Monday, November 25, 2013

High Prices Beget Higher Prices- Price/Volume Heat Map for Nov. 22

It should probably go without saying that I remain bearish overall. The economy remains weak, profit margins are abnormally high, and the investment/economic environment continue to be manipulated by the Federal Reserve's money printing/bond buying train. That said, it has been my observation that higher prices beget higher prices and the S&P 500 closing at an all-time high- following the Dow Jones- suggests equity prices will continue to trend higher. For how long is anyone's guess, as overall volume levels remains subdued and demand (as evidenced by the price/volume heat maps below) has become mixed. With that said, I would not expect us to get any definitive answers in this week's trading, considering the Thanksgiving holiday in the US.


Looking at the latest daily heat map, we are seeing a few divergences. For instance, the discretionary price performance versus demand.



Week Ending  Nov. 22
For the latest ended week, the S&P 500 closed marginally higher, but it was enough to push the index to all time highs.


That said, demand appears weak overall and the weekly performance was limited in scope.




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