Thursday, January 5, 2012

January Effect

Even though you can hardly tell that it's January in the Rockies, you can see the effect in the stock market where all the dogs are bouncing. Once again, this has totally suckered in retail.

The tell is the divergences that are popping up, e.g. the one between the Chinese and U.S. stock markets. There was a divergence between Chinese and U.S. markets that started in the spring of 2008 and resolved to the downside when the U.S. market collapsed in the fall of 2008.

The other notable divergences which I mentioned - the dollar rally, gold and silver collapses, etc. - are still in effect.

1 comment:

eahilf said...

Stock market still has an edgy, dangerous feel. But dips are still being bought -- intraday action is generally, albeit mildly, bullish. Play it that way until it isn't that way anymore.