Thursday, June 10, 2010

Unprecedented Turbulence

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Only a few days after I posted some secular chart porn related to the unprecedented down volume in the New York Stock Exchange relative to the up volume, along comes the second most lopsided up volume to down volume day in the last 18 years! Some may view this as a bottom, while I view it as a prelude to a potential crash. Here's an 18.5 year daily chart of the New York Stock Exchange ($NYA) with the ratio of the $NYA up volume ($NYUPV) to down volume ($NYDNV) shown above and below the plot of the $NYA:

The battle underneath the surface is important and shows the degree of uncertainty in the stock market. After a stratospheric rally in the context of a secular stock bear market, I hope people who care for my opinion on such a matter know where I stand. I find this to be essentially as bearish as a Hindenberg omen. I remain black bile bearish on stocks here and couldn't resist some mild nibbling on a few more puts today. If we go up significantly tomorrow, then I plan to take larger nibbles on puts.

Still waiting patiently to get back into Gold stocks for my trading account and still waiting patiently to buy more physical Gold for my savings account.

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