Dow [Archive] - Page 2 - Sharetrader Forum

Hoop

24-03-2009, 09:43 AM

Dead "MEOW" bounce! :eek:

DOW closed 7776 up 500 points :eek:

It seems your cat is made of flubber DrW and it has been dropped from a great height.

Your cat has super- bounced up through a major resistance point (old bottom) and is closing in on this huge band of resistances between 7900-8500. Remember the period between Jan - Feb 2009 when the DOW's huge selling pressure had trouble breaking downwards through this wide band.....

The Million Dollar question is... has the DOW got enough momentum and buying pressure this time around to push upwards through that band past 8500?.
From the Jan - Feb 2009 experience this wide band is a difficult zone requiring much energy to push through it.

If it manages to break through that band to the 8600 mark this must be seen as extremely bullish as that band becomes then becomes a huge massive support again.

Can the DOW get to 8600? I think Ichimoku charts may help to analyse how strong the DOW is, in relation to the strength of that 7900-8500 resistance band, by seeing where the Kumo is and whether the DOW has passed above it or not. I suspect the Kumo maybe situated around the 7900 -8500 ...are my suspicions correct? Can any Ichimoku followers help with this?
I will post part of this post on the Forex/DOW thread (http://www.sharetrader.co.nz/showthread.php?t=5689&page=8)

ananda77

24-03-2009, 07:22 PM

...as expected, a strong counter trend rally is now in it's initial phase and after today's power advance, the SPX500 *1000/1100 target remains a realistic possibility for the medium term;

...however, for the very short term, like couple of days, markets would do us a great favor with a 'kitcat move'; maybe still a bit of muscle flexing at the open but otherwise, a bit early for all this bull euphoria just yet;

Trading Strategy: if not already long equities or sold today expecting a down move next couple of days, buy on weakness with short stops respectfully placed down the line

Kind Regards

outspoken

25-03-2009, 12:23 PM

I'll go out on a limb here and say that the AIG debacle will result in Geitner using his power (today he said he has) to wind them down. They have already channeled hundreds of billions through to their cronie mates at Goldman, Meryl etc. They will be "allowed to fail" and the resulting backlash will send the Dow down to it's expected new lows.
Big call, I am probably 100% wrong, but maybe I'm not.

Stranger_Danger

25-03-2009, 03:21 PM

I think you're wrong. If we go to new lows, it'll be something new, unexpected - something shocking.

That AIG is a swindle is not shocking or unexpected.

ananda77

26-03-2009, 08:30 PM

...more SPX500 upside potential possible short term if:

-SPX500 *791 successfully defended

...medium Term (1 or 2 months+):

-SPX500 *950/*1000/(*1100)???? a realistic possibility

...long term (end of summer into fall +):

2nd. even more ferocious leg down expected based on fundamentals

Kind Regards

ananda77

28-03-2009, 09:02 AM

...likely, that SPX500 wants to test *766 before challenging *875 if test successful

Kind Regards

ananda77

01-04-2009, 08:45 AM

...31 March 2009 end of quarter -always a good time to rigg the market just a bit for good looks-

...no matter what, if SPX500 closes above February month low its a reversal month, bullish outcome

...just weired market action today as the market missed giving *750/*766 a thorough testing;

Kind Regards

Hoop

02-04-2009, 09:13 AM

DOW respected the 7500 floor so now expect the upward buying pressure to have another assault at boring its way through that thick ceiling (cluster of resistance lines within that 7900-8500 zone)

ananda77

03-04-2009, 11:39 AM

...most likely, more immediate short term gains; do not think even a higher unemployment rate (expected) will stop the SPX500 to reach for *875 during this current rally;

...medium term (weeks, couple of months), SPX500 *950+/1000+/1100(+) a realistic possibility; SPX500 *780 (minimum) - MA200 need to be tested

...long term, BEAR FOR SURE, but would not bet on level a second leg down will start; just fundamentally, -the WHOLE SHOW SUCKS BIG TIME-

Kind Regards

Economic Meltdown: The "Dollar Glut" is What Finances America's Global Military Build-up
by Prof. Michael Hudson
http://www.globalresearch.ca/index.php?context=va&aid=12944

ananda77

04-04-2009, 10:06 AM

...SPX500 consolidation with downward pressure on SPX500 been light, close above *839critical level, further short term upside -test *875- most likely;

-failure at *875 = shake out to *780/*766/*750 expected;
-successful test *780/*766*/*750 = substantial further advances;

Trading Strategy: sideline to after correction (safest); otherwise, hedge equity exposure short *875+

Dr_Who

04-04-2009, 08:18 PM

Ananda, you think this is a dead cat bounce?

I ve noticed that the Dow have been driven more by the Asian market lately.

ananda77

05-04-2009, 12:43 PM

Dr Who:

-Institutional Net Accumulation is at extremely high levels, so the assumption here is that a continuation of the rally is expected
-the downside to such accumulation is, that institutions may force the market up to set up hedges for an extended down move; however
-liquidity inflows into the market are also improving and breaking resistance points
-March close, higher than February close = Reversal month (for the last 10 years, such a reversal has always been followed by strong rallies)
-at March low, sentiment has been at extreme pessimistic levels

...consequently: prepared for a strong bear rally, which could very well test Dow *10000 at minimum, SPX500 *950 minimum; there is a realistic possibility, that this rally could come close to trading up to 2007 market tops; however

...L O N G T E R M, this B E A R just started (!!!ALWAYS REMEMBER!!!) and yes, considering the long term, this rally is just a tiny, tiny breather and if you wish, a dead cat bounce

Long Term Trading Strategy: sell into rally and go to 100% cash

Kind Regards

shasta

10-04-2009, 04:48 PM

http://www.businessinsider.com/bear-market-1950present

Great slideshow showing recent bears and how they behaved ... The lat slide shows an overlay of the worst bears and the current and, of course, 1929. If you think the current bear is bottoming, the last slide will give you something to think about ;)

Interesting that recent bear rallies are around the 25% mark - which is where we are at today'ish - bunch of big banks report next week - time to be very, very nervous!

DOW closed overnight up 246 points (+3%) to finish at 8,083.

Wells Fargo lead the way with a record profit announcement, & the overall financial sector starting to look a little better...

Article in full...

http://www.theaustralian.news.com.au/business/story/0,28124,25316144-36375,00.html

Hoop

11-04-2009, 10:47 AM

WF result was a stunner! MS up 11% and GE up 6.5%. BIDU up again too! Certainly timed those purchases almost perfectly .... (if indeed we've seen the bottom!)

Feeling a little less nervous but it's going to volatile!

Belgarion...this chart may ease your nerves

The vix is showing the volatility is downtrending

http://i458.photobucket.com/albums/qq306/Hoop_1/vixi_ix06apr06_to_19may09.png

lakedaemonian

11-04-2009, 12:47 PM

WF result was a stunner! MS up 11% and GE up 6.5%. BIDU up again too! Certainly timed those purchases almost perfectly .... (if indeed we've seen the bottom!)

Feeling a little less nervous but it's going to volatile!

In regards to Wells Fargo, I'm not a trader....but as an investor I'd be wondering how sustainble this "recovery" is:

*How much of the result can be attributed to the recent artifically low interest rate refi binge?

*How much of the result can be attributed to the lack of asset write downs?

While I think Wells is quite possibly the best run bank in the US(If I was crazy enough to keep a US bank account it would likely be with Wells)......it still smells like puffery to me.

Remember, JP Morgan showed good numbers last year...then went off a cliff.

ananda77

11-04-2009, 02:55 PM

...now, not saying SPX500 will get to *875, most likely momentum will get the index there (+) and immediately will turn down for a larger correction, but in the short term as of last Thursday, not in this market without DOWNSIDE COVER

...and after the Financial Accounting Standards Board relaxed the M2M rule, bank assets included, bank balance sheets have now become a lot easier to 'turk' and a lot harder for investors to know what is going on; would not buy 'US bank anything'; still think, US banks are beyond saving and will go down (bank holiday comes to mind -again-);
...yes, for the short term, strengthened bank balance sheets will look good and will be driving this rally further in the meduim term (weeks, couple of months)

Kind Regards

Dr_Who

12-04-2009, 08:17 AM

I love how abit of creative account makes can hide all sorts of defects. Its abit like hear no evil, see no evil and sweep everything under the carpet. The next big bubble follow by a crash will be much much worst.

Corporate

12-04-2009, 08:42 AM

.

...and after the Financial Accounting Standards Board relaxed the M2M rule, bank assets included, bank balance sheets have now become a lot easier to 'turk' and a lot harder for investors to know what is going on; would not buy 'US bank anything'; still think, US banks are beyond saving and will go down (bank holiday comes to mind -again-);
...yes, for the short term, strengthened bank balance sheets will look good and will be driving this rally further in the meduim term (weeks, couple of months)

Kind Regards

What has changed on the M2M rules?

ananda77

12-04-2009, 08:54 AM

A few comments about mark-to-market
Edward Harrison
http://www.rgemonitor.com/us-monitor/256271/a_few_comments_about_mark-to-market

The Mark-to-Market Myth
James Kwak
http://www.rgemonitor.com/us-monitor/256258/the_mark-to-market_myth

Kind Regards

Lotto

13-04-2009, 10:36 AM

Hoop

13-04-2009, 08:49 PM

Ichimoku Cloud

Cant remember who was looking for graph on this. I found this yesterday and may be a better one for you

http://stockcharts.com/h-sc/ui

Look under 'overlays' for Ichimoku Cloud

DJI code = $indu
SP500 = $spx

Thxs Lotto yes it was me ... posted it under the forex/DOW thread.
I'm still coming to grips with Ichimoku but it seems the DOW is nearly through the cloud which is the resistance part I think.

I've had my attentions on other matters at the moment and never replied back ..so if Peat reads this tread I thank him for posting the DOW chart. with explainations

Hoop

17-04-2009, 07:52 PM

DOW closed 7776 up 500 points :eek:

It seems your cat is made of flubber DrW and it has been dropped from a great height.

Your cat has super- bounced up through a major resistance point (old bottom) and is closing in on this huge band of resistances between 7900-8500. Remember the period between Jan - Feb 2009 when the DOW's huge selling pressure had trouble breaking downwards through this wide band.....

The Million Dollar question is... has the DOW got enough momentum and buying pressure this time around to push upwards through that band past 8500?.
From the Jan - Feb 2009 experience this wide band is a difficult zone requiring much energy to push through it.

If it manages to break through that band to the 8600 mark this must be seen as extremely bullish as that band becomes then becomes a huge massive support again.

Can the DOW get to 8600? I think Ichimoku charts may help to analyse how strong the DOW is, in relation to the strength of that 7900-8500 resistance band, by seeing where the Kumo is and whether the DOW has passed above it or not. I suspect the Kumo maybe situated around the 7900 -8500 ...are my suspicions correct? Can any Ichimoku followers help with this?
I will post part of this post on the Forex/DOW thread (http://www.sharetrader.co.nz/showthread.php?t=5689&page=8)

3 weeks have past since I wrote this post...and the DOW is still fighting hard to break through this 7900-8500 resistance band

ananda77

18-04-2009, 01:53 PM

...SPX500 *875 achieved and it's been a choppy struggle lately; further upside always a possibility but increasingly unlikely without a deeper correction; strong short term bearish divergences (momentum)

-first indication for a deeper correction > break of *836
-deeper correction testing *780/*760
-support most likely to hold with consequent rally to SPX500 *950 (minimum)/*1000/*1100

Trading Strategy: short *875 (stop to upside); 'trading equities': sold/selling

Long Term: BE AWARE OF THE BEAR (NO KIDDING)

Kind Regards

Hoop

18-04-2009, 02:13 PM

3 weeks have past since I wrote this post...and the DOW is still fighting hard to break through this 7900-8500 resistance band

Note that since the bottom the DOW has broken up through and retested the 7500 line with respect (bullish) and is now fighting with the 3 bands of resistances within the 7900-8500 area. The DOW has broken upwards through one of those 3 resistance lines within this band (8000) and is in the process of breaking up through the second band (8120).
The 8000 line can now be considered a tentative support line now.

How strong this yellow band of resistances can be assessed by the trouble the DOW had in breaking downwards from Oct to Feb towards the bottom (note: in hindsight the 20 Nov "old bottom" resembles a bear trap look about it now)

I added the Coppock indicator for academic purposes only.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW16042009.png

Dr_Who

23-04-2009, 08:14 AM

Talk about volatile market. The Dow bounced around the entire day.

peat

23-04-2009, 12:24 PM

Hoop
See my post in the Buttefly Gartley thread in the Forex Forum.

http://www.sharetrader.co.nz/showpost.php?p=252070&postcount=241

Dr_Who

25-04-2009, 08:05 AM

I have a funny feeling the Dow may surprise everyone on the upside.

Its been trying to breach the 8k mark and fail on many occasions with a bias for an uptrend.

ananda77

25-04-2009, 09:39 AM

-U.S. new home sales fell 0.6% to 356k in Mar, above median 340k vs rev'd 358k
-U.S. durable goods orders sank 0.8% in Mar, above median vs 2.1% in Feb

...SPX 500 rally chop continues to the upside, based on 'better then expected' bla...bla...bla... and most likely misleading and semi-fraudulent earnings reports from distressed financial companies

...SPX500 upside stop *875; neutral to bullish *875+ (equity bubble may develop)

Trading Strategy: selling kitchensinks into this rally

Kind Regards

ananda77

26-04-2009, 09:20 PM

Profit reports turn spotlight on consumer spending (http://finance.yahoo.com/news/Profit-reports-turn-spotlight-apf-15033043.html?sec=topStories&pos=main&asset=&ccode=) ... A few things to watch.

...by still believing in this 'Fairy Tale Nonsense' you are almost ensured not to have a chair left when the music will stop; so, MAKE SURE YOU ALSO LISTEN TO THIS:

..."The Financial Barbarians at the Gate" with financial economist and historian, Dr. Michael Hudson. Europe; worsening financial situation and indebtedness; the history of banking and the criminalization of the banking system; tax policy; real estate asset inflation; US imperialism via the monetary system; neoliberal/neofeudal economics; classical political economy; finance capital breaking away from industrial capital; the financial crisis leading to a political crisis; similarities with the Roman Republic; what measures labor should take...

Guns and Butter - Broadcast April 15, 2009

The Financial Barbarians at the Gate
Guns & Butter Interviews financial economist and historian, Dr. Michael Hudson
http://informationclearinghouse.info/article22490.htm

Kind Regards

ananda77

29-04-2009, 11:16 PM

SPX 500 challenge *875/*891 a possibility; reversal risk uncomfortably high;

Quarterly Review and Outlook (US)
First Quarter 2009
http://www.hoisingtonmgt.com/pdf/HIM2009Q1NP.pdf

Kind Regards

ananda77

02-05-2009, 05:19 PM

SPX 500 @ 877 ... Still seems to be some enthusiasm out there.

...SPX 500 *878 close, successful defense of *868, market most likely trading higher next week to test SPX 500 *900 (+); return to short term bearish ONLY if SPX 500 *847 taken out decisively;

...looking at old trusted DMI indicators on daily_weekly_monthly time frames, no reason this rally should not have a way to go (no indication of overbought) however:

...unexplained (at present): -Huge Inflow of Liquidity Into US Markets Last Thursday-
???government in an emergency measure????
???foreign sources????
!!!it was not institutions!!!! (they had their biggest EVER net accumulation during April)

Trading Strategy: cautiously bullish short to medium term -upside short term trades; still selling into rally; hedging -building short bias on higher market

-BEWARE OF THE BEAR LONGTERM-

Kind Regards

ananda77

03-05-2009, 09:29 AM

...could be, but the problem is that there was no initial surge in the markets following the inflow, actually the market ended down that day on high volume;

...but then again, the close is easily manipulated to create the perception of a top;

Kind Regards

lakedaemonian

03-05-2009, 05:31 PM

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=arl3VgxA0FAA

"Insiders from New York Stock Exchange-listed companies sold $8.32 worth of stock for every dollar bought in the first three weeks of April, according to Washington Service, which analyzes stock transactions of corporate insiders for more than 500 institutional clients. "

ananda77

03-05-2009, 07:49 PM

...another piece of news designed to shake out weak hands in the short term, but in the medium/long term, that IS the name of the game...

