Same Old
April 26th, 2007 by 
reality
Top 10 Volume Leaders on Nasdaq are the same old warhorses: LVLT, QQQQ, SIRI, AAPL, SUNW, MSFT, AMZN, CSCO, INTC, YHOO. If this were a new bull market, there would be new leaders. This is a bear market rally. The new highs (on the Dow) don’t mean anything. Get used to it.
Posted in Stocks | 
April 27th, 2007 at 10:15 am
With all due respect, I think your post is a perfect example of data mining. Large cap tech and growth has been by far the biggest laggard through this cyclial bull market - hardly the leadership. Leadership has been in sectors benefiting more from the commodity bull market and the growth outside the US.
As for the new highs in the Dow, I agree that they are speculative in nature and are likely to be surrendered during the next bear cycle. However, I suggest you read Jeremy Grantham’s latest quarterly letter. Even he respects the fact that the blow-off top in the global asset bubble may be in front of us rather than behind.
April 27th, 2007 at 1:31 pm
Data mining? Data mining is going through a mountain of data looking for gems of information - unanticipated patterns or correlations. This was hardly that. It jumped out.
The fact that on that day, the old warhorses were being flogged one more time to drive up the indices is an observation. Feel free to draw your own conclusions - I’ve drawn mine.
Clearly we are in a blowoff. Where it stops nobody knows, not even, with all due respect, Mr. Grantham. But it will be reversed.
April 30th, 2007 at 8:01 am
My point is that those stocks have not lead this market for 7 years - to argue otherwise is really quite impossible based on any of the data. Taking one day’s volume data and suggesting that this means that these stocks are the leaders of this “cyclical bull” or “bear market rally” is really stretching it my opinion. There are a TON of reasons to be skeptical long term and I share your caution, but this is not one of them. Rather, look at the median Value Line P/E at over 20 at normalized profit margins (when it was at 13 in 2000), or the massive % of market “earnings” that are simply accounting fantasy based on aggressive lending and derivatives assumptions. The epicenter of this bubble is hardly large cap tech, and they simply have not been leading the market. Seems like a general fighting the last war…
As for this being a blowoff, I do not disagree. However, as I’m sure you are well aware given your portfolio positioning, getting short into a blowoff can be quite painful, as they often last longer than most expect is possible. My methodology focuses on identifying potential areas that could be turning points - my next is in the 1510-1520 area on the SPX.