Dow [Archive] - Page 3 - Sharetrader Forum

ananda77

14-09-2009, 08:09 AM

A77, too small to read. Can you pls post a larger one or a link? Cheers.

...the text:

>

My partner Kevin Lane is fond of saying “Stock price direction is a function of several factors; valuation, future expectations, sentiment and liquidity.”

That last component, liquidity, seems to be most dominant lately since buying power (or lack thereof) determines if stocks go up or down.

Typically, liquidity is strongest when expectations are the most negative and people have already dumped equities; It is weakest when expectations are most optimistic.

Why? At market tops, investors tend to be “All In” — their expectations for the future are most optimistic, and that means their liquidity is spent. By the time investors go “all in,” things are about as fundamentally bullish as they are ever going to get, and stocks are fully valued. Indeed, at these “all in” junctures, valuations are typically highly stretched, with no room for earnings misses or weak forecasts.

With investors “all in” there is no buying power left in the aggregate to push stocks higher. The opposite occurs at bottoms: Investors become so pessimistic about the future they move large amounts of cash to the sidelines. We get the added benefit at this point as valuations typically have contracted as well and are now attractively priced.

With large sums of cash moved to the sidelines, valuations attractive and selling exhausted, there is no where to go but up — even if its only for a period of weeks or months.

The chart above looks at how far above or below the 21-year average allocation of 60 % invested in stocks individual investors are presently. As seen above when stock allocations drop 15 % or greater below that 22-year mean, (red circles) which has occurred only 3 times in the last 22 years (1990, 2002 and late 2008/early2009) it has equated into significantly higher stock prices 3/6 months up to several years later.

Even given the extent of the current rally, investors remain 6% below their mean allocation to stocks, and significantly below fully invested levels of 10-15 % above the mean. Sideline liquidity remains strong, investors are still not fully invested, and dips have remained fairly contained.

Anecdotal sentiment also echoes the under-invested theory as most investors expect a correction and refuse to invest as the market melts up. Typically investors talk their positioning and under investment breeds statements of caution.

Kind Regards

Hoop

14-09-2009, 10:22 AM

The AAII (American Association of Individual Investors) has some good stuff on their website (http://www.aaii.com/).

Have to join to see the stuff though..there are 3 levels of membership one level is free and this level has some good free stuff in it (incl some investor software)..so worth the 5 minutes it takes to join up.

ananda77

15-09-2009, 07:31 AM

...SPX 500 seems consolidating beneath the 11 month High set Fri September 11th *1048 in a range most likely featuring the Sep 10 Congestion *1026 and *1050 barrier.

...assuming *1026 is successfully defended, the market will likely break-out and deal with the Oct 7 High *1072 and the 50% retracement of the 2008-2009 Break *1119 further up

...on a cautious note, a market top becomes more and more likely as the index pushes towards the 50% retracement of the 2008-2009 Break *1119

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

Hoop

15-09-2009, 09:57 AM

The 1005 breakout of the S&P500 a month ago has been confirmed by the DOW this morning...but only just!

This is bullish (and technically important) news that hasn't been widely communicated from the media today.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW14092009.png

winner69

15-09-2009, 10:48 AM

Nice chart Hoop

More I look at it surely the DOW has to continue on its current trajectory to 12000 ... and then slowing down a bit as it heads to 14000

ananda77

16-09-2009, 07:29 AM

(12:07) Almost there, 10-yr back to a 3.424% yield
(10:26) Coming back following SFEF $4.5B 5-yrs
(9:55) Pulling back from lows, but 10s may make run at 3.495%
(8:12) Tempering sell-off, but pressure remains
(8:34) Sold off on run of better data with the curve swinging steeper still

---Core PPI: Actual 0.2%, consensus 0.1%, prior -0.1%
---PPI: Actual 1.7%, consensus 0.8%, prior -0.9%
---Retail sales: Actual 2.7%, consensus 1.9%, prior -0.2% (revised from -0.1%)
---Retail sales ex-auto: Actual 1.1%, consensus 0.4%, prior -0.5% (revised from -0.6%)
---Empire Manufacturing: Actual 18.88, consensus 15.00, prior 12.08
---Business inventories: Actual -1.0%, consensus -0.8%, prior -1.4% (revised from -1.1%)
---Fed bought $2.049B of $7.004B

Advancing issues outnumber decliners by roughly 3-to-2 in the S&P 500, helping the benchmark index preserve its gains. Of its 10 major sectors, eight are trading higher; only health care (-0.8%) and consumer staples (-0.7%) are in the red. Materials, now up 2.2%, continue to sport the best gains.
Airline stocks are also performing exceptionally well this session. In turn, the Amex Airline Index is up 3.5%.

...SPX 500 mildly higher so far and as long as Monday's 14th September Low *1035 holds, the market will likely break-out and deal with the Oct 7 High *1072 and the 50% retracement of the 2008-2009 Break *1119 further up

...on a cautious note, a market top becomes more and more likely as the index pushes towards the 50% retracement of the 2008-2009 Break *1119

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

Dr_Who

17-09-2009, 08:24 AM

Looks like the markets will trek higher.

winner69

17-09-2009, 08:41 AM

Ending on a high is a good sign as well eh Dr Who

That chart of Hoops is looking even better --- DOW at 1200 by Xmas at least .... you can see the formation forming nicely

ananda77

17-09-2009, 11:01 AM

...US Bonds

(13:24) Backed off some with long end still leading
(11:14) Clawing back in lightened trade
(10:33) Trading off hard with the 10-yr taking out the 3.485% and looking at 3.495%
(9:43) Back to negatives with a size spike in size
(8:21) Bonds back off highs following run of data

Core CPI: Actual 0.1%, consensus 0.1%, prior 0.1%
-CPI: Actual 0.4%, consensus 0.3%, prior 0.0%
-Current Acct Balance: Actual -$98.8B consensus -$92.0B prior -$104.5B (revised fro$101.5B)
-Net Long-term TIC: Actual $15.3B, Consensus $65.0B, prior $90.2B (revised from $90.7B) -Capacity utilization: Actual 69.6%, consensus 69.0%, prior 69.0% (revised from 68.5%)
-Industrial production: Actual 0.8%, consensus 0.6%, prior 1.0% (revised from 0.5%)
-Fed bought $1.799B of the $16.391B in the 2010 to 2011 maturity range

...NYSE Data (see attachment)

...SPX 500 Close *1068

-new 11-month High-
-immediate additional upside to Oct 7 High *1072 (+)/ *1082 likely
- bearish divergences in daily momentum appearing
-risk of a minimum shake-out back to *1027/*1035 congestion increasing
-downside risk versus upside potential becoming unfavorable short to medium term

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

Tee

17-09-2009, 05:36 PM

Hi Ananda,

I'm a newbie and I have a question.

I find the data on "up" and "down" volume, number of advancers and decliners interesting. Would you know if these data are available for ASX or NZX? Also is the "up" and "down" volume for each counter available?

Cheers

ananda77

17-09-2009, 08:47 PM

I'm a newbie and I have a question.
I find the data on "up" and "down" volume, number of advancers and decliners interesting. Would you know if these data are available for ASX or NZX? Also is the "up" and "down" volume for each counter available? Cheers

Hi Tee,

...no idea what market internals are available on the ASX or NZX; you could check that out on their respective websites; as far as the up/down volume is concerned, have only the NYSE and NASDAQ data set since trading the US indexes only;

Kind Regards

ananda77

18-09-2009, 11:22 AM

-Initial jobless claims: Actual 545K, consensus 555K, prior 557K (revised from 550K)
-Continuing claims: Actual 6230K, consensus 6100K, prior 6088K
-Housing Starts: Actual 598K, consensus 583K, prior 589K (revised from 581K)
-Building permits: Actual 579K, consensus 598K, prior 564K
-Philly Fed: Actual 14.1, consensus 8.0, prior 4.2

... SPX 500 set another 11-month High *1075 early; after that, the market decided to go for a light profit-taking retrace supported at intraday Low *1061; as a consequence, *1082 remains an immdiate target

...at *1082, risk increases for a minimum shake-out back to *1027/*1035 congestion, given the worsening bearish divergences in daily momentum

...downside risks are starting to dominate upside potential

...as far as the NYSE concerned, values are touching top of channel and breaking out of the channel would mean Blow-Off Territory (see attachment)

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

Tee

18-09-2009, 04:45 PM

Any idea on how Mr Bernanke's statement on the recession will have on the US markets?
And I could not help noticing that you employ hedging and I was wondering whether hedging costs will be higher than say internet brokerage.(During "down" months, my brokerage as a percentage of net profit/loss is pretty high.)

ananda77

18-09-2009, 07:21 PM

Tee:

...just to give you an idea how the market reacted to the Bernanke/Buffet Ramp yesterday, take a look at the NEW HIGHS compared to the SPX 500 in 2007 and now:

(see attachment)

...all important liquidity inflows (thanks to Fed pumping) remain at extreme high levels at present creating a possibility of upside run-away gaps if Institutions don't start some profit taking
...at the same time, the major US indexes are developing negative MACD divergences currently not playing out due to very high short term RSI data
...markets are stretched and this sort of short term strength will be difficult to maintain
...consequently confident, hedging will pay dividend soon; by the way Tee, hedging in upward trends > neutral = no/minimal cost; it is only when markets become top-heavy that hedging is applied; cost on profits according to hedge book 10% at present;

Kind Regards

ananda77

19-09-2009, 08:17 AM

Bond Market:

16:01 ET 10-Yr: -23/32..3.469%.. USD/JPY: 91.4180.. EUR/USD: 1.4701
Slammed: Treasuries were hit on the session with the mid-curve leading the move lower as the market considers the record supply on tap and players squared-up into the weekend. The auctions kick off Tuesday with the $43B 2-yrs, $40B 5s and $29B 7s with $27B 1-yrs Tuesday, $29B each of 3-and-6-mos Monday. The session saw wafer thin trade and was knocked lower with no data or other market movers to help things along. The week saw big size in corporate and sovereign issuance and trade is setting up for more of the same next week on top of the government offerings. The economic calendar starts pretty slow, with the FOMC kicking off Tuesday and junior league data through the week until Thursday. The curve came in flattening but unwound into the late session to take the 2-10-yr yield spread to 248, but the bias remains on the flatter slant. The dollar was given a breather from its recent sell-off, although it did nothing impressive and the index was stalled near 76.50. The euro was battling to hold over 1.4700 and is expected to return to the recent highs early in the week while holding near the month's best on the yen. The yen will likely have a little more trouble staying bid as the safety plays continue to pull back, but has been able to remain near the 7-mo highs. The Fed will be in doing a single bond buying operation Monday, getting into the 2013 to 2016 maturity range. The day has only leading indicators (10) while Fed-speak should remain on hold through the FOMC statement Wednesday.

NY Fed purchased $4.05 bln in agency debt maturing from Oct 2010 - Sep 2011

Stock Market:

...SPX 500 trading mixed below the September 17 High *1075 on quadruple witching Friday; despite the fact that the index stayed in positive territory after laboring back from intra-day Low *1064, the whole market was neutral at best; as a consequence, the immediate target *1082/*1090/*1119 is still in play for next week

...at this level however, risk increases for a minimum shake-out back to *1027/*1035 congestion, given the worsening bearish divergences in daily momentum and negative MACD in the major US indexes

...the implication of the correction could be the start of a double top process which would be confirmed by a second test and subsequent failure of the *1082/*1090/*1119 level

...as far as the Fed Ramp of the Stock Markets is concerned (see attachment)

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

ananda77

21-09-2009, 09:13 PM

The QE is basically doing what it should. The crunch should come when the program is wound back. I'm not expecting the 'crunch' to be significant thos - mainly just a slow down in the rise.

Hi Belgarion, although tend to agree so far, there are a couple of things I like to point out, which makes the whole show suspect

Headwinds:

-lack of income growth
-wealth destruction
-credit tight as ever
-Green Shoots may be no more or less, than correcting an over correction in business activity during the worst of the crisis when business cut back production to hard -plus a bit of stimulus induced growth

Stocks:

-valued on far to over optimistic earnings expectations at present
-prices driven up really hard by hedge funds, zombie banks, and power brokers using their superior market positions and (illegal) trading strategies like Flash- and HFT trading
-instead of using the funds the Fed is virtually paying them to borrow and channel them into the economy, they use the funds for speculative purposes only
-when valuations are at a point that even the most deluded punter realizes it is time to quit, it is them who take the opposite side of the trading and drive the whole show down

Revealed: The ghost fleet of the recession anchored just east of Singapore
http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-ghost-fleet-recession-anchored-just-east-Singapore.htm

Kind Regards

Dusty

22-09-2009, 07:37 AM

BDI index down for the 7th day in a row, doesn't bode well for commodities. Also of note is that the BDI index bottomed Dec 08 started to rise about 3 1/2 months before the march 'rally'. Peaked beginning of June and has been trending down for the 3 1/2 months since.

ananda77

22-09-2009, 08:21 AM

US Calendar:

Sep 21 10:00 Leading Indicators Aug 0.6% 0.9% 0.7% 0.9% 0.6%
(The leading indicator index does not provide much information on where the economy is headed. It is composed of 7 key economic variables that are known prior to the release and 3 estimated components. Therefore, the only differences between the actual indicator and the consensus is due to the estimation techiniques for money supply, new orders of nondefense captial goods, and new orders for consumer goods. Usually the differences between the leading indicator estimates and consensus estimates for these variables are minor and do not effect the overall index)

Bond Market:

15:33 ET 10-Yr: -02/32..3.471%.. USD/JPY: 92.0225.. EUR/USD: 1.4684
Clinging to Gains: The dollar has backed off its better levels but is still holding at better levels on the majors in slowed, holiday infected trade. The index has gotten caught near 76.75 after its early push through 77. The euro has been holding near the 1.4683 level on the buck, while being able to tick back up to get 135.20 yen per euro. The yen has been stalled out near 92.00 on the buck, ticking either side in a quite Japanese holiday session. The pound remains under pressure, trading near September's lows, with extended "quantitative easing" talk with the BOE due 9/23. The general short covering rally on the buck may see some follow through Tuesday with the FOMC sitting in the wings and players continue to square-up, but there is no chance the Fed will be doing anything on rates, and the statement will likely offer little for dollar trade. There‘s little in the way of EuroZone or Japanese reports due. Gold and crude continue to suffer as the buck gets bid with spot now 1003.40 (-4.20) while crude is on offer with November closing 69.93 (-3.56)

-Fed bought $4.050B of the $15.299B dealers dumping in the 2013 to 2016 maturity range-

Stock Market:

...SPX 500 still below the September 17 High *1075 trading with a slightly more bullish tone in Monday's session; maybe the Japenese holidays could be blamed for the restful attitude of the market since the index manages only a recovery from intraday Low *1057 and closes down at *1065;

...although decliners leading advancers more than 2:1 on quite negative volume, there remains short term strength in the market to achieve the immediate target *1082/*1090/*1119 level still in play for later this week;

...on a cautionary note, the market seems to loose more and more momentum and the outlook for a topping process strengthens

...consequently, at *1082/*1090/*1119 risk increases for a minimum shake-out back to *1027/*1035 congestion and the implication of such a correction could be the start of a double top process which would be confirmed by a second test and subsequent failure of the *1082/*1090/*1119 level

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

ananda77

23-09-2009, 08:18 AM

US Calendar:

U.S. FHFA home price index rose 0.3% in Jul, but fell 4.2% vs year-ago reading

Bond Market:
15:58 ET 10-Yr: +09/32..3.446%.. USD/JPY: 91.1800.. EUR/USD: 1.4800

Bid in Face of Supply, FOMC: Treasuries were able to come back from early selling with the 5-yrs leading the way higher ahead of a record $40B auction tomorrow and the FOMC statement in what should remain thinned trade. The market is once again running with stocks, trading higher even as riskier plays are renewed and supply crowds the bond market. On top of the record 5-yr issue there remains another record sized $29B 7-yr set to go off Thursday, the only of the big, new coupon issues on the week to get in behind the Fed's updates on stimulus plans, exit strategies and economic outlook. The statement will not likely be drastically changed, but there will be some note taking of better general numbers and some reference to the soon-to-be-over, dwindling, bond buyback operation (there is no meeting between now and the end of October) and potentially some talk of additions to the mortgage related programs set to end year-end. The market has become fairly well accustomed to supply and, possibly, a touch overconfident in the face of the deluge as offering after offering goes smoothly if not well. The market got a little spooked after the early 1-yr bill went only OK, but recovered well on the 2-yrs highest demand ratio in 2 years. The curve was ultimately swung well flatter with the 2-10-yr yield spread now 248.7 from near 252 in early trade. The dollar has been taken back down, seeing a year low in the index and against the euro, while flirting with its worst on the yen in 7 months. The euro took out 1.48 but couldn't hold while the yen was able to keep itself near 91. The day ahead has the FOMC (14:15) statement and the $40B 5-yr auction (13), meaning a potential snoozer, or crazy, indefinable, low-volume swings.

Stock Market:

...SPX 500 still below the September 17 High *1075 with bullish sentiment becoming more apparent in Tuesdays' session; it seems the upside break-out is almost a fact, maybe it is the Japenese holidays holding it back at present;

... the index found renewed support above yesterdays' Low *1065 and remained range bound consolidating comfortably between *1057/*1075 support/resistance

...advancers outpaced decliners 2:1 and as long as a positive accumulating tick indicates continued buying pressure within this level, the market will achieve the immediate target *1082/*1090/*1119 level later this week or during next weeks' trading; although NYSE up/down volume is strongly positive, NASDAQ up/down volume diverges negatively to almost 1:1 towards the end of the trading session

...on a cautionary note: downside risks are starting to overshadow upside potential and a possible failure at *1082/*1090/*1119 increases risk for a minimum shake-out back to *1027/*1035 congestion and the implication of such a correction could be the start of a double top process which would be confirmed by a second test and subsequent failure of the *1082/*1090/*1119 level;

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

ananda77

24-09-2009, 07:16 AM

US Calendar:
FOMC left rates unchanged (0.25%), elevated econ view, inflation tame, MBS pace slowed

Bond Market:
14:52 ET 10-Yr: +03+/32..3.431%.. USD/JPY: 91.0875.. EUR/USD: 1.4807
Buck Beat Down: The buck got taken out following the FOMC, with the promise of continually low rates in a slow, plodding growth scenario, the index was clocked to make new year lows and trade back to early August 08 levels. The euro was flung back through to near 1.4845 on the news. The yen took a delayed reaction run back through to 90.85 from just off the session high near 91.50 while paring some of its losses on the euro in the process. The run-off on the buck allowed the gold to make a run at session highs with spot now 1015.00 (+0.50) while crude was unable to get much back in the face of prolonged slow domestic, demand, now 68.99 (-2.77).

