Is The Individual Participating?

By: Stock Barometer | Tue, Jun 3, 2014
Print Email

6/3/2014 5:55:14 AM

Good morning Traders,

As we peruse the market activity here, we're at a critical point where the fuel that moves the market higher has run out, but there's a reserve tank, the liquidity from bonds. If bonds can turn lower here, stocks can enter a liquidity advance phase. If not, then the market is vulnerable. Here are two ways to look at that:

SPY versus Bonds relative Strength Chart

Looking out over a longer time frame:

SPY versus Bonds relative Strength Inverse Scale Chart

We're at the same point where we were in 06/07. It's taken a while to develop, and we could be a month away from the top actually forming, but the potential exists...

On CNBC this morning, they spoke of the lack of individual involvement in the market:

Equity to Index Option Volume Ratio Chart

Also one of our favorite indicators is also approaching an extreme:

Equity Put/Call Ratio Chart

And finally, the signal for the qqq trader is getting bearish again:

Daily Stock Barometer Chart

Generally these top and bottom conditions can exist, but the market needs a catalyst or lack thereof to move. So at this point I'd say the market is vulnerable to a correction, but in need of a catalyst to push it over the edge and initiate sell programs.

Everything could change on a dime, which will require us to act in our trading services. So stay tuned.




Stock Barometer

Author: Stock Barometer

Stock Barometer is completely independent. We have never and will not ever accept compensation from any company whose stock we recommend.

Our goal is to make you money. We offer you the tools and information to do so and leave it to you, the individual investor, to apply them in the best way possible.

Important Disclosure: Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.

Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.

In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.

For a complete understanding of the risks associated with trading, see our Risk Disclosure.

Copyright © 2004-2017 Investment Research Group, Inc.
d/b/a All Rights Reserved.

All Images, XHTML Renderings, and Source Code Copyright ©