by ilene - April 13th, 2010 11:52 pm
Courtesy of Joshua M Brown, The Reformed Broker
Hypselotimophobia (from the Greek, is an anxiety or extreme fear or hatred of high prices)
If you are uncomfortable buying or trading stocks that are at new highs, this is not your tape.
There are only two categories of investors who are unfazed by the deluge of new 52 week highs – the nimble and the desperate.
The nimble are in a position to act quickly should things change. With every tick, they are tossing blades of grass into the wind to gauge direction in real-time. If you run a machine shop or have a waiting room full of patients, this is not feasible.
The desperate are most likely professional runners of money, those without the luxury of waiting for their pitch. They must get more stocks on the books to show that they "didn’t miss it" and they must do so regardless of the top-tick risk. An ill-timed buy today can quickly be described as an "intermediate-term" pick to the investment committee if need be, but a swollen cash position in a vortex of up stocks cannot be explained at all.
There’s a bumper crop of gaps and breakouts, hundreds of 52 week highs daily – so why isn’t everybody happy?
Most market participants are not incredibly nimble nor are they under career pressure to buy at any price. The drumbeat of daily new highs can be more frustrating than fun for them.
Unless you’re in the habit of buying new highs, the ascent of this market has been way less enjoyable over the last 6 weeks than the headlines would lead outsiders to believe.
If you are a a hypselotimophobe, there isn’t much for you to do at this juncture, so maybe you want to just chill out.
Tags: Equities, investors, new highs, Stock Market, trading
Posted in Phil's Favorites | No Comments »
by ilene - March 22nd, 2010 11:57 pm
Courtesy of Damien Hoffman at Wall St. Cheat Sheet
As if TheStreet.com didn’t already have enough troubles with the SEC investigating their accounting, another Street veteran Doug Kass joins the pile fools who have tried to make prophetic claims regarding the stock market. (Nouriel Roubini is still my favorite.)
On August 26, 2009, Kass authoritatively proclaimed, “Markets top during times of enthusiasm. I believe that the markets are now overshooting to the upside and that the U.S. stock market has likely peaked for the year.”
On September 30, 2009,
…
Tags: 7 months, banking crisis, benefit of the doubt, case in point, chutzpah, Citigroup, conviction, Doug Kass, fools, James Cramer, Lenny Dystra, men in black, mind eraser, new highs, rainy day, Real Money, Roubini, sixth sense, street veteran, swine flu, TheStreet.com, u s stock market
Posted in Phil's Favorites | No Comments »
by Chart School - October 13th, 2009 5:06 pm
Bill Luby’s cautions that new highs are relative, and the ones occurring now are being compared back to when the market was in free fall last October. – Ilene
Courtesy of Bill Luby at VIX and More
Market breadth is a great tool. It can be used to evaluate momentum and also as a contrarian indicator to help identify potential market reversals. Various breadth indicators range from simple advance-decline indicators like the McClellan Summation Index, to measures of new highs and new lows, and beyond.
As I have seen a fair amount of comments related to new 52 week highs and lows in recent weeks, I wanted to point out what I hope is obvious to everyone looking at these charts. First, in many respects that 52 week time frame is an arbitrary lookback period. One could easily use a lookback period of 3 months, 6 months, 2009 year-to-date, 2 years or whatever. As it happens, 52 weeks is the conventional lookback period that is baked into almost all of the new high and new low data.
I mention all this because from October 1, 2008 to October 10, 2008 the SPX was in a free fall and dropped from 1167 to 839. As a result, a large number of stocks are making 52 week highs right now only because the lookback period no longer captures the values prior to the free fall.
So…keep a close eye on market breadth, but be wary of an artificial jump in new highs that shows new highs surging since the beginning of October. For the most part, this is a function of an arbitrary lookback period. Said another way, if you are going to be a student of technical analysis, but sure to study not just the recent data, but also the data that is scrolling off of the radar.
[graphic: StockCharts]
Tags: market in free fall, new highs, October
Posted in Chart School | No Comments »
by Chart School - July 16th, 2009 8:55 pm
Courtesy of Corey at Afraid to Trade
I almost let this bit of news slip me by! The NASDAQ Index crested above its June high today, creating a fresh new high for 2009. As strength in the Technology Index can foreshadow strength in the broader market, this is definitely worth a second look.
Without going into too much detail, I mainly wanted to highlight the pop to new highs that took place today.
There was resistance about the 1,850 level but buyers seemed to have no trouble at this level… so far.
Volume is not running at a significantly high level (it’s actually beneath the 50-day average) so buyers would like to see higher volume to confirm the move better.
As long as we’re at new highs, whatever your bias is, buyers are in control.
Corey Rosenbloom, CMT
Tags: NASDAQ Index, new highs
Posted in Chart School | No Comments »
German
Spanish
French
Italian
Portuguese
Japanese
Korean
Russian
Chinese
Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.