The fourth installment of this ‘Stalking the Bear’ theme brings us face to face with the devastation created by a simple swipe of a claw. If a reader has heretofore been discounting my words as mere hyperbole than I do hope yesterday’s 3% free fall will act as smelling salts.
Below you will find five paw prints, I mean charts, that crystallize the market breakdown. All charts have 60 minute intervals meaning each bar represents 1hour of trading. We place the highest degree of emphasis on the first two charts for the following reasons:
- We believe the NYSE Composite is a leading indicator of market weakness due to its relative lack of futures and ETF interference. While the NASD, Dow and S&P 500 appear to be routinely manipulated through the futures market the NYSE Comp. seems to enjoy relative anonymity. Average volume of the ETFs, DIA, SPY and QQQQ are 9 mil, 185 mil, & 78 mil shares/day respectively. The NYSE ETF, NYC, trades on average only 6 thousand shares/day; my case rests.
-Financial stocks as a group, for decades and this decade in particular, have a tendency to lead the overall market. Goldman Sachs (NYSE:GS) is the axe in this group so its importance goes without saying.