...with only slightly more than 60% bullish sentiment and rising [ Junk Bonds Rally the Most in 22 Years as Buyers Play ‘Catch Up’ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=av0WW_cKmEPQ - Investment-Grade Bond Sales Fall in April by Most in Five Years http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aj3fvCyUwFqU ], this leg up has a way to go as important trend changes occur around 80>90 (%) bullish sentiment; and as in 2007, by the time the next, even more devastating leg down will begin, insiders will have sold and the average investor will hold...

!!!REMAIN ACUTELY AWARE OF THE BEAR!!!

Economy On The Ropes
By Mike Whitney
http://informationclearinghouse.info/article22531.htm

-no FAIRY TALES from this crowd-

Kind Regards

patsy

05-05-2009, 09:56 AM

No matter where you look it from, the US is on the path to insolvency. This is a very suspect rally, and a clear sign is the long term Treasuries, which last week reached a higher level than that when Bernanke announced the monetisation of the US economy. The bond market is just so efficient that it never lies. However, this not the first time that the economy and the stock market are disconnected.

I think whoever leaves money on the table at this stage is doing it at their own peril.

Dr_Who

05-05-2009, 12:17 PM

The Chinese and Asian market are showing signs that it is leading the global market and not the Dow. The Dow and other markets started rallying based on the positive numbers coming out of Asia.

Hoop

05-05-2009, 11:33 PM

The DOW broke through an important level today. It has broken through the thick band of resistances 7900 - 8400 to close at 8427. A very bullish sign.
This 7900 - 8400 zone a difficult area to penetrate both up or down....The breakthrough is yet to be confirmed (bull trap?), but when confirmed will serve as a thick floor (support).
There is very little resistance until the major 9000 resistence level. Another important line especially for the TA trendies is the primary downtrend which is now in sight and only 350 points away. The 9000 resistance level is major because it is also the TA target if the DOW broke the 8000 resistance level and a point before a correction could begin. The good news of course is the fact that a major correction would have to tackle that 7900 - 8400 zone again. We can see that zone took a long time to penetrate downwards during the dark days of end of 2008 and it finally succeeded (confirmed) in February 2009.

If the immense selling pressure re-occurs causing another breach through this 7900 - 8400 zone there is another major resistance to overcome at 7500.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW05052009.png

It seems for the time being there will not be enough down pressure to retest the 6500 bottom. However if a very severe correction is ever going to occur it would have to happen within the next 2-4 weeks if you believe in Ichimoku. From the chart below the shaded orange & green areas called the Kumo cloud is at it's thinnest during this time but from this Ichimoku chart a dramatic fall to retest 6500 within the thinnest area of cloud does seems a very unlikely event. Kumo clouds are forms of resistances the thicker the better. As you can see around the 8 June the cloud is very thick again which offers resistance zone between 7500 - 8000 (coincidentally happens to be TA resistance points)

http://i458.photobucket.com/albums/qq306/Hoop_1/Dow04052009Ichi.png

I'm not a complete optimist so here's the bad news..... bad news based on TA target of 9000 informs us (TAwise) that there is a big chance that there is only a maximum of 7% left in this rally before a possible (hopefully healthy?) correction** occurs, or a revision of the TA target if the rare chance the upward movement keeps going.

** Note my use of the word "correction" a downward movement in a Bull market :)

Possible to move above 9000???? ...yes but remember the 2007 high of 14000 is unlikely to be surpassed for the next 4 or 5 years at least (Limitation theory within the Bear Market supercycle (secular) ).
The good news is some of us (Hoop included) have witnessed a 30% jump.
The bad news is for those who were not in this market rally have probably missed most of this rare opportunity and it may not be repeated to this extent again within this cycle.

ananda77

06-05-2009, 06:32 PM

...the latest advance in the SPX500 to *908 today launched at ~*890 and at present, the futures are testing the support (a strong test of this support could be expected in the open market)

...any further advance to *925/*944 based on ~890 -HOLDING-; failure will drive the index towards *815

...*925/*944 very formidable resistance and most likely trigger point for a deeper correction to *815 minimum (*890 holding > *925 most likely, *944 a real possibility)

Trading Strategy: sideline (safest); can anyone donate a kitchensink??? hedge: short bias

Kind Regards

ananda77

07-05-2009, 09:40 AM

SPX 500 *925/*934*/*944/*957 definitely possible, but daily reversal signs appearing and it could be *920 topped

Trading Strategy: sideline (safest); hedge: short (upside stop) [would not be buying equities at that level of maturity]

Kind Regards

ananda77

09-05-2009, 12:36 PM

[QUOTE=belgarion It's looking, to me at least, that the US markets may straightline their way back to 'normal'. QUOTE]

...nice strong retrace towards end of week, but strong price action continued on the last trading day;

...above SPX 500 *897/*901, *944/*957/*967 possible and it looks like, any down correction remains short and shallow to *815 or even stopping at *860, before index will head higher and hit target zone *1000/*1050/*1100;

Trading Strategy: sideline now (safest); hedge: short bias with down stops;

Long Term: REMAIN ACUTELY AWARE OF THE BEAR

Kind Regards

ananda77

12-05-2009, 07:25 AM

...SPX 500 under pressure...

...short term double top (*930) development a possibility, but only if *889 taken out for confirmation; price action remaining above *889 > SPX 500 *444 (+) most likely;

Trading Strategy: sideline (safest); hedge: short bias and building above *944; short stops respectfully below *889;

Kind Regards

Hoop

13-05-2009, 10:44 AM

Quote from my post #388 5-05-2009
The DOW broke through an important level today. It has broken through the thick band of resistances 7900 - 8400 to close at 8427. A very bullish sign.
This 7900 - 8400 zone a difficult area to penetrate both up or down....The breakthrough is yet to be confirmed (bull trap?), but when confirmed will serve as a thick floor (support).
There is very little resistance until the major 9000 resistance level. Another important line especially for the TA trendies is the primary downtrend which is now in sight and only 350 points away. The 9000 resistance level is major because it is also the TA target if the DOW broke the 8000 resistance level and a point before a correction could begin. The good news of course is the fact that a major correction would have to tackle that 7900 - 8400 zone again. We can see that zone took a long time to penetrate downwards during the dark days of end of 2008 and it finally succeeded (confirmed) in February 2009.

OK... the DOW had a intraday low of 8366. When I mention the 7900 - 8400 resistance now support zone (made of 3 closely spaced strong support lines at 7844 , 8013, 8350) it is approximate as I have zeroed the figures.
There is also another support line formed since end of March at 7770

The DOW (12 May) respected the top of the support zone at 8366 then bounced up off it to close at 8469 a bullish sign. This old resistance now support Zone has proved to be very strong.

ananda77

14-05-2009, 08:20 AM

...SPX 500 closing *884, well below April 30th high at *889; double top at *930 now confirmed;

...on a positive note, a correction to *826/*816/*811 most likely, before aiming at medium to longer term target SPX 500 *1000 (+);

...on a careful note, what if it is not a shallow correction and turns out to be a test of the March 09 low, or worse, a continuation of the bear market...???

...by the way, the confirmation point for the Dow double top *8308; Dow closed at *8285

Kind Regards

Hoop

14-05-2009, 09:37 AM

...

...by the way, the confirmation point for the Dow double top *8308; Dow closed at *8285

Kind Regards

OK.. I'll bite :)
Where's this DOW's double top??

cheers :)

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW13052009.png

ananda77

14-05-2009, 12:02 PM

...sorry Hoop; should read Dow *8308 confirming 4-month high *8588 (8th.May);

Kind Regards

STRAT

14-05-2009, 02:51 PM

Hi Ananda77 and Hoop.
Just wanted to say thanks for your insight on this thread fellas.
Much appreciated

Hoop

14-05-2009, 07:13 PM

Hi Ananda77 and Hoop.
Just wanted to say thanks for your insight on this thread fellas.
Much appreciated

Thxs for those kind words Strat...made my day a lot more cheerful
:)
Hoop

ananda77

14-05-2009, 08:49 PM

Where for tomorrow?

considering the large amount of long positions I took up today I'm counting on a bounce.

...yes, and it will be most likely a 'dead cat bounce' topping at SPX 500 ~*915 (Dow ~*8517);

Kind Regards

Dr_Who

15-05-2009, 08:33 AM

I am staying on the sideline abit. This Dow can go both ways.

Hoop

15-05-2009, 10:46 AM

I am staying on the sideline abit. This Dow can go both ways.

Add another way Doc....sideways.

I've been mentioning this strong 7900-8400 resistance band for a while now.
The DOW has fallen back within this band again:(. It tried to break out last night (intraday high 8377) but failed to close at 8331 (+44).

The market is skittish atm and the two forces may be fighting either other for a little while ....thus ...that possible sideways trading pattern scenario.

Re: the charts it wouldn't surprise me to see trading range averaging between 7900-8400 with Max High 9000 and Min Low 7500) ....accompanied with heart attack material each time it heads down to test 7900 or (mid7800)...and ultimately if it happened the heart pounding test of the November low (7500)

If the DOW got inundated with immense selling pressure and some how does break down through that very strong 7900-8400 zone all is not lost until...
.... the DOW fell below the November2008 bottom that of the 7500 major support mark....this would upset that bullish inverse head and shoulder pattern that the DOW is presently setting up....

Then again the future usually proves me wrong....so I am ready to jump one way or the other, if my assumption proves to be wrong.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOWheadandshoulder.png

ananda77

15-05-2009, 05:53 PM

...would strongly assume, that SPX 500 key support level *875 would need to be tested (at a minimum) for this rally to go for target without any deeper correction

...top *930 to target *1000 > 70 points; who would want to go in big for this sort of gain in the short term;

...in 2007 at the SPX 500 top, bullish sentiment reached 88% bulls; last Friday, the reading stood at 85% (if 85% of market participants are long, who are the institutions selling to???

...Institutional selling was above its March/May resistance line on Monday and it closed above the shorter term horizontal resistance line yesterday (Wednesday)

...Wednesday, inflowing liquidity moved down sharply

Trading Strategy: sideline (safest); short with upside stop;

Kind Regards

STRAT

16-05-2009, 10:55 AM

...would strongly assume, that SPX 500 key support level *875 would need to be tested (at a minimum) for this rally to go for target without any deeper correction

Kind Regards
Hi Ananda77.
Was looking over the S&P500 and I cant identify the support you refer to at 875. Can you help me out here?

STRAT

16-05-2009, 11:02 AM

Add another way Doc....sideways.

I could live with that Hoop. There will always be stocks that will perform in those conditions.

ananda77

16-05-2009, 04:09 PM

Hi Ananda77.
Was looking over the S&P500 and I cant identify the support you refer to at 875. Can you help me out here?

...on a closing basis in the daily/weekly timeframe:

-April 17th High SPX 500 *875.6 was not exceeded until month end April
-1st of May marked the start of another advance exceeding *875.6 at the close
to the May 8th High *930
-*875 > bottomline for any sustained continuation of the current rally

...SPX 500 closed at *883 with intraday low *876.9 (not bad)...but well below last month's high *889

...this should give the index enough strength to test resistance at *915
-successful test of *915 > SPX 500 *944/*967*(+)
-failure in the *915 range (most likely) will result in a substantial downturn, possibly testing March 09 Low SPX 500 *666
-the deciding point for a shallow or deeper correction is a successful/failed test of SPX 500 *816/*826 range

Trading Strategy: sideline (safest); hedge: short term neutral to short bias to *915 with sell stops respectfully below 875.6

!!!LONG TERM, REMAIN ACUTELY AWARE OF THE BEAR!!!

(there is no guarantee and strategies are just ideas)

Kind Regards

Kind Regards

STRAT

17-05-2009, 11:32 AM

Thanks Ananda77.
I appreciate your reply

ananda77

20-05-2009, 08:07 AM

...SPX 500 tilted at *915 and closed at *908

Trading Strategy: sideline (safest); hedge: short term neutral to short bias to *915 with sell stops respectfully below 875.6

(there is no guarantee and strategies are just ideas)

Kind Regards

ananda77

21-05-2009, 10:28 AM

...SPX 500 closed at *903; for the last two days, the volume on the NYSE was quite thin, while the down volume by day end was up today, indicating increasing selling pressure;

...however, unless *875 is taken out decisively, it pays to be careful on the downside;

Kind Regards

Peitro

21-05-2009, 10:41 AM

Hate to say it, the worm has turned.

US$ in real trouble, DOW to take a hit.

Hoop

21-05-2009, 12:53 PM

Hate to say it, the worm has turned.

US$ in real trouble, DOW to take a hit.

Don't Agree Peitro.

End of uptrend of the US$ is no12 in my list of 23 indicators I used to signal a possible bottoming out of Equities (end of bear)cycle and the beginings of a new Bull cycle. (see #177 10th Feb post in Investing strategies and secular bear markets) (http://www.sharetrader.co.nz/showthread.php?t=5171&page=12)
My post in February showed many indicators hadn't signaled back then including the all important never yet failed copper indicator.

However all 23 have signaled now, one of the last being US$ which turned (broke its uptrend) at the end of March 2009.

A fall in the country's currency is part of the economic cycle process..and not necessary a bad thing, it shows the economic cycle is progressing through its recessionary phase towards the next phase (recovery).

Usually a bullish sign for Equities...eg DOW

ananda77

23-05-2009, 10:04 AM

...SPX 500:

-double top *930 (8th. May)
-peak *920 (20th. May)
-now puffing in an attempt to bounce back to take out 20th May close *903 -unsuccessful so far as the week closed in negative territory-
-more downside most likely however, if by any chance *920 decisively taken out
> SPX 500 *944/*967 (+) for a start

Trading Strategy: side line (safest) hedge: short with upside stop

(there is no guarantee and strategies are just ideas)

Kind Regards

winner69

23-05-2009, 05:02 PM

If Phaedrus did a video probably better than this one ''' interesting how a double top can turn into a sad face wth a few quick brush strokes

http://broadcast.ino.com/education/sp_20090521/?campaignid=3

winner69

23-05-2009, 05:07 PM

This chart has the PE for the S&P skyrocketing of the chart

http://www.chartoftheday.com/20090522.htm?T

....... because earnings have collapsed

http://www.chartoftheday.com/20090515.htm

Halebop

24-05-2009, 11:06 AM

Thanks for the posts W69. Food for thought on the earnings front...

Hoop

25-05-2009, 08:39 AM

Another spin on the S&P 500 charting showing 878.94 as a key point. It has be noticed that the S&P500 market has a cyclic wave with an average of 17 weeks between bottoms. We are presently in week 12. It is feeling from the Chartist that if the 878 level is breached it will begin the wave down to a possible Fibonacci 61.8% level of 768? before it starts to wave up again.

http://broadcast.ino.com/education/sp_500_17week_cycle/

From all the posts presented on this thread lately it seems there is a common consensus that this present rally in the US Equity markets may be over.

This period coming up may define whether we are still in a bear market or that we are in a young bull market.

ananda77

25-05-2009, 05:46 PM

From all the posts presented on this thread lately it seems there is a common consensus that this present rally in the US Equity markets may be over.

...can not see much evidence of that, but after the double top in the SPX and Dow now and if *875 falls, trading needs to happen on the assumption that yes, the rally may be over and the next down leg may have indeed started, although this scenario is the least likely amongst others. A more likely scenario is that the market is going for a correction on a shallow or deeper level before hitting 'GO' for SPX 500 target *1000 (+).

Long Term: !!!!BE ACUTELY AWARE OF THE BEAR!!!!

Kind Regards

peat

25-05-2009, 10:31 PM

S+P 500
long with pretty tight stop

miner

26-05-2009, 12:29 AM

Give you butterflies trades like that.

Cheers
Miner

Dr_Who

26-05-2009, 08:21 AM

US market close last night.

peat

26-05-2009, 09:34 AM

yes I knew that, it was Memorial day. market still traded tho, and in the right direction too. but yeh overall things were very quiet.

haha miner. yes a confluence of harmonic patterns was irresistible to me.

Hoop

26-05-2009, 10:40 AM

Originally Posted by Hoop http://www.sharetrader.co.nz/images/buttons/viewpost.gif (http://www.sharetrader.co.nz/showthread.php?p=257102#post257102)
From all the posts presented on this thread lately it seems there is a common consensus that this present rally in the US Equity markets may be over.

...can not see much evidence of that, but after the double top in the SPX and Dow now and if *875 falls, trading needs to happen on the assumption that yes, the rally may be over and the next down leg may have indeed started, although this scenario is the least likely amongst others. A more likely scenario is that the market is going for a correction on a shallow or deeper level before hitting 'GO' for SPX 500 target *1000 (+).