Stock Market:
...as expected, SPX 500 traded higher into lower end of immediate target *1082/*1090/*1119 level after FOMC statement; at this stage, a brief slip back of the index to affirm the current *1057 trading range floor is possible

...the US economic calendar features Initial Claims tomorrow 24 September and disappointment could threaten the *1057 support; failure at this level would increase risk for a minimum shake-out back to *1027/*1035 congestion and the implication of such a correction could be the start of a double top process which would be confirmed by a second test and subsequent failure of the *1082/*1090/*1119 level;

...on a cautionary note: downside risks based on momentum and VIX cycle studies are starting to overshadow upside potential and possible failure at *1082/*1090/*1119 (see attachments)

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

Dusty

25-09-2009, 05:32 AM

Vic continuing its cycle up as you say A77, currently up 5.62% and approaching 25. Fed announced it is scaling back 2 stimulus methods, firstly the amound of money available to the banks in the short term under TAF.
Secondly it is scaling back the program where investment firms can swap dodgy securities for safer treasury ones. Sales of exisiting homes fell for the first time since march, 2.7% drop in august.
On the other side 7 year bond went well with bid to cover at 2.79.

winner69

25-09-2009, 07:39 AM

This joker says its all over

http://www.nzx.com/news/2894152/S-P-has-2-weeks-til-tumble-starts

ananda77

25-09-2009, 07:51 AM

US Calendar:
U.S. initial jobless claims 21k to 530k, below median 546k for Sep-19 week
U.S. existing home sales sank 2.7% to 5.10 mln in Aug, below median 5.35 mln

Bond Market:
15:36 ET 10-Yr: +12/32..3.374%.. USD/JPY: 91.2400.. EUR/USD: 1.4656
Ramped Up: Bonds backed off the highs on profit-taking heading into the close, but are holding the best levels in a week on the shorter end and in 2 weeks on the 7-30-yrs. The market is done for the week as far as big events are concerned and came through with, if not flying colors, parasailing ones. The record $29B 7-yr offering today went very well, coming on the back of an OK 5-yr and solid 2-yr. It helped that it is the final big offering for the quarter, buffered by other window dressing buyers and general newly minted safety buyers. The day's data was a mixed bag, but mostly bond friendly. That the Fed and assorted central banks are saying they are reeling in (via baby-steps) some measures of liquidity-pumping, which is giving hope that they will be able to wiggle out of the bailout mess without blowing things up. EuroZone bonds also got boosted, with added push as the deteriorating housing report put some doubt on the recovery story. Treasuries will likely be giving some back into Friday's session, with little in the way of market movers on tap, but with a recess from large supply and general safe-haven concerns there will be a floor under prices and the 10-yr should be able to stay clear of the 3.475% yield level. The curve was generally flatter, but in a fairly tame range with the 2-10-yr yield spread 243.9. The dollar took off as safety buyers stepped in, stock slumped and commodity prices crumbled. The index was able to get back to the 77 handle as the removal of funds is a step toward higher rates. The euro was clocked back to the 1.4630 area after topping out just over 1.4802, while backing off eventually on against the yen from a mid-session 134.30 to 133.60. The yen was backed up 1.4% from overnight levels on the buck, but spent the last hour working back some ground. The pound got slammed to a 5-mo low as officials show little concern over its dropping value. The day ahead has durable orders (8:30), revised UofM sentiment (9:55) and new home sales (10), while Fed-speak is popping again with gov Warsh speaking on the economy (13).

Stock Market:
...as expected, the economic data set out this morning disappointed and the SPX 500 extended the downslide
...short term support *1057 taken out decisively but the market stopped short to affirm Aug 28 High *1039/ Sep 14 Low *1035 and the market is mounting an attempt of a recovery on intraday Low *1046
…...the first market top of a possible double top process is in place and rest assured, this top needs to be tested for the market to stake out its future territory; considering the bearish undertone in the market at present, it is very unlikely however, that a sustainable bottom for a second test of the *1082/*1090/*1119 level could be in place without a thorough test of *1039/*1035/*1027

...further 'undercover' indications for a possible topping process: institutional buy/sell spread narrowing with a new High in selling (see attachment)

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

ananda77

26-09-2009, 08:02 AM

US Economic Calendar:
U.S. new home sales rose 0.7% to 429k in Aug, below median 445k vs 426k Jul
U.S. durable goods orders sank 2.4% in Aug, below median 0.5% vs 4.8%
U.S. consumer sentiment (final) rose to 73.5 in Sep, above prelim & 70.4 median (Sentiment readings are a reflection of a variety of events rather than an accurate tool for forecasting consumer spending. Gas prices and political events can have an outsized impact on sentiment. In general, these data are of very little economic value)

Stock Market:

...SPX 500 traded back from intraday Low *1041 and as a result, established the upper end of the Aug 28 High *1039/Sep 14 Low *1035 range as first line support

...possible contributing factors to the result:
-liquidity inflows remain strongly in positive territory
-(+1088) Tick buying power on the NYSE past the intraday Low
-end of Q3 window dressing may have kept stocks elevated

...the relative shallow sell-off so far starting two sessions ago and todays' relative strong performance could indicate a second test of the *1082/*1090/*1119 level in the not too distant future

...a cautionary note from Kevin Lane (Fusion IQ): (see attachment) and considering current fundamentals or 'funnymentals' as mentioned in some trading circles, a double top between the *1082/*1119 level should trigger a sharp 20% (+) sell-off during most of Q4 that should affirm its July Low *869 before stabilizing

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

ananda77

26-09-2009, 11:38 AM

Things are looking a bit fragile. I sense the beginnings of a pullback ...

...traders have been extremely careful not to let momentum slip too close to the SPX 500 *1039 (Dow *9630) level today;

Kind Regards

ananda77

29-09-2009, 08:29 AM

US Calendar:
empty

Bond Market:
Treasury yields rangebound near lows amid holiday-thinned trade, despite firm stocks
USD-JPY rebounded back above 89.0 vs 88.2 trend low, half-year end flows abating
USD index bounced 0.4% to 76.90 despite stock rally and firm bond market

Stock Market:

Marketwatch:
Recouping last week's loss
Wall Street plays off fresh merger activity as Abbott Labs and Xerox announce multi billion-dollar deals

...SPX 500 defended the upper end of the Aug 28 High *1039/Sep 14 Low *1035 range and surged higher in what could turn out the early stages of another bull run towards the *1080/*1090/*1119 range in the near future

...the advance featured so far today:
-NYSE advance/decline ratio ~ 4:1
-NYSE strong up-volume within unspectacular total volume
-market direction neutral to bullish
-(-460/+226 buying power) diminishing towards day end
-selling into the most bullish market phase apparent

...as a result, until the index closes above the Sep 17 Peak *1075, the early stages of the envisioned bull run could include a second testing of support with a downside break-out possible

...looking ahead, a double top between *1080/*1092/*1119 should trigger a sharp 20% (+) sell-off during most of Q4 that should affirm its July low at 869 before stabilizing

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_

delinky

30-09-2009, 09:18 PM

It's amazing how we miss your posts when you don't check in. I guess there are more of us lurking and reading than one realises. Maybe we are becoming to reliant on your updates. :)

ananda77

30-09-2009, 10:28 PM

...too busy even to fit in a proper update until around 10th October but try to post if there is a dramatic change in trend

...taking out SPX 500 *1075 still relevant for a bullish turn around with the minimum hurdle being *1069; trading under *1069 Close is bearish; trading above *1069 start of bullish sentiment returning for a second test of *1080/*1092/*1119 range

Kind Regards

ananda77

01-10-2009, 07:52 AM

...writing in between jobs, today's update seems to be an easy one as the SPX 500, as mentioned stuck to *1041 support area and surged higher; have not checked market internals but looks like today's trading is the overture to another test of *1080/*1092/*1119 range;

...failure > double top established > 20% (+) correction

...break-out > more in the next update, but currently not my favorite option

Kind Regards

ollie

01-10-2009, 09:25 AM

delinky, even I was showing signs of withdrawal yesterday, ??

ananda77

02-10-2009, 08:07 AM

US Calendar:
U.S. ISM slipped to 52.6 in Sep, below median 53.3 vs 52.9 in Aug
U.S. construction spending rose 0.8% in Aug, above med -0.3% vs -1.1% Jul
U.S. NAR pending home sales surge 6.4% to 103.8 in Aug vs 97.6 in Jul
U.S. personal income +0.2% in Aug, in line
U. S. Personal Spending Aug 1.3% consensus 1.1% prior 0.3%
U.S. initial jobless claims rose 17k to 551k, above median 535k for Sep-26 week

Stock Market:

...SPX 500 under pressure following the release of a mixed data stream and as a result, a thorough test of key support range Sept 14 Low *1035/Sept 9 congestion *1027 is now underway

...at present, the index rebounded from intraday Low *1034 and holding above so far

... a sucessful defense of key support range would form the basis to fire the index up for the initial Sept 16 High *1069 on its way to a second test of the *1080/*1092/ *1119 target range

...failure in the key support range on a Close basis would substantially increase risk for a downside break-out to the September Low *992 initially

...looking ahead, still very much in favor of the double top scenario between *1080/*1092/*1119 that should trigger a sharp 20% (+) sell-off during most of Q4 that should affirm its July low at 869 before stabilizing

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

ananda77

02-10-2009, 11:40 AM

However, still feels a bit bearish to me.

...fundamentally, could not agree more

...two things stand out about this rally:

-Wall Street 'Pros' pushing it based on the theory of pricing the market on 'mid-cycle earnings'
-happy, no clue economists et. al pushing it on 'less negative data' as actually 'bullish'

...technically, the index is at key support and some sort of short term bounce is most likely including a second test of before mentioned target range before a larger sell-off

Kind Regards

ananda77

03-10-2009, 05:10 AM

US Calendar:
U.S. nonfarm payrolls sank 263k in Sep, below median; jobless rate up to 9.8%
U.S. factory orders dove 0.8% in Aug, well below median 1.1% vs 1.4% in Jul
US Hourly Earnings Sep actual 0.1% prior 0.4%
US Average Workweek Sep actual 33.0 prior 33.1

Stock Market:

...SPX 500 under renewed pressure following the release of employment data and as a result traded down to 31 August Close *1020 intraday holding just above the 50 MA *1016

...traders/investors bought the index at this level keeping market direction in the neutral to bullish zone; the intraday rapid recovery bodes well for today's *1016 to be a bottom (Dow Close above Sep 9 Congestion *9497) that completes the first half of the expected major double top pattern in the *1080/*1092/*1119 target range followed by a sharp 20% (+) sell-off during most of Q4 that should affirm its July Low *869 before stabilizing

...the other side of the bargain features a Close below todays' intraday Low *1016 which would negate the double top pattern scenario and would strongly indicate, the Q4 20% (+) sell-off is already well on its way

Market Finish: market direction turned bearish towards the Close with increased selling becoming apparent; Dow missed key support Close by 9; Nasdaq by 1; SPX 500 Close above intraday Low *1016; upside momentum rolled over;

Current Elliot Wave commentary:

In summary: all the major stock indexes are in synch lower, with prices in the process of tracing out “five down” from the September peaks. There may be a little upward bounce early next week, but we are not certain of this potential. Regardless, we would view such a move as an opportunity for the bears because once the bounce exhausts, prices should decline again and make new lows. The initial downside support surrounds the September lows—9252± in the DJIA, 992± in the S&P—but much lower potential exists

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

Dr_Who

04-10-2009, 08:55 AM

ananda77

04-10-2009, 09:13 AM

Have you guys had a look at the China market graph. Looks like a top and moving down. This does concern me abit, cos China have been where the action is this entire year. I keep a close eye on China these days for directions.

...that would be smashing nice if you would keep us informed about China developments; you could extend the US Markets thread to include the China Market;

Kind Regards

ananda77

04-10-2009, 03:34 PM

Key Technical SP 500 Levels:

*1020 > 50-day MA and below >
*1008 > uptrend line March Low and below >
*992 > 02 Sept Low > and below
*869 Ultimate Support and below > (do not think it) (see attachment_1 = Free Data Chart)

SP 500 Major Pivot Point: (see attachment_2 = S&P 500)

SP 500 Fundamentals:

...The average U.S. institutional fund manager is up 22% for the year, outperforming the S&P 500 by some 400 basis points. This in turn suggests that there will be incentives to “hug the index” and try to hang on to that outperformance through year end. This in turn suggests that the stock market may end up losing a prime source of buying power — otherwise known as the panicky PM who has been desperately trying to make up for last year’s horrendous performance.

...And whether you look at operating or reported earnings, trailing or forward, the S&P 500 today is trading at multiples that are higher than they were at the market peak in October 2007. So we’re not talking about pricing the market with ‘mid-cycle’ multiples – it is trading at ‘late-cycle’ multiples.

...WHO HAS BEEN DOING THE BUYING?
We already ascertained earlier in the week that is hasn’t been Ma and Pa Kettle – in fact, the FT quotes data from TrimTabs showing that only $2.5 billion in net inflows has gone into U.S. equity funds and ETF’s since the March lows. Inflows into bond funds have been ten times as strong. We know that corporate insiders have been net sellers of size. And the buying power from short-covering subsided months ago.
The answer, and this validated by the FT on page 16 of yesterday’s edition, are the hedge funds. And once they begin to see signs that a V-shaped recovery is about as real as Santa or the tooth fairy, watch out. Because there aren’t any other buyers out there that can be identified. (see attachment_3/_3a = Core Holdings/Institutional Buy-Sell Spread)

US Long Bond Market:

...the Treasury market is signalling that deflation is the more profound risk. The yield curve is flattening big time and since mid-September the long bond has rallied more than 30 basis points. That is amazing and it means that the bond market crowd smells a rat somewhere – as it did when it rallied like this as the stock market was making new highs in the summer of 2007. As an aside, the last time the long bond yield was at 3.95% was in late April … when the S&P 500 was sitting at 855. We should add that real interest rates – the bond market’s proxy for real growth -- as measured by the yield on 10-year TIPS is all the way back to 1.5% after hitting a peak of just over 2% in early July and again, the last time it was where it is today, the S&P 500 was 20% lower than it is today.

...The real question is, if we in fact do have this sustained reflation trade going on, which is actually necessary to justify the earnings expectations embedded in equity valuation, why it is that the yield on the 10-year Treasury note isn't north of 5.0% already? Instead, it is 3.3%. And history shows that when bonds and stocks do diverge, as was the case in the summer of 1987, the fall of 1994, the summer of 1998, the winter of 2000 and the summer of 2007, it is the former that proved to be prescient.

Kind Regards

eel

05-10-2009, 10:48 AM

Thanks V much your work is invaluable

ananda77

06-10-2009, 09:23 AM

US Calendar:
U.S. ISM services index rose to 50.9 in Sep, above median 50 vs 48.4 Aug

Bond Market:
U.S. 10-year TIPS sale awarded at 1.51%, firm cover 3.12, indirect bid 44%
Treasury yields rebounded after firm TIPS, options trade faded Friday rally
The 10 year TIPS reopening auction was solid and bidding was aggressive. The yield was about 5 bps below expectations and the bid to cover of 3.12 was the highest since Jan 1999 and well above the average over the past two years of 2.17. Indirect bidders totaled 44%, slightly below the July auction of 49.7%. Bottom line, combining this with another breakout attempt in the price of gold and the US$ trading near recent lows and its clear that investors want inflation protection and are less sanguine with the inflation picture than the Fed is. The conventional 10 year note did trade lower in response as a yield of 3.20% doesn’t reflect much fear of inflation.

Stock Market:
...SPX 500 is extending its rebound today after a successful defense of the 31 August Close *1020 and the 50 MA *1016 last Friday; the index penetrated the initial up target *1041 intraday, but finished on the weak side *1040

...its successful defense indicates that *1016 remains a short term floor, but the continuous weak finish in the major US indexes also indicates and strenghtens the double top view in the *1080/*1092/*1119 target range; only an unexpected Close below SPX 500 *1016 would negate this scenario and would confirm, that the expected 20% (+) sell-off during Q4 is already well on its way

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

ananda77

06-10-2009, 04:41 PM

SPX 500 Monthly update:

...according to September month end data, the index is now in a bull market and current market weakness should not indicate a slide back into bear territory (see attachment > SPX 500 Monthly Index)

...current favorite quote for the short- to medium horizon:

-stash cash for minimum *869-

Kind Regards

Phaedrus

06-10-2009, 04:49 PM

Ananda, I was looking back over this thread and couldn't help but notice that you were quite Bullish while the market was crashing (you sold nothing!) yet, just as soon as the market turned, you became overtly Bearish, with most every post concluding "Market Strategy: Sidelines (safest). Longterm THE BEAR". It appears that you rode the slump fully invested all the way down and that you have been fully cashed up for most all of the very strong rally that has ensued. From where I sit this looks awfully like a lose-lose strategy! You maximised your losses on the way down and have minimised any gains on the way up. As Sarah Palin said - "say it aint so". Please!

While you have been advocating sitting on the sidelines, the market has soared roughly 50%. It seems to me that you have painted yourself into a corner here. Having advised avoiding any market involvement during the biggest rally in decades, you really would be going out on a limb to advise buying now - the longer this exceptional rally continues, the higher the likelihood of a correction. I think you will be stuck with your unfortunate "sidelines" recommendation for quite some time yet!

You should have been Bearish when you were Bullish and Bullish when you were Bearish. Imagine if you had sold everything when you said "sell nothing" and bought back in when you said "This Bear has just started"!

The bluntest, crudest instrument in the TA toolbox is the 200 day Moving Average. Van Tharp said "My advice, get in the market when prices are above the 200-day moving average and get out when they are below. That would have kept you out of this market throughout 2008". Indeed. It is of course fairly easy to improve on such a simple, basic system.

http://h1.ripway.com/78963/DOWa77.gif

Ananda, I feel a bit mean featuring your posts like this, but maybe there is something we can all learn from it.
Regards,
Phaedrus.

ananda77

06-10-2009, 05:12 PM

Hi Phaedrus,

...I know that you do that and I think its funny...

