"Cash is king" right now

[Gizmo]

Sunday, May 08, 2005 | Permalink | Comments (1) | TrackBack (0)

"Cash is king" right now
in Trading
The Stock Trader's Almanac:


MARKET TALK: A Little Something For The Bears...

The Stock Trader's Almanac has issued an alert - decidedly bearish. "Our outlook calls for the market to return to the area of last October's lows (Dow at 9750, S&P 500 at 1095 and the Nasdaq Composite at 1903) before moving higher," says Jeffrey Hirsch, editor of the tome that tracks trends in the stock market. The Nasdaq Composite has already closed at 1904 this year, making it likely that it will fall below 1900 before this correction is over - perhaps back to the August 2004 low of 1750, Hirsch says. "The potential also exists for the Dow, S&P 500 and the rest of the market to break those October 2004 lows." In other words, according to Hirsch: "Cash is king" right now.

http://bigpicture.typepad.com/
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Gizmo

[Gizmo]

Here's a link to the most recent Specialist and member short interest I can find. This chart is normally updated weekly but looks to be a bit behind. http://tal.marketgauge.com/dvMGPro/charts/Charts.asp?chart=MEMSRT

Sure...the markets oversold. If the bear market has resumed oversold won't matter it will just keep going down.

Actually my personal map calls for a low in the traditional Fall time period, (Sept./Oct.), followed by the traditional rally into Dec./Jan. and a low in Oct. 2006 that retests the bear market low of 775 Spx. Time will tell and in the meantime stops will keep bulls and bears alike out of serious trouble.
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Gizmo

[HenryTo]

Thanks Gizmo, for your post. It is always good to keep me on my toes. The link that you provided is very interesting, but what's more interesting is that I actually found this post in the same link:

Again, the link is: http://bigpicture.typepad.com/

"And now we have yet another 'there are too many bears' sentiment indicator to add to the mix. This time it's the NYSE Members Short Ratio. This ratio has come down to 46%. There is nothing magical about 46% per se, but we rarely get down to this mid-40s range. In August of last year (at the lows) we reached 47%. Prior to that we had a reading of 44% in December 2003 that preceded a run 200 points higher on the Nasdaq over the next two months. And the S&P went up over 10% in the same time frame. The other two times we've seen this ratio down in the mid-40s range was March 2003 and September 2002."

A good contrary sentiment indicator.

Source:
The Market's Rally Window Is Narrowing (subs)
Helene Meisler
RealMoney.com, 5/2/2005 9:06 AM EDT
http://www.thestreet.com/p/_rms/rmoney/chartistrm/10221036.html