Floating Along

For now, the market just keeps floating along. It is entirely possible that we had our final high last week Tuesday in most of the market, one day before the all-time high positive multiple in the Nasdaq 100 of 6.45. That's six and a half times as much money on the positive side as on the negative side. The Dow has continued to higher highs. But for much of the market, we had a high on the 18th and then a pretty good drop for a few days, and now we've come back a little.

My best GUESS, just for fun, is that we have not seen the final high. I still think the S&P 500 numbers have to get less negative. The positive/negative numbers on the S&P 500 for last week and so far this week:

Tuesday, 1/18: 85.72/105.84

Wednesday, 1/19: 157.77/93.91

Thursday, 1/20: 160.28/97.71

Friday, 1/21: 97.08/98.06

Monday, 1/24: 118.72/97.54

Tuesday, 1/25: 175.65/94.64

So you can see the $200 million man jumping in and out a few times on the positive side. He was in again today (Tuesday) and we still managed to break even basically after being down most of the day. Before we got into topping mode a few months ago, a move to the positive side by the $200 million man like this would have yielded a strong down day, or at least a mild down day. Not in topping mode. You can see the negative numbers staying pretty steady, mostly in the nineties. But I still strongly suspect that negative number needs to get smaller and stay smaller before the final top.

The Nasdaq 100 multiple number for the past week and so far this week:

5.22, 6.45***, 5.91, 5.56, 5.06, 5.58

So it went down a little bit during the three down days for the Nasdaq 100, but still outrageously high, and now it's coming back. Again, that could have been it.

Further thoughts on the EndofAmerica36 web story:

Weird how this guy mentions things I've been talking about, such as riots on the streets, federal troops being used to quell riots, banks closing left and right, credit cards not working. But we come at it in a slightly different way. It's the old chicken before the egg thing again.

His take seems to be that horrible times are coming because of the debt we have built up, which is so high we can't even keep up with the interest payments anymore. And I guess any stock market crash would be a result of these financial problems.

My take is that the stock market rules. The stock market does its thing, which is based on human behavior patterns, not on financials, and the economic world follows. Things seem to be going fine right now in the financial world as the stock market keeps going up from its lows last summer, right? Well, we have all that debt right now. Why no problems now? He was saying it's because the dollar is still the world's currency. I'm saying as soon as the market starts down, we will have plenty of economic problems, especially since so many governmental entities and so many people are heavily invested in the stock market.

So I'm very curious to see if that was the high last week in most of the market, except for the Dow, or whether there is more upside, even after that astounding reading of 6.45 last week Tuesday in the Nasdaq 100.

As far as the rioting in the streets and stuff, I do think that will come, but I'm not talking mass insurrection here. I'm saying many people will be very, very pissed off and will surely do some demonstrating about it, especially if they just lost all their money to a bank that closed and there's no federal insurance left to cover it. But we'll get through it. Just some very unpleasant times. Not the end of the world. And as Jerry Favors said, when we finally get to the bottom, it will be followed by probably the longest and strongest bull market of our lifetimes, lasting many, many years and probably decades. You can see why. When we reach bottom, it means that everybody has finally given up and gotten out, or nearly everybody. And they'll be saying they'll never get in the stock market again as long as they live. So of course that's when it will go up and up and up for years and years. Hang in there.

Rob