RebelTraders

Is there a parallel universe? If there is it crossed Wall Street today. Markets advanced on essentially nothing good. FedEx earnings warning, earthquake in China, declining corporate earnings, and on and on.

If you look at today’s volume levels it was downright terrible. A 130 point advance on the DOW with lowering volume is a warning sign that the bulls may have their dangling parts handed to them on a platter soon. There was a lot of negative money flow within the very stocks that advanced the major indices today.

(Data Source - Wall Street Journal , Money flows)

In the data shown above you can see that many big cap stocks were selling on the price advancement today. So while small money was bidding up the price, the large money was cashing out.

Recall that I mentioned last week that corporate earnings were getting worse. Now we have the proof. In my commentary on May 5th I wrote that revenues were down 18% compared to one year ago. That was of the 2,058 companies that had reported up to that date. Now, with 2,807 companies having reported their earnings the earnings are now down 26% compared to last year!  I mentioned that my back of the envelope calculations showed me that earnings were deteriorating, and the proof is in with more and more companies having reported their earnings.

Charts and more tonight…

This entry was posted on Monday, May 12th, 2008 at 6:55 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.