Long Term: !!!!BE ACUTELY AWARE OF THE BEAR!!!!

Kind Regards

Cross out the all and add minority now.;)

peat

27-05-2009, 06:18 AM

stop was at 877.6 so it held through those dark moments. woke up to a nice limit having been taken at 896. lots more there for others to have. notice the new butterfly in this picture sometimes they take off as if they were eagles.

Hoop

27-05-2009, 12:20 PM

Peat. Just had a vision while reading your post :D:D
I think I should tone down my optimism a tad...you agree?;)

http://i458.photobucket.com/albums/qq306/Hoop_1/ScreenShot012.jpg

ananda77

27-05-2009, 02:23 PM

...SPX 500 continued to bounce after staying ahead of *879 last week

- *916 congestion/*925/*930 double top overhead

Trading Strategy: sideline (safest); hedge: short with upside stop

Kind Regards

peat

27-05-2009, 02:57 PM

haha thats awesome Hoop.
I'm certainly feeling optimistic now, tho not that the market will go in one direction or another, more that my harmonic patterns get it right sometimes.

dumbass

27-05-2009, 04:25 PM

S+P 500
long with pretty tight stop

nice work peat

ananda77

28-05-2009, 07:33 AM

...most likely, the bulls need some more visionary aid to see the index past *916/*925/*930 but in the meantime, *875 seems to go for a walk soon

Trading Strategy: sideline (safest), hedge: short with upside stops and naturally, sell stops somewhere in the desert below *875

FRBSF Economic Letter
2009-16; May 15, 2009

U.S. Household Deleveraging and Future Consumption Growth
http://www.frbsf.org/publications/economics/letter/2009/el2009-16.html

Kind Regards

frostyboy

29-05-2009, 02:54 AM

the last 3/4 hours action sofar looks like a bear flag. after it was oversold. the xlf has tested 11.64 again today. looking to add to shorts at 895 s&p

ananda77

29-05-2009, 06:46 AM

...starting from May 8th High SPX 500 *930 > declining tops *925*/*914

-*914 > Key Level to any further upside potential; most likely market will fail beneath *814 and consequently drive SPX 500 out of current trading range > if *875 test fails

Trading Strategy: sideline (safest), hedge: short with upside stops and naturally, sell stops somewhere in the desert below *875

Kind Regards

ananda77

30-05-2009, 04:40 PM

...during the last 5 minutes of trading the SPX 500/the Dow/the Russell 2000 all pushed through their respective Wednesday's (27th) intraday High;

...before getting carried away with bullish sentiment, today's charge needs to be confirmed with a close above SPX 500 *925 (May 20th High), further indicating the continuation of the bear rally towards the SPX 500 target *950/*1000 (+);

Trading Strategy: sideline (safest) till confirmation; hedge: stopped out and now neutral with very tight down side stops to protect equity exposure (I have my reservations about this move)

Transparency????

As for today's market close, with a literally parabolic jump in the last minute of trading, if anyone still thinks this market trades based on anything resembling normal behavior (unless someone had a very Jerome Kerviel-esque fat delta hedging finger or one/two moderate/large quants who had a huge index hedge imploded), I have some BBB+ rated CMBS to sell to you at par. One culprit could be hiding in the huge drop of agency trading, which this week dropped to a several month low of 1.875 billion shares.

(see attachment 1)

So as essentially no institutional or retail clients are trading any more, it is just a few desperate computers trying to front run each other. And, of course, for the biggest beneficiary of this PT principal bonanza, look no further than the chart below.

(see attachment 2)

Going back to today's ridiculous close, the chart below shows it all: the complete tape painting volume spike at the very end of the day speaks for itself. And as computers now simply issue forced stock recall orders to each other, painting the tape wet with manipulative intent and volume spikes into the last 20 minutes of trading every day, their human creators are left on the sidelines, trying to outshout each other as to the reason for why the market keeps rising while the economy keeps tumbling.

(see attachment 3)

Is there ever going to be any transparency in this market again?

Kind Regards

ananda77

31-05-2009, 08:40 PM

Further to Friday's Close:

Friday's close was "interesting", to put it mildly.

Here's a chart of Friday's price action in the /ES, the S&P 500 "Electronic" Futures:

(see attachment 4)

Notice the huge volume spike (the blue underlay) on the chart at the close.

There were 146,083 contracts traded in that one-minute period between 14:59 and 15:00 (Central); the next minute, when the real dislocation hit, traded 91,774 - after the cash market bell had rung.

The closing bell is usually busy. But this sort of volume is absolutely unheard of. To put it in perspective yesterday the same time recorded 26,540 contracts, and 36,642 the minute after.

Volume was light all day, as is somewhat common in the summer on a Friday. The close started its usual increase, and was up to 23,000 contracts at 14:57 with two minutes remaining.

Then all hell broke loose.

"Paper", or institutional representation, was stalking the close; the pit audio feed so stated. Directly in front of the bell 1,000 contracts were bought - as near as I could tell at the market.

Those are "Big" contracts, each being 5 of the /ES minis; this was, in effect, a 5,000 contract /ES market order.

The reaction was instantaneous. The offer side of the market collapsed and the /ES rocketed higher. In the pit, trades went off as high as 925, but on the E-Mini trades were recorded as high as 927.75. As quickly as it got there, it collapsed back to 922 - a nearly six-handle (3/4 of one percent) straight-up and down spike.

Now here's the problem:

For me to believe this was "organic", that is, this was an un-forced order, I have to believe that someone wanted to go home net long the equivalent of 5,000 /ES contracts into the weekend at a severely disadvantaged price. The market had been calm all day; if you wanted to buy 1,000 spoos (equivalent to 5,000 E-Minis) there was plenty of opportunity to do so all day long. This sort of market order was guaranteed to dislocate the market - so the buyer had to simply not give a damn what sort of price they got.

How bad of a fill was this? To put this in perspective each /ES point is worth $50 per contract.

Each single point that was disadvantaged to the buyer by this execution cost him a cool quarter-million bucks, and on average, the "disadvantage" was likely around five full handles, meaning that the buyer of these contracts, if this was an "organic" order, willingly ate $1.25 million dollars.

I don't believe for one second that is what happened.

There are only two possibilities that I can come up with, and both demand answers:

"Someone" was forcibly liquidated out of a short position - a fairly big one. 1,000 S&P "big" contracts has a maintenance margin requirement of $22,500,000 - that's not a small position, and each point, as noted, has a $250,000 move associated with it. Who was it and why?
"Someone" who didn't give a damn if they lost a sizable amount of money intentionally wanted to shove the cash market up through the 200DMA, a critical technical level. They were 1 minute late; they succeeded in doing so in the futures, but not the cash!
#2 makes for great conspiracy theories, but my money is on scenario #1 - someone got forcibly liquidated into the close, perhaps a big customer, perhaps a hedge fund, but someone.

Whoever it was the coupling between the pit and the Globex futures guaranteed the result. There are computers and traders looking for differences between the pit and E-minis every day who try to pick up those nickels in front of a steamroller. When the offer side collapsed the computers took over and stops got run all the way up to 927.75 before quickly collapsing back down to 922.

Here's the cash chart, as of the close this afternoon:

(see attachment 5)

That's a very pretty potential double-top in the oval, and it coincides with the 200MA.

This is not to say that this level will necessarily hold. We are, in fact, only at the 38.2% retrace from the decline that initiated last fall! It would not be unusual for a bear market rally to go as far as the 61.8% retrace before its over, which is up around 1060ish, or the 50% retrace around 990.

What does this all mean? A few things:

The stops up there are gone. They were potential rocket fuel for next week and the propellant to take us to - and potentially through - the 200DMA on the cash.
A bunch of someones had a lot of contracts that were short taken out on them. Those nearly 250,000 E-mini contracts did change hands, and odds are a very large percentage of them constituted stop-loss orders on contracts sold short from when we were up toward 933 a few weeks ago. Those traders are going to be quite pissed off, but that's the risk of the game.
Next week is very likely to be extraordinarily violent, especially Monday. /ZN (10 year Treasury futures) has seen an insane drop in open interest over the last few weeks. This little game undoubtedly severely damaged open interest in the E-Mini /ES contract.

Thin markets are dangerous markets. While the E-Mini still is very liquid, the removal of these stops from the order book leaves the door open for both little resistance if the market decides to move higher early next week, and also provides the potential for irritated shorts to re-establish their positions short, driving the market lower. Those who wound up long during that little ramp job are likely to be rather nervous as well.

For my part I shorted that spike. Not large, and I am fully prepared to hedge it Sunday evening if necessary or just take it down, as there is every possibility, this close to the 200MA, that we will at least hit it on the cash, and blowing through it on volume and continuing higher cannot be ruled out.

I will note, however, that the last time we saw this sort of dislocation activity start up into the close it it too began with these sorts of "rocket shot" moves higher - and once the shorts were all blown out by having their stops run, the market essentially pancaked.

Look sharp - the sharks are in the water and you taste good.

Disclosure: Mildly short (~5% position) the broad market.

(looks like I am a bit more scottish than this guy but as I said, the downside stops ARE PRETTY TIGHT and thinking about it could ride his short position all the way to Athens....)

Kind Regards

ananda77

01-06-2009, 11:47 AM

...no point speculating; sure is that according to some analyst opinion, since the Dow is price weighted and GM's price is under 1 US$, the removal of GM would not have a big impact...but whatever the replacement could be, would probably make for a more volatile market.

Kind Regards

Hoop

01-06-2009, 01:03 PM

The DOW replacement when GM exits is going to be a talking point. It seems a tech company may get the nod. Apple? Google ?

Many have observed that there are no insurance companies now and thin in financials so the DOW seems unbalanced at this moment. Many also point out by saying "who cares" as the DOW is becoming irrelevant as an index.

The current 30 companies that make up the DOW are

Company Symbol /Quote

Alcoa AA
American Express AXP
AT&TT
Boeing BA
Caterpillar CAT
Coca-Cola KO
Citigroup C
Disney DIS
DuPont DD
Eastman Kodak EK
Exxon MobilX OM
General Electric GE
General Motors GM
Hewlett-Packard HWP
Home Depot HD
Honeywell HON
IBM IBM
Intel INTC
International Paper IP
Johnson & Johnson JNJ
McDonald's MCD
Merck MRK
Microsoft MSFT
3M MMM
JP Morgan JPM
Philip Morris MO
Proctor & Gamble PG
SBC Communications SBC
United Tech UTX
Wal-Mart WMT

Just general information

With this last week I have heard of commentators within various media mentioning uncertainity in the markets and increasing volatility within the markets. I thought I better check on the VIX a good measuring indicator for volatility. I was surprised to find that it is continuing to fall and is still in its downward trend channel.

..just goes to show don't take the media as gospel.. pays to do your own homework. (the vertical line is my reference when I last check VIX)

http://i458.photobucket.com/albums/qq306/Hoop_1/vixi_ix29may06_to_08jul09.png

ananda77

01-06-2009, 04:00 PM

With this last week I have heard of commentators within various media mentioning uncertainity in the markets and increasing volatility within the markets. I thought I better check on the VIX a good measuring indicator for volatility. I was surprised to find that it is continuing to fall and is still in its downward trend channel.

..just goes to show don't take the media as gospel.. pays to do your own homework. (the vertical line is my reference when I last check VIX)

...they were most likely referring to a Sell Signal the VIX flashed twice on May 7th and 20th which states:

the VIX indicates bearish sentiment (sell signal) if:

-VIX closes below 2 std-deviations from its 20-day period moving average and then closes back within it

...anyway, the market was short up to 5 minutes trading last Friday and there is no doubt in my mind that it has been rigged up, like this 'Green Shoot Bear Rally' has been tampered with from the start...

...and as far as GM concerned, it's history but it's death will create severe ripple effects throughout the markets for a long time as one supplier after the other will bite the dust...

!!!!REMAIN ACUTELY AWARE OF THE BEAR!!!!

_no guarantees and strategies are just ideas_

Kind Regards

patsy

01-06-2009, 07:58 PM

Further to Friday's Close:

Friday's close was "interesting", to put it mildly.

Kind Regards

You'll enjoy watching this:

http://myprops.org/content/EVIDENCE-OF-GOVERNMENT-MANIPULATION-IN-THE-STOCK-MARKET-Dan-Shaffer-explains-on-Fox-Business-News-video-and-transcript/

---

As an aside, I believe that some of the radical fluctuations during the last half an hour of US trading has a lot to do with the heavy trading of double-short and double-long ETFs.

P.

Mick100

01-06-2009, 10:08 PM

I believe your wish is about to be granted patsy

the next bubble will be precious metals

ananda77

02-06-2009, 07:30 AM

You'll enjoy watching this:

http://myprops.org/content/EVIDENCE-OF-GOVERNMENT-MANIPULATION-IN-THE-STOCK-MARKET-Dan-Shaffer-explains-on-Fox-Business-News-video-and-transcript/

---
As an aside, I believe that some of the radical fluctuations during the last half an hour of US trading has a lot to do with the heavy trading of double-short and double-long ETFs.

P.

Thank You Patsy and agree, according to analyst opinion, it could have been an EFT squaring position...

...for SPX 500 after the bullish break-out last Friday and despite overall weak volume on the recent rally, momentum should get the index to *950/*968 (+) before further corrective downside develops

Trading Strategy: hedge: short bias

_no guarantees and strategies are just ideas_

Kind Regards

Hoop

02-06-2009, 06:52 PM

The 30 companies that will make up the DOW effective from 8 June are:-

Company Symbol /Quote

Alcoa AA
American Express AXP
AT&TT
Boeing BA
Caterpillar CAT
Coca-Cola KO
Citigroup C out... replaced by Travelers Companies Inc
Disney DIS
DuPont DD
Eastman Kodak EK
Exxon MobilX OM
General Electric GE
General Motors GM out... replaced by Cisco Systems Inc
Hewlett-Packard HWP
Home Depot HD
Honeywell HON
IBM IBM
Intel INTC
International Paper IP
Johnson & Johnson JNJ
McDonald's MCD
Merck MRK
Microsoft MSFT
3M MMM
JP Morgan JPM
Philip Morris MO
Proctor & Gamble PG
SBC Communications SBC
United Tech UTX
Wal-Mart WMT

Source: MarketWatch 1st June 2009 (http://www.marketwatch.com/story/with-gm-and-citi-out-dow-should-be-more-volatile)

BigBob

03-06-2009, 04:23 PM

....
General Electric GE out... replaced by Cisco Systems Inc
...

This is out of control... GE has been dumped too... maybe also in Chapter 11...??? ;o)

Hoop

04-06-2009, 12:52 AM

This is out of control... GE has been dumped too... maybe also in Chapter 11...??? ;o)

ooops.....well spotted Big Bob
General Motors not General Electric.....got the General part right;)
I will go and edit my post to correct

ananda77

04-06-2009, 07:43 AM

Fed chief's testimony: Economy's worst may be past (marketwatch)

...nice one chief, but sorry, sure not going to join you in LA-LA-LAND

...market may be using good, pump & dump news to test support, SPX 500 *925 before heading to back towards *965 (+)

Trading Strategy: hedge: short bias

Kind Regards

ananda77

05-06-2009, 09:24 AM

Hoop

09-06-2009, 12:33 PM

Usually what happens with continual noise happening everyday, ones brain tends to turn off certain channels and become somewhat out of focus on what really could be happening.

To prevent myself from becoming somewhat brainwashed I develop little projects to try and keep everything within an overall perspective.

I often look back at various historical events for help.

My little project today was looking back at history using long term resistance/support lines and to test the DOW's long term memory effect on the present DOW index performance

The 9000 mark on the DOW is well known by chartists as a key level. If the DOW breaks above this 9000 level it signals a return to a primary uptrend.

What is so interesting about this 9000 level (see green line on chart) is the fact it was also the mark which signaled the primary uptrend back in 2003 confirming the end of the last Bear Market cycle in 2002.

