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

Taking Stock - Week of 12/28/20

Monday, December 28, 2020

Green Arrow Up

DJi30 index at the close   —-   30,403.97   +204.10 (+0.68%)

The Index opened at 30283, the lo for the day, up 83 points, and immediately shot up another hundred.  By 10:00 it reached 30416, and 30526, a new intra-day hi at 10:30.  It slid to 30380 at 1:30, rose back up to 30450 and hovered there from 2:15 for about an hour before sliding into the close.

The Santa Clause Rally happens in the last week of the old year into the first two trading days of the new. That extends from today until a week from tomorrow, and got off to a strong start.  A gain of 0.68% is quite modest, but we got a new intra-day hi of 30256, and a new closing hi of 30404.  This is a clearly up day, with the hi and lo up by 316 and 184 points, respectively.  The span was 242.

Ignoring the aberrant low on 12/21, the rising wedge is getting narrower.  This can’t go on much longer, since the lines will cross in just a few days. 

Today was a rather tepid session on the NYSE, with volume at about 3/4 of the last 6 week’s average, and decline volume greater than advance volume.  The S&P500 and NASDAQ were also up today, but the Russell 2000, crude oil, silver and gold all slipped.

My way of measuring momentum looks at time spans from 5 to 34 days.  Today’s increase did next to nothing at the short end [which surprised me a little;] and the 34 day measure, which had been steadily rising to catch up, has now converged to head sideways with the five shorter ones.  They set up more or less this way - though far less neatly - a couple of times in late ’19 and early ’20 before the final convergence from Feb. 21 to 24.  After that came the crash. 

Can’t say with any certainty that history will repeat itself only a few months later, but it does seem likely that some sort of a down-turn will materialize in the reasonably near future.  Have I hedged that prediction enough?  There are few sure things in the real world.  So I’m very curious to see how this plays out.

% Changes -

DJI30  +0.68% 

SP500 +0.87%   

NASDAQ  +0.74%    

Russell 2000 -0.38%

DJI30 Closings -

12/28/18 - 23062 

01/02/20 - 28869

11/27/20 - 29910

12/28/20 - 30404

NYSE Internals -

A/D =  1658/1509 = 1.10

A/D Vol = 0.92

New Hi/Lo = 300/6 = 50

Tuesday, December 29, 2020

Taking Stock - Week of 12/21/20

Monday, December 21, 2020

Yellow Arrow Sideways

DJI30 Index at the close   —-   30,216.45   +37.40 (+0.12%)

Overnight, the DJI futures fell sharply between 4:00 and 6:00 a.m., bottoming near 29400, and were near 29680, off about 430 points at 9:00.  They rose about 90 points just before the opening bell.  The Index then opened at 30159. off 20 points, and immediately dropped to 29865, off 314.  It quickly recovered back to 30000, off 179, then dropped to the lo of 29755, off 424, before 10:30.  From there it was a slow steady climb to 29304, up 124 points and the day’s hi, at about 2:30.  After that, there was a slide to 30110 at 3:52, and then a 106 point rise into the close.

I didn’t expect a climb back into the green today, but that is where the Index ended up. The hi was 39 points under the all time intra-day hi set last Friday.  The close was 87 points under last Thursday’s all time closing hi, and two points under the close on 12/04.

Today’s span was 549 points, the largest since 803 on 11/09, the day the Index was up 834 points.  It was a strange day, with hi lower by 39 points, the 37 point gain at the close, and the lo off by 274.  The lo was the lowest since 11/30.

The Index, even with all the new highs, is really going nowhere. It seems that 30000 is a level this market just can’t get away from.  I ran a few numbers  for the action since 11/24 to check.  That was the day before Thanksgiving, and the first session to have intra-day and closing highs above 30000, at 30117 and 30046, respectively.

Total lo to hi span: 29463.94 to 30343.59; or 879.95 points.

Mean of the hi and lo = 29903.62

Average of all the daily highs and lows = 30015.36

Span as a % of all the highs and lows = 2.93%

So the range over this time is 30015.36 +/- 1.47%
The standard deviation for this data set is 215.

The 875.95 point range is 4.10 standard deviations.
The dataset is 29903 +/- 2.05 St Dev units.
There were no highs above this range, and only one lo below it.

Even with all the new intra-day and closing highs, this is a very well behaved data set.

