I will once again say that we are at or within a few days of some sort of important top. We are probably at point 15, although the numbers today do make me wonder if this is something far more important.
Again, to summarize, I've watched these positive/negative numbers for over a decade now. The highest positive divided by negative number at the time I had ever seen was something like 2.6 that occurred right at the all-time high back in 2007, which was followed, as you know, by a tremendous drop. After that drop, those numbers started coming back up again, going past 2.6, past 3.0, past 4.0, past 5.0, past 6.0, all the way up to 7.25 times the positive money versus the negative money that we saw back in early May of 2011. Then the markets fell some, and so did the positive/negative numbers. Now they have climbed back and then some. We had an all-time high of 8.18 times the positive money versus the negative money on March 14, a few weeks ago, then 8.57 on March 21, 8.68 on March 27, 9.18 on March 29 (are you kidding me??), 9.26 yesterday, April 2. And now, today, we reached a new all-time record of 9.46. Wow. I always figured, if a giant market crash was going to happen, we would first reach numbers something like this.
Even more powerful to me though is what happened today with what I'll call the hard number of positive money, the actual number of millions of dollars on the positive side. I remember what happened back at the high in 2007 very well with this hard number. Although the multiple of positive to negative was "only" 2.67, the hard positive number, after being in the 200's for quite a while, suddenly jumped up into the 300's, where it stayed for about a week. Then there was one final crazy day, right at the final high, where that number jumped all the way up to 500. And that was it, the final high.
Those Nasdaq 100 numbers for last week and so far this week:
3/26: 272.12
3/27: 273.56
3/28: 282.67
3/29: 282.25
3/30: 278.52
4/2: 278.55
today, 4/3: 316.70
I never thought I'd see this number up in the 300's again, but here we are. So are we at point 15, ready to start some down, up, down, up, down, then shooting up to the final head and shoulders top? Or are we already at the final high, ready to roll on the down side? Or, one other possibility, a very possible possibility, is that parts of the market have already just completed the first move down and back up, what would be 15 down to 16 and back up to point 17, and the Nasdaq is bucking that move and continuing up.
I would bet that we are just now arriving at point 15, ready to start a steep drop. The $200 million man has been jumping in on the positive side time and time again, only to have the market drop a little when he does, and so he gets out and of course then the market resumes climbing upward, and I think he's tired of being made a fool and is ready to just stay in. He did jump in on the positive side today. Good chance he'll stay there a while, even if we start dropping, which will lead to more dropping. Then the fear will finally set in, people will see their wonderful profits of this year dwindling away, and they'll jump out to save what they have left of this year, and we'll reach point 16 and start up again.
The above paragraph is speculation. We'll see what happens. But the number 316.70 is not speculation. That is shocking to see. If we are indeed only at point 15, imagine what that number might get up to by the time we reach the final high which the timing of the pattern suggests will be early to mid-July. But it does make perfect sense. At the final high before a drop into a depression, the market has to have everyone on board. That's how it works. That's what my blog is all about. People talk a lot about the deficit leading to economic calamity, but they obviously aren't too worried about it. Greed is blinding.
Rob
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