...interesting ....eh

Also interesting is the DOWs long term memory as shown with the other major long term resistance/support lines drawn in orange. None of this is uncommon as most charts show trends are affected by long term memory, however as an investor one can see these long term memories can give you valuable advanced warnings to be careful at these times in the future.

http://i458.photobucket.com/albums/qq306/Hoop_1/djiaa_us03jun94_.png

Mick100

09-06-2009, 01:04 PM

http://www.financialsense.com/Market/rpuplava/2009/images/0608_clip_image012.gif

ananda77

11-06-2009, 08:30 AM

...on Wednesday, SPX 500 *925 test successful and index now most likely to take out *949 (June 2nd. High) to target *965 (+)

Trading Strategy: hedge: short bias (building above *950)

_no guarantees and strategies are just ideas_

Kind Regards

...SPX 500 in trading range consolidating between June 23rd. low *924 and June 5th. high *952
...as long as price action remains above *924, bullish upside potential to *968/*976 (+) remains

Trading Strategy: hedge: short bias (building above *950)

_no guarantees and strategies are just ideas_

Kind Regards

ananda77

12-06-2009, 03:33 PM

bad news? Think it'll hold.

...careful Belgarion, the Fed is about to raise rates (the dollar and the bond market)... not good at all for equities

Kind Regards

ananda77

12-06-2009, 05:45 PM

Ahh ... but when?

...end of summer ??? ...anyway, the writing is on the wall

30y Bond Results: ~50% Primary Dealers + ~50% Indirect Bidders (foreign CB's) at 4.6% (that, quite frankly, is ridiculous with inflation expectations running hot)

Kind Regards

ananda77

13-06-2009, 10:35 PM

30y Bond Results: ~50% Primary Dealers + ~50% Indirect Bidders (foreign CB's) at 4.6% (that, quite frankly, is ridiculous with inflation expectations running hot)

Kind Regards

...it's kind of weird, the 4.6% yield for PD's and CB's over 30 years...however:

...considering the US needs to finance USD 3.25 trillion by September 2009, of which foreign CB's will take a chunk of, at least 1 trillion can be expected to be taken by PD's, which are literally stuffed with cash to their necks thanks to the bail outs...and this is how it could work:

-PD's and banks borrow at 0% and earn 4.6% short-to medium term -not bad in a deflationary environment
-in the long term however with inflation taking hold, to borrow at 0% at the short end of the curve and lend out expensive at the long end of the curve, constitutes good conservative banking business

...the question however arises, who is going to dash into debt right now, when the whole of the USD denominated debt stands roughly at 52 trillion???
...it is most unlikely, as a matter of fact, the Fed is simply powerless to stop the deleveraging of the credit based financial/economic system; therefore, inflation will not be a problem short- to medium term as long as this debt is not purged from the system;
...and why would the Fed want to raise rates in the short- to medium term???

-Deliberately acting detrimental to the PD's and CB's interests???
-Deliberately killing off the ???Green Shoots???
-Deliberately going against their own strategy of buying bonds to keep rates low???
-Deliberately worsening the housing market???

...and the Fed is DEFINITELY not raising rates to SAVE the BOND MARKET as the bond market does not need saving

...The Fed has only done two most important things based on the long term view:

1. hand out enough cash to the PD's and banks to survive the ongoing asset squeeze short- to medium term and long term to be ready to lend
2. change the mark to market back to mark to model to stop asset write downs short- to medium term and long term for 'toxic' assets to become 'de-toxified'

...for this long term view to play out profitably for the Fed , the PD's, and the CB's, it will be essential for the deleveraging cycle to come full circle

Trading Strategy: mostly cash; hedge: short bias (still); (timing of delevaraging cycle) to buy PD's (banks)

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

16-06-2009, 10:52 AM

...SPX 500 closed bang on *924; giving the index a bit of lee way from severing *928, any sustained violation of *924 and the market is looking at a short term down target of SPX 500 *880 (minimum)

...selling pressure was intense

...any short-term close above *935 indicates more bullish potential

Trading Strategy: hedge: short with upside stop;

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

18-06-2009, 05:17 PM

...the initial SPX 500 sell-off to date leaves room for a bounce; *920/*924/*928 provide initial resistance and failure below that level offers a minimum short term target of SPX 500 *880 (15th. May low); however:
...the retrace from SPX 500 low *904 to intraday high *918 to a close *911 could indicate that another move down has already started

Trading Strategy: short with upside cover to *956

_no guarantees and trading strategies are just ideas_

Kind Regards

Jess9

18-06-2009, 07:17 PM

Hoop

18-06-2009, 09:31 PM

Are many "long" holders cashing up now?

I saw in the paper this morning that the index's were up about 40% for the year. Could be near the end of a bear bounce. Mind you, if this is coming when...days, weeks or months away yet and opportunity's in the market all the time. Ahh the dilemma. Sold off alot of oilers today (probably regret that one by Monday) but will hold a few goldies. Patience needed now.

I'm thinking like a true optimist:D:D
What happens Jess if this bear bounce turns out to be a short bull correction?

Not only patience is needed. You may also need that mental re-adjustment such as an unexpected quick buy back in strategy (using investment disciplines of course;)). ...

or if your gutfeel is true... Hoop will need a mental re-adjustment such as an unexpected quick sell out:(

Jess9

18-06-2009, 10:17 PM

Hi Hoop. Yip, happy to be wrong. May even get in and out a bit. Will use charts and tighter stop losses on my favorites. I really don't need any nights of being "in" and worrying about hearing... the Dow plunged again, and again, each morning on the radio. Had a few of those late 2008.

Dr_Who

19-06-2009, 09:20 AM

My money's on a short bull correction. Guess I'm an optimist too. ;)

I am with you on this one also.

All the data is pointing to a recovery. How quick of a recovery is anyone's guess at this stage.

ananda77

19-06-2009, 02:42 PM

...SPX 500 bouncing up like a lame duck

Trading Strategy: short (upside cover for optimists); upside stop *935; Short Term Target (Minimum) *847

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

lakedaemonian

19-06-2009, 04:09 PM

I am with you on this one also.

All the data is pointing to a recovery. How quick of a recovery is anyone's guess at this stage.

I disagree......in REAL terms and possibly nominal as well I think we are staring down the barrel of another leg down in equities.

Have you seen the latest US State Income Tax % drops?

Wall Street has become completely disconnected from Main Street reality.

They're not likely to remain so disconnected forever....one of them's gotta move towards the other I reckon.....and with Main Street showing little sign of life I'm going to go with another leg down.

Dead Cat Bounce.

ananda77

19-06-2009, 05:00 PM

I disagree......in REAL terms and possibly nominal as well I think we are staring down the barrel of another leg down in equities.

Have you seen the latest US State Income Tax % drops?

Wall Street has become completely disconnected from Main Street reality.

They're not likely to remain so disconnected forever....one of them's gotta move towards the other I reckon.....and with Main Street showing little sign of life I'm going to go with another leg down.

Dead Cat Bounce.-

...yes, for example, Deutsche Bank's latest (last night) forcast for US properties: -40% to come, ETC, ETC, ETC

The Retreat of the Shadow Lenders, Why Deflation and not Inflation is the Order of the Day
Ellen Brown

"While contrarians are screaming “hyperinflation!”, the money supply is actually shrinking. This is because most money today comes into existence as bank loans, and lending has shrunk substantially. That means the Fed needs to “monetize” debt just to fill the breach."
read it here>>> http://www.globalresearch.ca/index.php?context=va&aid=14011

...and although we could see a total of 50 to 60% retrace in the markets -after the current correction has run it's course- the most devastating leg down....etc, etc, etc

Kind Regards

Hoop

20-06-2009, 02:09 PM

A better than 50% chance its uphill from the March 2009 bottom.

My in depth post (took 2.5 hours to write up...Mrs Hoop not happy:mad::mad::mad: waiting for me to finish so we can go to town).
Its posted on the Forex thread but really it should have been posted here
Click here to see it Post #147
(http://www.sharetrader.co.nz/showthread.php?p=261716#post261716)

ananda77

21-06-2009, 08:55 AM

[QUOTE=Hoop;261717]A better than 50% chance its uphill from the March 2009 bottom.
QUOTE]

...at this stage I would assume not many people would disagree with that

...very volatile trading during the Double Witching Day in the US and at this stage would not want to be absolutely definite about a particular number on the SPX 500 index

...sure though, the equity rally paid well to *956 (as noted in many posts, the first major target in this bear rally) and cash is King at present in terms of equities, no point involving high risks

...as far as getting some cash back from hedging, at this stage would take a sweeping view:

-give me *956 (+) and I may be back in the market in terms of equities
-give me *916 (-) for a change in hedging from short bias to short

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

23-06-2009, 07:30 AM

...after breaking 17th. July SPX 500 *904 Low decisively, *979 most likely the next logical target

...further out, potential to reach down for April 21st/23rd congestion *827/*835 if *879 fails

...if *827/*835 defended successfully, another advance to Nov 2008 High *1008 (+) possible and likely

Kind Regards

Hoop

23-06-2009, 10:58 AM

Vix has spiked too. Checked my stops and only a few more points down and I'll be out for a bit. The World Bank ... !!! Who needs more doom and gloom!

Hi Belg..
yes.. it seems I have been kicked out of some of my stocks today as well. The DOW down -201 to 8339 does not give much confidence short-term and has presented as you say, doom and gloom again.

On the broader outlook of things.

The volatility measured by VIX. Big MEDIA news today it has spiked big time ...HMMM up 11.36% today...OK lets do homework ..below is the VIX chart
The red circle is what the media is all upset about..you can make up your own mind as to the degree of this drama.

Note: The VIX last Wednesday!! spiked higher than today

http://i458.photobucket.com/albums/qq306/Hoop_1/vixi_ix19062009.png

Below is a long term DOW chart with orange resistance/support lines. There is one green line which is important as this was the key line showing when the 2000-2003 and this 2008-20?? bear market period technically ends.

Notice how the DOW has a long memory I have drawn this lines going back years. The DOW still reacts to these lines that are years old.

Also notice the 8250ish support line is important now as if this support is breached as many are fearing it will...a drop back to the next support level is 7900 is very possible.

Many months ago I posted that the DOW had a big struggle breaking up through this 7900-8200 zone.(not noticeable on this long term chart). This is now a strong support zone and will require huge selling pressure to breach.

Also notice that the DOW from last mid October 2008 onwards is attempting to form to form a bullish inverse head and shoulder pattern. The good news is that this pattern can stay intact even if the DOW sharply falls to 7500 then rebounds sharply.

A fall below 7500 would be very bearish and would signal another C wave or capitulation event in progress and would identify the April- June 40% rise as an unusual bear market rally and not a bull market beginning.

On a positive side the creation of the right hand side shoulder is still in progress and a break through the green 9000 resistance line (completing the shoulder formation) signals a technical end of the bear market cycle.

http://i458.photobucket.com/albums/qq306/Hoop_1/djiaa22062009.png

Stranger_Danger

23-06-2009, 11:30 AM

winner69

23-06-2009, 11:59 AM

Hoop

23-06-2009, 12:27 PM

As you say, the VIX has recently had a bigger spike and nobody cared.

If they care now, the point is not the hard data - ie how much it spiked by. The point is the reaction received.

I'm not sure the sunny weather of the last 3 months in the market is about to end, but it is definitely a time for having the umbrella nearby.

SD...
I'm sure..... and I can just about guarantee you that the last 3 months sunny weather is definitely over (index wise). 40% rises in a share market index in a period of 3 months are very rare events....a golden opportunity.

Have a look at my DOW chart again. This 2008 bear market freefall was absolutely huge by historic comparisons, so a V shape reaction at the bottom should have been expected by all even without foresight... I as well as some others expected it and made a lot of money out of it....

Look at it in a perspective way (refer to my DOW chart)....the 2008 stock market fall was so severe, steep and sudden that even this dead cat bounce bounced 40%.

Notice on my chart that during the middle of cycles the index trades in a much less volatile and more predictable trading ranges for year or more..

ananda77

23-06-2009, 07:15 PM

Hoop

24-06-2009, 10:14 AM

A Technical Indicator freebie report on Marketwatch today. (http://www.marketwatch.com/story/14-to-1-down-breadth-day-may-signal-new-downtrend?pagenumber=1)

Not good news for the Bulls unfortunately:(, as they see a lot of signals suggesting a downtrend has commenced with the S&P500 NASDAQ DOW.

They use the indicators that we use on this thread...so this makes good reading and comparisons from us thread posters with how the expert chart readers see it at the moment.

Ananda.. some great stuff for you to look at (re: S&P500) reinforcing your good work on this ST thread

macduffy

24-06-2009, 11:30 AM

Hoop

25-06-2009, 11:05 AM

I don't really understand all the TA stuff but there's been a lot of talk recently about the Dow being close to a "Golden Cross" - the point at which the 50 day moving average crosses the 200 day MA. Apparently this would be seen as a strong bullish indicator.
I presume that with the recent weakness in the Dow, this hasn't actually happened yet.
Could someone with a firmer grip on the subject comment on this. In particular, would a failed attempt be regarded as a significantly bearish turn in the market or would there still be grounds for expecting possible further attempts at the cross?

:)

Golden cross or junk jewelery...both are treasured by different people.:)

It's a late indicator so it tells you what has been happening.

The media has hyped it up a bit because its perceived to be more reliable on a medium/long term chart in situations that we are presently in.

Is it more reliable in sharp movements ? Refer to chart...The last time we had a similar situation to now was the 1984-87 bull market cycle...the warning cross was crap as it occurred after the 1987 crash and then crossed again (bullish?...nah not in this case) after a 30% gain only to have several crosses again (always late). This time (end 2007) the All Ords fell more slowly so the cross was very accurate.

Not an good indicator to use in isolation.

The vertical (sepia colour) lines on the chart below indicate the crossing over....so you can visually make up your own mind on how good this indicator is and how it could be of good use to you. Personally I don't use it.

I have posted an All Ords chart because the MA50/200 crossed on the 18 June 2009.

http://i458.photobucket.com/albums/qq306/Hoop_1/xao_ax31dec79_to_24June.png

ananda77

25-06-2009, 09:30 PM

ananda77

26-06-2009, 07:06 PM

...SPX 500 closed comfortably above *916/*917 today and the positive tone carries the potential to test *930/*956

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

27-06-2009, 03:08 PM

...again, the market is at a critical juncture:

...a SPX 500 close above *917 would be indicative of a short term Low
...an immediate break and Close below *879/*880 would negate any bouncing potential
...a Head & Shoulder Topping Pattern may be developing (see attachment)

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

...as a trading strategy, it may be a good idea to stay out of this fractured market until the intermarket divergence between the Dow and the Nasdaq/SPX 500 are resolved as there is as much bearish as bullish potential at present; the key will be the Dow direction early next week; the Dow *8490 level needs to fall convincingly to resolve the divergence;

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

winner69

29-06-2009, 09:08 PM

Hoop - this on the Golden Cross from Hussman
http://www.hussmanfunds.com/wmc/wmc090629.htm

Similarly, we are skeptical about things that cross our desks urging us to forget the economy's debt fundamentals and break into a chorus of Zippidee-Doo-Dah. Last week, for example, I was treated to a report on the so-called “Golden Cross” – the event where the 50-day moving average of the S&P 500 crosses above the 200-day moving average. Next to a carefully compiled set of dates were the purported returns of the S&P 500 over the following 1, 3, and 12 months. As one moves down the report, the analyst either figured that investors would no longer pay attention or forgot how to operate a calculator, so one-year gains of 100%, 200% and more were piled into the average (the figures were about 10 times the true returns). Suffice it to say that the true history of the Golden Cross is bronze at best, with actual 1, 3 and 12 month total returns in the S&P 500 (since 1940) coming in at 1%, 3% and 14% on average. Even those figures, however, benefit from three particular instances where the S&P 500 gained over 40% over the following year – those instances were 1942, 1953, and 1982 – each which began at multiples of just 7-8 times normalized earnings (not the current multiple of nearly double that). Excluding those three instances, the subsequent returns from the Golden Cross are no better than throwing dice.

In short, beware of analysts bearing indicators that all is suddenly well, and check their facts.

ananda77

30-06-2009, 04:58 AM

...SPX 500 challenging very critical *927 after *917 intraday defended:

-decisive break and Close above *927 > positive environment to challenge *956 (+)
-Failure at this point > imminent retrace to *879 at a minimum likely

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Phaedrus

30-06-2009, 03:35 PM

winner69

30-06-2009, 04:53 PM

Here is a link to download a pdf copy of a recent Merrill Lynch research report on S&P500 golden crosses.
Go to http://www.tradersnarrative.com/free-trading-resources/
Select "Reports and Articles"
Then "Golden Cross.pdf"

This report was commissioned by Bank of America/Merryl Lynch and shows that when associated with recessions, the average 12-month return after a Golden Cross is 19.2% vs the 7.1% average 12-month return for the index.

