Friday, May 25, 2012


Sotheby's is a company stock that I watch all the time.  Essentially it has become a market indicator for me as it is gauge of the financial health of the richest of the rich.  In the past, my use of Sotheby's auction house stock has been helpful in identifying very large and long term changes in the market.  I noticed that we had some action in this indicator in the last couple of weeks, so I thought I'd show you a couple of charts.

Recall, that all of these are weekly charts with a focus on the 14/40 EMA's.  When the 14 day EMA crosses down below the 40, you have a signal warning that there is serious deterioration.

Let's also take a closer look at a chart with an index behind it.  Over the years I've found that BID's usefulness is a better predictor for performance with the NASDAQ rather than the DOW or $SPX, so I've included a chart for your inspection here with the $COMP in the background.  It seems that BID is a pretty good tool (it may be early like in late 1999) for the exit.  It also appears that the turn around upward signals at the same time, so it is not as good as a timing device to challenge you to re-enter positions.

Very plainly, the crossover means that you would exit long term positions and dare I say buy treasuries?  I'm not sure about that, but who could turn down a 10 year treasury with a 1.74% yield? HA!! -


Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at