January 23rd, 2012 Market Recap… Complacency at Fresh Highs

Nothing major from the market today as the indices closed flat on lower volume. The word floating around is that there is extreme complacency with the market currently, suggesting a pull back is looming in the very near future. For further analysis read these quality posts from today’s StockCharts.com and ZeroHedge. Some key points from ZeroHedge:

  • “Most measures of market sentiment are back to where they were last May just when the S&P 500 was peaking.
  • Short interest has dried up to three year lows.
  • The VIX closed the week below 20 for the first time since last July.
  • As Mike Santoli points out in Barron’s, volume in leveraged ETF’s versus bearish ones has risen to levels that in the past touched off interim market pullbacks.
  • Credit market indicators have lagged well behind the improvement in equity performance.
  • The S&P 500 is three standard deviation points above its 20-day moving average.
  • Again, as Barron’s points out, the ratio of the 15-day volume puts on the S&P 100 Index to bullish call volume hit 2-to-1 last week – this happened in the February 2007, February 2011 and April 2011.”

On the earnings front there are a few notables reporting tomorrow. Get ready for earnings reports from Apple (AAPL), McDonald’s (MCD) and Coach (COH). Also on the economic front, Wednesday will have the latest Pending Home Sales data released.

I also wanted to mention a pretty cool website I stumbled across today while doing testing for the StockBrokers.com 2012 Broker Review set to be published next month. The site is Trefis.com and for visual investors it is interesting to say the least. The site breaks down each company visually to see what product lines make up the stock price value. Here’s Apple’s from the site below. Anyone use this before? I’d be curious to know if these are actually accurate metrics.

Notes aside, hope this market is treating you well and I will see you back here tomorrow! Try not to be too complacent out there ;)

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Comments

  1. says

    Thanks for sharing that site – hadn’t seen it before so I’m looking around it now.

    On the sentiment front it is interesting how everyone has been looking for a top this past week and yet we march higher and higher. Myself included, I’ve been waiting for one to show for 2 weeks now with nothing signaling it’s near.

  2. says

    C$INR, Do you subscribe to his newsletter or have his book by chance? If so, any good? I have never heard of him until now and considering atleast buying the book to see what this volume theory is all about.

    Matt, that is exactly where I found out about Trefis! Etrade has the service tied into its research area. Pretty cool stuff.

    Kirk, it is strange how the sentiment indicators play out. Such an irrational market!