We live in hope that 2009 might be one of these years - (Quote from above post) Even those figures, however, benefit from three particular instances where the S&P 500 gained over 40% over the following year – those instances were 1942, 1953, and 1982 –

Phaedrus

30-06-2009, 05:38 PM

Those figures benefit from three particular instances where the S&P 500 gained over 40% over the following year... Sure - but such good years also contributed to raising the S&P 500 "buy and hold" historical average return.....to 7.1% pa.

ananda77

02-07-2009, 07:39 AM

ananda77

02-07-2009, 07:32 PM

...SPX 500 reversed all of Monday's sell-off, but so far, the *930 break-out barrier still stands
-further advances to *956 likely, above *922/*925 congestion
-if there is a decisive Close below this level, *879/*865 need to be confirmed before any further advances to the *1000 level are possible

Trading Strategy: as before, give me *956 (+) and I start thinking, but even then, it is most unlikely, I would be seriously bothered with this manipulated GS-bull****

...and although medium to longer term, The SPX 500 most likely has not topped out yet, short term, in regards to the SPX 500 H&S topping pattern, any new High below the 11th. June Top *956, is a potential H&S peak (see attachment)
...and the VIX, after a low of ~25 (= 2 standard deviations below 20-day MA), now closed back within 2 standard deviations (= short term sell)

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

03-07-2009, 07:41 AM

SPX 500 so far today:

-*922/*925 >gone
-*917 >gone
-*913 >gone
-*900 may go on the Close, >May 15 Low *879 and *865 in range

...if *865 defended > possibility, that the potential *1000/*1008 bottom will be in place

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Dr_Who

04-07-2009, 09:38 AM

Ananda, the S&P looks like it is in a good trading range.

I must learn how to read it so maybe have a trade one day. Never traded the S&P before.

winner69

04-07-2009, 10:07 AM

Ananda, the S&P looks like it is in a good trading range.

I must learn how to read it so maybe have a trade one day. Never traded the S&P before.

As time slowly grinds on the US market charts from 2000 are looking very much what they looked like from 1965 to 1981 ..... going nowhere over 16 years ... except this time the amplitude (volatility) of the ups and downs are a bit bigger but none the less the same pattern .... and we are not even at the half way point of this secular bear market

ananda77

07-07-2009, 07:50 AM

so far, SPX 500 *886 marks the low point of the current correction drive

-reluctance to take it lower at this stage >
-markets oversold >
-modest upward bounce to *900 congestion could be expected >
-*879 remains likely target before market would have the potential to head higher to *1000/1008

...as far as the H&S concerned, there are voices questioning the symmetry of the pattern, but in any case, if there is a decisive break below *879 (CONFIRMED), then potential exist to test the March Low

Trading Strategy: sideline

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Dr_Who

08-07-2009, 08:38 AM

The market is pricing in a bad profit result from the companies.

If there is a few good result announcements, then we can see another run.

ananda77

08-07-2009, 04:45 PM

The market is pricing in a bad profit result from the companies.

If there is a few good result announcements, then we can see another run.

...like the usual high negative forecasts and then better than expected results...

the SPX 500 tiptoeing to lower Close, no impulsiveness leading the charge lower, as a result I would be bullish in the short to medium term until the index reaches the *1000/*1008 level as a minimum; further limited losses to *865/*868 could be expected short term;

Trading Strategy: sideline (safest); hedge: short bias

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Lego_Man

09-07-2009, 10:31 AM

Support on the S&P looking solid at current levels...

ananda77

09-07-2009, 06:21 PM

Support on the S&P looking solid at current levels...

...pressure on the SPX 500 remained ante earnings reports, but volume has been light on down ticks

...as a matter of fact, maybe due to program trading again, a MASSIVE amount of buy volume hit the market -NYSE ticks up to +1466, the highest extreme since the March Low...

Trading Strategy: sideline (safest); hedge: short bias

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Dr_Who

09-07-2009, 08:58 PM

shasta

09-07-2009, 09:46 PM

Market should bounce overnight abit. Dont know if it is a dead cat bounce or not.

The consumer numbers coming out of China is very good. Chinese Auto sales up over 48% and auto market now larger than the US. Very impressive.

Given the US automotive industry is just about on life support, is that such a benchmark to achieve?

The Japanese are far far smarter & have adapted to changing consumer demand (as have other Asian countries, ie Korea), time the US looked elsewhere for guidance :rolleyes:

ananda77

10-07-2009, 09:52 AM

...round 1: SPX 500 *868 successfully defended

...further pressure on *868 expected, but if the level holds, it will be the base for a bullish advance to *100/*1008/1027 medium term towards the end of summer

Trading Strategy: sideline (safest); hedge: short bias

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

15-07-2009, 07:37 AM

...like the usual high negative forecasts and then better than expected results...

the SPX 500 tiptoeing to lower Close, no impulsiveness leading the charge lower, as a result I would be bullish in the short to medium term until the index reaches the *1000/*1008 level as a minimum; further limited losses to *865/*868 could be expected short term;

Trading Strategy: sideline (safest); hedge: short bias

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

...looks like the SPX 500 H&S topping pattern turns out to be a 'faker'; and although another sell-off could be expected near *930/*950, there is good potential for *860/*865/*869 to be the floor for a bullish advance to *1000/*1027 (+) towards the end of summer

Trading Strategy: sideline (safest); hedge: long bias to *930/950 (+)

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Dr_Who

15-07-2009, 10:25 AM

Good numbers coming out of Singapore and China. Goldmans and a few others also posted good results. The market is now concentrating on corporate results. A few more good results can push this market higher. Lets see what the rest of the week brings.

winner69

16-07-2009, 10:22 AM

Look at it this way ....

VIX at 31 means that punters are expecting the S&P500 to move by 9% in the next 30 days .... UP or down ... just slightly more than the =/- 8% expectations of yesterday

Not that volatile really?

See ..... the VIX was saying something like this weeks rally might happen ..... 9% indicated above was UP .... volatility can go both ways

And with the VIX now only 25 (pretty low) does that suggest that the current gains will hold and we can see some good dtaedy gains from here on in

Hoop

16-07-2009, 12:09 PM

See ..... the VIX was saying something like this weeks rally might happen ..... 9% indicated above was UP .... volatility can go both ways

And with the VIX now only 25 (pretty low) does that suggest that the current gains will hold and we can see some good dtaedy gains from here on in

Agree.....and VIX is just one indicator of many that are showing conflicting signals to those theorists (mostly EW people) predicting a bear movement back to 6500 and below. I personally think the VIX has to break its primary downtrend and do a sudden and very dramatic uptrend reversal before any C wave can occur....a good indicator to keep your eye on ..eh Winner

ananda77

16-07-2009, 08:02 PM

# FOMC minutes: downside econ risks still significant; 5-6 yrs before trend growth

...to make the SPX 500 *1000/*1027 target juicy enough, quite a bit of bullish sentiment needs to be shaken out of the market with a good portion of fear inducing downside

...index vulnerable to retrace to *869 which, if supported, would form the perfect solid base supporting the expected bullish *1000/*1027 advance; also, the *900 level can not be ruled out as support

...anyway, would be slightly uncomfortable to have filled a bullish portfolio today

Trading Strategy: sideline (safest); hedge: short bias

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Hoop

17-07-2009, 10:36 AM

Hoop, EW people?

A77 great work dude! While I don't usually play week-on-week positions your analysis has been wonderful in that it helps me to understand daily swings.

Hi Belgarion.

EW short for Elliot Wave analysis.

My posts might assume I am a critic of EW but I'm not..

...I respect this discipline of forecasting.....it's hard not to respect it when when you see past spectacular results acheived from it... such as Robert Prechter’s winning the big trading contest in the late 1980's by using EW alone.

Most EW people throughout the world and Dumbass our own ST resident EW poster all concur that this latest rally (March -?? ) is now a very mature B wave and is overdue to end resulting in a sharp downward trend (C wave) the extent of the drop of which can be forecasted using Fibonacci sequences.

I must admit that during last week I sold down when the technicals broke, and with Dumbass' impending C wave posts flashing through my brain, I decided to play the safety game and become less exposed. I was 95% in the market and was technically foolishly overexposed. I sold down to 60% with 40% now in cash. This week my gains are not as huge as they would've been but my portfolio is safer and I have cash for opportunities again .. I'm am bullish in that I beleive this inverted H&S formation will complete seeing the 9000 broken and another move up towards the 11000 but there was volatility on the left hand shoulder so this could theorically be mimicked on the right hand shoulder seeing drops to 7700 as being feasible if volatility returns...a good volatility indicator is the VIX and the VIX is saying at the moment that there is a better than average chance that a drop to 7700 won't happen in the short term because the volatilty is at a medium level and declining, Winner calculating it at this moment as a theoritical 9% swing either way (see Winner 69 post)

With this weeks hindsight, it seems last weeks TA breaks was false (bear trap) and the EW critics are out once again banging their drums, and the shorters are licking their wounds once again.

It's a funny old market..eh Belg?

Dr_Who

24-07-2009, 07:34 AM

Dow is above 9000!

Bullmarket!
:)

Dr_Who

24-07-2009, 10:31 AM

Question is ... How far? And how fast? ... (personally I'm picking both far and fast!)

I am guessing, all those doomsayers which includes the funds that are short the market are climbing over eachother trying to get set back into the market. Alot of money have been sitting in the sidelines for too long, so it will take them time to buy back into the market.

Footsie

07-08-2009, 07:52 PM

with non-farm payroll out tonight.... that pullback might arrive.

Dusty

08-08-2009, 01:06 AM

with non-farm payroll out tonight.... that pullback might arrive.

247,000 jobs cut when forecasted was 320,00 and not only this but unemployment rate dropped to 9.4% as opposed to forecasted rising to 9.6. Which is obviously a good sign for consumer spending which many see as being the main obstacle for a sustained recovery.
AIG also have posted a profit for the first time in 7 quarters, (2nd q net earnings $1.8b)
Pullback not likely tonight.

macduffy

08-08-2009, 08:34 AM

The Dow had another good day but keep an eye on the Baltic Dry Index.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aOkYkh3CsUFg

Dr_Who

08-08-2009, 07:11 PM

Thanks for the article Mcduffy. This is an interesting statement which can mean it is only temporary, maybe?

Rates are declining as Chinese steelmakers delay imports while they negotiate annual iron ore prices with producers such as Rio Tinto Group, BHP Billiton Ltd. and Vale SA, Durrell said. “I don’t think they will come back until they agree,” he said.

The unemployment figures out of the USA only tells us that there is maybe a light at the end of that tunnel, it is NOT yet a turn around figure. The unemployment rate have not turned around, it is only falling slower than previously forecast. This concerns me, esp when the market have rallied 50% too far ahead of itself.

Most of the company results have been boosted by cutting cost and not from increased earnings.

Footsie

09-08-2009, 08:21 PM

well done belg... its about constantly improving yourself

ananda77

10-08-2009, 10:29 AM

...just making a quick judgement without an in-depth analysis of the markets so far it seems, the SPX 500 trades within reach of a major top at *1044, with an intraday trading high of *1100 not out of reach

...the Dow sell-off from Friday, unconfirmed by the other US indices seems like a typical 'can not be bothered to hold over the weekend event')

...watch for further strengthening of the USD, which would add a lot of headwind to further bullish advance and supporting the 'major top argument'

Trading Strategy: sideline (safest); hedge: short bias adding on the upside at *1100;

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards
__________________
Exit Strategy:

ananda77

10-08-2009, 07:32 PM

Welcome back A77.

Quick question - why "long term: the bear" ... what measures are you using?

...there are very strong views out there which expect a severe trough some time in the not too distant future as a result of extremely irrational and unsound financial practices that will only lead to the unhinging of existing financial and economic systems

...consequently, I do not look too far out on the curve as far as equity investment strategies are concerned

Kind Regards

ananda77

11-08-2009, 07:04 AM

...SPX 500 light profit taking early in the week after Friday's 10 month high *1018, but the corrective move is likely to find support at the *1000 level;
...if the *1000 defense leads to a Close above *1014 (38.2 % retrace 2007/2008 break), then the SPX 500 should be on it's way to *1044/*1100 by the end of the month

Trading Strategy: unchanged

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards
__________________

winner69

11-08-2009, 07:05 AM

love the term ;bailout bubble'

http://informationclearinghouse.info/article23224.htm

Hoop

11-08-2009, 09:45 AM

Media bubble (http://sharemarketing.wordpress.com/2008/04/24/social-media-bubble/).... a great tool from conspiracy theorists rumour merchants politicians to company promoters etc.......a great marketing tool. (http://www.bubblemedia.co.uk/)

Internet bubble...used to be the phrase for the Dot-Com 1998-2000 bubble ...now its the explosion of internet communication Twitter Facebook etc.

Life Bubble ...another name for Earth

Bubbles everywhere!!!!!!!!!!!!

Bubbles are even come out of my TV set every-night....Mrs Hoop watching Shortland St, Coro, Casuality and all that other Soapy mush.

Are we in an age of Bubble Mania (http://www.bubblemania.com/)? ...obviously not according to Google

Edit:....food for thought... system cycles can not exist without bubbles.

Hoop

11-08-2009, 11:39 AM

Adding on about system cycles and bubbles...

Everyone is rather focused on the Financial systems side of the "whole"(Global economic network of all systems). Understandable as part of the financial system cycle nearly went from orderly function to chaos in 2007 it panicked a lot of people and there are lingering doubts.

From my personal view the financial systems, although still a worry, they are not bothering me as much now as these systems have had the mechanics bought in overhauling part of these systems behind the scenes

....Personally I can see problems that worry me more coming from other systems

The Commodity cycle bubble is now big and growing. The system mechanics have yet to start work here to hinder/fix the large flow of smart money speculating within and distorting these markets.

For a complete normal economic recovery all system cycles have to behave (within their normal Standard Deviation range).

Vital to a continuation economic recovery is the future disconnect of commodity/Equity uptrend sync (correlation).

After this inverted Head and Shoulder formation is complete, it may not be the financial market worry that cause the DOW S&P500 + other Equity Markets to pause their uptrend and retrace negativity for a period of time it may well be the Commodity market (remaining high temporarily) starting to disconnect.

Edit....High commodity prices raising fear of flow through inflation...other reasons for a pause in uptrend and retrace to test the supports..would be recovery counterbalances commencing e.g rising interest rates

ananda77

12-08-2009, 07:25 AM

ananda77

13-08-2009, 07:04 AM

...SPX 500 stayed well clear of the *983 and bottomed at *988 before heading impulsively higher

...the door is open for further gains to *1044/*1100, but to be sure, the bulls need to clear the *1014 on a Close

...SPX 500 Close *1006 and intraday High *1013 > dicey and the advance not to be trusted so far

Traing Strategy: sideline (safest); hedge: bullish to *1044 (minimum); no equity exposure at these levels

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

14-08-2009, 08:41 AM

U.S. retail sales sank 0.1% in Jul, well below median 0.7%; -0.6% ex-autos
U.S. jobless claims rose 4k to 558k, above median 545k for the Aug-8 week
U.S. July home foreclosures +7% m/m, up 32% y/y to new record - Realtytrac
U.S. business inventories declined 1.1% in Jun, below median vs -1.2% in May

...despite the soft data out in the US, the SPX 500 managed a firmer Close *1013 and seems to consolidate between Aug 7 high at 1,018 and the Aug 11 low at 992; bullish sentiment remains and a break-out from the consolidation range to the upside targeting *1044/*1100 seems likely by end of August

Trading Strategy: sideline (safest); hedge: bullish to *1044 (minimum); no equity exposure at these levels

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ollie

14-08-2009, 09:55 AM

Hi ananda77, I look for your posts most days and enjoy reading them.

Each or at least most state, quote:
-----------------------------------------------------------

Trading Strategy: sideline (safest); hedge: bullish to *1044 (minimum); no equity exposure at these levels

Long Term: THE BEAR

-------------------------------------------------------------------
Are you saying to stay on the side line and not trade ?
Are you saying here, the market is bullish to 1044 (Dow) but no equity exposure ?
Long term the bear, you've been saying that most of this year.

It's like telling the lost driver to turn either left or right at the next corner, no firm direction.

