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Friday, January 26, 2018

Daily update 1/26 Bitcoin leading indicator?

FOMO running rampant on Wall Street.

Clearly this year is different then last year.  Whenever we got to the highs last year the intraday price range contracted to almost nothing.  No problem this year.  Nobody seems to be afraid to buy the highs.  Just pile in no matter the price.  The breadth was +53% which was pretty weak considering the size of the move up.  Small caps under performed.  New highs were stable at 284.  New lows were up again to 77.  Probably a lot of bond funds as rates were higher again today. 

The futures just keep on heading higher.

The green count is fully overbought now.  Quite the show of strength.

Both the 10 DMA breadth lines and the McClellan oscillator are showing a weakening of breadth over the last couple of weeks.  The market is thinning out on the upside.  That is normal.  The market can go up for a while on very few stocks when people are chasing the big caps.

The historic move up continues unabated.  We don't need no stinkin' pullback.  Just buy, buy, buy.  I don't know what else to say. 

This is an interesting article from Tom McClellan.  Finally, An Actual Use For Bitcoin

I find this chart really interesting.  In Daily update 10/19 Yacht Life I wrote "I have been contemplating that a bitcoin crash might indicate the current bubble mentality that has gripped the world has come to an end.  Just a thought.  The stampede for the exit should be pretty interesting to watch."  Has the bitcoin bubble popped?  I think it probably has.  Is DJIA showing bubble like price action?  So it would seem.  The more we go up from here without any real pullback the more likely we are in a true blow off top (similar to 1929, 1987, and COMPX in 2000).  The major stock indexes rarely do the straight up blow off top.  It is much more common in individual stocks.  The aftermath of that kind of top is never pretty.

Have a great weekend.


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