Are We There Yet?

What, we're still going up?? Gee, everything sounds so wonderful. I guess I must be totally wrong about everything. Actually, I remain totally confident that I am totally correct, even though this balloon is taking longer to explode than I figured. And the fact that it's going on so long I think increases the odds that the next move down will be a super-large move down.

The all-important Nasdaq 100 number has climbed to a new high number, marching past the old high of 5.03 back on November 5. Again, this is taking the volume number of the money in the fund that tracks the movement of the Nasdaq 100 times two on the positive side and dividing it by the money that's in the inverse Nasdaq 100 fund. So it's money on the positive side versus money on the negative side. What I have found is that the stock market moves up on doubt, usually, except when it's in topping mode as it is now. This number was at 2.69 when we had the market high in 2007. It climbed up to even high numbers at the two other important highs we had this year, up around 4.10 both times. And now it's gone completely bonkers on this third time up.

The numbers for the past two weeks for the Nasdaq 100 (I missed the volume number on 12/10):

3.96, 4.55, 4.49, 4.65, ?, 5.01, 5.55***, 5.56***, 3.97, 4.65

Where the asterisks denote a new all-time high number, ever, that I've been watching these numbers, which goes back to the early 2000s.

One thing that makes me think we still have a little more to go is the S&P 500 numbers, which, when you take away the short-term movements of the $200 million man, remain slightly negative. And I still think part of the money that has remain parked on the negative side has been a longer-term move by the $200 million man, where I think he parked maybe half his money on the negative side a couple months ago and now he's finally starting to throw in the towel.

The positive/negative numbers for the S&P 500 for the past two weeks:

Monday, 12/6: 81.74/208.27 ($200 MM obviously on the negative side)

Tuesday, 12/7: 79.87/141.32 (and he gets out of that negative position)

Wednesday, 12/8: 79.13/146.11

Thursday, 12/9: 78.49/121.60 (someone is getting out of their negative position a little, probably the $200MM)

Friday, 12/10: (Forgot to get volume data!)

Monday, 12/13: 82.87/178.89 (he jumps back in on the negative side, but we keep going up)

Tuesday, 12/14: 141.21/117.10 (now he jumps to the positive side, and he actually wins a little here as we continue up ... he only wins when we're in topping mode)

Wednesday, 12/15: 160.52/114.09 (still more positive, and we do finally have a down day)

Thursday, 12/16: 100.30/114.11 (now he's totally out with his short-term money, but I still suspect that's him keeping the negative money larger than the positive money, since the entire rest of the market, everything I watch, is extremely positive, although he is slowly but surely throwing in the towel)

Friday, 12/17: 100.97/126.30 (more negative)

So these S&P 500 numbers make me think there might be some more "crashing up" before we reach that final high. Or maybe not. We could certainly be at that high right now. As I say, I think the market has to extinguish this guy on the negative side before we get the final high.

We could get something on Monday that would probably knock this guy out of the negative position once and for all. I don't talk about it much, but I do also watch the movement of the biotech ... I'm forgetting the word, where they take all the biotech stocks and track the movement of that number. Anyway, biotech seems to frequently presage what's going to happen in the rest of the market by a day or two. Frequently, certainly not always. And on Friday, biotech was up over 7% in a single day. So don't be surprised if the market as a whole has a gargantuan up day on Monday, 12/20. Or the message could be that biotech just had to get to a new high for the year, which it did with that giant up day, and that's it, end of up story.

I still believe you should be totally out of the stock market. And I still believe I can tell you when to get back in. It will be when that Nasdaq 100 number finally goes negative, and then some.

Rob