Kind Regards

Hoop

04-11-2009, 10:30 AM

TA's life is like a slow moving soap opera...everyday a little more of the plot is revealed :):cool:

Ahh Hah.... a zig zag upturn on the 2 November. Hmmmm
Everyone has been beating the market correction drum.

Hmmm..could it be that this latest weakness is just another leg in this zigzag formation?

coming up....
will we end the year in a EW Prechter c wave crash :confused:
will we end the year on a Jim Cramer high dressed in a bathrobe (again) :confused:
will we see Nouriel Roubini exit the market & add another room to his loft ;)

Stay tuned for the next exciting:rolleyes::p episode of...THE DOW

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW03112009.png

Hoop

06-11-2009, 11:45 AM

Hmmm..could it be that this latest weakness is just another leg in this zigzag formation?We'll know soon but I'm thinking "yes".

Just too many fundimentals globally going the right way for US markets not to pick up on the back of it.

Back over the psychological 10000 ...
Belg...that "yes" looks a good bet now..eh :)

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW05112009.png

Dr_Who

06-11-2009, 12:33 PM

Nice graph Hoop. :)

Keep us up to date on the TA side. I am more of a FA man and have no clue when it comes to TA.

I ve always said the market will go higher (read other posts) and bought more stock during the last week of weakness. As long as those rates are low, the market will hold.

Nevl

06-11-2009, 01:58 PM

Good jumps in the Dow but the Aussie seems to be lagging despite the fundamentals. Am picking up Aussie and hoping it plays catch up. Will have my stops in this evening when the US labour figures are announced. But yeah lots of good news out lately.

May head towards 10200 by Xmas

Hoop

17-11-2009, 10:14 AM

As I write the DOW closed at 10407 (+136).
The 50% Fibonacci has been breached. the primary downtrendline is under threat and the Market correction due point has been exceeded.
What is so important is that all these points are happening at this period of time and creates a large resistance for the DOW to leap over. it seems today the DOW's rise today is remarkable as it is against the chartists odds. The chartists last week were expecting a fall of the DOW index this week as they were assuming a respect of these lines and points. Even though today's rise is big and enthusiasm is abound with sideline money starting to enter the Equity market..there are still the same warning bells going off for a bull market correction to happen.

If the DOW keeps rising there is another big hurdle looming, the strong resistance line (orange 10650) created back in the previous bottoming out in 2002/2003 That resistance line is the Feb 2002 Feb 2004 necklines of that inverse H&S formation.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW16112009.png

Hoop

20-11-2009, 11:51 AM

The DOW is respecting the triple wammy..the Primary downtrend line, a resistance level and the FIB 50% extension point, all together at this point of time (see the above chart in the last post) This was always going to be a big hurdle to mount, it will be easier to break upwards later when these points shift and don't coincide together...at this moment all together they are acting as a big heavy lid which would take more than normal buying pressure to move above it.

Meanwhile.. with this big lid in place, a TA bull correction due point of 10360 market, and the ending of a double zigzag wave pattern...its time to be careful again.

PS Edit....Notice the short/medium term down trend in Volume
.
http://i458.photobucket.com/albums/qq306/Hoop_1/DOW20112009.png

Footsie

20-11-2009, 05:56 PM

Hoop

21-11-2009, 11:52 AM

Hi Hoop

as always a very informed post.

I'm starting to feel a little nervous. The market has just stretched itself too far without a good 3 month pull back/ consolidation.

i'm increasing my cash position. frist time i;ve done that since March 09

PS NZ and Aussie markets.. which is what most of us all trade HAVE NOT MADE NEW HIGHS

Hi Footsie
yeah corrections do make us feel insecure and can make us do emotional actions rather than the discipline/calculated actions.

Your PS quote says it all..PS NZ and Aussie markets.. which is what most of us all trade HAVE NOT MADE NEW HIGHS...
The NZX50 and All Ords seem to be already halfway through a correction which started about a month ago. Ideally... (and you had a crystal ball that works) if you had an indexed portfolio and were expecting a correction it was a month ago you should've sold. However, for most of us why sell? as Bull corrections are mild and often end without triggering medium/long term sell signals with the net result further down the track a higher market..

At present the NZX50 correction is waveless and has consistently downtrended about 4% already.. so I guess we are half way.
The All Ords had a sharper correction of 8% and has bounced to recover 6% of that..whether it is a B wave and a bigger drop (c wave) is coming is not clear...some charting indicators (Ichimoku) suggest it could be forming a triangle/pennant (higher low lower high) we have to wait and see.

Disc:- 90% equities 10% cash.

Phaedrus

21-11-2009, 06:45 PM

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOW1121.gif

Hoop

24-11-2009, 10:41 AM

Even with today's new high (10451) nothing much has changed chartwise since the last charts.

Still green on P's Charts:)

The DOW still banging away at this heavy lid on my charts and doesn't seem to want to go down.:)

So...are the investors fearful with all this correction talk.......The VIX (fear index) says ... Nah..bring it on:D.

http://i458.photobucket.com/albums/qq306/Hoop_1/VIX23112009.png

Phaedrus

29-11-2009, 06:04 PM

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOW1129.gif

peat

30-11-2009, 08:20 AM

that graph is still around the 10500 mark tho, so isnt it missing a couple of days data?

Phaedrus

30-11-2009, 09:39 AM

Whoops! All fixed now. Thanks Peat.

ruethewhirl

02-12-2009, 12:59 PM

Thanks for that post Phaedrus, but it was a bit crass. The truth hurts, but why rub it in?

I wonder if anyone's been posting on here that might get Phaedrus's stamp of approval?

Be a bit more positive than drawing attention to the losers ad nauseum?

COLIN

02-12-2009, 05:19 PM

Phaedrus

05-12-2009, 11:46 AM

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOW125.gif

Phaedrus

20-12-2009, 10:16 PM

http://i602.photobucket.com/albums/tt102/PhaedrusPB/Dow1220.gif

Hoop

21-12-2009, 08:42 AM

Ground Hog Day

Got the feeling nothing has changed much this last month. You wake up and swear that you have seen the closing day of the DOW at this level before.

To save writing and it is a Ground Hog Day scenario, it is fitting that I repeat my post (in green) :)

Repeated Post #678....Hoop Quote 24 Nov 2009

Even with today's new high (10451) nothing much has changed chartwise since the last charts.

Still green on P's Charts:)

The DOW still banging away at this heavy lid on my charts and doesn't seem to want to go down.:)

So...are the investors fearful with all this correction talk.......The VIX (fear index) says ... Nah..bring it on:D.

Hoop

22-12-2009, 09:24 AM

What Will Happen After The Year-End Rally? (http://finance.yahoo.com/news/What-Will-Happen-After-The-etfguide-1093073391.html;_ylt=Au5tr2XVgwjG3v81N3ybasi7YWsA; _ylu=X3oDMTE1Z3JqZjU0BHBvcwM5BHNlYwN0b3BTdG9yaWVzB HNsawN3aGF0d2lsbGhhcHA-?x=0&sec=topStories&pos=7&asset=&ccode=)

Ya can't fault the logic. But will he be right?

Hi Belg
Hmmm ....seemed a credible article up until nearly the end..but... when I saw that notoriously erroneous PE Ratio chart which keeps on popping up to support a writers bear argument.. all credibility was lost

Gee Bee

22-12-2009, 10:53 PM

http://wallstreetbear.com/board/view.php?topic=64489&post=216981

This chart unless a giant headfake suggests we go a lot higher
inverse head and shoulders is circa 1220 on the s&p

Corporate

23-12-2009, 07:46 AM

http://wallstreetbear.com/board/view.php?topic=64489&post=216981

This chart unless a giant headfake suggests we go a lot higher
inverse head and shoulders is circa 1220 on the s&p

I've got a red cross?

Hoop

23-12-2009, 11:03 AM

:) Thought you'd enjoy it,Hoop. Merry Christmas dude. Its been a great year for us contrarians.

Since end of 1999, U.S. stocks' performance has been the all-time clunker; even 1930s beat it (http://finance.yahoo.com/banking-budgeting/article/108453/investors-hope-the-10s-beat-the-00s;_ylt=Ait5sPP6YPS6G.eVD2POCqy7YWsA;_ylu=X3oDMTE 1Ymxnb2Y3BHBvcwM3BHNlYwN0b3BTdG9yaWVzBHNsawNpbnZlc 3RvcnNob3A-?mod=bb-budgeting&sec=topStories&pos=5&asset=&ccode=)

More statistical nonsense ;)

Belg..a Merry Xmas 2 u 2 :cool:

Yeah..statistics!!!......The secular bear cycle starting exactly at the start of a decade really has made the 2000-2009 decade figures look real bad...eh.

However down under I'm personally going to miss 2009...my best year ever. Unfortunately there will be a downside.. the tax bill :(

Speaking about tax...a interesting snippet on CNBC this morning..they were speaking about the American investors who recently expected a correction or worse (EW supporters?) and shorted. Now that the Equity market has not down-trended as expected, if they want to claim a this year tax loss they have to cover by 31 December, and apparently there is quite a number of these investors around.
Would this covering add enough momentum to crack that resistance zone and see another upward wave?

Edit PS....another example of how one can lose their money ...shorting in a cyclic bull market

Phaedrus

04-01-2010, 09:25 AM

:) Its been a great year for us contrarians.... I don't think so, Belg. True contrarians look at what the herd is doing - and do the opposite. When the herd began bailing out of the market (at the big red arrow) contrarians were buying. What mugs! (There are documented examples of this right here on ST)

When the herd began re-entering the market in strength (at the big green arrow) true contrarians were selling. What mugs! (Again, there are examples of this behaviour right here on ST)

It is the market followers that have had a great year, Belg. A great 2 years, come to that.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/Dow14.gif

Phaedrus

11-01-2010, 07:57 PM

Load up and go long.Belg, a contrarian seeks opportunities to buy or sell specific investments when the majority of investors appear to be doing the opposite..... ie they buy in downtrends and sell in uptrends. You can't advocate "loading up and going long" when the herd is thundering North and claim to be a contrarian!

Market Strength Indicator chart update :-

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOW111.gif

winner69

17-01-2010, 09:07 PM

P's chart will still be green

Heres something from Chart of the Day .... this rally is by historicall terms almost a non event ..... a long way to go yet

Quote ..... all major market rallies of the last 110 years are plotted on today's chart. Each dot represents a major stock market rally as measured by the Dow. As today's chart illustrates, the Dow has begun a major rally 27 times over the past 110 years which equates to an average of one rally every four years. Also, most major rallies (73%) resulted in a gain of between 30% and 150% and lasted between 200 and 800 trading days -- highlighted in today's chart with a light blue shaded box. As it stands right now, the current Dow rally (hollow blue dot labeled you are here) has entered the low range of a "typical" rally and would currently be classified as both short in duration and below average in magnitude.

Corporate

22-01-2010, 06:38 AM

Bad times on the DOW tonight. Down 220 (2%) points at the moment.

P, has this changed your chart from "Stay in" to "Caution"...it must be close.

Phaedrus

23-01-2010, 10:12 AM

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOW123.gif

Hoop

23-01-2010, 12:41 PM

evilroyrule

23-01-2010, 03:43 PM

pardon moi, senor hoopster, what is a kicker?

fungus pudding

23-01-2010, 04:01 PM

pardon moi, senor hoopster, what is a kicker?

Tony Veitch?

evilroyrule

23-01-2010, 04:25 PM

touche meester pudding!

fungus pudding

23-01-2010, 05:06 PM

touche meester pudding!

Merci Monsieur Evilroyule.

evilroyrule

23-01-2010, 05:36 PM

ive been planning all day today to sell my shares on monday. and then i strted reading all the old posts, charts on the size and length of this rally, looked at big phaddys charts etc. and im actually going to stay all in. im not a day trader, nor am i by any means any expert, but to me this looks like any normal healthy retracement. we go up up up down down and then up again. after all this is what happened in nov just last year.

cool heads is what is called for. cld be famous last words, but imo this is just how the staircase traces. while will be good pickings next week i cant be bothered with short selling, and will simply wait for herd to trek north again.

good luck everyone. interesting times.

Hoop

23-01-2010, 07:17 PM

pardon moi, senor hoopster, what is a kicker?

Bonjour evilroyrule...

Je suis ne peut pas écrire le français donc j'ai trompé l'utilisation d'un traducteur de texte en ligne... niffy hein! essayez-le ici (http://www.online-translator.com/Default.aspx/Text)

A kicker is a very powerful two candlestick formation. Investors are known to make a lot of money from doing nothing else in investing except hunting down kickers and acting upon them.
see here (http://www.tradingmarkets.com/.site/stocks/how_to/articles/-76066.cfm) (click "skip the ad" if it pops ups)

Google... candlestick kicker for more info

I mentioned to watch for a kicker (which may or may not happen) next week as the market drop is very severe on news which isn't particularly bad when you sit down and calmly think about it. The markets being closed for the next two days investors have time to "group think" and may decide on Monday to proact rather than react.

evilroyrule

23-01-2010, 07:31 PM

Bonjour evilroyrule...

Je suis ne peut pas écrire le français donc j'ai trompé l'utilisation d'un traducteur de texte en ligne... niffy hein! essayez-le ici (http://www.online-translator.com/Default.aspx/Text)

A kicker is a very powerful two candlestick formation. Investors are known to make a lot of money from doing nothing else in investing except hunting down kickers and acting upon them.
see here (http://www.tradingmarkets.com/.site/stocks/how_to/articles/-76066.cfm) (click "skip the ad" if it pops ups)

Google... candlestick kicker for more info

I mentioned to watch for a kicker (which may or may not happen) next week as the market drop is very severe on news which isn't particularly bad when you sit down and calmly think about it. The markets being closed for the next two days investors have time to "group think" and may decide on Monday to proact rather than react.

thanks hoopy,

sadly i quit 5th form french before i flunked.

i dod my homework. so we are looking for a bullish kicker? god knows how you can recognise that candle forming until the event is upon us? it cld go either way, but i agree, the news out hasnt been bad at all.

so someone looking to trade off these bull kicker (good name for next racehorse or a derivitive of at least) signals wld take a punt on monday? surely if they waited till after the day, the candle wld have been formed and opportunity lost? appeciate your reply, this is really interesting. thanks

ok so this is what we are looking for:
Recognizing the formation of a potential Kicker Signal requires observing the previous day's candle formation, with the open price, then the closing price continuing in the direction of the existing trend. A bullish kicker is formed after an announcement or some event, a down-trending price alters its direction, opening at the same level or higher than the previous day, a gap open, and proceeding to close in the complete opposite direction of the previous day.

in practical terms how does that work? if on open monday, any one stock opens highr than its friday close, is that it?? or is it formed at days end after reversing previous trend? if so, ho much higher wld it have to close??? is the bull kick est on open or at end of days trade?

ps good use of the on line translator!!

Hoop

23-01-2010, 08:13 PM

Thinking a bit more about it ...Realistically Monday would not be the day for a bullish kicker..The Dow would have to open above 10400 and rise higher and close higher (gap), a bit too much to ask for methinks.

Maybe Tuesday if Monday suffers a much smaller fall....hmmm.. an assumption

Hmmm... need the right variables...maybe at this moment this is not the right scenario (chartwise) to expect a bull kicker formation...

Oh well.... I'll stop assuming and continue analysing the real stuff.

evilroyrule

25-01-2010, 01:03 PM

Hoop

26-01-2010, 10:53 AM

We needed an up day to offset the bearish effects of the 3 identical black crows. We got that.

The DOW closed up at 10197 (+24) a positive but wary start to the week the Media say.

But did the returning bulls do a good job today?....Personally...Nah

Their first bullish attempt to regain their lost territory failed. (retest of new resistance 10250 respected). Maybe tomorrow?

A bull market correction in progress scenario is the odds on chance at the moment..

http://i458.photobucket.com/albums/qq306/Hoop_1/dow25012010.png

Footsie

26-01-2010, 05:22 PM

Hoop
Where would a bull market correction take the DOW 9500?
what affect will that have on the asx i wonder.

markets are starting to diverge vs the 2008-09 correlation.

Phaedrus is calling aussie to bounce and he might be right with a solid reporitn season abotu to start...but it will be had for aussie if the SP and DOW are correcting

btw, what % are you invested at the mo hoop?

Phaedrus

27-01-2010, 11:04 AM

Phaedrus is calling aussie to bounceNo he's not. He simply drew attention to Mondays candlestick. This chart shows some previous examples :-

http://i602.photobucket.com/albums/tt102/PhaedrusPB/AllOrdsDoji.gif

evilroyrule

27-01-2010, 08:54 PM

nikkei down .11% anything to make of that?

and hang seng .38%

winner69

03-02-2010, 04:39 PM

Just how rooted the US is relative to the rest of the world can be seen in this chart from chartoftheday.com

Yanks need heaps more gold to buy the DOW now than they did a few years ago .... and note the log scale as well

evilroyrule

03-02-2010, 08:10 PM

hang seng on fire tonight, nikkei less so. cld it be 3 green for the DOW?

Dr_Who

03-02-2010, 08:24 PM

China IS BOOMING! Up 2.4%

Phaedrus

03-03-2010, 01:14 PM

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DJIA33.gif

Hoop

24-03-2010, 02:04 PM

Final confirmation that the Bull market correction is over.
DOW had a good day and closed at 10889 (up 103 +0.95%)

OK... what happens now..?
If I knew I would be richer than Buffet.:cool:

Well being a TA bent investor I would first have a look at the charts ...I would take history and project it forward look forward and use TA Targeting to find the next bull market correction due point.

Using TA targeting method and simply averaging the 2 previous corrections uptrend distance at 2500 points the next correction due point should be in the vicinity of the 12300 area (2500 + 9835).
Looking at the charts below from history there is confidence that a correction will start near or at a major resistance level. At the 12300 area unfortunately a major resistance point is absent...so one has to look at resistance points nearby. There are some around the 11760 area and more towards the 13000 area. Looking at the second chart I have marked this 11750-13000 zone in yellow. A wide area but the correction due point of 12300 happens to be nearly in the middle of this zone.
http://i458.photobucket.com/albums/qq306/Hoop_1/DOW23032010.png

The chart below points to some possible pessimistic news if one believes in charts.

This next correction has to be taken seriously as it may or may be not a cyclic turning point. The 11760 level happens to be the peak back in February 2000 that saw the commencement of a cyclic bear market as well as a change of secular cycle from bull to bear. Investors will be reminded that in secular bear cycles (on average, give or take) cyclic peaks tend to be no higher than the last. However a long strong cyclic bull market during 2003-2007 did push a new high peak to over 14000...so hopefully this time around with this present day cyclic bull market we are in, we may see that 14000 area again.. but any level above 13000 if we get that far, would become a constant worry for the chartist investor.