All the indexes were close to neutral.  The other 3 were slightly negative.

Today’s lo fell outside the up slanting wedge, but in the end, nothing came of it.

% Changes -

DJI30  +0.12% 

SP500 -0.39%   

NASDAQ  -0.10%    

Russell 2000 -0.02%

DJI30 Closings -

12/21/18 - 22445

01/02/20 - 28869

11/18/20 - 29438

12/18/20 - 30216

NYSE Internals -

A/D = 1170/2016 = 0.58

A/D Vol = 0.49

New Hi/Lo =  177/6 = 29.5

Tuesday, December 22, 2020

Taking Stock - Week of December 14, 2020

Monday, December 14, 2020

Red Arrow Down

DJI30 Index at the close   —-   29,861.55   -184.82 (-0.62%)

The Index opened at 30124, up 78 points, and immediately shot up to 20240.  Then it climbed more slowly, hitting the hi of 30326, up 279, at 10:30, giving us a new all time intra-day hi - by 6 points.  [Yippee!] But by 11:30 it had dropped to 300100, and stayed below 30130 until dropping another 40 points by 12:30.  After that, it just kept tumbling, hitting 29960 at 2:30 and the low of 29849, 12 points below the close, in the last few minutes.  

The hi and lo were higher by 255 and 28 points, respectively.  But the Index tumbled almost continuously after the first hour. Maybe this illustrates the Smart Money Index that I mentioned last week - the idea being that emotional [dumb] money enters the market at the beginning of the day, and rational [smart] money trades at the end. The spread was 477 points, the largest since 498 on 11/18.

The big gains in November were concentrated in the first half of the month. Increases since, though real, have been rather tepid, and would have been far less impressive without the late October slump.  In fact, compared to the highs on 9/03 and 10/12, the recent gains, though real, are rather incremental.

All the indexes started hi this morning and slumped the rest of the day, though the NASDAQ and Russell stayed positive.

DJI30 momentum is still sideways, though at the micro level it’s been slipping for the last 3 sessions.  And today’s closing value is the lowest since 12/01.  The question always is - what will the follow-through be?  Today might have been a turning point leading into a slump.  The action for the rest of the week will either confirm or refute.  At least I hope so.

% Changes -

DJI30  -0.62% 

SP500 -0.44%   

NASDAQ  +0.50%    

Russell 2000 +0.11%

DJI30 Closings -

12/11/18 - 24101

01/02/20 - 28869

11/13/20 - 29480

12/10/20 - 29862

NYSE Internals -

A/D = 1218/1932 = 0.63

A/D Vol = 0.26

New Hi/Lo = 221/2 = 110.50

Tuesday December 15, 2020

Taking Stock - Week of December 7, 2020

Monday, December 7, 2020

Red Arrow Down

DJI30 Index at the close   —-   30,069.79   -148.47 (-0.49%)

The index opened at 30233, up 15 points, and a new intra-day hi.  It immediately started falling, and hit a local lo of 30036, off 182, after 10:00.  It recovered to about 30115 at noon, then resumed falling.  It hit the day’s lo of 29967, off 251, at 2:00.  From there, it zig-zagged into the close, gaining 100 points along the way.

This is an outside day by tiny margins.  The hi was higher by 15 points, and the lo was lower by 22.  The span was 266.

I guess this could be called a sideways day, since it’s only off a half percent; and if you chose to do that I wouldn’t argue.  But the Index slid most of the day, so I’ll stick with red. We’ll have to see what happens for the rest of the week.

Today’s close was the 2nd highest. [Friday’s was the highest at 30218; 11/24 is in 3rd place, at 30046.]  Momentum increased by the tiniest increment, but remains basically sideways, as it has been since 11/16.  

This day was uninformative.  It’s hard to say whether the Index is topping or biding time for another thrust up.  An impulsive move below 30000 would be required to support the bearish case.

% Changes -
DJI30 -0.49%
SP500 -0.19%
NASDAQ +0.45%
Russell 2000 -0.06%

DJI30 Closings -
12/07/18 - 24389
01/02/20 - 28869
11/06/20 - 28323
12/07/20 - 30070

NYSE Internals -
A/D = 1315/1823 = 0.72
A/D Vol = 0.61
New Hi/Lo = 286/2 = 143.0 

Tuesday, December 8, 2020