Market Barometer Turns Bearish
The following is an excerpt from Richard Russell's Dow Theory newsletter
The story is in the charts. I'm trying to discover what's going on in the great American economy. After going through hundreds of charts, I think I may have found the answer in the five charts that are lined up below.
We have Apple, Ralph Lauren, Tiffany and Co., Nordstrom, Saks Inc., and XLY "consumer discretionary spending." These are all entities related to higher or deluxe spending. And they have all been hit hard as they are now probably discounting lower sales.
In general, the so-called "rich" get their information first, it's the rich who cut back when they see times getting tough. And that's what I think these five charts are telling us. The wealthy are cutting back on their spending for deluxe items, and it shows clearly in these charts.
Further notes -- Last week Lowry's Selling Pressure Index crossed ABOVE its Buying Power Index, a move that I consider bearish. Thus, the barometric needle has switched over to the bear side. In the past there have been manic periods like the one we have been going through. This switch in Selling Power to the dominant position, is an early warning, and I think it behooves all subscribers to sell their regular common stocks and move to the sidelines, thereby awaiting clearer signals as the market finally calms down.
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