Now seeing that yellow zone within striking distance (10-20%) now, it may look as if the bear is ready to attack this year and the cyclic bull dies ...however correction due points are based on distance not time.

I have illustrated this example, (see the red elliptical) February 1994 to February 1996.
By Feb 1994 it seemed the cyclical Bull market had nearly run its course but as it happened it was still another 2 years before that due point was finally reached...this gave the market time to create a strong floor (support level) to spring up from and the life of the cyclic bull market was extended. EDIT: Its this same strong then Support / now(was) Resistance level (10700) that was broken up through last week...a very bullish sign.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW17yr.png

winner69

24-03-2010, 02:51 PM

Hoop

You might be interested in this view of the US markets .... even uses your Shiller figure

http://hussmanfunds.com/rsi/valuationforwardearnings.htm

winner69

30-03-2010, 07:17 PM

Interesting piece
http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2010/03/29/us-stock-market-returns-what-is-in-store.aspx

The current - "buy-and-hold" investors in the S&P 500 Index are still 25.5% down from the levels of 10 years ago, the Dow Jones Industrial Index a similar 23.5% lower and the Nasdaq Composite Index a massive 52.5% under water.

The future - Based on the above research findings, with the S&P 500 Index's current ten-year normalized PE of 20.3 and ten-year normalized dividend yield of 2.1%, investors should be aware of the fact that the market is by historical standards expensive. As far as the market in general is concerned, this argues for unexciting long-term returns, possibly a "muddle-through" trading range for quite a number of years to come.

So buy and hold strategy appears next to useless .... need to be invested on the uptrends and out of the market on the downtrends ........ hey isn't that Phaedrus is trying to tell us

evilroyrule

30-03-2010, 08:31 PM

asia pumping up the jam tonight. nikkei 12 month high.

winner69

10-04-2010, 10:07 AM

Yipee ...... DOW back to 11000

On and upwards from here to 12,000 and maybe 13,000

But gee the DOW was 11000 in 1999

Todays 11,000 just what you expect in a secular bear market .... and we'll probably celebrate again in 2014 and 2015 when the DOW reaches 11,000

beacon

10-04-2010, 12:25 PM

Todays 11,000 just what you expect in a secular bear market .... and we'll probably celebrate again in 2014 and 2015 when the DOW reaches 11,000

Et tu Brute'

Phaedrus

12-04-2010, 11:16 AM

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOW412.gif

Phaedrus

12-04-2010, 01:52 PM

It seems that more people on ST are now applying Fibonacci levels to indices and stocks in an attempt to identify future turning points. In view of this, I thought it might be interesting to "backtest" Fibonacci levels over 20 years of Dow history and see how well they identified the significant turning points of this period.

Trends are followed by countertrends. Fibonacci theorists claim that the extent of these retracements is often a Fibonacci ratio of the extent of the previous move. The countertrend "ought" to retrace 23.6% or 38.2% or 50% or 61.8% or 100% or 123.6% or 150% or 161.8% (etc!) of the previous major trend. You can see from the charts below that after each and every major trend, Fibonacci levels failed to identify (let alone predict) the extent of the following retracement, even approximately.

Troubled by too many significant highs and lows failing to occur at conventional Fibonacci levels? No problem! As illustrated in the latest chart (bottom right) all you need do is simply apply another set of Fibonacci levels within each of the original ones. Such a subdivision gives the current uptrend 26 putative reversal levels - so far. This technique (as posted right here on ST) gives such a multiplicity of possible reversal levels that it virtually ensures any event deemed to be of significance will be "at or near" a Fibonacci level.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOWfib.gif

A recent study by Professor Roy Batchelor and Richard Ramyar found no evidence that Fibonacci numbers work in American stockmarkets. They tested nearly 90 years of history of the Dow Jones Industrial Average (1914-2002) and found no indication that trends tend to reverse at the 61.8% level - or at any other Fibonacci level.

http://www.cass.city.ac.uk/media/stories/story_30_69004_65846.html

peat

12-04-2010, 03:52 PM

maybe you should have started a new thread.
I think perhaps you're taking the fib claims a little too literally in that no one claims its perfect but that there are a lot of instances where they act as support resistance levels which may or may not hold.
There are so many examples of them being useful that your 1 post denigration using one index isnt really a satisfactory refutation in my opinion
Also you didnt mention the fib that I prefer most of all in conjunction with the .618 fib, and thats .786 (the square root of .618)

There - I did bite! (I was very tempted not to)

STRAT

12-04-2010, 08:43 PM

What? only one nibble.
Come on you Fib fans. Get stuck in and defend the cause.:p

Peat reckons they may or may not work which is a bit like it may rain tomorrow or it may not. Not exactly a strong defence :D

peat

12-04-2010, 09:37 PM

well it seems to me when I draw the Dow Fibs that is there IS some magical attraction to fib levels during the correction - the price corrects to the 23 the 50 and 61.82 levels.

peat

12-04-2010, 09:56 PM

and on the way down the 2.61 extension is just a little uncanny dont you think?

Phaedrus

13-04-2010, 11:25 AM

Peat, our plots differ because we are basing our respective Fibonacci retracements on different starting points. The attached chart shows just a few of many possible start date options. All are equally valid, and of course even more become available as you extend the timespan covered by the chart. The low that you elected to use is marked by a red arrow, mine light green. Fibonacci levels are colour coded to match their respective start point arrows.

This chart gives some idea of the very large number of Fibonacci retracement levels that can be generated. They are so closely packed that one can be found for nearly every peak and trough. I have included Peat's favourite 78.6% fib. You can see that it is no more effective or accurate than any of the other retracement levels. All these lines - and not one got it right! I certainly see no "magical attraction to fib levels" and the only thing I find "uncanny" is that the reversal, when it came, was between Fib lines - and in an area where they were unusually sparse!

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOWfib413.gif

peat

13-04-2010, 11:59 AM

i knew it was stupid having this discussion , you're being ridiculous.

the only obvious place to start on the time frames we're using is at the bottom after the 1987 fall
and that one shows the fall found support at 61.8 - fact (and end of discussion) .

winner69

13-04-2010, 05:00 PM

i do like my self drawn chart of the ASX200 (weekly) though with my calculated Fib levels on it - calculated from the all time high just under 7000 to the March 09 low.

What i find interesting is that the 50% level at 4922 was a period of consolidation on the way down (the blue box) and has been been a strong level of resistance on the way up

As I said on another thread it is also interesting that one could say that the ASX2000 has ranged traded for over six months between the 38.2% and 50.0% levels

If I did bother calculate it I would probably find that the width of the channel on the way up from March 2009 is also a Fib number

Maybe ASX200 at 5000 is around about a 50% Fib level ... or it might be the emotional attachmennt to round numbers that is making the 5000 point so important in some people eyes

Summary of raving - Fib levels are interesting and have a lot of merit as nature does seem to play out so often .... but dont work in all cases

Would aslo say that in the short to medium term I would only use Fibs based on the most recent significant top to bottom or vice versa

ananda77

13-04-2010, 05:16 PM

...personally do not use Fib-levels for trading and there is a lot of mixed opinion around their merits; I assume that if trading hits a Fib-level, it would be one indication of something happening in the market at that point which should best be confirmed by another trading system

...however, institutional movements track better technically than any of the other indexes. For instance, on October 11th. 2007, the Institutional "core holdings" index hit an EXACT 61.8% Fibonacci retracement while the other indexes did not. That day marked the EXACT top of the market.

Kind Regards

Phaedrus

13-04-2010, 05:19 PM

Gosh Peat, if I am being ridiculous backtesting 30 years of Dow data, how silly were Batchelor and Ramyar analysing three times that amount!

Did you read the paper they wrote? Here is the abstract :-

"We examine whether ratios of the length and duration of successive price trends in the Dow Jones
Industrial Average cluster around round fractions or Fibonacci ratios. We identify turning points by
heuristics similar to those used in business cycle analysis, and test for clustering using a block
bootstrap procedure. A few significant ratios appear, but no more than would be expected by chance."

Their conclusion?

THERE ARE NO MAGIC NUMBERS.

Dr_Who

13-04-2010, 05:21 PM

I need to learn about charting. After all these years I still have no idea what you guys are on about. Stop telling fibs! LOL

The market wants to come down and waiting for any good reason to go up. I think the market has Already factored into good reporting period. Any disappointment will see it getting smashed.

Phaedrus

15-04-2010, 12:47 PM

I do like my self drawn chart of the ASX200 (weekly) though with my calculated Fib levels on it. What i find interesting is that the 50% level at 4922 was a period of consolidation on the way down (the blue box) and has been been a strong level of resistance on the way up. As I said on another thread it is also interesting that one could say that the ASX2000 has ranged traded for over six months between the 38.2% and 50.0% levels Maybe ASX200 at 5000 is around about a 50% Fib level ... Summary of raving - Fib levels are interesting and have a lot of merit as nature does seem to play out so often.I appreciate that you find such a chart interesting and useful, W69. These qualities are not there because you have used Fibonacci levels, though. You consider that the 50% mark is especially significant, but I feel obliged to point out that this is not a Fibonacci level! Let's follow through on that idea though, and plot 2 further 50% levels, and yet again, such that the retracement is now divided into 8 exactly equal parts. Here is a set of four charts comparing two using these arbitrary 12.5% increment levels with your version. Take a look and see which one you think works best......

http://i602.photobucket.com/albums/tt102/PhaedrusPB/W69x4.gif

The way I see it, W69, is this. You could have a chart that does everything your old one does, only better, more accurately and faster - without resorting to magic numbers, mysticism or numerology!

Lego_Man

19-04-2010, 12:29 PM

Always thought there was something dodgy about Fibonacci levels.

beacon

19-04-2010, 07:35 PM

point well made Phaedrus, as always. kudos

peat

10-05-2010, 02:41 PM

didnt want to start a new thread so will post it here.... Kraft has (like Eur$$$) done a perfect Gartley - retracing to .618 and .764 fib levels .... will be interesting to see what happens going forward.
1st target would be 25

winner69

16-05-2010, 08:10 PM

This chart from chartoftheday.com suggests that some time in the future the DOW will br back to 5000-6000 before it gets to 15,000

]For some long-term perspective, today's chart illustrates the Dow adjusted for inflation since 1925. There are several points of interest. For one, when adjusted for inflation, the bear market that concluded in the early 1980s was almost as severe as the one that concluded in the early 1930s. Also, the inflation-adjusted Dow is a little more than double where it was at its 1929 peak and trades 61% above its 1966 peak -- not that spectacular of a performance considering the time frames involved. It is also interesting to note that the Dow is up 65% from its March 9, 2009 low which is actually slightly more than what the inflation-adjusted Dow gained from its 1966 peak to today.

Hoop

18-05-2010, 09:36 PM

Winner..A chart from Chris Kimble, similar outlook from another long time historical perspective.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW70yeartrend1.png

leonchai

21-05-2010, 10:05 AM

The trend line only looks like a straight line because the Y axis is not to scale, i.e 0-5000 is longer than 500-1000.

peat

21-05-2010, 10:18 AM

The trend line only looks like a straight line because the Y axis is not to scale, i.e 0-5000 is longer than 500-1000.

log chart?

winner69

21-05-2010, 10:18 AM

The trend line only looks like a straight line because the Y axis is not to scale, i.e 0-5000 is longer than 500-1000.

Its called a log scale mate and a better representation than using a normal scale because it reflects percentage changes better.

Hoop

29-05-2010, 10:53 AM

Dow ends worst May in 70 years

http://money.cnn.com/2010/05/28/markets/markets_newyork/index.htm

Hoop

08-06-2010, 11:45 AM

The DOW turned into a bear today...broke the 9900 support.
The next question is how mean is this bear going to be ..a nicer short-lived Teddy Bear and then the cyclic Bull market cycle resumes or the cyclic bull dies and another big Grizzly Bear in a cyclic bear market begins:confused:

Remember at the begining of the last market recovery the "experts" reckoned there would not be any "V" shaped recovery ...more of a "L" shaped......FAIL:D

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW07062010.png

winner69

08-06-2010, 11:53 AM

Remember at the begining of the last market recovery the "experts" reckoned there would not be any "V" shaped recovery ...more of a "L" shaped......FAIL:D

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW07062010.png

If the experts were right about the L then the V has been a big mistake and needs to readjust to where it would have been if it had been a L .... right?

Or maybe we are having a W after all

Hoop

08-06-2010, 01:27 PM

If the experts were right about the L then the V has been a big mistake and needs to readjust to where it would have been if it had been a L .... right?

Or maybe we are having a W after all

"W" stands for wobbly :confused::cool:

When nothing goes to how those people want it to go or according to plan, its always classed as a mistake by the other party not them.. Prechter, Roubini the perma-bear kings and today's moment heroes have reckoned the market has been making one big mistake for the last 20 years. Those investor faithfuls have lost a lot of money and lost even more in lost opportunities by following these guys recommendations over the years ..so who is making the mistakes.

For me its easy..rule of thumb.."the market is always right until it proves itself wrong".

Talking about re-adjustments (market proving itself wrong).........Annualised PE (S&P500) jumped up to 16ish from that flash lowpoint of 13 last year (crash bottom) and it was considered back then at 16 the market was considered still undervalued. That same market went to 20ish at the end of March 2010 ..20 was considered overvalued*, and correction time rumours began circulating.
* Crestmont Research had 18.9 as slightly undervalued

At the moment we are in the mid or perhaps towards the later stages of a secular bear market which requires a downtrend in annualised PE with the usual peaking and troughing as we downtrend towards the end of the Secular bear cycle which requires a change in trend to that of an uptrend from the baseline of below 10.
With this sudden bear trend movement together with 80% of the USA companies producing very good profits and bottom lines it could safe to assume that the annualised PE would have dropped quickly back from that 20ish figure at the end of March to possibly 15 now.

So the S&P500 (and probably the DOW as well) at 15 would be considered undervalued again at this moment in time...... so Winner you would assume it to be a mistake by that market if it falls another 20% within the next 6 months?

Hoop

08-06-2010, 11:02 PM

Hmmmm...the media has a lot to answer for...Belg. You sound like me before I read and embraced this site http://www.crestmontresearch.com/content/market.htm (http://www.crestmontresearch.com/content/market.htm) it explains the mechanics of the sharemarket as well as financial physics.

Have a read of the Crestmont Research site..it may take a hour or two (many hours and many referrals for me)...It's heavy going..but persevere...expect your mind to have your ingrained beliefs twisted around, your media brainwashed beliefs purged under protest and excepting the new correct facts/disciplines will be hard to embrace.. but in the end the "penny drops" and it all starts to make perfect sense.

I thank Winner69 for pointing me to this site a few years back.
After I had read the whole site I was surprised how much false logic (reinforced by the media as being true) I had stored in my memory after 35 years of share investing.

As an educational website I rate it as an A+ (I haven't found one even close to being better).:t_up:

It covers what you have mentioned in your last post in depth with facts, figures and tables.

Hint:- :).....the economy and the share market are not statistically correlated.**

**The site will teach you the reasons why it's not.

(http://www.crestmontresearch.com/content/market.htm)

Logen Ninefingers

09-06-2010, 09:08 AM

Dow in triple-digit comeback

By Alexandra Twin, senior writer
June 8, 2010: 4:10 PM ET

NEW YORK (CNNMoney.com) -- Stocks staged a comeback late Tuesday, with the Dow and S&P 500 rallying near the end of a choppy session, following a surge in commodity and financial shares.

The Dow Jones industrial average (INDU) gained 123 points, or 1.3%, and the S&P 500 index (SPX) rallied 11 points, or 1.1%. Both ended the previous session at the lowest point since Nov. 4.

Hoop

09-06-2010, 10:40 AM

Hi Hoop,

Go to settings on the top right of a ST web page, then to attachments at the very bottom of the list of links on the left of that page. :t_up:

Thx Yankiwi much appeciated...Gosh a rather complicated maneuver... probably would've taken me years to figure that one out:confused:

peat

09-06-2010, 10:50 AM

it would be easier to edit the post ... select go advanced , and then manage attachments and delete the attachment wouldnt it ?
still , what ever works....

Hoop

09-06-2010, 06:41 PM

it would be easier to edit the post ... select go advanced , and then manage attachments and delete the attachment wouldnt it ?
still , what ever works....

Yeah Peat .. That was my first thought ..I did exactly that, but there's no delete option there...you would think that managing attachment would include a delete option somewhere wouldn't you...if there is I cant find it....anyway Yankiwi was on to it.

winner69

13-06-2010, 08:42 PM

Hoop, the key thing for me when comparing average PEs of S&P or DOW is to compar PEs associated with similar stages of macros cycles.

For example, when the markets are recovering from cyclical events like the GFC1 or DotCom or whatever, then these average PEs should be compared with similar upwards or downwards PEs. Or perhaps another way of expressing the same is to say that PEs should be higher as economies recover, as the market, being forward looking, is pricing in future improvements which results in higher PEs as PEs are, after all, historical. Conversely, on down cycles the market is pricing in future degredations. Thus using average PEs over both recoveries and contractions doesn't really tell the true story.

Thus at this early juncture of the turnaround, with the global economy recovering and expecting 3.5 to 5.5 percent growth, I'd expect PEs to be 15-20 as they're pricing in a future that hasn't occurred yet. (At the other extreme, 15-20 in late 2007 would have way too high and should have been 5-10!)

This is the big danger with PEs - just two factors are involved and one is historical (earnings) and the other is forward looking (price).

This weeks free chart from chartoftheday.com must be espeially for you belg

http://www.chartoftheday.com/20100611.htm?T

The comments that came with it -

Today's chart illustrates how the recent rise in earnings as well as the the recent pullback in stock prices has impacted the current valuation of the stock market as measured by the price to earnings ratio (PE ratio). Generally speaking, when the PE ratio is high, stocks are considered to be expensive. When the PE ratio is low, stocks are considered to be inexpensive. From 1936 into the early 1990s, the PE ratio tended to peak in the low 20s (red line) and trough somewhere around seven (green line). The price investors were willing to pay for a dollar of earnings increased during the dot-com boom (late 1990s), surged even higher during the dot-com bust (early 2000s), and spiked to astronomical levels during the financial crisis (late 2000s). Currently, the PE ratio stands at a touch below 18 which is near the lowest levels that have existed since the early 1990s.

