Chart Chatter
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Not that this chart means a lot, especially in the near term — I just found it rather curious. The solid black line is a 3-year weekly chart of the Nasdaq Composite. The reddish line is the weekly cumulative Nasdaq Advance-Decline line over the same 3 year period. If more stocks are advancing than declining, the line goes up. If more stocks are declining than advancing, the line goes down. Since the spring/summer of ‘05, the Nasdaq has moved higher — but instead of tracking with the index, the A-D line has fallen, indicating that declining stocks have been outnumbering advancers during that same time period. And note the very weak move up in the A-D line off the lows of last summer, as compared to the size of the move in the Nasdaq itself. |
Chart courtesy of StockCharts.com
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Now that’s a scary chart. It’s one thing to hear Fleck say he’s bearish and point out problems with fundamentals–we all know the fundamentals and don’t know why they don’t affect the market more–but that chart kinda implies that the fundamentals ARE affecting the market. It’s just not being seen by looking at the major indices…
Comment by Maria — 4/22/2007 @ 5:08 pm
Very good info. The run up in NASDAQ is not telling the whole story, it looks like. With margin debt at its highest level (even higher than before the year 2000 stock market crash), this is another piece of info to keep at the back of mind.
Comment by William — 4/22/2007 @ 10:19 pm
Geez.
Now I understand why this recent rally has made me so uneasy. I wonder if the SP500 data would look similar.
Comment by Pat D — 4/23/2007 @ 6:29 am
Pat,
Sorry, I don’t have access to a S&P A-D line. Even the NYSE A-D line looks vastly different, but it is skewed by all the bond related issues, closed-end funds, etc. that trade on the NYSE. I don’t know of anyone that puts out a ’stock-only’ NYSE A-D line on a free site.
Comment by BMBull — 4/23/2007 @ 7:48 am