Monday, August 01, 2005

Current State of Market Internals

Is the market sick? Does it need any medicine to get better? I've been wondering this lately. I personally have many watch lists of individual stocks, and lately, maybe in the last month or so, the stocks I watch don't paint the same picture as the overall market. It's quite possible that the stocks on my watch aren't enough of a sampling, and it is just aberrant observation. Well, today I run into a commentary (click here) that seems to cover this question of mine.

I found it to be an interesting read. Maybe it is time to re-evaluate the market's condition. Perhaps this divergence between the Russell 2K and the other major indices can be played as a pairs trade using index ETFs. Or, maybe this is just another doomsayer trying to rain on the bull's parade. Looking at other writings of his, it does not seem like it, but anyone can be deceived.

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