Dr_Who

14-06-2010, 01:55 PM

Hey Winner. Thanks for that great chart.

Phaedrus

16-06-2010, 09:36 AM

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOW616.gif

Hoop

17-06-2010, 11:18 AM

I'm not exactly a Mark Hulbert fan but his todays article in Marketwatch follows my thinking. I think Richard Russell is a bear, so I agree more with the other 2 ...the bull isn't dead yet but it is sick. The DOW briefly entered the Bear zone, the question has to be asked...was this brief break below the primary support of 9900 the bottom.. hence a bear trap and the cyclic bull lives on?.. or ...have we entered a new cyclic bear market cycle and we are currently experiencing a bear market rally (sucker rally)which is due to peter out?

By Mark Hulbert (mhulbert@marketwatch.com) , MarketWatch
ANNANDALE, Va. (MarketWatch) -- The Dow Theory jury is still out.

But we at least know more than we did as recently as late May. According to one of the three Dow Theorists I monitor, precise parameters are now established for what the bull must now do in order to avoid a death sentence. The second of these Dow Theorists appears to agree.
The third member of the jury, however, has already said he is voting for that death sentence.
So the bull market has its work cut out for it to keep even this shred of hope alive.
The Dow Theory, of course, is the oldest market timing system still in widespread use today. Although its adherents don't always agree on its interpretation -- as is the case now -- the Theory has received an academic seal of approval for having beaten a buy-and-hold in the past. So it behooves us to pay attention to what the Dow Theorists are saying.
You might wonder why there is any room for disagreement in the first place. The reason is that the Dow Theory's creator -- William Peter Hamilton, who introduced the approach in numerous Wall Street Journal editorials over the first three decades of the last century -- never codified his thoughts in a set of complete and precise rules.
Consider the three Dow Theory preconditions for a sell signal. Though they are clear enough as far as they go, they still leave an enormous amount of room for interpretation -- especially in the definition of "significant" in Step #2 below:

Step #1: Both the Dow Jones Industrial Average (DJIA (http://www.marketwatch.com/investing/index/DJIA) 10,409, +4.69, +0.05%) and the Dow Jones Transportation Average (DJT (http://www.marketwatch.com/investing/index/DJT) 4,419, -47.99, -1.07%) must undergo a correction from joint new highs.
Step #2: In their subsequent "significant" rally attempt following that correction, either one or both of these Dow averages must fail to rise above their pre-correction highs.
Step #3: Both averages must then drop below their respective correction lows.

Consider how these rules applied to the situation immediately after the so-called "Flash Crash" in early May. Following the lows that both the Dow industrials and Dow transports hit on May 7, both indexes rallied -- gaining 5.0% and 8.4%, respectively. But in that rally, neither average was able to surpass its earlier highs. And then, on May 20, both proceeded to break below their May 7 lows.

Richard Russell, editor of Dow Theory Letters, interpreted this sequence of events to unambiguously satisfy all three steps of this sell-signal process. Writing after the market closed on May 20, he wrote: "The curse, it is cast. ... [The breaking of the May lows] means that the primary bear market is resuming. The monster is creeping toward Bethlehem." And in the several weeks since then, Russell has become even more apocalyptic in his pronouncements.

But Jack Schannep, editor of TheDowTheory.com, and Richard Moroney, editor of Dow Theory Forecasts, argued that the market's rally off its May 7 lows was too short to count as "significant" -- it lasted just three trading sessions, in fact. On their interpretation, therefore, the market throughout May was stuck in the correction that constitutes Step #1 -- two steps shy of a sell signal.

What about this month's rally, which began on June 7? After Tuesday's impressive triple-digit increase, that rally has now lasted six trading sessions and tacked 6.0% onto the Dow Industrials and 10.6% onto the Dow Transports.

Schannep, for one, thinks that's enough to be "significant." On his interpretation, that therefore starts the clock ticking: If both averages now proceed to close above their highs of six weeks ago, then the bull market will receive another lease on life.
But if they fail to surpass those highs and then close below their June 7 lows, then Schannep (and perhaps Moroney) would join Richard Russell in declaring a primary bear market to be in force.

In the meantime, according to this interpretation, the market is in the "no man's land" between reconfirming the previous bullish signal and declaring a fresh new bear market signal.

This indecision will no doubt frustrate investors who want black-and-white certainty in their market timing judgments. But, given recent volatility, it is a situation that is likely to be resolved in the very near future.

Fasten your seatbelts and hold on for the ride.

Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.

Phaedrus

30-06-2010, 09:21 AM

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOW630.gif

Jess9

13-08-2010, 12:47 PM

Hi Phaedrus.

Have you posted an recent ASX one also?

Jess9

14-08-2010, 07:38 AM

Thanks for that karlos.

Is P's above chart the latest on this board? Its dated June. With the States recent return to some emergency measures (printing money again) wondering where that little line is today...I'm guessing still red.

Corporate

21-09-2010, 07:56 AM

Jeez I was expecting to see the DOW down overnight...but BANG 160+points

Phaedrus

25-09-2010, 07:51 AM

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOW925.gif

Corporate

25-09-2010, 12:45 PM

hey P...i can't see it?

Financially dependant

25-09-2010, 01:02 PM

hey P...i can't see it?

I can see it ok!

Dark green....can't get any stronger.

Lizard

03-11-2010, 07:36 AM

This 11,200 level on the Dow seems to be pretty significant, as we've seen the market fail around there numerous times on a daily and intra-day basis.

Am interested in TA as to probability of this breaking up or down? I am presuming any move is like to be quite strong once the magnetic pull of 11,200 is broken?

Phaedrus

03-11-2010, 10:01 AM

I don't see 11,200 (or any other level) as being of particular significance, Liz. Looking at the short-term chart below we can see that 11,200 has been broken plenty of times before and doubtless will be broken again.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DJI113st.gif

Long-term I guess you are referring to the April peak of 11,309 when the Close was 11,205. Certainly the Dow closed today below this level, but that was just another peak in an uptrend that is still intact. A clear break above this level would simply re-confirm the uptrend.

Here is an update of the long-term Dow chart. You can see that the plot remains resolutely Green and the MSI is as high as it can go. Is that not positive enough for you?! It certainly is enough to keep me Bullish! In my opinion, there is a high probability that the Dow will break "up".

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DJI113.gif

Hoop

03-11-2010, 01:33 PM

Hi Liz
As P says there is no significance at 11200. However if you use candlesticks or OHLC format you can clearly see the 11250/60 resistance (see chart)... There has been a couple of intra-day attempts recently to break this level and each time it has failed. (see my first chart)

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW021120101year.png

Chances are there could be a correction as the market rally has reached its TA target point and the purple Bollinger bands are squeezed at this moment indicating a trend change (see my second chart)

The market has had a good rally lately (Sept - Oct) and maybe this could signal time for the market to catch it's breath.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW021120103year.png

If there is a market correction ..how big??..All rumours suggest the institutions will be buying into this next anticipated correction so maybe it will be a shallow correction (-5%) downwards to test the trend lines somewhwere around the 10700 area (there's a support line here too, not drawn in on the chart).
There's been traps this year so a bear scare such as seeing a break of one of these trendlines is possible around this 10700 area***. Remember trendlines aren't foolproof and false breaks are common....of course if this happens the usual Doom watchers noise will no doubt be deafening and negative media feeling will result.

Overall: ...In my Opinion I see a short small dip (correction) looming. Usually when a Down trendline is broken there is high chance the index will fall back to test that trendline before it continues to rally upwards again [***Note: This may result in seeing a temporary breaking of the long term primary uptrend line (bear trap) ]...... then I agree with P's opinion.

As my comments is a prediction only ..it would wise to take things day by day ..The present day( as at 2 Nov 2010) the key chart points to watch are :
......climb above 11260+ back to bull market mode and rally continues...
......a fall back to 10700, no problem...P's MSI probably won't be red
......fall back to below 10700, start to worry

Lizard

03-11-2010, 02:36 PM

Thanks Phaedrus and Hoop. Yes, I am very "general" in my use of 11,200 as a level - just a visual squiz at the chart when I open my eyes most mornings and surprised at how many times it has hovered around/above this level before retreating back down.

Thanks, as ever, for the comments, charts and thoughts.

Phaedrus

05-11-2010, 10:11 AM

In my opinion, there is a high probability that the Dow will break "up".There - that didn't take long did it!

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOW115.gif

Hoop

05-11-2010, 10:40 AM

There - that didn't take long did it!

Nope..and painless as well

Hoop

11-11-2010, 10:39 AM

The Dow retested its new major support line today (11255) and respected it to move back higher to close at 11357 (up 10)

Note how it did this retesting mini correction action after it broke its previous 10720 resistance (blue circle).

Also of TA interest was the pull back retesting of its falling wedge after break out

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW10112010intraday.png

Hoop

14-11-2010, 11:10 AM

There - that didn't take long did it!

Closed 11193 (-91) Friday.

DOW teasing us with a break back down below that major 1255 line...

It seemed the DOW broke up through that major (but weak?) resistance 1255 level into cyclic Bull market resumption area in a attempt to reach its 11500 TA target goal (Market correction due point) but met sellers on the way and broke back down under that 11255 level again.

Some could argue that short term temporary upward push was artificially caused by the influence of QE2 ... but in theory it still qualifies as a break upwards.

TA Target 10720 + (10720 - 9940) = 11500

Cautious at present but still bullish in the longer term...Green is good..eh

winner69

14-11-2010, 04:15 PM

Hoop DOW is in a shocking downtrend if GOLD is your currency

Jeez - just over 10 years ago the man says ou needed 45 ounces of gold to 'buy the DOW' but now it only costs 8 ounces of gold

What a disaster ..... and still nobody really believes the US economy (and by implication the US markets) is truly stuffed .... munted in a big way

Chart of the Day
For some perspective on the stock market, today's chart presents the Dow divided by the price of one ounce of gold. This results in what is referred to as the Dow / gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes a mere eight ounces of gold to "buy the Dow." This is considerably less (82% less) than the 44.8 ounces it took to buy the Dow back in 1999. While the actual Dow continues to make new post-financial crisis rally highs, the most recent rally that occurred in the Dow priced in gold is fairly similar to several bear market rallies that have occurred since late 1999. It is also of interest that the Dow / gold has often tested (and is currently testing) resistance (red line) of its accelerated downtrend but has failed to break through on each occasion.

Hoop

14-11-2010, 07:12 PM

Interesting chart Winner... it seems it all began at the start of the secular bear cycle in 2000 - as well.

airedale

14-11-2010, 09:20 PM

The other side of the coin is that gold is in a startling uptrend dating back to 2002.

"Hoop, DOW is in a shocking downtrend if GOLD is your currency"

Hoop

15-11-2010, 11:23 AM

The other side of the coin is that gold is in a startling uptrend dating back to 2002.

"Hoop, DOW is in a shocking downtrend if GOLD is your currency"

Correct me if I not included something but I think the chart is made up of 3 variable factors...Dow index priced in US$, gold price, P/E Ratio.

P/E ratio is gradually falling (long term secular style) and we expect it to fall another 50% before the secular bear market cycle ends which still could years away...downward pressure on chart.

POG expected to go up some say to $us2000......downward pressure on chart

US $ still in downtrend but treasury bonds look to be bottoming......still short term downward pressure on chart...but possible upside medium term.

These variable factors point to continuing downtrend action...

Been thinking about this chart Winner posted ...I know the USA economy is stuffed but by x6 fold decrease in the last 10 years ..I find that hard to believe.,,,something is over cooked here...8 or 9 is too low.....
to get back to a still low 15 it would need a 60% decrease in POG or 60% increase in the DOW increase or some sort of combination of the two...I can't imagine the annualised PE ratio rising by any large amount.

Thoughts?...

Hoop

02-12-2010, 11:14 AM

14-11-2010 11:10 AM

Closed 11193 (-91) Friday.

DOW teasing us with a break back down below that major 1255 line...

It seemed the DOW broke up through that major (but weak?) resistance 1255 level into cyclic Bull market resumption area in a attempt to reach its 11500 TA target goal (Market correction due point) but met sellers on the way and broke back down under that 11255 level again.

Some could argue that short term temporary upward push was artificially caused by the influence of QE2 ... but in theory it still qualifies as a break upwards.

TA Target 10720 + (10720 - 9940) = 11500

Cautious at present but still bullish in the longer term...Green is good..eh

2 1/2 weeks later the DOW is revisiting that 11250/11260 R&S zone again.
That huge 2.1% rise today did not break any technicals..however a small rise tomorrow will trigger a bull reaction which should see the end of this correction.

This correction sofar has been smaller than normal (about -5%) but it was predicted to be -10% or less.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW01122010.png

Hoop

03-12-2010, 10:39 AM

http://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by Phaedrus http://www.sharetrader.co.nz/images/buttons/viewpost-right.png (http://www.sharetrader.co.nz/showthread.php?p=324990#post324990)
There - that didn't take long did it!
.................................................. .................................................. .................................................. ..........................

Well a month later and the DOW has cracked the same 11260 level again after that early November false start.
Maybe the Bull rally this time ...eh?

closed 11362 up +107

Phaedrus

03-12-2010, 01:48 PM

Well Hoop, as far as I am concerned, the DOW has been strongly positive for over 3 months now. So long as this situation continues, I remain resolutely Bullish.

The 5 month "medium-term" uptrend continues, as does the 20 month "long-term" uptrend.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/DOW123-1.gif

Hoop

02-01-2011, 01:42 AM

Hoop

26-05-2011, 11:43 AM

Well Belg...so far so good nearly half a year gone and the DOW is headed for its third up year in a row....
Statistics say 3 up years in a row is rare in a Secular Bear Cycle
and....
Simple basic market theory and Hypothesis sees the DOW bull market could be maturing in its possible BM phase3.
as I said a long time ago on this Thread any distance above 11500 would make me worry.

Can the DOW keep above 31 December 2010 figure at 31 December 2011?

http://www.imageurlhost.com/images/bhbxc12ifyfgzlj9rs0.png

Hoop

04-08-2011, 09:55 AM

That rare 3 years of rises in a secular bear market is looking distant now

The DOW Theory just signalled a primary tide Bear Market confirmed on the 2nd August 2011.

This event happens when both primary up trendlines break...... the DOW Ind index gets a confirmation with the DOW Transport Index or vice versa.
Edit: forgot to add the extra requirement ::: as well as the primary trendbreak, the index has to drop below their previous low point (Not drawn on the chart)

The DOW theory although looks simple on a chart is a highly reliable signal indicator.

http://www.imageurlhost.com/images/mw8ijly0qv0hup337jf0.png

Hoop

04-08-2011, 11:48 AM

Hoop, I'd love to agree with you but feel the trend line breaks are driven by macro events that have limited long term effects. E.g. Japan earthquake, US debt bollocks, European debt, etc. Meanwhile the BRICs, the engines for global growth, just keep on keeping on albeit some of the BRIC's govts are reigning in growth (and inflation). Time will tell but I'm not convinced the cyclical bull is over just yet. (That said I'm pretty cashed up and not seriously buying anything unless a) has a history of growing earnings and b) has a high current yeild and c) is protected from FX movements.

Time will tell

The market index charts is a only a historic visual display of group equity investor behaviour. Secular market human group behaviour follows patterns..

How can the sharemarket fall when the economy finally comes right????? one might ask

It is interesting atm in the USA because the American companies are making record profits!!!! yet the sharemarket doesn't fully recognise this... it has rallied into a cyclic bull market since 2009 but not to record highs...why? because of the group investor demands for higher yields to offset higher perceived risk...This is typical behaviour in a secular bear market environment
What is happening next???...record company profits are unsustainable and expected to see a tapering off their record highs in 2012 ..this effect will see a general downward pressure on Equity prices..........The economy is expected to suddenly come right and this will create less perceived risk resulting in upward pressure, but it is not enough as an improved economy causes inflationary events triggering a tightening of money supply higher interest rates, currency gains and all these have a larger combined large downward effect on the Equity Market and that market has to again increase yields to now compete with the money/currency and other markets.

The economy has no long term effect on the sharemarket...It may sound like a paradox but the economy runs just as good during a secular bear cycle as it does during the secular bull cycle...the difference is the group investors behaviour as they demand better returns and take less speculated risks during secular bear periods than in secular bull periods...hence causing a long term downtrend in the P/E Ratio over the time of the secular bear market cycle.

Therefore PE Ratio is the key driver and inflation is its secondary driver effecting cyclic and secular cycles of the Sharemarket. Economic events have only "ripple" effects within cyclic cycles.

dumbass

07-08-2011, 12:23 AM

Hoop

07-08-2011, 11:26 AM

looks very much like the end of the bull market and this becomes my preferred count.
5 completed waves up from 09 low, so now looking for a 3 wave bear market going south.
clear break of 3 year trendline.
head and shoulders topping pattern printed with neckline break.
total bugger really !
Thanks for the EW Dumbass
Even more of a total bugger when the differing TA disciplines all agree to the same conclusion...eh?
The US Equity markets may seem fundamentally OK but this latest weakness has created huge technical damage.

dumbass

07-08-2011, 12:10 PM

do you have any thoughts on targets and time frames Hoop.
im thiking its most likely going to run between 1 to 3 years with a target around 9700 or worse case low 8000's.
in corrections wave patterns can run from simple zig zag patterns to complex affairs but will always be 3 main waves.
need to keep your wits about you when it comes to trading with long grinding down waves with counter trending sharp rallies.

http://i183.photobucket.com/albums/x107/joicey9999/dow-1.jpg

Hoop

07-08-2011, 03:13 PM

Damm...internet dropped out and lost my reply spent 20 minutes on it I wont retype
Dumbass..short version if it is a bear market cycle we will see all the 3 stage patterns over an unknown life span ( average 15 to 18 months).. the severeity is unknown could be a cuddly teddy bear or a man eating grizzly.
The next couple of weeks we may see 11000 there is a support to break first however...watch for pullback to test the neck-neck trendline happens 64% of the timebefore the next posssible fall off (Ref Thomas Bulkowski)

http://www.imageurlhost.com/images/gvujcd5nddwwm2r2rukt.png

dumbass

07-08-2011, 07:12 PM

this is my trading plan for the next week or two , of course it wont pan out so neatly but looking for

1 fourth and fifth waves of this decline , market may have already put in a base aroun 11,100 will be loooking for a double bottom and indicator divergence to go long with risk and target defined
2 looking for test on either h+s neck line or green trendline
neck line should be aroung 61.8 retracement of wave down then looking to go short with risk defined amd open target at the moment
3 all bets are off if the 11 100 does not hold then the market is in serious trouble and will short the living daylights out the market
4 my feeling the credit downgrade will not be market moving in the short term.

http://i183.photobucket.com/albums/x107/joicey9999/dow-2.jpg

dumbass

08-08-2011, 08:46 AM

currency markets open and not much of a reaction on nzd
looks like a move into swiss otherwise muted opening.
my personal feeling is not much of a market mover but no doubt volatilty will be high.

