace than I normally would. That is I will short the shit out of the market when topping sings are eveident and then I will cover earlier and wait for a bottom to get back in long.
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