Pull the trigger with confidence.

Years ago, an analyst named Richard Arms wondered what it meant when the stocks going up (or down) traded a greater share of the total volume than the other side.  So he created a ratio which now bears his name, the Arms Index, which looks at the A/D ratio versus the Up/Down Volume ratio.  The raw formula is as follows:

Advancing Issues / Declining Issues

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       Up Volume / Down Volume

It is neutral at 1.0, and readings below about 0.5... Read More

Several months ago, I introduced the chart comparing the stock price pattern of Apple Corp (AAPL) in the current day to that of RCA in the late 1920s.  I later also drew a comparison to Microsoft (MSFT) before and after its top with the Internet bubble in 2000.  That latter one merits an update. 

Looking at AAPL's price pattern alone, the situation does not look all that bad.  It has broken out above the declining tops line which was in effect from the top last year, and then the price went... Read More

Three weeks ago, I wrote about the indication of a liquidity problem which was being given by closed end bond funds.  Those are among the most liquidity-sensitive issues, and so when they are doing something different from the major market averages, it is a sign of potential liquidity problems which could come around and bite the rest of the market.

We did see the fulfillment of that prophecy with a halfway decent selloff for the major averages in mid-April.  But now the message from... Read More

Since bottoming in October 2012, inventory levels of copper have risen 190% in warehouses operated by the London Metals Exchange.  That's a huge and rapid increase, and it conveys a powerful message about the future for copper prices. 

Back in September 2012, spot copper prices topped out at $3.81/pound, and they have now fallen 18%.  In terms of big drops in copper prices, this one does not rank very high among the big drops in copper prices over the past few years.  But it is producing a... Read More

The April 15 income tax filing deadline is just a few days away, so I thought it would be appropriate to take a look at what tax collections have been doing lately.  With the federal tax rate increases for 2013 now taking effect, it is not too surprising to see total federal tax receipts rising.  The top individual income tax rate rose back up to 39.6%, and the individual Social Security payroll contribution (AKA FICA) returned to 6.2% after being at 4.2% for 2011 and 2012.  That latter one... Read More

Shortly after the Flash Crash in 2010, I wrote a Chart In Focus article explaining that the problems that the stock market had just been through in the wake of the Flash Crash were not liquidity problems.  I cited as evidence then that we were still seeing strength in the Advance-Decline (A-D) Line for bond-related closed end funds (CEFs) traded on the NYSE.  We are seeing a different situation now, which is worthy of mention, but first we should review the terms I am using.

Only about 60%... Read More