No doubt your directions are clear but i am confused.

Thanks

beacon

14-08-2009, 03:14 PM

kudos ananda. good work.

Lego_Man

14-08-2009, 04:51 PM

+ 1 for ananda appreciation.

The question is, how long is longterm?

ananda77

14-08-2009, 06:21 PM

...Markets overbought > sideline = safest
...Markets not trending > sideline = safest ...or you trade depends on your risk profile

...trading two markets easier than one:
-ASX for equities for example
-derivatives (market platform) for insurance, flexibility, speed, extra leverage
-no equities in an overbought market = position automatically profitable to the downside; derivative market position covers the upside potential > the spread is up to your own creativity and risk aversion (SPX 500 upside potential = *1044 minimum to *1100)

...long term: up to a couple of years (+) or soon, but I expect a severe trough in 2012/2013 > by end of year or sometime next year, the market could start the slide; long term: the bear really means, that trading happens on the basis to be always aware that every downside correction could be the big one (a bit like earthquakes)

Kind Regards

ananda77

15-08-2009, 07:41 AM

U.S. CPI was flat in Jul, below median 0.1%; core rose 0.1%, below median 0.2%
U.S. industrial production rose 0.5% in Jul, above median 0.2%; cap use 68.5%
U. Michigan sentiment sank to 63.2 in Aug, well below median 68.0 vs 66.0 Jul

...stay put is not in the nature of a market and the failure of breaking through SPX 500 *1014/*1018 on a Close during the week, motivated profit taking;

...the retrace to the intraday *994 low (at present) stayed well within the defined consolidating trading range and still leaves the bullish sentiment intact for now; expect another attempt to break through resistance as early as next week

Trading Strategy: sideline (safest); hedge: bullish to *1044 (minimum); no equity exposure at these levels

Long Term: THE BEAR

‘The World Is in Trouble’: Deutsche Bank Chief Economist
http://www.cnbc.com/id/32396144

RBS uber-bear issues fresh alert on global stock markets
http://www.telegraph.co.uk/finance/markets/6018076/RBS-uber-bear-issues-fresh-alert-on-global-stock-markets.html

_no guarantees and trading strategies are just ideas_

Kind Regards

Dr_Who

15-08-2009, 09:56 AM

‘The World Is in Trouble’: Deutsche Bank Chief Economist
http://www.cnbc.com/id/32396144

Kind Regards

I have to disagree with the views by the DBS chief economist.

The Chinese purchase US debt using cash, not debt. It is in the best interest for the Chinese to assist and rescue one of their largest customers. US is by far the Chinese biggest and most important market.

Also the Chinese have a large commodity reserve that will hedge against any USD weakness. China is forecast to be the worlds biggest market by 2015. We are already witnessing a decoupling happening right now in front of our eyes. Strong Chinese economy have a flow on effect to other Asian and Eastern countries. This is evident with Australia. What we are seeing in Australia is the result of a strong Chinese economy.

The world is slowly decoupling from the US.

The central banks in the US and around the world will need to inflate the economy to help pay off the huge debt. This will create another bubble. They are doing exactly what they have done in the past. The cycle of boom and bust revisited yet again.

ananda77

15-08-2009, 10:53 AM

Dr. Who:

...just to give you another few views on reality read:

The Coming China Meltdown
by Martin HutchinsonAugust 04, 2009
http://www.prudentbear.com/index.php/thebearslairview?art_id=10256

The Return of Thomas Mun
by Martin HutchinsonJuly 27, 2009
http://www.prudentbear.com/index.php/thebearslairview?art_id=10254

China Has become a Giant Ponzi Scheme
Andy Xie (Morgan Stanley economist fired because of controversial views in e-mail)
http://www.my1510.cn/article.php?id=e3fc777cdd24720a

The Coming Collapse of The Chinese Economy
By Professor Ching-hsi Chang
http://en.epochtimes.com/news/5-8-25/31554.html

...and DO NOT FORGET the USD-RALLY just gaining momentum

Kind Regards

Dr_Who

15-08-2009, 11:25 AM

Hey Ananda.

Some of the points the commentators and economist make are valid and I dont disagree with them. I too believe that the next crash will come from China, so keep a close eye on China. China is going down the same path as the SE Asians in 1997 and the West recently 2007 crash. China still have a few more years to run before we have concerns about a fall.

I believe that China do have a few more years to run as their economy is still growing at lighting speed. Their debt level is very low and the average Chinese are still saving more than they earn. The domestic debt level in China are still low in comparison to the other countries.

I hope China dont get themselves into trouble by mounting up huge debt levels and learn from the mistakes displayed by US. If China goes down the toilet, the world will go into a deep depression.

For now we are still relatively safe with the Chinese economy strong and going on a spending spree that will have a very positive flow on effect for its neighbours. Aust will still be in a recession if it wasnt for China.

Hoop

15-08-2009, 01:10 PM

I have to disagree with the views by the DBS chief economist.

The Chinese purchase US debt using cash, not debt. It is in the best interest for the Chinese to assist and rescue one of their largest customers. US is by far the Chinese biggest and most important market.

Also the Chinese have a large commodity reserve that will hedge against any USD weakness. China is forecast to be the worlds biggest market by 2015. We are already witnessing a decoupling happening right now in front of our eyes. Strong Chinese economy have a flow on effect to other Asian and Eastern countries. This is evident with Australia. What we are seeing in Australia is the result of a strong Chinese economy.

The world is slowly decoupling from the US.

The central banks in the US and around the world will need to inflate the economy to help pay off the huge debt. This will create another bubble. They are doing exactly what they have done in the past. The cycle of boom and bust revisited yet again.

I agree with you Doc..

China is a different story...it never suffered from this last global recession as it was never in recession..therefore there was no economic recovery in China, for them it was and is business as normal and growing/profiting from it.

From reading these economist's articles you get the feeling they are fiddling with their worry beads and forecasting with false logic influenced from the present tough times.

Figures are unofficial at the moment but Multinational Companies marketing departments seem to agree that Western world source growth figures for China are unreliable and conflicting...Independent research from PepsiCo is showing growth of 9+% (a couple of months ago) most of it internal.

International companies are being pulled like a magnet to China. These Multinationals bring money into the country's infrastructure which promotes growth and help sustain it... another win win situation.

And don't forget India target 8% growth rate neither. India is also becoming a International Company magnet.

Indra Nooyi (PepsiCo CEO) video PepsiCo extra $500M investment into India (http://www.youtube.com/watch?v=pjz4kVaZPeY&feature=related) (Dec 2008) gives us some idea how these Multinational companies boost all areas of a country's well being from Health to building roads (infrastructure) ..research .. school education ..target to eliminate poverty in India by 2015..etc.

All this money spent in China /India is money not spent on USA/ Europe infrastructure.
The US aren't used to other Countries competing for Multinational Company funds of this magnitude...it is a loss situation for USA.

We as Investors are going to have to live with conflicting media reporting much of it US influenced, as well as increased covert economic and political fiddling... as US and Europe aren't just going to roll over without a fight and let the world power base slowly gravitate to Asia.

whatsup

17-08-2009, 10:26 AM

U S banks if you believe the U S recovery is a "light at the end of the tunnel", they are well off their Mar/April lows by a large factor and when the proceeds are repatiarated back to N Z there is the ex factor as well.

Dr_Who

17-08-2009, 10:12 PM

Big drop in Asia and follow weakness in Europe. The Dow may tank tonight.

WEakness all round. :eek:

ananda77

18-08-2009, 07:26 AM

...short term indications (VIX divergences) that the SPX 500 may already have topped at Friday's high *1018
...today's trading below *1000 opens up risk for a test of *983, which, if defended successfully, leaves the door open for further gains to *1044/1100 by end of August; otherwise, watch out for further losses to *925/*950 initially

...traders seem ready to abandon ship

Trading Strategy: sideline (safest); short bias with no equity exposure at present;

...in sympathy with the global equity routs, the SPX 500 fell out of its Aug 7 High *1,018/Aug 11 Low *992 trading range to July 23 High *979 intraday Low

...despite stabilizing at *979, risk has now increased for further downside initially targeting *968 (-)

...if this level holds, the market will be set for a bullish bias to initially retake *1018 with view to target *1044/1100 marking a major top by end of August

Trading Strategy: sideline (safest); hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ollie

18-08-2009, 09:13 AM

ananda77,

message understood

over and out

peat

18-08-2009, 03:10 PM

Two points of interest ...

1. VIX most recent low higher than previous low - and spiking above 50 MA

2. Recent falls are on declining volumes

3. advance decline ratios are getting much smaller i.e more stocks are falling than are rising.

ananda77

18-08-2009, 04:31 PM

...SPX 500 current bear-rally support line: a Close beneath would mean extreme risk of substantial downside (see attachment)

Kind Regards

Dr_Who

18-08-2009, 07:43 PM

Asian market recovered follow by European. Will the Dow stay positive over night?

Hoop

18-08-2009, 09:05 PM

Two points of interest ...

1. VIX most recent low higher than previous low - and spiking above 50 MA

2. Recent falls are on declining volumes

The VIX chart show no big deal at this moment...it may have broken its steep decline but no short term uptrend is evident yet. All downtrends have to end somewhere The VIX at 25 is higher than the normal range, 20 would have been better but I'm happy with that if it plateaus out here for a while considering what we have been through.

http://i458.photobucket.com/albums/qq306/Hoop_1/VIX18082009-1.png

The DOW has changed its direction but it may just be a healthy bull market(1) maybe (2) correction (a breather) within an overall secular bear cycle. The last breather was in June - July and lasted about a month...

A fall as far as to the 8800 level can be expected, and then resume upwards again with another rally, creating a bear trap at the 9000 primary line.

There is also a chance that 9000 support may hold (retest).

If 8800 level fails the next target level down is 8200 last seen in early July.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW17082009.png

ananda77

19-08-2009, 07:42 AM

U.S. PPI fell 0.9% in Jul (median -0.2%), ex-food/energy fell 0.1% (median +0.1%)
U.S. housing starts fell 1.0% in July to 581k unit rate (median 598k)
Fed Senior Loan Officer Survey: Demand down for all loan types except prime mtgs

...if the SPX 500 attempted bounce stalls out beneath a Close *992, another leg down to test the July 29 *968 Low is likely; if tested successfully, a bullish bias would target *1018 initially with *1044/*1100 in sight

!!!BUT!!!...make no mistake, there is potential that this bear rally had it!!!

Trading Strategy: sideline (safest); hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Dr_Who

19-08-2009, 09:38 AM

Ive got a feeling that the US market is struggling to go higher. It is trying to find a reason to move higher. It will have to be a very good reason for it to move higher after having gone up 50% in 6 months.

The Asian market will be volatile for awhile yet, which could mean good trading opportunities.

Ananda, have you thought about trading the Hong Kong or China market?

lakedaemonian

19-08-2009, 03:52 PM

Dr_Who

19-08-2009, 07:48 PM

China took another bath today down over 4%. A health correction before the next leg up? Who knows, valuations on some China stocks are pretty up.

Laked, do you have a link to the article? Cheers

lakedaemonian

20-08-2009, 01:12 AM

China took another bath today down over 4%. A health correction before the next leg up? Who knows, valuations on some China stocks are pretty up.

Laked, do you have a link to the article? Cheers

Unfortunately, it is not available in the public forum....gotta join Select :)

It would be inappropriate for me to copy the article, BUT in short:

EJ at iTulip is sticking his neck out and calling China a top as well as the 2nd and last chance to short China for the foreseeable future.......and he's been right far more than most everyone in the last 10 years.

Also, Andy Xie is calling Chinese stocks and property 50-100% overvalued.

I'm not one to trade shorts, but am considering it.

My biggest worry is the big picture stuff, if EJ and Andy are correct.

I think we are as well positioned as we can be in the event it happens, but it's always worth quadruple checking I suppose.

iTulip is an invaluable resource.....I strongly encourage folks to tab it alongside sharetrader.

ananda77

20-08-2009, 07:45 AM

...SPX 500 *978 successfully defended in early trading leading to a swift recovery, the upside capped however by the Aug 14 Low *995/Aug 14 Congestion *1,004; (the Dow penetrated *9233 and traded as high as *9310); the Closes on the US indices are important after today's trading action

...a SPX 500 Close under *995/*1004 would most likely invite another leg down for a test of the Jul 29 Low at *968 minimum; if tested successfully, a bullish bias would target *1018 initially with *1044/*1100 in sight

!!!BUT!!!...make no mistake, there is potential that this bear rally had it!!!

Trading Strategy: sideline (safest);
-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias with equity exposure (the juice upcoming dividends in some defensive stocks are difficult to resist at times)

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Dr_Who

20-08-2009, 09:57 AM

EJ at iTulip is sticking his neck out and calling China a top as well as the 2nd and last chance to short China for the foreseeable future.......and he's been right far more than most everyone in the last 10 years.

Also, Andy Xie is calling Chinese stocks and property 50-100% overvalued.

If they are right, it can have huge implications for the global economy. We can go into a depression.

I am in a view that China do have a few more years to run. Make no mistake, alot of assets are over valued cos China is growing at a faster pace than other countries and assets can be priced at a higher multiple.

Alot of SE ASian countries are now booming because of China and India. The flow on effect is huge.

Here is hoping China do not fall too soon.

lakedaemonian

20-08-2009, 05:44 PM

If they are right, it can have huge implications for the global economy. We can go into a depression.

I am in a view that China do have a few more years to run. Make no mistake, alot of assets are over valued cos China is growing at a faster pace than other countries and assets can be priced at a higher multiple.

Alot of SE ASian countries are now booming because of China and India. The flow on effect is huge.

Here is hoping China do not fall too soon.

To clarify further...iTulip' official position IS referring to this process as a Depression....and I would agree.

ananda77

21-08-2009, 07:30 AM

S&P 500 pushed back above 1,000, buoyed by AIG, Shanghai Composite bounce
U.S. Philly Fed jumped to +4.2 in August (median -1.0) from -7.5 in July
U.S. leading indicator rose 0.6% in July, as expected, vs +0.8% June
U.S. jobless claims jumped to 576k (median 550k), vs 561k in prior week

...after yesterday's firm Close *1007 and despite the mixed data, the SPX 500 reached out for further gains with bullish sentiment set to drive the index to a new recovery high later August

...there is potential, not a necessity, for a mild correction, to affirm Jul 29 Low at *968 (minimum) before hitting a new High; if tested successfully, a bullish bias would target *1018 initially with *1044/*1100 in sight; but it could be a one-way street to initially challenge *1018 (+)

!!!BUT!!!...make no mistake, there is potential that this bear rally had it!!!

Trading Strategy: sideline (safest);
-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias with equity exposure (the juice upcoming dividends in some defensive stocks are difficult to resist at times)

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

22-08-2009, 07:25 AM

Eurozone Aug manufacturing PMI jumped to 47.9 (median 48.0) from 46.3
Eurozone Aug services PMI much stronger than expected at 49.5 (median 46.5)
U.S. existing home sales surged 7.2% to 5.24 mln units in Jul (median 5.00 mln)
S&P 500 surged to new trend high, keying off U.S., eurozone data, corporate earnings

...SPX 500 gapped open higher to a bullish take-out of the Aug 7 peak *1,018 and further upside appears likely in the short term

...the break-out sets the tone for a tackle of the Oct 14 High *1,044 initially with *1100 in sight

Trading Strategy: sideline (safest);
-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias with equity exposure

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Footsie

22-08-2009, 01:29 PM

still bearish amanda?
I hope you dont turn LONG TERM BULLISH at the top

ananda77

22-08-2009, 03:29 PM

I hope you dont turn LONG TERM BULLISH at the top

...aware the market is close to a top and the Bear will strike in a truly spectacular fashion, just as spectacular as the whole rally has been so far

but unless I see first indications of trouble like:

-SPX 500 *968/*959 taken down on a Close
-support line taken out on a Close (see Hoop's and my posts earlier on the Dow and SPX 500 respectively)

the market is in for another top;

...bearish or bullish are limitations which may distort your ability to act in markets accordingly, so I try to trade the markets objectively

Kind Regards

Footsie

24-08-2009, 10:15 AM

fair enough Ananda... but your posts always seem to have a bearish tone.

I too agree that this is a secular bear market. but there are great minor bull markets to ride, which seems to last anywhere from 18months to 4 years.

ananda77

24-08-2009, 07:27 PM

fair enough Ananda... but your posts always seem to have a bearish tone.

