Indeces have rallied (bear rally) in the past weeks to resistance and are still in the recession range. A true break out won't happen anytime soon. Maybe turning off manic depressive CNBC would be the best thing you could do for yourself if you're not a speed trader. There are signs that overcapacity is still endemic in the corporate arena, in the global supply chains as evidenced by shipping companies scrapping their ships and corporate officers dumping company shares at surprising ratio to purchasing.
According to Paul Kedrosky, struggling containerships are destroying their capacity.
"We have seen record numbers of containerships being sent off to scrap yards... [with] ships as large as 4,000 teus. To put in context, so far in 2009 we have destroyed as much containership capacity as transited through Oakland annually back in the 1960s when it was among the largest ports in the world."It's a good indicator of the collapse in demand, and as an extension, the collapse in the global commodity chain demand for goods, raw and finished. these companies are liquidating assets to cut on high fixed costs. This along with excess capacity in commercial and infrastructure building will dampen commodity prices needed in those industries.
Corporate insider selling is still extremely bearish. Insiders' normal sell to buy ratio is 2:1, but in the five weeks ending August 12, according to the Wall Street Journal's Market Data Center, insiders sold a $2.2 billion and purchased measely $62.2 million in their companies for a sell-to-buy ratio of 36:1, or 17 times normal. Selling to buying in technology stocks was 61:1, or 24 times normal. That is a major red flag. Technology, in general, lead the market, so the insider selling in that sector is an extraordinarily bearish indicator for the direction of the stock market.
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