A Stock Market in Distribution, Big-Time

Index futures were in their wonted yo-yo mode Sunday night, perpetuating the tedium that has characterized securities markets in recent months. My gut feeling — not the first time I’ve had this feeling, as longtime followers of Rick’s Picks will recognize — is that the stock market is in a broad topping process.  Permabears need to understand nonetheless that institutional players have so completely dominated this bull market that it is unreasonable to expect it to top until such time as trade desks start dumping shares en masse.  Thus, anyone who says the Dow is about to take a 5000-point header is necessarily saying that, after a seven-year run-up that allowed the Big Boys to make a mountain of money effortlessly, they are about to turn tail.  We who have longed for an honest reckoning by Wall Street of the intractable problems facing the economy should therefore be encouraged by recent news that massive distribution of stocks — $44 billion dollars’ worth last month — has been going on. At the very least, this kind of action is likely to put a cap on any rallies, making them somewhat easier to short. And so we shall try. Join us in the chat room for guidance and ideas from some of the best traders you will ever meet.