A tale of two markets

There are times when there is a tale of two markets. Now may be one of those times. If we look at the past ten days of stock trading on the NYSE versus the point change in the DJIA for this period, we see an outlier event. Breaking the ten days into two groups of five days, the first being the back-end five days and the other being the front-end five days, we see a complete disconnect of internal stories between the periods. For the back-end five days, the DJIA rose 263 points with 153 net advancing stocks on net advancing volume of 51 billion shares. Sounds impressive until you compare it to the front-end five days. For the most recent five days, the DJIA declined 247 points, roughly offestting the back-end point gain. This is where the stories now diverge in a meaningful way. The number of net declining stocks for the front-end period was 4,084 companies on net declining volume of 1.2 trillion shares. Compare those internal statistics for a moment. It does seem the internal voting machine is heavily pointing toward the exits, even if the Index point change is lagging behind. Invest wisely……..

Author: Thomas Connolly

Tom possesses a rich and diverse background that includes deep investing experience, senior corporate executive positions, and roles as a Regional Managing Partner and Global Industry Leader within Ernst & Young. He has advised executives on some of the largest acquisitions and dispositions in the Media and Entertainment industry, including clients such as Comcast, Citibank, Sony, Dalian Wanda and Publicis. Tom is a Certified Public Accountant with a Masters Degree from Columbia University. His skills are further accompanied by a personal passion for the study of economic trends and evolving market dynamics.

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