Corporate

08-08-2011, 08:32 PM

3517

I'm a charting novice and for me simple is better. But, I don't like the look of this at all....

dumbass

12-08-2011, 11:40 AM

STRAT

12-08-2011, 05:32 PM

So downtrend losing momentum and shaping up for what looks like a good long.
Still need one more wave lower ( fifth wave ) before its safe to enter long.
Could be a double bottom or a new low but its getting close.Hi Dumbass.
Looks over done to me.
Nice little divergence with RSI last couple of days.
Lookin for a higher low.

dumbass

12-08-2011, 06:40 PM

Hoop

13-08-2011, 02:28 PM

I agree with Dumbass..as chances are that another drop could happen shortly. ATM the different TA disciplines are agreeing each other which increases the certainties of the forecasts.

Using pattern formation analysis method ....when a possible pattern is still forming it can be a little dangerous to assume what it is.... Usually the pattern is not identified until after it has completely formed.....However....lets assume this is a dead cat bounce(DCB) pattern forming and speculate. Lets note firstly that there is no gap down usually associated with DCB formations so we should be extra wary of this assumption. The rest of the actions look similar though long candlestick bars volatility and high volume so apart from the gap down everything else resembles the first half of the DCB pattern....

...so whats next if it is still looks like a DCB pattern?

Often people assume a DCB pattern to bounce up quickly within a day or two...yes that can happen but a DCB pattern usually has a longer time frame than many people think in its bounce. Quote Bulkowski "...Bounce. Prices bounce up, recovering much of what they lost during theevent decline. The recovery typically ranges between 15% and 35% and takes between 5 and 25 days to reach the top of the bounce....."

If we assume a typical average 35% recovery bounce it shows a target of 11600 which highlights and also adds more significance to that medium term resistance level which is also at that 11600 level....so for the DOW to recover back to where it was in July it would need a complete change of investor attitude, so to create strong buying pressure to force the 11600 resistance break and also break the 11900 resistance to turn this bear market back into a bull....This is not impossible chart-wise as the chart still resembles some sort of an uptrend with a possible large bull correction in progress. Note...Bull market corrections do break primary supports and trends.

However...there has been a technical change to a primary downtrend or bear tide which is usually a good name to use when an analyst thinks the cyclic change point has been reached but too early to be sure... the signs of a cyclic change are there ..primary trend breaks, MA200 broken, primary supports breaks and when combined with high volatility it indicates a cyclic shift...so..... until the market confirms otherwise one should assume that the DOW has shifted into a cyclic bear market cycle and therefore an investor should expect lower highs and lower lows.

if there are higher lows and higher highs again in the near future then we can re-evaluate the assumption to that it was just a huge Cyclic Bull market correction and we can alter our invest strategies again with out any harm done to our portfolios.

.....but...

with this present bear tide... the immediate DCB pattern assumption can not be ruled out...so in theory we should not get too excited about a recovery going up to that 11500/11600 area thinking that this insane market has finally got over itself and the market will keep going up. ...it may bust through 11600 and keep going up but remind yourself there's also a good or better chance it won't.

The last part of the DCB pattern after the bounce (part recovery) is a downturn to below the previous fall of 10700 (support)...If this happens it will confirm that the DOW has had a cyclic shift to the Bear market.
Quote Bulkowski "...Decline. After price peaks during the bounce, it drops, falling slowly, until reaching a trend low 15% to 45% below the bounce top. It makes this journey in 10 to 50 days, usually.

The biggest investor enemy in the next few days when (if) the bounce happens will be the media..Remember Media reports peoples emotions so expect to see "cheap shares" "Average PE Ratio at 11 is now below the long term average" "The economy is recovering" "Record company earnings" ...blah blah... all positive feel good stuff which may fuel this bounce.

With Media is mind ..did anyone read recently how the big corporate investors sold out and rumour has it that they are now piling back in with the insane low prices bottoms to strengthen their portfolios...I have added the OBV to the index chart below...normally the OBV is less reliable with indexes but it does highlight the fact that there has been no wholesale buying recently, just evidence of the increase volume coming from short term buy/sell opportunists activity.

More Balanced Assumptions from this Post ...I have mentioned the bearish side which I'm biased towards atm,,,however on a bullish note...if the index rises above 11600 this weakens my DCB pattern forming assumption ..a rise above 11900 suggests it may be just a bull market correction and weakens the bear tide assumption. ..a rise above 12800 confirms the cyclic Bull market is still intact

http://www.imageurlhost.com/images/f1pgq1xwudmi1bi1kwvi.png

dumbass

13-08-2011, 03:33 PM

reviewing the SP weekly chart, which shows nicely the major trends over that period, i would say you could draw the following conclusions

1 you need to trade the market , if this was a stock we would rightly say its in a trading range from 1997 to present day.
if you held from 1997 you be at break even.

2 any significant trend change has dispalyed a divergence on the rsi, currently no divergence on weekly or daily charts too.

3 the market is no where near oversold on rsi

4 if the market was to rally from here and continue the bull market it would far exceed any other correction in a bull market looking back over the last 17 years
the only similar situation was a sharp correction in 1998 ( circle in chart ) where trendline was broken but this was a secondary trendline not a primary trendline and the magnitude was not as great as this drop and the divergence from the trendline is much more significant.

5 the market is close to rallying from here but in the context of this chart it will be a rally in a confirmed downtrend.

in summary it looks like the start of a bear

http://i183.photobucket.com/albums/x107/joicey9999/sp500weekly.jpg

peat

16-08-2011, 07:01 AM

Entrep

16-08-2011, 07:52 AM

Big gains on small volume - looks weak to me and might short from here.

Hoop

16-08-2011, 12:35 PM

hey DA
Twiggs trading diary quote of the days says

I came to learn that even when one is properly bearish at the very
beginning of a bear market it is not well to begin selling in bulk until there
is no danger of the engine back-firing.

~ Jesse Livermore in Reminiscences
of a Stock Operator (http://astore.amazon.com/incrediblecha-20/detail/0471770884) by Edwin Lefevre.

I reckon major resistance around 1250 (S+P)

When you sit down and take time to think about this quote it doesn't take long to see it is poor logic.

Hint: risk v reward

Agree ..resistance at 1250 if it fails to crack that its extra confirmation of a bear market and its only 4% away.

For the DOW 11600 which is 1% away...or the next level up at 11900 which is 4%

dumbass

21-08-2011, 02:29 PM

hi strat, i still think there needs to be a final wave down to finish this pattern.
i hold 8 short positions and have rode the big move down , due to market volatilty stops and targets are a little redundant.
no real divergence yet on dailies so far.
fingers crossed but will look to unwind into this down wave.

http://i183.photobucket.com/albums/x107/joicey9999/sp500.jpg

final down wave now in progress , this will finish the first wave down of this bear market and should therefore provide a good long entry.
i still hold my eight short positions which i will sell this week , around 1230 spx points in total for the trade and each short is a 100 unit contract which is currently a profit of about $123,000 US dollars.
When the market is so volatile the waves are very clean and balanced, my favoured point will be around 1080 to 1090 and will be a double bottom pattern or may shoot lower to provide divergence on longer frame indicators.

in summary will look to reverse shorts and go long . good luck everyone.

http://i183.photobucket.com/albums/x107/joicey9999/sp500-1.jpg

BIRMANBOY

21-08-2011, 03:41 PM

Obviously not as dumb as your name!!! :-)
final down wave now in progress , this will finish the first wave down of this bear market and should therefore provide a good long entry.
i still hold my eight short positions which i will sell this week , around 1230 spx points in total for the trade and each short is a 100 unit contract which is currently a profit of about $123,000 US dollars.
When the market is so volatile the waves are very clean and balanced, my favoured point will be around 1080 to 1090 and will be a double bottom pattern or may shoot lower to provide divergence on longer frame indicators.

in summary will look to reverse shorts and go long . good luck everyone.

http://i183.photobucket.com/albums/x107/joicey9999/sp500-1.jpg

dumbass

21-08-2011, 04:07 PM

i like to think not but some would disagree.

Entrep

21-08-2011, 04:53 PM

final down wave now in progress , this will finish the first wave down of this bear market and should therefore provide a good long entry.
i still hold my eight short positions which i will sell this week , around 1230 spx points in total for the trade and each short is a 100 unit contract which is currently a profit of about $123,000 US dollars.
When the market is so volatile the waves are very clean and balanced, my favoured point will be around 1080 to 1090 and will be a double bottom pattern or may shoot lower to provide divergence on longer frame indicators.

in summary will look to reverse shorts and go long . good luck everyone.

http://i183.photobucket.com/albums/x107/joicey9999/sp500-1.jpg

Very impressive - when did you start going short exactly?

Currently short the SP500 also, but not to the same degree as you!

dumbass

21-08-2011, 05:14 PM

the little inverted triangles are the trades , so started early july mainly , then early august for main positions.

the last down triangle was a shorter term trade that stopped me out for about + 30 yesterday which i didint include.

i would be carefull now entrep as this is the end game for the first leg of the bear!

Entrep

21-08-2011, 09:58 PM

Thanks, yup I am only going short term and keep tight stops. I too see this bottoming soon and am just trying to take advantage ;)

Entrep

23-08-2011, 08:38 AM

Not looking good for the bulls - tried to go higher this morning but failed. Volume was very weak. Added to my short at EOD.

Man there will be/are some bargains out there though!

Hoop

24-08-2011, 10:53 AM

Not looking good for the bulls - tried to go higher this morning but failed. Volume was very weak. Added to my short at EOD.

Man there will be/are some bargains out there though!

The wise words from Dumbass.... be careful as this is the end game for the first leg of the bear.

DOW rose 322 (+2.97%) to 11177

The first leg and "recovery" is the denial stage....This volatile more up than down "recovery" (sucker rally) lasted 4 months back in the last Bear market Cycle stage 1 (denial stage) (end Jan 2008 to May 2008)..."bargain" hunters put counteracting upward pressure back on the index....until the next bad news hits.

Entrep

24-08-2011, 11:26 AM

The DOW rose on bad news. Apparently this is good now though because it will force QE3... what a joke. Volume was weak again too. That said I covered 1/3.

Joshuatree

24-08-2011, 12:37 PM

Charlie Aitkens newsletter today shows 3 charts of Bank Of America ( Holds 25% of all U.S bank deposits;too big too fail,yeahh right) Meryl Lynch and Goldman sachs all falling away badly. combined with death spirals on many European banks we are on "the cusp of another round of bank counterparty risk". Take profits on any lifts methinks.

dumbass

27-08-2011, 09:40 AM

overnight action seems to confirm a bottom is in on the sp 500.
i would now trade from the long side with extreme caution as the primary trend is still down.
uptrends in a bear market can be sharp and powerfull , i will look at potential targets for this up wave.
for the more technically minded punters some charts confirming eacy other.

firstly the bottoming pattern looks like a cup and handle bottom set up on a truncated fifth wave compromising of and ending diagonal pattern. which basically means the true price bottom was the third wave down and the fifith wave did not set the price low as there was no bear momentum left to set a new low.

http://i183.photobucket.com/albums/x107/joicey9999/cup.jpg

next looking for 5 waves up and 3 wave correction to confirm uptrend

http://i183.photobucket.com/albums/x107/joicey9999/elliot-1.jpg

and finally a text book bullish pattern called a gartley

http://i183.photobucket.com/albums/x107/joicey9999/gartley.jpg

peat

27-08-2011, 02:54 PM

and finally a text book bullish pattern called a gartley

not exactly textbook ;+) B point was at 50% not 61.8

as per my post #804 (http://www.sharetrader.co.nz/showthread.php?6114-Dow&p=354553&viewfull=1#post354553) , there is a support zone around 1110-1160 and so congestion may occur here. and on the shorter time frame we've now found support at 1150 itself.
I drew this before last nights trading.

3565

peat

02-09-2011, 10:58 PM

3565

3590

so we have now hit that upper area of resistance and bounced off.... may retest of course.

winner69

03-09-2011, 06:46 AM

Hoop

03-09-2011, 12:07 PM

ZERO jobs added ... and down the DOW etc goes

ZERO jobs should be good news for the market .... bullish in the short term ..... will make the Fed do something to stimulate the economy ..... but that would only make the inevitable crash even bigger when it does happen

Winner..yes that rise did not happen.....another warning sign..ehh??

It seems from the technicals that investor behaviour is becoming "strange?"..something like an uneasy calm before a storm......there must be insider rumours operating to get these technical patterns forming (not all shown here).

My survival instincts are flashing a "get the hell outa there" sign..

11600 resistance tested and held... the possible Dead Cat Bounce (DCB)target 11600 has been reached...this could be the start of the "rout".

My chart below.....the yet to be complete DCB formation has a flag incorporated in it (Flags are not a formation on their own)...A flag raises the chance the DCB formation will be completed successfully.

Thomas Bulkowski cites a flag as being "road kill" within a trend formation ...a small bump on the highway...it this case the steep downtrend highway.

Its becoming clearer that this "reinforced" DBC formation when competed (breaks the 10700) is going to hurt long investors.

The failure rate of flags in a downtrend in a bear market is very low. For the optimist..if a flag continues it turns into a rectangle or triangle formation with better failure rates..This flag on the chart below is nearly "done" therefore it should breakout downwards any day now..if not it turns into a triangular formation and creates a slightly upward holding pattern until the lines nearly intersect around November.. this is unlikely though.

Where to if the breakout downwards occurs??.......failure rate is low so expect the 10700 support to fail.

Target price 11600 - (12750 - 10700) = 9550

Target prices are influenced by well established Support lines ...there is one at 9700 going back to Jan 1999 which has been tested numerous times. I suppect that this 9700 will be the next pause.

http://www.imageurlhost.com/images/kiiu15p1sk57p03rtyt.png

Hoop

03-09-2011, 12:22 PM

For those who want good news.... here's a balancing:D post

Dow 13,600, here we come
http://www.marketwatch.com/story/dow-13600-here-we-come-2011-09-02?link=MW_story_popular

ananda77

04-09-2011, 05:04 PM

...starting buying - Q3 in pipeline ready to be unleashed - US = RIP - they will not be able to fix their internal problems unless ???WHO??? will take action to reign in the F.I.R.E - anyway, get ready for the next global Super Boom

Kind Regards

Hoop

29-09-2011, 11:06 AM

A significant technical event happened today on the DOW..a retest failure which is bearish...surprise surprise you may say.

Well...not everyone is in an agreement that the Stockmarket is stuffed. I've had a couple of very optimistic people telling me that a very rapid rise is about to take place basing their limited knowledge on this double bottom / semi-complex Head and Shoulder looking formation....Hmmm...well... the neck line broke and the retest today failed ...I dent in their optimistic thinking...probably not as there is tomorrow and the next day etc for the DOW to do another retest...If it does succeed it will throw the cat amongst the pigeons or a better phrase throw the bear into the bull ring.
It has to be remembered that the countries that are economically in the crap still have their stockmarkets in cyclic bull market cycle...its the economically sound Countries such as China India Brazil Australia etc that have their stockmarkets in a cyclic Bear cycle...a paradox? ..nah..it can be explained by Stockmarket Theory.

So.. with the DOW and S&P500 displayng this strange type of bullish H&S formation within what is thought to be a bearish Dead Cat Bounce There is obviously evidence to recite for both Bull investors and Bear investors......so who's right??

TA tells the past and the "now" not the future so we don't know who's right or wh's wrong.... yet!!!

However past history gives us a better chance of being right and when TA formations gives conflicting signs you add many other TA indicators and other stockmarkets that have an effect on the one you are trying to make sense of.

so...caution is advised as the bigger picture still looks bearish...for example my chart below still shows the DOW in an area of grave concern...It is still flaunting with the cliff edge and until it moves away from this area I'm staying bearish and away from the market.

Today's bearish move down away from the retest back towards the 10700/10600 supports and the candles having wicks both indicate that the selling pressure has returned....this highlights the need to be cautious and bearish rather than blindly optimistic. ATM with this volatility, the reward could be 8% (target 11860) but the risk is a larger 10%, a possible capitulation down to 9600/9800 target if the 10700/10600 support breaks.

http://www.imageurlhost.com/images/7qbbsf142kudltzpdfjf.png

winner69

29-09-2011, 11:21 AM

Keep at it Hoop .... its all unfolding to plan

This was written in 1997 (Strauss/Howe 'The Fourth Turning') - The Crisis is upon us and over the next 20 years the world will change and will be much different than it is today .... and investment markets will have got rid of a lot of rubbish that has accumulated over the last 20 or so years and will operate on solid foundations where most things are 'real'/actually exist

Quote - “Through the Unraveling, people will have preferred (or, at least, tolerated) the exciting if bewildering trend toward social complexity. But as the Crisis mood congeals, people will come to the jarring realization that they have grown helplessly dependent on a teetering edifice of anonymous transactions and paper guarantees. Many Americans won’t know where their savings are, who their employer is, what their pension is, or how their government works. The era will have left the financial world arbitraged and tentacled: Debtors won’t know who holds their notes, homeowners who owns their mortgages, and shareholders who runs their equities–and vice versa.”

Financially dependant

09-10-2011, 09:46 AM

The Dow is in repair mode...just above a pivot point...or another trap??

3642

Hoop

12-10-2011, 10:37 AM

Keep at it Hoop .... its all unfolding to plan......

Yep Winner...however this event is being drawn out like a good soap opera ...Some good days lately to gee up the the Fundies ..

For me though it resembles a dead cat being shaken around inside a box...so I'm still bearish

The only good signs are these two factors.... this prolonged continuation pause and time...the more time factor increases the odds of a break up outside this 11600/10600 trading range area (Rectangle formation) rather than the favoured odds on break down.

http://www.imageurlhost.com/images/1v3hf6a164qlxhn5yjic.png

Hoop

17-10-2011, 10:35 AM

The Dow is in repair mode...just above a pivot point...or another trap??