...if the posts seem to always have a bearish tone, then it is most likely that they are tilting to the bearish side;

Kind Regards

ananda77

25-08-2009, 08:02 AM

..SPX 500 encountered the first taste of overhead resistance of the Oct 17 High *1044 and subsequently turned lower at the beginning of a new trading week;

...test to affirm *1018 seems likely, but there is potential that the overall strength of the advance could propel the index towards *1050/*1072 before *1018 will be undergoing a thorough testing

...a *1018 successful defense would open the *1100 (+) target

Trading Strategy: sideline (safest)

-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias with equity exposure; minimum 50% short at *1100

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

26-08-2009, 07:49 AM

...SPX 500 stayed above August 7 Peak *1018 but has not made it yet to the Oct 17 High *1044 (+), which leaves the potential *1044/*1050/*1072 targets still open for the taking, before a thorough testing of *1018

...a *1018 successful defense would open the *1100 (+) target

Trading Strategy: sideline (safest)

-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias with equity exposure; minimum 50% short at *1100

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

26-08-2009, 10:39 PM

...the market may stay bullish for a while longer but indications are mounting that support the notion of 'Long Term: THE BEAR'... (long term may be understood as any lenghth of indeterminable time)

History may or may not repeat, but here is an interesting Chart (see DJIA 1929 - 1932)

Thanks to Elliot Wave International -The chart shows the last deflationary bear market, the decline from 1929 to 1932 when the DJIA lost 89 percent of its value. Observe the bear market rallies during the nearly three-year long stock debacle. Save for the first rise that occurred from November 1929 to April 1930, each time the Dow violated the support line drawn beneath the bear market rally, the next leg down was confirmed underway. I’ve listed the percentage declines that ensued, as well as how many weeks the market fell prior to the start of the next bear market rally. Some trendline breaks caught the start of the next leg early and some occurred a bit after. But this simple technical method was quite effective in identifying when the Dow was in the next phase of collapse.

The risk of a double-dip recession is rising
By Nouriel Roubini
http://www.ft.com/cms/s/0/90227fdc-900d-11de-bc59-00144feabdc0.html?nclick_check=1

Mr. Kellner (marketwatch.com) on the money supply: (see chart -Money Supply Growth)

“Guess what? The Federal Reserve has not only stopped depositing copious amounts of liquidity into the economy -- it now appears to be in the process of making a sizable withdrawal. A close look at quantitative measures of monetary policy reveals a sudden change in trend. After growing at unprecedented rates for well over a year, these aggregates stopped rising several months ago and have since declined, according to data provided by the Federal Reserve Bank of St. Louis.

For example, the monetary base -- the raw material for the money supply -- has fallen at a seasonally adjusted annual rate of 8% from early April of this year through mid-August, after soaring at a 187% pace during the previous eight months. And after ballooning from $100 billion to nearly $1 trillion between September 2008 and mid-May, adjusted reserves have since declined at a 43% clip, to just over $800 billion. As a result, the Fed's two measures of the money supply, M2 and MZM, have begun to contract. M2 has shrunk at a 3% pace since the middle of June, while MZM, the St. Louis Fed's measure of liquid money, is down by 2% over the same period. Both had been rising by rates as much as 15% earlier this year. These are sharp enough changes over a long enough period to suggest that our central bankers are more concerned about inflation developing down the road than you might think, judging by their public statements.

And with good reason. As I pointed out in my column of Dec. 28, 2008, the Fed can't wait for all the stars to align or for the umpire of the business cycle, the National Bureau of Economic Research, to make the official call that the recession has ended. It must act long before if it is to prevent another burst of inflation.

The markets are already concerned about inflation. The yield curve has steepened over the past few months, while the spread between the plain vanilla 10-year Treasury note and its TIPS (Treasury Inflation Protected Security) counterpart has jumped from zero at the beginning of this year to 2 percentage points today.

To be sure, no one expects the Fed to hike interest rates anytime soon. But some forecasters think that by the second quarter of 2010, the effects of these reductions in liquidity will result in the federal funds rate rising above the top of the central bank's current target range.

This will mark the beginning of what could be a rather aggressive tightening of monetary policy. After all, it would follow a period of aggressive easing. This V-shaped configuration for monetary policy is why I think the recovery will look like a W. It is also a good reason to take some profits from the recent run up in stocks -- along with the fact that the two worst months for equities, September and October, are just around the corner.”

Thanks to Stocktiming: Interesting Developments on the Interest Rate Front (see chart -US TNX 10 Year Yields)

-So, what's in the future for interest rates?

Something big is around the corner ... a large move in the interest rates. At least, that is what the 10 year yield chart is telling us now.

Take a moment to look at the (TNX) 10 year yield chart. A very large triangular formation has occurred. It started in May and it is now working its way to its apex where a breakout will occur.
From a technical projection standpoint, a 9 point move should occur from the breakout point ... up or down. That is a very large move and it will have an impact on housing, automobiles, and anything requiring a loan. And yes ... it will also have an impact on the stock market. The question is whether the breakout will be up or down?

For the past few months, the Fed has been actively engaged in the market and buying down rates in an effort to feed/nurse an economic recovery. But, this week, Bernanke announced that the Fed would stop their interest rate buy down program by the end of October.
If this market influence is removed, it would seem reasonable to expect interest rates to rise without that dampening influence. If rising interest rates is the direction that could happen, then the affect on the housing market and large financed purchases will be very negative because of the projected magnitude of the interest rate rise.

Kind Regards

ananda77

27-08-2009, 07:26 AM

- U.S. durable goods orders surged 4.9% in Jul, above median 3.0% vs -1.3%
-U.S. MBA mortgage market index rose 7.5%, purchases +1.0%, refis +12.7%
-U.S. new home sales surged 9.6% to 433k in Jul, above median 390k vs 395k
-Fed's Fisher: Great Recession is over, but jobs recovery will be painfully slow
-Fed's Lockhart: past worst of downturn, but high unemployment seen protracted

...the SPX 500, failed to achieve the new High *1044/*1050 and despite the positive data out in the US, slipped down the slope for a possible test of the Aug 7 High *1,018 at least

...risk lingers to go lower to affirm the midpoint Aug 17-25 rally *1,008, but bullish potential *1044/*1050/*1072 targets still open for the taking

......a *1008/*1018 successful defense would open the *1100 (+) target

Trading Strategy: sideline (safest)

-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias with equity exposure; minimum 50% short at *1100

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

28-08-2009, 09:16 AM

...after a profit taking shake-out, the Dow *9459 successfully defended Aug 7th High *9438 and surged higher to intraday *9610 to a Close *9581;
...the SPX 500 suffered the same fate earlier in the trading day but additionally displayed weakness by penetrating *1018 to a intraday Low*1016, before surging higher to a *1031 Close

...as a consequence, risk still lingers to affirm the midpoint Aug 17-25 rally *1,008 (-);

Trading Strategy: sideline (safest)

-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias with equity exposure; minimum 50% short at *1100

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Dr_Who

28-08-2009, 09:44 AM

Ananda, what do you mean by ... Long Term: THE BEAR?

Footsie

28-08-2009, 01:34 PM

it means he/she is a "perma bear"

constantly bearish regardless of market direction.

at least thats what i think......

srowe

28-08-2009, 02:20 PM

ananda77

28-08-2009, 05:56 PM

It pays to take note of what others are predicting.It reflects research done by those who predicted the last crash.If your right ,you can be happy,but if the Bear comes ,youll know who to listen to next time. Either way,you can benefit.

well said...

...and if someone does not like it in the update soup, they can just ignore it

Page 38, Dr Who will give you an idea

Kind Regards

ananda77

29-08-2009, 04:01 AM

...another High *1039 for the SPX 500 in 2009 followed by another mild sell-off (transfer = bear-speak) to currently *1030'ish which looks like another consolidating attempt before trading shut-down for the week

...the trading action remains supportive as long as SPX 500 *1000/*1008/*1018 are not taken out; this floor leaves enough bullish potential in the SPX 500 for another High next week as soon as *1044 eats dirt in a bullish effort to reach *1050/*1075/*1100 (+)

...the Oct High *1072 carries the potential for the SPX 500 to probably top out at the 50% retracement of the 2008-2009 Break at *1119;

...the parameters are set so let's get on with it, knowing, that any new High may be the the one before a major sell-off

Trading Strategy: sideline (safest)

-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias with equity exposure; minimum 50% short around *1100

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Phaedrus

29-08-2009, 02:04 PM

The main question here that we all have to answer is "What should I be doing today?" Right now, should I be buying, selling, holding or standing aside?

I regard the future as essentially unknowable. Anyone can make guesses as to what might happen, but that is all we can do. Guess. Why waste time and effort futilely striving to predict what the market might do in the future? An accurate and objective assessment of the current market state is more useful than any forecast. Sooner or later, experience teaches you that forecasting is not necessary in order to react logically to changing market conditions. All you have to do is act appropriately as each day presents itself. My objective is to assess the market direction day by day without any preconceived notions as to what it "ought" to be doing. Without any Bullish or Bearish bias. My aim is to get as close as possible to total objectivity.

To this end I have developed a new oscillator, a "Market Sentiment Indicator". It is a composite indicator which is derived from a combination of other indicators. Each of the constituent indicators is itself a "compilation indicator" formed by using a very wide range of time periods on standard indicators and tabulating the results. This means that there is no backtesting, no optimisation and no search for the "best" time period for each indicator. "All" time periods are used.

The Index is charted in different colours which are controlled by the MSI plot as per the inset table.

http://h1.ripway.com/78963/DJIA829.gif

sharer

29-08-2009, 04:35 PM

It has been fascinating watching your development of this new MSI in posts over recent months on various threads, Phaedrus. The philosophy that you have succinctly summarised above as lying behind the reasoning I find very attractive (in fact totally convincing, no doubt because i agree with it!).

Obviously for presentation reasons each recent version analyses this major international Index. Will you soon be able to apply the MSI to major local stocks like BHP.asx or TEL.nzx?
Since i saw your first version posted somewhere i've been trying to imagine various charts of contemplated trades and the volumes & wondering how it might look in your new graph format, for a start. Now the MSI is emerging from the creative caves of your imagination, well, the clamour must begin - we just have to have it! Soon? Soonish?
Of course there will be limitations (i'm guessing you may be sweating behind the scenes to identify these). Will it then become available?
There must be many here like me who can hardly wait.
Thanks for the inspiration.

ananda77

29-08-2009, 08:36 PM

...in terms of current market behavior:

...of course Phaedrus' new MSI (congratulations by the way) would be advice to be 100% invested because that is the present market moment in terms of optimism and bullish sentiment;

....looking at another 'The Daily Sentiment Index', it reads at present 89% bullish sentiment;
so 89% of market participants are already more or less invested in the markets and one must wonder where on earth major upward price movements should come from; furthermore, this extreme optimism coincides with prices hitting major resistance points in the US Markets;

...and as the saying goes, of course this time, it may be different, but just before the October Crash Moment, the DSI read 88% bulls and just before the March 2009 Low, pessimism was at its extreme and bearish sentiment read an extreme 98%, which left 2% bulls in the field;

...other than that, I readily agree with Phaedrus' notion: "...the future as essentially unknowable" and "...Why waste time and effort futilely striving to predict what the market might do in the future?"

...in my experience also

--if one wants to know the future, look no further than the present moment
-the next moment is totally and completely unknown but:

...markets are essentially people

-based on observations of current behavior there is potential to make likely (future) assumptions
-market risk can be minimized but never totally eradicated unless one stays out of the markets

WHAT ARE THE CHANCES OF A GREEDY PERSON TO DEVELOP GENEROSITY TOWARDS FELLOW HUMAN BEINGS (and DO be careful not to make futuristic judgements in the moments just ahead of you)

Kind Regards

pago

30-08-2009, 10:05 PM

Phaedrus

31-08-2009, 09:47 AM

Sharer, re running this indicator on stocks. I think you would want it in a somewhat simpler form. You really don't need to differentiate ordinary stock "market strength" into so many categories. Maybe just "Going Up", "Going Down", and "Going Nowhere". Of course, this should be obvious from the price plot, but the idea is to make these judgments totally objective.

Pago, I use MetaStock software to prepare these charts.

beacon

31-08-2009, 12:00 PM

The main question here that we all have to answer is "What should I be doing today?" Right now, should I be buying, selling, holding or standing aside?

Isn't that predicting as well? Immediate rational action would be impossible unless you had a view (prediction/speculation/reasoning/intuition - call it what you will.) on where things were headed. All TA is aimed at crystal ball gazing, isn't it? And perhaps, so is FA to some extent. One builds on perception momentum, the other on performance history. But both are useful only in where and how they can help us look forward and act accordingly.

Ananda 77 deserves kudos because he stuck his neck out day after day laying bare his reasoning, as well as predictions - and so far he is winning, by my count. TA logic usually comes as hindsight (barring some instances from commentators like you, but then you too get well deserved praise for that), quite unlike Ananda 77's forward looking statements. Macdunk also got credit for his foresight as well as having the guts to voice his market crash call.

I for one thoroughly appreciate well reasoned posts, regardless of whether they were proved right or wrong by the market in the short term....

Phaedrus

31-08-2009, 03:00 PM

"The main question here that we all have to answer is "What should I be doing today?" Right now, should I be buying, selling, holding or standing aside?"
Isn't that predicting as well? No it is not. Right now, my system classifies the current market as being Strong and therefore a market that I should be in. This is not a prediction and in no way should it be viewed as one. I'm not saying it will stay strong. I'm not even saying it will probably be strong tomorrow. The classification could easily change overnight. This is NOT forecasting, which would imply a prediction of future strength at a future time. The essential point here, Beacon, is that this system is totally reactive and is dedicated to assessing the current market condition.

Immediate rational action would be impossible unless you had a view on where things were headed. Not so. Quite the reverse, in fact. I may hold the view that the US economy is going to Hell in a handbasket, but if the current market is strong, I want to be in it. My immediate reactions would be totally at variance with my longterm view, but I would nevertheless regard my actions as being totally rational.

All TA is aimed at crystal ball gazing, isn't it? Absolutely not! Robert Rotella in his excellent book "The Elements of Successful Trading" put it very well when he said "Technical analysis is the study of past market behaviour to determine the current state or condition of the market". That's the CURRENT state of the market - not what we think or hope or predict it might be tomorrow.

Both (TA and FA) are useful only in where and how they can help us look forward and act accordingly. I disagree. You don't necessarily need a forward view in order to act appropriately right now. Act logically each day and your position will always be congruent with the prevailing market conditions.

TA logic usually comes as hindsightUnfair comment. TA logic is very well documented. The situations it covers are meticulously described in great detail. For example, a common "breakout" Buy signal occurs when, after a downtrend, prices rise on high volume. This situation will either apply or it won't. Where is the hindsight? You might like to take a look at this (http://www.sharetrader.co.nz/showthread.php?p=158715)thread. Well ahead of the event, this post documented a system that would detect any significant weakening of the market, enabling a timely exit before the crash. When the time came, it worked beautifully. No hindsight there!

Right now the market is assessed as being strong, so I want to be in it. I have no way of knowing how long it will remain strong, but so long as it does, I want to be in. When I assess the market as weakening, I will reduce my exposure to it. When I assess the market as being weak, I aim to be totally out of it. No predictions, no hindsight, no crystal ball gazing, - just appropriate, immediate rational action.

ananda77

31-08-2009, 05:38 PM

Beacon, Belgarion, Dr.Who, Phaedrus, et al. (this is an alphabetical listing of names and not indicative of preference)

...why limit ourselves...

...there is no doubt about Phaedrus's insight and extensive knowledge in conventional TA and its validity; consequently, it should be an important part in any mix of market analysis;

...as far as my posts are concerned, they are, over the span of a week/month, mainly the research results of three different styles of market analysis, analysing the US market according to various time frames using an exiting mix of tools;

-an extremely conservative analysis with the main focus on 'Preservation of Capital'
-a contrarian analysis
-a trading analysis extremely close to the daily market action using mainly 'price' to determine probabilities

...the more knowledge that goes into the decision making process, the better the result

...one may argue till the cows come home, but personally, that would distract me only from the task at hand;

Kind Regards and see you at tomorrow's market update; -May We All Be Successful-

ananda77

31-08-2009, 08:21 PM

The main question here that we all have to answer is "What should I be doing today?" Right now, should I be buying, selling, holding or standing aside?

