Traffic Indicates . . .
In the Soros discussion this morning, Drey asks (in comments):
"Curious about what your unofficial # of visits to the site indicator may be telling you about the likelihood of an oversold bounce on Monday. My gut tells me that while this may be possible or even likely, one of these days a big distribution day will be followed by an even bigger distribution day as the bottom falls out completely and that's when the fun will really start.
So which will it be, short term bounce or 'look out below'? Either way the Jan/March lows will be taken out by the end of summer so I guess you can kill me fast or kill me slow..."
That's a good question worth digging into: As the chart below shows, Traffic has been softening this entire week, at least when compared to the prior three weeks.
In the past, we have seen big traffic spikes accompany tradable bottoms. We are not seeing the same degree of fear we have seen in prior whooshes down. Whether that's a function of sentiment, vacations -- or just me slacking off -- I cannot say for sure.
However, I am unsure as to how valid this lack of traffic spike is as an indicator. Hey, Summer officially starts today -- and we do not have a whole lot of past examples to draw from. I can say that I didn't get the sense of a high volume panic that accompanied the prior traffic spikes -- like the ones we saw on January 23rd.
Blog Traffic as a Contrary Market Indicator (February 2008)
Traffic Spike? (January 2008)
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For those who missed it, this piece about an RBS "crash alert" was in the UK news a few days ago. RBS is the UK's second largest bank...
If such an event should pan out, I would expect it to be more like a 1929 style crash than the 1987 variety - not a quick crash and recovery...
Should be an interesting summer.
Posted by: theyieldcurve | Jun 21, 2008 6:28:30 PM
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