History

 I wrote this on my Face Book page 6 years ago.

I see two great, overarching themes to all of human history.

1) War

2) The desire of a small privileged elite minority to dominate and exploit the rest of us.

These two phenomena rise from the same root: greed.

War is always and everywhere about one of two things -

1) Somebody trying to take somebody else's stuff - wealth, land, natural resources, strategic locations, a population to be exploited.

2) The oppressed trying to exact revenge or take back what they thought was once theirs.

Nationalism and religion get the masses fired up and willing to go to war, but they are never the root cause.

Wealth and power are fungible. Money gives one the power to dominate. And with both wealth and power there is always the desire for more, and no amount is never enough.

Greed might not be the root of ALL evil, but it is the root of the greatest and most consistent evils in human history.

Gamestop = Tulip Bulbs

The company is a niche marketer of new and used video games and associated computer accessories and collectables. Small investors - or more, properly, speculators - have driven the price up to levels beyond the dreams of avarice, or anything else that makes some kind of sense. Just today, it went from the ridiculous price of $248 per share to $347.51. Contributing to the rise is a short squeeze on market professionals - the situation in which they must buy shares to cover their short positions.

In the 3 hours since the markets closed, shares have dropped dramatically. A few minutes ago they were off 123 points, but have now rebounded to where they are off only [!] 90. I suspect the short squeeze might be over, and the amateur speculators [dumb money] like the 16-year H.S. student mentioned in the attached article are on their own.

This is speculation run amok. There is little intrinsic value to these shares, which were hovering around $4 year ago, and through much of the summer, before creeping up to about $14 in mid December.

There is only one way for this to end - with Gamestop shares back in the range of $2 to 4, where they belong. The only question is when it is going to happen. Rather soon, I suspect.

Taking Sock - Week of January 25, 2021

Monday, January 25, 2021

Red Arrow Down

DJI30 Index at the close   —-   30,960.00   -36.98 (-0.12%)

The Index opened at 30990, off 7 points, and fell to 30775 before 10:00.  It recovered to 30925 a half hour later, but then dropped hard, citing the lo of 30564, off 433 points after 11:00.  It then climbed back, reaching 30950 after 1:30.  After a dip to 30850 at 3:15, it climbed 62 points into the close.

The loss was small, but the entire day was under water, and deeply negative by late morning.  This is a clearly down day, with the hi and lo lower by 152 and 344 points, respectively.  The span was 426 points, the largest since 710 on 1/06.  Surprisingly, the convergence of momentum measures stalled a bit, despite the small loss.

All the indexes had similar contours today.  The DJI never touched green.  The Russell 2000 started out positive, but slid into the red by mid-morning and never climbed out.  The S&P and NASDAQ hovered around neutral and wound up positive.

% Changes -

DJI30  -0.12% 

SP500 +0.36%   

NASDAQ  +0.69%    

Russell 2000 -0.25% 

DJI30 Closings -

01/25/19 - 24528

01/24/20 - 28990

12/24/20 - 30200

01/25/21 - 30960

NYSE Internals - 

A/D =  1320/1890 = 0.70

A/D Vol = 1.07

New Hi/Lo = 287/2 = 143.5

Tuesday, January 26, 2021

Taking Stock - Week of January 18, 2020

Monday, January 18, 2020

The markets were closed in recognition of Martin Luther King Day.       

Tuesday, January 19, 2021

Green Arrow Up

DJI30 Index at the close   —-   30,930.52   +116.26 (+0.38%)

The Index opened at 30887, up 73 points, and immediately surged up another 199 to 31086 and change, the day’s hi.  This was followed by a rather steep fall to 30915 in the next 20 minutes.  After a bump to 30985 it dropped to the day’s lo of 30865 about an hour later.  From noon on it stayed between 30925 and 30995, and slipped 65 points from that local hi in the last 2 hours.

This is a clearly up day, with the hi and lo higher by 145, and 252 points, respectively.  The range was 221 points, and is surrounded by the 347 point range of 1/08.  Short term momentum slid by a tiny increment. 

All the excitement in this session occurred in the first half hour.  The rest of the day was ho-hum.  It doesn’t look like today’s gain is significant. It looks to me like a local top is forming.  