In theory the DOW has made a slightly higher high thereby weakening the bear tide....This is a bullish signal
Remember the DOW is technically still in a cyclic bull market cycle unlike some others e.g China Australia Brazil etc
Bull market corrections of 20% are possible and caution should wane with each confirmation points being broken through.
Expect a retest of the 11555 support line and/or a retest of the resumed up trend line (both marked with an orange A). If these lines hold then the Bull is still alive.

http://www.imageurlhost.com/images/y7u84b2dk6d1f4xpf9ib.png

Hoop

18-10-2011, 09:57 AM

Didn't have to wait long for the retesting
Support 11555 line broke down and the DOW dropped further to retest the resumed upward trend line (orange A) by resting right on it at close (11397)

Hoop

28-10-2011, 10:43 AM

It seems from the recent number of positive confirmations that the 20% decline was in fact a very large Bull Market Correction...therefore climbing to a new high is quite possible
The DOW seems to retest everything atm so expect a 11900 support retest when this relief rally loses momentum
If the 11900 retest holds then expect the 12380 Resistance level to come under attack...
If the 11900 retest fails then the resumed up trend line comes back into play (orange dotted line).

http://www.imageurlhost.com/images/snegyhl180lvyetum5n.png

Hoop

22-11-2011, 09:23 AM

Its all bad news....The US stockmarket is broken again...The suddeness is the worry..Expect the DOW to retest the next watched line (orange) 10700 if it fails to get above that old support (now resistance line) 11555 (orange)

EDIT 30 minutes to closing There is a rapid late rally to regain some losses..very importantly it has regained the MA50 and the11555 to be at 11622 a very bullish very short term scenario.EDIT 10.49am...then it turned to custard again to close at 11547 ....support 11555 failed but still above the MA50 (11533)

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW21112011.png

Hoop

01-12-2011, 09:59 AM

Today we have witnessed Market Euphoria due to a good dusting of pixie dust.

When it wears off...the big bogey of the market intervention effecting market signals will appear...Just look at my chart!!! a red/blue arrow mess. Hoop does not like his charts being messed around like this...from my past experiences this is a bad omen.....where's the exit?

EDIT: DOW closed at 12044 (+4.23%) higher the best day rise since March 2009 (the end of the last bear market) ....on my chart the close is testing the top trend line of the pennant feature (my highest orange dotted line to watch).
If 11900 support holds and this downward sloping line is breached expect the testing of the 12230 /12280 resistance zone (not marked on my chart)

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW01122011.png

Hoop

31-12-2011, 12:17 PM

2011...Will it be another Year of the Bull or is it Bear-time once again?

Well, we now know who won the race in 2010? The Bulls :t_up:..The Dow ended the 2010 year up +11%:)

Good news..eh another "up" year following the 2009 year of +19% :)

Therefore 2011 going to be better, especially with the global economy in recovery mode, you would think..huh?...Out with cash and lets buy up stocks...3 years of a rising market is common I hear you say...the dates and figures below proves it so...eh
1924 - 1928....4 years in a row
1933 - 1936....4 years in a row
1942 - 1945....4 years in a row
1949 - 1952....4 years in a row
1954 - 1956....3 years in a row
1963 - 1965....3 years in a row
1970 - 1972...3 years in a row
1985 - 1989....5 years in a row
1991 - 1999....9 years in a row...wow:eek2:

and 10 years have past us by ...so ...we must be overdue for another 3+ years..eh

Ok..party pooper time... here's the bad news....note the blue date

History shows us that since 1901 ...only once has there been 3 "up" years in a row in a Secular Bear Market Cycle
1970...+ 5%
1971...+ 6%
1972...+15%

The DOW has seen many 3+ "up years in a row within the Secular Bull market cycle as shown above (the black dates)

.... unfortunately the DOW is presently in the middle of a Secular Bear Market Cycle (2000-????):(

It's 2011 now and it's another blue date... do you still feel lucky?

2009 - 20??....? years in a row

Hoop, I'm feeling pretty lucky and will go out on a fairly solid limb to predict 2011 will be another 5%-10% year for the DOW. I did something a bit similar to what you did above but focussed on the years following recessions (US and worldwide/regional) that would affect american sentiment/confidence. (I also indulged in some macro tweaking to recognise "significant events", eg. oil shocks, US dollar unpegging, WWs, etc.) These events don't always lead to the indexes crashing as they did with the GFC and sometime the indexes just go nowhere - or take breather. This might happen in 2012 but 2011 I'm predicting to be pretty good as investors will be getting leery about the risks posed by being too overweight in bonds. Another factor is inflation. While there is some overcapacity in many areas, there are constraints (both price, e.g. oil and supply, e.g. rare metals) in some core areas which will push up prices and bonds will come under pressure. How the Fed reacts to this going to be interesting but I don't expect them to anything more than dovish with reagrds i-rates. Another factor is that the USD should be under more downside pressure than it is currently and if the USD weakens in a managed way, the DOW will go up.

These posts were written a year ago on 3 January 2011...

Congratulations Belg...well done. The historic odds were against you but you came through as a winner. You were spot on with nearly everything you predicted except the USD which bottomed out mid year.

So for the second time in modern history the DOW managed 3 consecutive up years within a secular bear cycle....

We now focus on 2012... Is it going to be another up year and see that 4th consecutive up year record ....surely not???

Interesting to see the DOW outperformed the S&P500 which for the year came in just on the redside of zero. (-0.002%)...also the DOW is one of the few equity exchanges to be positive for 2011.

DOW Statistics.for the record books.
Year 2009...+19%
Year 2010...+11%
Year 2011...+ 5% .. (+5.5%)

Others Year 2011

NASDAQ... - 1.8%
S&P500.....- 0.0%
FTSE........- 5.6%
NIKKEI......-18.0%
AllOrds......-15.2%
NZX50.......- 1.8%
Shanghai...-21.6%
India(BSE).-24.6%

Interesting to note that the world is perceived to be relying on the big economies in Asia yet they have had the largest stockmarket falls.

winner69

31-12-2011, 02:01 PM

So 5 +ve years in the last 6 and still the US markets go nowhere over time

Still an informative rable this one
http://www.crestmontresearch.com/docs/Stock-Secular-Chart.pdf

DOW was 11497 at the beginning of this secular bear market in Dec 1999 .... 12 years on it is only 6% higher .... so much for the a buy and hold strategy .... and jsutifies sensible trading strategies as outlined in other threads to manage your way through such markets

Hoop - and seeing the USDNZD is about the same as a years ago thats a great perf from the DOW eh .... esp relative to the rest of the world - spooky eh

winner69

20-02-2012, 07:10 PM

Another interesting chart from chartoftheday.com

This rally a bit of a fizzer so far ..... maybe heaps more to go eh ......

The Dow made another post-financial crisis rally high Thursday. To provide some further perspective to the current Dow rally and in response to several requests, all major market rallies of the last 111 years are plotted on today's chart. Each dot represents a major stock market rally as measured by the Dow with the majority of rallies referred to by a label which states the year in which the rally began. The difference between today's chart and last week's chart is that for last week's chart a rally was defined as an advance that followed a 15% correction (i.e. a major correction). For today's chart, however, a rally is being defined as an advance that follows a 30% decline (i.e. a major bear market). As today's chart illustrates, the Dow has begun a major rally 13 times over the past 111 years which equates to an average of one rally every 8.5 years. It is also interesting to note that the duration and magnitude of each rally correlated fairly well with the linear regression line (gray upward sloping line). As it stands right now, the current Dow rally that began in March 2009 (blue dot labeled you are here) would be classified as well below average in both duration and magnitude.

Halebop

20-02-2012, 07:51 PM

Not surprised it looks likes a fizzer against some of those benchmarks. To me the Dow is merely approaching the top of its 15 year (15!) range. At least the likes of 1987 and 1921 were making new highs. Still, a low of 7,000 to 13,000 in 3 years is nothing to sniff at.

Hoop

29-02-2012, 12:10 PM

The DOW has again today confirmed its resumed cyclic Bull market cycle by beating its May 2008 13000 high ....so the market is looking very rosy for the time being.

Not surprised it looks likes a fizzer against some of those benchmarks. To me the Dow is merely approaching the top of its 15 year (15!) range. At least the likes of 1987 and 1921 were making new highs. Still, a low of 7,000 to 13,000 in 3 years is nothing to sniff at.

The DOW can still travel some distance upwards....but...14150 is the primary resistance level with theoretical secular bear market constraints. This is the ultimate hurdle to jump some time in the future.
As the market climbs it increases the secular bear gravitational force.... Theoretically the physics show that at the 14150 level the index will then have such a big gravitational pull back to contend with, it will struggle to keep going up and will eventually fail.
Therefore increasingly well above average buying demand will be needed to combat that increasing gravitational force.

Secular bearwise..... 14150 real estate area includes a bull cemetery

Note :..The S&P 500 is already moving upwards in this real estate area

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW28022012.png

Toulouse - Luzern

01-03-2012, 05:36 AM

I looked at Bernanke testimony/address to Congress on CNBC.
As CNBC puts it.
"Stocks dipped into negative territory Wednesday amid Fed Chairman Ben Bernanke's testimony to Congress on the economy"

Something of an understatement.
Dow is at 12948 as i write this. Down 107 from the intraday high.

When I started watching cnbc about 4.00am NZT all 12 Europe exchanges and indexes on Yahoo Europe summary were in the green.

After his speech all had declined and 4 are in the red.

Dow composite hit an intraday high of 13055 up about 50 before the speech.

The DOW declined as it got closer to Bernanke prepared speech (some may say spin) and rose somewhat on recognition of positive factors (eg employment, signs of recovery) and then declined on negative factors (eg Euro).

Biggest decline (and wealth destruction) was when Congress spokespeople had 5 minutes each to make points and ask question (some may think of this as grandstanding).

If the initial US players negativity is not reversed then World markets including NZX and ASX may be in for a hit today.

Hoop

07-03-2012, 11:24 AM

TL....... short term market influenced by media events are soon forgotten. In reality..when a market gets toppy and bearish divergences appear the investors and media will ignore the good news and focus on any bad news (even a week late news will do) as an excuse to get out.

When the market has bullish momentum as it did last week this announcement (28th Feb) Euro little changed after S&P cut Greece to "selective Default" (http://www.investopedia.com/forex/news/dailyfx/EuroLittleChangedafterSPCutGreecetoquotSelectiveDe faultquot.aspx#axzz1oNDSsAuP) which I considered very bad news never got much mention as it virtually says S&P has downgraded Greece from CCC to C which is the lowest grade possible. C is the default level with two parts, a better selective default or the worse disorderly fault. Finch also downdraded Greece to this level as well. Usually this downgrade stops foreign bold holders from investing further money as it is near 100% they will never see their money again...so foreign funding to Greece become nigh impossible...strange and bizzarre that Mr Market dismissed it until today................ so todays news (http://www.marketwatch.com/story/us-stocks-hit-by-greece-global-growth-fears-2012-03-06?dist=afterbell) comes as no surprise to me charting the DOW as Mr Market is using this excuse (a catalyst) to correct an overdue toppy market.

The Dow fell 204 to close at 12759. It tested the first major support of 12750 (12753) it dipped below it intraday (giving a warning that this major support may fail in days to come) ...then closed above the support again at 12759. (see my chart in above post).

Forget the media BS......Technically, the DOW outlook has to be viewed as a negative........ todays event should be considered as a possible start to a Bull Market Correction.

Hoop

15-05-2012, 10:45 AM

A few days after my above post Europe gave Greece an expensive pill and was told it to go to bed and rest..... the global market was happy with that and the US Equity Markets bounced off that 12750 support and continued their Bull Run and squeezed out another 4% rise..In April the worries returned and the 12750 support got busted only to bounce back up to resume the bullish mood creating a 12710 support with an equal top .....until now!!
Now we are at another TA critical juncture today a break of that 12710 support to a lower low. The very slight Broadening formation has been created, it is descending in character, that being of equal tops and lower lows...this formation is under threat of a breakout to the downside as well.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW14052012.png

Hoop

22-05-2012, 11:16 AM

The DOW broke out downwards from its slight broadening top formation towards its target of 12100.
This target will need selling pressure (e.g bad news) around the support zone if this target is to be reached...
In the meantime the downward movement has been arrested by a pullback which is common event (occurs 50% of the time) after a formation breakout.
Expect this pull back to test the bottom boundary of the old broadening top formation or it could go back inside it to test the 12700 area. If the pullback fails these tests expect the DOW to fall again towards it's target 12100 testing the support zone.
If the pullback is strong and busts back through the 12700 area expect it to rise to 13000 in it's quest to gain a new high which would indicate the Bull market Correction is over.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW22052012.png

Hoop

24-05-2012, 11:08 AM

A Bull market correction in progress??... or.... has the market topped out and the Bull has died??..........

Dow Theory says the Bull has died.

How relevant is DOW theory in today's world is debatable...however it's called a theory because of its proven track record....and it's has been impressive.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOWTheorychartbreak23052012.png

winner69

26-05-2012, 09:40 AM

Hoop

19-06-2012, 12:02 PM

Hoop - might be interested in this chart from Chart of the Day

Only 8 oz gold needed to buy the DOW now compared to 45 oz at the end of the bear market in 1999

Maybe the decline is slowing and we might see a decent resurgence in the DOW - atleast in gold terms that is

A possible a secular connection???? (correlation)... Pity the gold standard alters the gold variable so I imagine we can't get a longer term chart thats reliable.

Hoop

19-06-2012, 01:00 PM

Hoop

22-06-2012, 10:12 AM

Dow closed at 12742 today ... Recent media is signalling that the correction is overAll the buy triggers have gone off
Hmmm ...they assume the DOW and S&P500 is still in a Bull Market Cycle.

OK the 21st Century debate consensus is that the DOW theory is not as good as it used to be....

If the DOW theory is correct however ......the correction has not ended, it has begun in a form of a bear market rally (sucker rally). TA buy triggers go off with these types of corrections too.

So whatever you believe is happening atm just be careful around certain resistance points. Fibonacci Retracements between 1/3 and 2/3 area are typical secondary correction perimeters Since the retracement off the bottom has passed through the 50% the next area to watch is the 61.8% which is the 12850 area (not shown on chart). 13000 is another resistance area... both these areas are investor behaviour sensitive (psychological).

If this is a bear market rally expect the rally to peter out below the previous high.
If this latest rally creates a new high DOW Theory has failed (Modern day Failure rate less than 20%???) and the bull lives on.

This rally has topped out at 12837 (closing high) very close to the Fibonacci 61.8% retracement level.
The DOW had its 2nd worse fall of the year saved by the bell again finishing at 12574 down -251 (-1.96%).

Is this the end of the rally?..............Maybe, maybe not, it could be a pullback to test the neck line support*** around the 12530-12540 area... factoring in this terrible day, technically speaking this rally did not break-down..it is still intact. ....(as long as it stays above the neck line support)

***Looking at the above chart, the head (inverted) formed at the beginning of June 12035 and the neck and shoulders are around that 12400-12550 area either side of the head. (Mirror image)

airedale

30-06-2012, 11:07 AM

An interesting Friday close this week with the indices all up around 2%. On Thursday the markets were dull all day then rallied strongly in the last hour and that followed through to Friday. Is it sustainable, or is it a bull trap?

Hoop

24-07-2012, 08:26 PM

Update chart from 16 June

Airedale..hindsight has shown an established uptrend...it seems to be a weak trend so far (the lack of volume) so we have to wait and see. Another Euro upheaval these last couple of days has not created any breaks to this trend..yet!

*****That possible Head and Shoulder formation never eventuated, the shallow uptrend channel pattern took over instead.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW23072012.png

Hoop

03-08-2012, 12:12 PM

Business as "normal" Dow falling back as per trading pattern (uptrend channel formation).

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW02082012.png

winner69

04-08-2012, 04:34 PM

Hoop - Mauldin and Crestmont have updated some of their stuff about the S&P earnings cycle and where the US markets might head in the future

EPS growth at a real high level and 'forecasted' by the experts to go even higher .... record margins even expanding and all that ..... see chart

Also love this bit .... As reflected in Figure 10, over one-third of the past 61 years have seen EPS declines despite growth in the economy. So, don’t be surprised that EPS might decline in spite of continued economic growth.

Full article
http://www.mauldineconomics.com/images/uploads/pdf/mwo080312.pdf

Hoop

04-08-2012, 07:19 PM

Hi Winner...nice post
Already read it :). It arrived in my Email box 3 1/2 hours ago via John Mauldin and InvestorsInsight... John Mauldin articles are always great reading.

So, don’t be surprised that EPS might decline in spite of continued economic growth.,,,,,Reading between the lines is the fact that Economic Business and Stock Market each have their own cycles. The article also says that EPS decline can come as a surprise to all except the readers....

The biggest surprise is in stall for those media taught investors who are waiting for the economic to "come right" and give the companies a good environment to make good profits. Through negative media many are oblivious to the fact that the biggest and predicted to be the longest running Business Bull Cycle phase ever to have taken place in the USA in modern times has been happening in front of their noses for the last 3 years.

Hoop

31-08-2012, 09:27 AM

19th June 2012 Post#847.................If this is a bear market rally expect the rally to peter out below the previous high. (13300)....................

Technical cracks are appearing now.

Dow theory has a good record of being correct (+80%) therefore the DOW has a good chance of being in Bear Market (phase 1). This early phase is difficult to determine as it looks as if it is still a mature bull market phase (a small chance it still is).

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW30082012.png

Hoop

19-11-2012, 11:46 AM

Since my last post the unmentionable happened ....a 6 week bull rally occurred when all the technical signs pointed towards a correction.....however the bully rally failed legs to continue well above that 13300 break level to cement in the start of another bull uptrend and thereby turned itself into a sucker. ...However this mini bull rally did break all the Technical and DOW rules and caused the DOW Theorists to run for cover and reexamine their DOW Theory cyclical change criteria.

...and the argument still continues ..is the DOW in a Cyclic Bull Market Cycle or a Cyclic Bear Market Cycle? yes no yes no.... maybe.

I take the view that during the early stages of Phase 1 of a cyclic bear market cycle it is very difficult to tell where the actual beginning of the cycle occurs...if we did know we would be all be genius's and richer than Buffett....The actual cyclic point can usually be found well after the event with hindsight.

In the short term it seems we will not know the DOW's cyclic nature as this downtrend looks to be weakening .....The next rally will create more arguments among the purists.....

