Still Looks Like Some More Upside

The most incredible topping pattern of all time continues. The Nasdaq 100 reached the highest all-time multiple of positive/negative on Tuesday of this past week, with 256.88 on the positive side versus 44.24 on the negative side, yielding a record multiple of 5.81.

The numbers for the Nasdaq 100 for 2011, except for January 3 which I didn't get:

5.15, 5.14, 5.53, 5.48, 5.43, 5.81, 5.60, 3.95, 3.86

You'd think that was positive enough to reach a major top, but I still think there is probably more to go on the upside. That's because I still think the S&P 500 numbers are still too negative for a major top. I could easily be wrong. That major top could occur any day. But here are the
S&P 500 numbers for the past week:

Monday: 149.58/123.51

Tuesday: 86.30/120.79

Wednesday: 87.12/102.22

Thursday: 159.46/91.41

Friday: 86.75/102.36

So you can see the $200 million man jumping in and out on the positive side. And there was a definite solid move down in the negative number on Wednesday. But that negative number was still above 100 on Friday, still definitely larger than the positive number without the $200 million man. So I still think this negative number has to drop and stay down before we reach the final high. But again, I stress, I'm speculating that we might have more upside to go. What I'm sure about is a major, major high is coming, maybe right now, maybe in a couple weeks, maybe even in a couple months.

I mentioned in my last post that perhaps we need to reach certain positive volume numbers in the Nasdaq 100 before the final high. I'll add another possibility, and that is that we need to go to a new all-time high in the Dow, whatever that is. That obviously would mean a shocking surge up here, but that is the one thing that would finally break the back of the long-termers on the down side. I'm just throwing this out as a thought that occurred to me. I think the chances are very, very low, simply because of how high the Nasdaq 100 multiple is right now, I can't imagine shooting up another couple thousand points. But the market does like to do what you can't imagine sometimes, that's for sure.

The way we're reaching such amazing multiples in the Nasdaq 100 sure seems to point to the mother of all economic collapses coming right up, not just your garden-variety big move down. But I'm just speculating again.

Rob