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Some Warning Sign, but Don’t Panic March 3, 2012

Posted by Tom in Thoughts.

Another short posting, I’ve been spending a lot of time on the computer since I’ve been back from vacation.  But . . please read the March Newsletter under the Newsletter tab (above).  In it you’ll note a number of concerns about the strength of this market (“risk off” via the Russell Small Cap Index and the weakness in the Advance / Decline data).  Also in the newsletter you’ll see the latest pie charts on the Accumulation & Distribution of shares in the S&P 1500 (broader index) as well as their Price Strength.  This data has backed off recently from being “very Green” in color coding to more normal distributions (a “healthier sign”?).

So one quick posting of a chart; the S&P 500.  Of note here is the divergence between the Price chart (lower) and its relative momentum (the histogram above it).  Certainly prices slowing down their advance is not a sure sign for lower prices, but it does indicate a Pause and perhaps a Yellow Flag of Caution.  I’ve got a feeling that we won’t have to wait much longer to see IF this plays out, but I don’t think any correction will be significant with all of the money liquidity in the world today.  This will likely be a buying opportunity, especially for the “Big Guys” to re-load.  (click on chart to enlarge it)

                          chart courtesy of MetaStock / Equis; used with permission

Have a Good Week and keep you eyes open in here.  … Tom  …


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