...as a personal strategy, considering emerging divergences displayed on some indicators in the major US indexes:

...fully invested, currently 5% hedged on equity, ready to take the hedge VERY quickly to 50%

...by he way belgarion, I like your investment style

Kind Regards

ananda77

01-09-2009, 08:22 AM

...so far the SPX 500 intraday Low *1015 and the Close *1021 is still within the support range where upward bullish developments are likely; because of the current weak streaks appearing in global markets, there is likely further downside for a test of the August 20th High *1008 with possible further down to the *1000/*980 support for the SPX 500; if this support range is defended on more then aenemic volume, the bullish bias is likely to target the Oct 14 High *1,044 (+) initially

...there are some serious divergences developing in the major indexes however which indicate a continuously weakening market support if they develop further

Trading Strategy: sideline (safest);
-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias (5% short on equity) with equity exposure

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

01-09-2009, 09:18 PM

...after the major US Indexes rallied to over 50% since their March Lows, the markets face now hurdles that are not easy to take (see attachments); so it comes as no surprise, that according to TrimTabs Investment Research:

Insiders Selling Stocks at Highest Level Since May 2008
http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/08-28-2009/0005084471&EDATE=
"In a research note, TrimTabs explained that insider activity is not the only sign the rally is about to end. The TrimTabs Demand Index, which tracks 18 fund flow and sentiment indicators, has turned very bearish for the first time since March."

...however, because the markets are so close to their respective trend lines, it is likely in the very short term, the markets will challenge those hurdles and with a high degree of probability a major market top should coincide with the test...otherwise we would have a new bull market ahead of us...

Kind Regards

Jess9

01-09-2009, 09:20 PM

Cashed up today. Watching TA signals closely. Discipline and patience required next.

ananda77

02-09-2009, 05:59 AM

U.S. ISM surged to 52.9 in Aug, well above median 50.5 vs 48.9 in Jul
U.S. construction spending sank 0.2% in Jul, in line with median vs 0.1% in Jun
U.S. NAR pending home sales rose 3.2% to 97.6 in Jul, above median vs 94.6
U.S. vehicle sales tracking 23% surge to 13.8 mln in Aug (med 13.3) on clunkers

...SPX 500 testing Aug 20 Congestion *1,006/Aug 19 High *1,000 in what could be described as an 'Impulsive Sell-The-Fact' sell-off;

...Aug 19 Congestion *993 currently supported by intraday low *998; however, the impulsive plunge below *1012 has certainly introduced the bear into the markets and as a consequence, markets are now on the tilt;

...a decisive defense of the current trading Lows would indicate the willingness of bulls to still play the game targeting Oct 14 High *1,044 and the *1050 barrier initially, but!!!

...a new recovery High remains unlikely unless the bulls really take out the SPX 500 *1030 barrier decisively

----Game On---

Trading Strategy: sideline (safest);
-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias (10% short on equity (+) depending on today's Close) with equity exposure

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Dr_Who

02-09-2009, 07:44 AM

Looks like a healthy correction coming up.

I held on some cash to take advantage of this correction.

winner69

02-09-2009, 07:55 AM

VIX jumps to 29 .... thats good news cause it signals the strong possibility of a 8% rise in the S&P500 in the next 30 days

STRAT

02-09-2009, 09:26 AM

Cashed up today. Watching TA signals closely. Discipline and patience required next.Everything Jess? :eek:
Thats quite a strong reaction I would have thought

Hoop

02-09-2009, 10:11 AM

A freebie from Technical Indicator courtesy of MarketWatch. (http://www.marketwatch.com/story/sp-500-dow-industrials-violate-first-support-2009-09-01)

It has Monday 31st August data but not todays (USATime) data (1 Sept) so just mentally note on the charts the latest closing bell data
DOW 9311
Nasdaq 1969
S&P500 998

Jess9

02-09-2009, 10:11 AM

Hi Strat. Probably jumped the gun as usual. All sold apart from what cant be, those troublesome oppies in a nameless gold minnow...which is sorely trialing my patience, BUT which may still shine : )

Happy to wait for ITC, at the right price, on any general sell down.

ananda77

02-09-2009, 05:55 PM

The Shanghai 180 A Shares Index is already back in bear market territory;

China: Bogus Boom?
John H. Makin
http://www.aei.org/outlook/100061

"China's aggressive attempts to maintain an 8 percent growth rate for an economy that is export-oriented in a world in which global trade volumes are collapsing carry substantial risks."

Will the spill-over effect into global markets be ongoing

Kind Regards

Dr_Who

02-09-2009, 07:26 PM

If only we can buy the Shanghai A share index.

I wouldnt mind trading it. Looks like heart attack territory fun.

I actually think this is a healthy correction.

ananda77

03-09-2009, 12:51 AM

VIX jumps to 29 .... thats good news cause it signals the strong possibility of a 8% rise in the S&P500 in the next 30 days

...VIX pushed to a Close beyond two standard deviations above its 20-period MA = bearish; however a consequent Close under its 20-period MA would turn the market short-term bullish; but!!!

......a new recovery High remains unlikely unless the bulls really take out the SPX 500 *1030 barrier decisively

Kind Regards

ananda77

03-09-2009, 07:16 AM

U.S. Q2 productivity revised up to 6.6%, above median 6.4% vs 6.4%; ULCs -5.9%
U.S. ADP employment survey sank 298k in Aug, below median -250k vs -360k Jul
U.S. MBA market index sank 2.2%, purchase index -1.0%, refi index -3.1%
FOMC minutes: rates should be kept low for long time, asset purchases steady
Fed's Lockhart economic recovery mild, inflation risks are not a major worry now
FDIC's Bair warns on commercial mortgages

...as expected, SPX 500 traded lower to *992 support and currently hanging on the cliff with bare teeth; the 31 August Low *1014 would be the minimum bull rescue bid on a Close-Basis, to get the index back on land, otherwise additional weakness would cause another plunge for a test of Aug 17 Low *980 as a potential stronger floor

...*1014 as the minimum bid would indicate the willingness of the bulls to still play the game targeting Oct 14 High *1,044 and the *1050 barrier initially, but a lower risk strategy would imply no action until *1030 taken out on a Close-Basis

Trading Strategy: sideline (safest);
-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias (10% short on equity to *1014 on a Close-Basis; 5% short on equity to *1030 on a Close-Basis; neutral >*1030) with equity exposure

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

04-09-2009, 06:50 AM

U.S. ISM non-manufacturing index rose to 48.4 in Aug, above median 48.0 vs 46.4
U.S. initial jobless claims fell 4k to 570k, above median 560k for Aug-29 week
China finalized deal to purchase $50 bln worth of SDR-denominated IMF notes
S&P raises 12-month target for index to 1,100

...as long as the Chenards-RSI stays positive, there is a chance for a rebound, but the market remains on a tilt; the VIX still not trading below 2 STD below its 20-day MA period (= bullish signal for short term bounce) and consequently, the market is in bearish mode at present

(see attachment)

...basically flat-lining, the SPX 500 seems stabilizing and as long as today's intraday low *992 remains the pivot point in the short term, chances are, bullish tendencies will resume at some stage later;

...SPX 500 keypoints *1014/*1030 have to be taken out on a Close-Basis for bulls to show, they are still in the game playing the *1044/*1050 targets and eventually establishing a new High above August *1039;

...if *992 goes down the pipe, the market would most likely take another breather around *975 (= 38% retracement of the Jul-Aug rally) for a test

...watch out for the Job report tomorrow as a possible katalysator for a key move to either side

--- 8:30 am Nonfarm payrolls Aug. forecast -233,000 last -247,000 ---

Trading Strategy: sideline (safest);
-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias (10% short on equity to *1014 on a Close-Basis; 5% short on equity to *1030 on a Close-Basis; neutral >*1030) with equity exposure

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

05-09-2009, 04:48 PM

Austrian economist Ludwig von Mises (1881 - 1973):

"There is no means of avoiding a final collapse of a boom brought about by Credit Expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

...translated into current markets

Charles Biderman, CEO TrimTabs Investment Research:

”"Insider selling is 30 times insider buying, while corporate stock buybacks are non-existent. Companies are saying they don't want to touch their own stocks."..."When companies are heavy sellers (of their own stocks) and retail customers are borrowing to buy stocks; that's always been a sign of a market top."

...the end of the trading week has been under the wing of an extended US holiday and trading may have been subject to position squaring;

...although NYSE volume is still diminishing, the SPX 500 took the minimum *1014 hurdle on a Close-Basis preparing for the bulls' entrance onto the playing field again;

...and despite being knocked back during the sell-down last week, Fed and Foreign liquidity inflows remained strong but are extremely over-extended; as the bond market shows, markets anywhere have become addicted to the continuous flow of funds fresh off the press

the buy/sell spread of institutional investors just avoided the cross-over level and remained neutral with a slight up-tick by the end of the trading today;
last not least, the VIX delivered the expected SHORT-TERM bullish signal by closing back within two STD of its 20-day period MA;

...in terms of trading, SPX 500 *992 most likely in for another test next week and the rest is covered in the previous update:

-successful defense = bullish to *1044/*1050 targets initially
-failure = test of *975 initially

......so watch timing; watching the spreads in the credit market always has been a good indicator of an approaching crisis

Trading Strategy: sideline (safest);
-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias (10% short on equity to *1014 on a Close-Basis; 5% short on equity to *1030 on a Close-Basis; neutral >*1030) with equity exposure; STOPS to the downside VERY UNCOMPROMISING (although it may compromise the margin)

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

07-09-2009, 07:18 PM

the SPX 500 and other US markets are at a MAJOR resistance level (see attachment)

ananda77

09-09-2009, 07:58 AM

...seems the bulls have come back refreshed from their extended holiday and immediately got to work to extend the SPX 500 bounce from *992 to take out the Aug 28 Low *1015 decisively; as a result, the new key level to watch for any sign of weakness is the Sep 4 Congestion *1,012;

...as long as the weeks trading action remains above that level, the risk of a deeper sell-off is markedly reduced and chances are, that the market will grunge higher to take on the long awaited Oct 14 High *1044/barrier *1050 targets initially;

...further up the market would have to deal with the Oct 7 High *1072 and the 50% retracement of the 2008-2009 Break *1119

...on the other hand, a break below *1012 would signal a sideways/consolidating stance featuring a range between *992 - *1026

...looking at the SPX 500 monthly chart, it looks like a bull market has already started as the MACD/MACD histogram, as well as the Stochastic are turning upwards (see attachment); however, September is not over yet and only if these indicators stay positive into the month end and the SPX 500 Close *1039 is taken out, the market is technically in a new bull phase

Trading Strategy: sideline (safest);
-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias (10% short on equity to *1014 on a Close-Basis; 5% short on equity to *1030 on a Close-Basis; neutral >*1030) with equity exposure

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

ananda77

09-09-2009, 07:18 PM

.... What effect will a depreciating USD have?

belgarion, I guess a devaluing US dollar will be a positive for stocks; it will be inflationary for sure, but if a company has pricing power over their products, it can raise prices and maintain profitability;
also, a company that generate a large portion of their sales from outside the US will benefit from the declining dollar

...maybe the Chinese ARE worried about diminishing dollar values but it is not a worry to me; I would be a lot more concerned for the equity markets about what is happening in the bond markets right now

Kind Regards

ananda77

10-09-2009, 07:37 AM

...SPX 500 currently up 5 and seems on track to continue the rally as long as trading level remains above *1012

Trading Strategy: sideline (safest);
-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias (10% short on equity to *1014 on a Close-Basis; 5% short on equity to *1030 on a Close-Basis; neutral >*1030) with equity exposure

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Footsie

10-09-2009, 10:57 AM

a77 by missing this entire rally "on sidelines - safest"

how do you make money from investing?

ananda77

10-09-2009, 12:23 PM

a77 by missing this entire rally "on sidelines - safest" how do you make money from investing?

...if you stay on the sideline, you are not making money from investing, but you are not loosing it either; -decisions, decisions-

Kind Regards

fungus pudding

10-09-2009, 12:25 PM

...if you stay on the sideline, you are not making money from investing, but you are not loosing it either; -decisions, decisions-

Kind Regards

You might be 'loosing' it through opportunity cost.

ollie

10-09-2009, 04:17 PM

footsie, you don't get it do you. Bank interest mate, thats sidelines. Never mind the Dow's up like 50% since March ?????????????????????????

long term : the bear

sorry 77 but i don;\'t get it either

ananda77

10-09-2009, 08:54 PM

long term : the bear; sorry 77 but i don;\'t get it either

...let's take a look at what is happening to the US 10 yr Long Bond:

(see attachment _a)

...the Long Bond breaks out of the triangle formation to the downside

(see attachment _b)

...immediately, the Fed, despite talking bull**** re: monetary policy reversal, intervenes in the market in an effort to hide that the credit crisis is still well and very much alive

(see attachment_c)

...the Long Bond currently

(see attachment_d)

and the question begs: -How Long Can The Fed Keep This Complete Nonsense Up?-

!!!A YIELD BREAK-OUT TO THE UPSIDE WILL SIGNAL THE END OF THE CREDIT CRISIS!!!

!!! A YIELD BREAK-OUT TO THE DOWNSIDE WILL SIGNAL A DEEP DEPRESSION!!!

...the bond market is approaching the Apex of the triangle formation and until the break-out occurs, the equity markets are likely to continue to rally and any attempt to top-hunt is likely to fail;

Kind Regards

ananda77

11-09-2009, 06:48 AM

U.S. initial jobless claims sank 26k to 550k, below median 560k for Sep-5 week
Continuing Claims 08/29 6088K down (main reason: benefit period ends)
U.S. trade deficit deepened to -$32.0 bln in Jul vs median -$27.5 bln, -$27.5 bln Jun

...SPX 500, after a mild shake-out move early in the trading day, crawled steadily higher and is within a hair breadth of the *1044/*1050 target

...as long as the weeks trading action remains above the *1012 level, the market will likely grunge higher to take on the long awaited Oct 14 High *1044/barrier *1050 targets initially and deal with the Oct 7 High *1072 and the 50% retracement of the 2008-2009 Break *1119 further up

...on the other hand, a break below *1012 signals a sideways/consolidating stance featuring a range between *992 - *1026

----Treasury prices extended gains Thursday, pushing 10-year yields down by the most in two months, as the government's sale of 30-year bonds drew strong investor demand on the heels of two note auctions that went off successfully this week----

Trading Strategy: sideline (safest);
-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: short (minimum 5% equity covered ) with equity exposure; short bias (+)

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

Dr_Who

12-09-2009, 10:20 AM

I have a feeling this market wants to come down.

The market is now factoring the best case scenario. Any bad news will be a good reason for a sell down.

ananda77

12-09-2009, 03:03 PM

You mention insiders are selling - Could this be because insiders, typically high net worth individuals advised by the same group that touted derivitives, are in the same position as the banks and they need to sell assets to cover the loses they've made in derivitives. Reason I'm speculating is that much the same thing happened when some Lloyds syndicates got hit hard.

...no matter what objective a company CEO, Chief Financial Officer, or Majority Share Holder has to sell their shares, there is only one reason for the US $31 SELLING TUNE against the US1$ BUYING TUNE at the present moment:

-namely, selling on expectations, that prices will not go substantially higher

...despite light NYSE volume, the SPX 500 crawled higher to intraday *1048 and the trading day ended with a typical weak weekend finish *1042

NYSE Up Volume 130.9 243.2 264.3 [278.5] 299.4 373.5 586.5
NYSE Down Volume 76.0 152.3 256.9 [2359.6] 428.6 475.8 688.1

again, a new recovery High for the SPX 500 on a up/down volume ratio: -0.92

...index top-hunting just does not make sense at the moment, but neither does the fundamental state of the SPX 500 (leaving the liquidity injections responsible for this rally aside)

...maybe the market will go for a slight sell-off next week, in which case *1026 should act as a short term floor from which the index is likely to target Oct 7 High *1075;

...looking further out, it will take some time, but the SPX 500 so far is on track to achieve *1100, but a market top becomes more and more likely as the index pushes towards the 50% retracement of the 2008-2009 Break *1119

...as far as the US Long Bond Market goes: ---Treasury yields tumbled to 2-month low---

Trading Strategy: sideline (safest);
-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: short 10% equity covered; short bias (+); with equity exposure;

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards