A Theory of Narrowing Breadth
Worth revisiting my theory of narrowing breadth, since breadth is getting very narrow indeed:
"Narrowing breadth is a mania concentrated in fewer and fewer speculative vehicles. It's created by momentum investors with stop loss rules who consolidate into their winning positions."The new NASDAQ high came from... Google. And - to a lesser extent - Facebook. Meanwhile, new highs minus new lows aren't confirming.
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5 comments:
Agree that it feels like the start of a drawdown. During the latest Greek negotiations, I assumed the crisis would blow over and any eventual correction would come from some other economic problem that people weren't watching. Maybe I was wrong and it will come from nothing more than weakening technicals.
Anecdotally there seems to be a lot of complacency and "why short anything?" sentiment.
money well spent re narrowing tops
http://www.lowryresearch.com/special_reports.cfm
May not be a good time to short after all:
https://twitter.com/ukarlewitz/status/625070979090399234
Have you read any of those Lowry Research pieces?
No, I'm not familiar with their work.
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