% Changes -

DJI30  +.38% 

SP500 +0.81%   

NASDAQ  +1.53%    

Russell 2000 +1.49% 

DJI30 Closings -

01/18/19 - 24528 

01/17/20 - 29348

12/18/20 - 30179

01/15/21 - 30931

NYSE Internals - 

A/D =  1979/1194 = 1.66

A/D Vol = 1.61

New Hi/Lo = 203/3 = 67.67

Wednesday, January 20, 2021

Taking Stock - Week of January 11, 2021

Monday January 11, 2021

Yellow Arrow Sideways

DJI30 Index at the close   —-   31,008.69   -89.28 (-0.29%)

The index opened at 31015, off 81 points, and immediately dropped to 30832, off 264.  There was a stepwise increase to the hi of 31097, a half point positive after 1:00.  It slipped to about 30970 before 2:30.  There was a rebound to about 31070 at 3:00 followed by a jagged slide into the close.

Except for a few moments near 1:00, the Index was in the red all day.  But, it’s an inside day, with the hi lower by 44 points, and the lo higher by 88.  Plus a change of only 0.29% occurred, so a yellow arrow is appropriate.

Momentum lags a bit, and is not the effect of a single day, or a small number of days.  The smallest period I look at is 5 days, and the Index is certainly up over that span.  So, today, momentum went up again, and by the largest single day amount since mid-November. Seems odd for a flat to down day, but that is how it works out.  Still, in the grand scheme of things, it’s a small blip on the larger sideways move.

All the indexes has roughly similar contours today, and all wound up negative.

% Changes -

DJI30  -0.29% 

SP500 -0.66%   

NASDAQ  -1.25%    

Russell 2000 -0.03% 

DJI30 Closings -

01/11/19 - 23996 

01/10/20 - 28824

12/07/20 - 30046

01/07/21 - 31009

NYSE Internals - 

A/D =  1259/1859 = 0.68

A/D Vol = 1.07

New Hi/Lo = 183/5 = 36.60

Tuesday, January 12, 2021

Taking Stock - Week of January 4, 2021

Monday, January 4, 2021

Red Arrow Down

DJI30 Index at the Close   —-   30,223.89   -382.59 (-1.25%)

The Index opened at 30627, up 21 points, and quickly rose to 30674, up 68, making yet another intra-day hi.  A steep decline followed, hitting a lo of 30018, off 588 around 11:00.  After a slight bounce to 30150, the fall resumed, hitting another lo of 29882 at 12:15.  The Index rattled around under 30000 for an hour, then again rebound to about 30150 before 1:30.  It hovered around 30100 until 3:30, then rose to the afternoon hi of 30256 before sliding 34 points into the close. This represents a recovery of 47.2% of the drop from the early morning hi to the mid-day lo.

This is an outside day, with the hi up by 37 points and the lo down by 463.  The span was 792 points, the largest since 803 on the big up-surge day of 11/09.

Today’s dramatic and impulsive-looking drop breaks the up-slanting wedge, with the lo and close landing well below it, and should be the beginning of a leg down.  Declines of 5, 10, 15 or 20% from this morning’s hi would land at 29141, 27607, 26073 or 24539, respectively.  I’m not predicting anything, just pointing out some possibilities.  But, given the extremes all the indexes have achieved in the last few days, I doubt that 5% would be an adequate correction.  Also but, I do have a bearish bias, so take that with a kilo of salt.

Yet another but - almost all of the few dozen individual stocks I’m tracking peaked on or before December 18th, and since then have drifted sideways or slid a bit, so down is looking a lot more likely than up - at least in the short term.

Momentum is down slightly from last Thursday’s local hi, but is still broadly sideways.  Today’s close and low are well within the trading range observed since mid-December.  One day isn’t going to do much to that picture. 

If I’m reading this situation right, early tomorrow there might be a slight move up to reach a 50% retracement of the drop, or a larger move up to 30372, reaching a 61.8% retracement [though neither of those is necessary] before the next leg of the drop.  There are other possibilities that will be addressed if they arise. There might be a support band at 29750 to 29980.  There are several daily lows in that range since late November.  But that is only a drop of 3% or less, and would not be much of a correction.

% Changes -

DJI30  -1.25% 

SP500 -1.48%   

NASDAQ  -1.47%    

Russell 2000 -1.47%

DJI30 Closings -

01/04/19 - 23433 

01/03/20 - 28635

12/04/20 - 30218

01/05/20 - 30224

NYSE Internals - 

A/D =  913/2254 = 0.41

A/D Vol = 0.46

New Hi/Lo = 167/5 = 33.40

Tuesday, January 5, 2021