What to watch for ....If this downtrend ends now and the next rally fails to break up through the 13100-13300 Resistance zone then this would create more evidence that the cyclic bear is roaming around Wall St. (lower high)
....If the downtrend pauses then continues down below 12035 ...ditto...(lower low)

EDITED CHART. ....The primary trendline is under threat... these breaks can also be cyclic change signals

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW16112012-1.png

Hoop

20-11-2012, 09:40 AM

Hoop ... I'd suggest it was far, far safer - with all the debt shennanigans still in play, to exit at 13,100 level - bear trap or not! ... Belgie is just about all cashed up in US and is waiting from (I hope) the safety of the sidelines. ... Just one recent stock hold that keeps going up no matter how much I tighten the stops and I really, really want out of this one too!
A successful test off the primary up trend line, a spectacular spring board rebound 12766 +177 (+1.40%) as I write ...the bulls have won this round Belg

Hoop

23-05-2013, 01:29 AM

People are now asking the question..how much higher can the DOW go??????

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW22052013.png (http://s458.photobucket.com/user/Hoop_1/media/DOW22052013.png.html)

The chart of the day people posted this chart today

http://www.chartoftheday.com/20130522.gif
Looks like this rally could last another 1000days and go to 26000 to just to get to the average.........the chart shows good news...eh?

Since the year 2000 the DOW has been in a secular bear cycle :(

I have colour coded the chart of the day which shows only one secular bear cycle rally has gone further than the 1900-2010 average....the chart doesn't look so good now does it

http://i458.photobucket.com/albums/qq306/Hoop_1/DowRallies.png (http://s458.photobucket.com/user/Hoop_1/media/DowRallies.png.html)

winner69

23-05-2013, 06:06 AM

another 1000 days sound sine to me ......up up and away ... no worries

Hoop

23-05-2013, 12:26 PM

another 1000 days sound sine to me ......up up and away ... no worries
I can live with that :)

winner69

23-05-2013, 09:15 PM

Sounds like we can't win either way ..... Read this somewhere today but can't remember where but the quote is attributed to some us guri

The central banks of the world are then caught in a classic catch-22 situation. They can’t stop printing money because this would cause the whole deck of cards to come crashing down; they can’t keep printing money because this only creates the conditions of an even bigger stock and assets price crash.

Joshuatree

23-05-2013, 09:42 PM

Japan down 1,100 points , ASX down 2% , Russia down 3% ,Hongkong down 2.6%chinese PMI below 50( contracting economy) DOW futures minus re 134. Looking very messy ahead.

Joshuatree

24-05-2013, 07:52 AM

Yes , "buying on the dips" DOW -13 atm Gold up to $1391

Valuegrowth

20-08-2013, 09:08 PM

http://www.reuters.com/article/2013/08/19/us-markets-stocks-idUSBRE9770GZ20130819

Wall Street falls for fourth straight session as Fed eyed

Hoop

22-08-2013, 09:36 AM

People are now asking the question..how much higher can the DOW go??????..................

since that post on 23rd May 2013...the DOW fell back then made a marginally new high.

The DOW now looks destined to test the MA200 area again as bull market corrections do...The chart still shows the DOW in a Cyclic Bull market Cycle

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW21082013.png (http://s458.photobucket.com/user/Hoop_1/media/DOW21082013.png.html)

ari

22-08-2013, 12:01 PM

Hindenburg Omen??
http://finance.yahoo.com/blogs/breakout/hindenburg-omen-very-ominous-high-technical-warning-sign-163004190.html

Hoop

13-09-2013, 10:35 AM

Ari ...Hindenburg Omen is a "cry wolf " indicator....Yes it has correctly shown the past crashes but is irregularly too sensitive to be an useful reliable indicator... as it picks up some (but not all) Bull market corrections and the occassional bearish blip as well..

The media are confident that the economies are on the mend and the Equity markets look set for another rally into the "blue sky" area. Even the very bearish Shiller has become bullish lately...

So its all good times again..eh? ..Well it pays to be cautious and have quick exits atm just in case a Head and Shoulder pattern forms.
H&S is a bearish pattern with a good success rate.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW12092013.png (http://s458.photobucket.com/user/Hoop_1/media/DOW12092013.png.html)

Hoop

09-10-2013, 09:48 AM

The Dow managed to push through to a new high (just!!) to prevent a bearish H&S chart pattern ..but in realty... has this slight higher high stopped the bearish nature that a H&S pattern would've indicated????.....What would've been a neck line break today...has been swapped to a Quasi neck line break....It tells the same story....

The MA200 is now an important line ....if it holds we may see another volatile (higher VIX) swing reversing the DOW back up to a new high..If the MA200 breaks then we can treat the target calculation as a quasi H&S pattern

Target 14850 - (15677 - 14850) = 14023

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW08102013.png (http://s458.photobucket.com/user/Hoop_1/media/DOW08102013.png.html)

Hoop

10-10-2013, 01:33 PM

Quasi neckline break? Is that kind of sort of like getting hung from a rope by your neck and just sitting there strangling instead of breaking your neck and killing you that way? I just can't wait for the slow death of the Dow if it is (note the sarcasm)! :P
You can call it a trendline if you like...technically thats all it is...As I don't hold much faith in trendlines only..I do add some extra weight to these "nearly" patterns...especially in less liquid stocks where you could get a "smart-ass" to buy in at a higher price to try and butcher the formation of the H&S formation by creating a "RHS shoulder" above the head ...the resulting breaking trendline is still bearishly valid with odds I expect to be similar to that of a S&H pattern neck.
break.,,,,this is the quasi piece I mention...re: dirty tricks in day trading

Moosie its charts and you can ignore them in your analysis...its a free world to use any investment strategy system you like....

Hoop

10-10-2013, 10:29 PM

Not sure that the charts are going to make much sense with the uniqeness of the 1-in-a-long-time event affecting the US at present.
Charts are only a visual record of past events Belg..what ever happens all will make sense on a chart because that's what happened...Patterns and trends shows ongoing trading behaviour and whether that trading behaviour makes sense is questionable...eh? :D

I've copied the chart of the day from the Daily S&P500 Index tracker thread post #1449 3rd Oct 2013

http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page97 (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page97)

Hoop

01-11-2013, 08:40 AM

DOW showing some negative divergences ...could be a bearish triple top in the making

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW31102013.png (http://s458.photobucket.com/user/Hoop_1/media/DOW31102013.png.html)

Valuegrowth

11-11-2013, 05:30 PM

Dow may break even 16,000 during next six months. Still we may see bull markets in some sectors, commodities and some markets in 2014. In some point there may be correction in DOW. As I said before we may have opportunities in developed, emerging and frontier markets. We have to do home work to identify future bullish markets, sectors, commodities and currencies before others.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

Hoop

13-11-2013, 09:17 AM

For the time being.....There's a good chance The DOW will break 16000 shortly. The latest record created a trading channel (rectangle pattern) breakout....Today's intraday drop, believe it or not, is bullish as the DOW has today successfully defended its new suppport (15708)...

Target price of the rectangle breakout is 15700 + (15700 - 14800) = 16600
See Colin Twiggs Article here (http://goldstocksforex.com/2013/11/12/dow-signals-fresh-advance/)

There is a risk attached to the success of this breakout...still waiting for confirmation with S&P500
EDIT...the S&P500 confirmed the next day (14th November.. NZ time)

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW12112013.png (http://s458.photobucket.com/user/Hoop_1/media/DOW12112013.png.html)

kiora

13-11-2013, 03:14 PM

Thanks Hoop; I,m always waiting for your next post with baited breath :)

Valuegrowth

19-11-2013, 07:54 PM

Dow may break 16,000 again.

My ideas are not a recommendation to eitherbuy or sell any security, commodity or currency. Please do your own researchprior to making any investment decisions.

Valuegrowth

27-12-2013, 09:55 AM

Hoop

27-12-2013, 11:55 AM

DOW may break 16500 and S&P may touch 1850 sooner that later.

If markets develop into bubble scenario we may have another financial crisis worst than 2007. As you can guess, a “melt-up” could lead to a “melt-down,” as happened in the past. There may be some volatility in 2014 still global stocks will give higher return for those who did home work. Asian and European stocks did not perform well when compare with U.S. stocks in 2013, with the notable exception of Japan. It is time to identify next winning markets, sectors, stocks, commodities, currencies and other assets globally. We may have correction in S&P 500 in 2014. Long term players may have another opportunity in 2014 and 2015. Bull will continue in undervalued global stocks markets in 2014. Remember intelligent investors will identify opportunities in all types of markets such as developed, emerging and frontier markets. They outperformed others in all types of markets in 2013. They will do it in 2014 as well. In the currency market USD will outperform other currencies such as NZD and AUD in 2014 and 2015. More than USA stocks USD dollar is damp cheap now. In commodity market Gold, corn and soya bean will go down further in 2014.

The big debate among some market players is whether international markets will have bull market in 2014.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

Yes interesting scenario MarketWinner.

How about this scenario
To think simple by applying this one single market physics factor....markets dependent on "available" money ..less money less demand for stocks, yields increase to compete and attract back that available money to the US equity market...

Expanding one this one simple factor.............. The action is happening in America atm..Is this part of the reason why US Equities are in rapid uptrend and the second biggest economy (China) Shanghai index is in the doldrums??? ...What happens if the action shifts geographically and the smart money gravitates to Shanghai (or Asia) from Wall St during an US recovered economy..Obviously fundamentally-wise Wall St prices wouldn't crash but prices could go nowhere (trading range bound), Wall St becomes stagnate and boring with all the action now happening in Asia, this would create a PE Ratio crash resulting in a typical secular bear market cycle correction while the cyclic bull market cycle is still alive but in hibernation.

Valuegrowth

27-12-2013, 11:35 PM

Hoop

We cannot beat the market all the time. There are lot of things to learn. After 2007 crisis many avoided markets and they missed the train. Lot of players tried to seek more attractive destination for their money. If I am correct warren buffet invested in Japan before others. Others joined the party only recently. Some had opportunity to get attractive capital gain from selected frontier and emerging markets. Then we saw money flows into gold. So gold went up rapidly. Then what happened to NZD and AUD. All speculators and carry traders parked their money in both NZD and AUD. When they suddenly tried to pull out money we noticed some sort of instability in AUD and NZD recently. Very soon both NZD and AUD will go down dramatically.

Some of the speculative capital flows can move very quickly in and out of markets, potentially leading to market instability. Have a great 2014.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

Valuegrowth

08-01-2014, 07:33 AM

Still DOW has a leg. Dow broke 16500 again. There is a possibility that there could be correction in 2014. The USA reported trade deficit of four year low in November. It is becoming more energy independent.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

Hoop

08-01-2014, 09:54 AM

Update chart from previous post #874 above.

As up to this moment in time (2.44pm 7th Jan) the DOW is going to the technical plan...its business as normal within its bull market cycle.
It is reaching its target price of 16600 as expected (~+70% chance)
It had a throw back (second chance to buy in) to test its breakout price which has an average ~58% happening after any chart pattern breakout (Bulkowski) (http://thepatternsite.com/throwbacks.html)

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW07012014intraday.png (http://s458.photobucket.com/user/Hoop_1/media/DOW07012014intraday.png.html)

Valuegrowth

08-01-2014, 01:06 PM

It is interesting to see DOW is trading above 16500 again. Still market has a leg. Yes I agree with you that it could break 16600.We could expect moderate returns from stocks depend on the strategy we apply to pick stocks. Even in DOW some stocks and sectors could outperform others. Overvalued markets and sectors could have corrections and undervalued markets and sectors could have bull markets in 2014.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

fungus pudding

08-01-2014, 04:11 PM

Things might go up, things might go down. You got any more wisdom to share?

Then again they could stay just as they are.

That is not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions. :D

Blue Horseshoe

25-01-2014, 08:36 AM

The Dow's legs just got broken, down 252 points at last glance.

Valuegrowth

28-01-2014, 08:16 PM

I strongly believe Fed could carry out their tapering in a systematic way and gradually. As I said before gradual tapering is a good for the world economy in the long run. We could see strong rebound in global stock markets sooner than later. There could be another great opportunity for intelligent investors in the USA and selected frontier and emerging markets. Coming weeks and months could become some of the best bullish months while having some volatility before we see some sort of correction in over valued markets. DOW, S & P 500 and NADAQ could bounce back strongly again.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

Hoop

04-02-2014, 09:13 AM

This downturn and today's drop (1508 -292 -1.86%) has caused major technical damage...When all the triggers fire off together one has to assume this correction could be bigger than those experienced during the last 2.5 years .............(or cyclic reversal?)

There is strong supports around the 14600 to 14800 area.......from today's damage, a fall back to test the primary trend line over the next few weeks doesn't seem too far-fetched now...

Cyclic Bull market Cycles often revisit (and sometimes with minor breaks) with their primary up trend lines ..it has been 15 months (Nov 2012) since its last flirtation ...must be due for another...eh?

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW03022014-1.png (http://s458.photobucket.com/user/Hoop_1/media/DOW03022014-1.png.html)

Jay

04-02-2014, 03:32 PM

(ie. dont sell up everything, not everything will be caught in the downtrend).

Have to agree KW, during the GFC, I did not sell any of my (very modest) Long Term Portfolio, the stocks never hit my triggers - similar to your KW in the main. Have sold some since, but that was to fund things like a new Bathroom etc.
Keep up the informative/educational posts KW - appreciate them

Hoop

24-03-2014, 10:09 PM

Amazingly 99% of US industry leaders asked by MarketWatch expect a crash in 2014 or so says Marketwatch who has some of the many very bearish reporters who obviously ask very bearish leaders...

So Is the DOW going to crash tomorrow....the chart below can't find any evidence yet that the DOW is even weakening** ...

**..The chart below is a very long term view which is less sensitive to daily or weekly changes...The shorter term view (the daily chart not shown) is not as rosy however...it is showing a possible bearish double top forming with the Bollinger bands suggesting a trend change.. and the indicators are showing slightly negative divergences ....another correction looming??...

Some mention lately about Coppock indicator down-turning and crossing zero is a good warning system that the BULL is dying.

It has to be remembered that Coppock created his indicator to reliably find the beginning of the DOW"S next Bull market cycle...nothing else was intended!!!

Over the years there seems to be another less reliable use for Coppock indicator in finding a bear cycle ..It seems the coppock indicator also works well for other other stockmarket indices e.g S&P500 and to some extent other markets such as gold as well(See the chart I made for gold click here (http://www.sharetrader.co.nz/showthread.php?7449-Gold&p=469526&posted=1#post469526)). However, it should be remembered the Coppock indicator was designed for the DOW... the S&P500 did throw up a false positive in February 2002 of which didn't happen with the DOW......so it seems Coppock is less reliable as an indicator for other markets.

I've always been a fan of finding successful MA crossovers...I seemed to have "struck gold" with the MA4 month and MA12 month as they spookily agree with Coppock indicator (which is a rate of change indicator) when finding new Bull market cycles.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW24032014.png (http://s458.photobucket.com/user/Hoop_1/media/DOW24032014.png.html)

Hoop

13-05-2014, 09:26 AM

Well the old 5yr bull which galloped away in 2013 had a breather in 2014 is looking set for another gallop ....or is it?
There was some black clouds out there with Media news of bearish head and shoulder pattern (FAILED) and then the bearish tripled top pattern (FAILED) all dismissed now with the rather decisive price rise today into record territory..
I don't think the bear drums will quieten down though...they will find another excuse or a piece of bad news to harp on about...eventually like a stopped clock there will be a time when the market will reverse and the bear drummers will tell you "I told you so"...

Contrary to the Media the main reason for a Bull's demise is exhaustion of available money to value the market ever higher..when investors are "all in" and debt margins reach their upper limits there are less avenues where money can be found to feed the Equity market and inevitably there's a gradual flattening off in volume momentum where finally sellers out number the buyers...This is a typical sign in the last stage of a Bull Cycle....Normally a healthy correction (-10+%) solves these exhaustion problems but with no "Walls of Worries" to climb at this stage of the Bull cycle (ie recovered economy + too much dip buying instead of realising captal gain mentality) the demise of the bull is often due to its own success and greed...

When will that tipping point (cyclic reversal) happen and the bull dies...who knows?? tommorrow? next week? next month? next year?... you choose

The chart below reinforces that above argument with the volume not enjoying the record breaking success...

Target price for the first hurdle is 16760 ..we are nearly there already (close today 16695)

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW12052014.png (http://s458.photobucket.com/user/Hoop_1/media/DOW12052014.png.html)

Hoop

16-05-2014, 09:37 AM

The target price never made it to 16760.

It got to a record of 16735 then technically threw back (throw backs are common they occur just over half of the time) to test the MA50 which successfully held as it had done the previous two times...normally that is a bullish trend continuation sign to advance upwards into record territory again ...however there is now doubt as the DOW failed to hold onto its brief 16580 resistance breakthrough...breaking back down through the 16580 support now resistance once again is a bearish sign.

The charts have been showing reduced volume for some time which is effecting the DOWs momentum push into record territory.

Often at this time of year, any reduced volume trend shows reliable trader sentiment, the unwillingness of many traders to hold large positions through the summer holiday slowdown...This is commonly seen in history and it is labeled as "Sell in May and go away behaviour"...

This negative sentiment wasn't seen last year and the DOW rose through the Summer, but the year before and often in history the pre summer volume reduction did reflect as a leading indicator to a significant drop in price at some stage during the summer period.

The next few trading days will tell the story as the resistance line at 16580 and the MA50 are key points of interest..

As is the case every April/May the bear drums become deafening and beat to the Sell in May song..but this time the drums may be right, as with the reduced volume trend history tells us there's odds on chance that some sort of price correction will occur..

Valuegrowth

18-05-2014, 10:12 PM

It was a very intersecting week. There were sell off not only in stocks but also in commodities such as wheat, corn, oat, soya bean and other agri commodities. We may see this type of sell off in the second half of this year as well. Even there will be sell off in currencies sush as NZD and AUD. I believe Dow is due for correction.

http://www.marketwatch.com/story/stocks-are-telling-you-a-bear-market-is-coming-2014-05-14

Stocks are telling you a bear market is coming (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=2&cad=rja&uact=8&ved=0CCcQqQIoADAB&url=http%3A%2F%2Fwww.marketwatch.com%2Fstory%2Fsto cks-are-telling-you-a-bear-market-is-coming-2014-05-14&ei=IIR4U9qVHMLDlAWXz4DQBw&usg=AFQjCNF6o5n1Dn8heKV5tav-h_EN1B8Axg)

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions. Please note that I do not endorse or take responsibility for material in the above hyper-linked site.

winner69

19-05-2014, 07:02 AM