If you have trading experience and have actually studied the data, you should know that Rising Volatility and Declining Volume on rallies are always associated with Bear Markets Rallies. Bull Markets are always accompanied by Rising Volume and steadily Increasing Prices.
For nearly 100 years, there was a standard rule for gauging long term Entry and Exit points in the Stock Market. If the DJIA Dividend Yield fell to 3%; sell and don’t come back until it was over 6%. This simple Rule of Thumb worked wonderfully until Doctor Greenspan became Wall Street’s Keynesian Master Bubble Maker in 1987. What ever happened to his belief in the GOLD STANDARD that he held up until he became Chairman? At the top of the 2000 Bull Market, the DJIA was only yielding 1.32%, not that anyone but me and a few others cared or even noticed. It’s a scary thought, but at the March 2009 Bottom, the DJIA Dividend Yield had only increased to 4.6%, and now it’s back below 3%. Dividends matter, especially during Bear Markets. When Capital Gains and decent Bond Yields become Distant Memories, the only logical reason for investors to buy stocks is to get higher and safer dividend yields than can be had from Treasuries because below the surface, there is nothing positive going on.
THE FRANK – DODD, SCREW AMERICA, BILL EXAMINED
Without blinking an eye the Administration did more yesterday to guarantee the next financial crisis than FDR did with his New Deal. With the single stroke of a pen, President Barack Obama set in motion 243 new formal rule-making bodies and 11 different federal agencies. Each of the 243 new bodies will create employment for hundreds of banking lobbyists as they try to shape what the final laws will actually look like. And when the rules are finally written, thousands of lawyers will bill millions of hours as the richest incumbent financial firms that caused the last crisis figure out how to manipulate the new system.
Yesterday, the Washington law firm, Jones Day snapped up the Securities and Exchange Commission head enforcement division lawyer, and J.P. Morgan Chase assigned more than 100 teams to examine the legislation. By delegating so much to the regulators, Congress is inviting everyone interested in the outcome to make more and more campaign contributions, as they will try and succeed in intervening in the regulatory process to influence the regulators. Nothing is settled.
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