Introduction
All seven components of my stock-market tracking group closed yesterday at fresh 2004 lows, but those lows were of the most marginal variety. Be assured, therefore, that everything imaginable will be attempted by the bulls today to hold the line!
_____
Have a look at the following. How is this for being down in the proverbial trenches?
-----------------------------------------------
GILLESPIE STOCK-MARKET TRACKING GROUP
-----------------------------------------------
Prior Low Close
08/12 ----------------
Close Value Date Change
-----------------------------------------------
DJIA 9814.59 9815.33 08/06 -0.01%
S&P 500 1063.23 1063.97 08/06 -0.07%
NYSE Comp. 6217.06 6225.83 08/06 -0.14%
Wil. 5000 10293.53 10307.80 08/06 -0.14%
Russ. 2000 517.10 518.33 08/09 -0.24%
Value Line 333.06 335.02 08/09 -0.59%
NASDAQ 100 1304.43 1315.30 08/06 -0.83%
-----------------------------------------------
Average -0.29%
Median -0.14%
-----------------------------------------------
I cannot remember the last time I carried anything like the above to two decimal places. However, when you examine the difference between yesterday's closing prices and the prior low closes, you will quickly grasp why two decimal places were almost obligatory. And for the one of the above measures that is highly important to individual investors, the DJIA, the number in the "change" column was rounded from an actual result of minus 0.00754%.
So today's market performance represents another critical juncture for the bullish camp, which continues to say, at least in venues like CNBC, that what's going on is nothing more than a "correction."
Readers know full well from my recent writings, and nothing at all has changed in the overall analysis, that I think what's happening in the equity market is far more serious than merely a correction. In short, the cyclical bull is over, the secular bear has resumed! And the transition has been setting up for months, for those who were watching carefully and maintained an open mind.
As the above numbers clearly illustrate, the bulls must hold the line right here. And they may -- for a short period. After all the last two days' pounding has the market marginally back to a short-term oversold condition. There will be an attempt to parlay Dell's earnings of yesterday into some deal bigger than they are. And I'm sure yesterday's "successful" 10-year Treasury note auction will be used as a crutch, too.
(As an aside, I'm not sure at all yesterday's auctions was as good as it looked. At current yield levels and given current circumstances, I have a gut feeling that a lot of people who bought the new 10-year 4.25s yesterday bought them for nothing more than a trade.)
Thus, the nasty reality remains the nasty reality, at least to my continuing way of thinking. The stock market is in real trouble, and enough damage has now been done that it is unrealistic to think prices will simply reverse and everything will be okay.
I continue to think that to get a rally that possesses any sustainability will require a much bigger thud than anything we've experienced so far -- a real selling climax readily identifiable as such. Therefore, I believe yesterday's marginal new lows will shortly become something far less marginal, which means materially lower prices.
And who knows, maybe the bulls will not succeed today in holding the line, and indisputable new 2004 lows will be a reality by 4:00 PM ET this afternoon.
__________
|
