Daily S&P 500 INDEX TRACKER

[ananda77]

Trader Update -data point 27 February 2012-

SPX 500 Chart: http://www.spx500dailyindextracker.blogspot.com
...the 24 February 2012 market continues crawling cautiously up the 5 May 2011 price, adding a fresh multi-month High *1368.92 to the list.
Interestingly, the day's Close came in *1365.74, above the 5 May 2011 Open *1365.21, suggesting the market's determination to break the 5 May 2011 Top *1370.58 at least marginally at a minimum. Trading above the 5 May 2011 Top *1370.58 opens up potential to challenge the *1400 Psych barrier

VIX Chart: http://www.spx500dailyindextracker.blogspot.com
...the VIX trade below *18.00 is all for it

Institutional Selling Chart: http://www.spx500dailyindextracker.blogspot.com
but the institutional selling up-trend suggests selling into strength

SPX 500 Cot Chart: http://www.spx500dailyindextracker.blogspot.com
and the public investor appears to get cold feet with no one in sight to take the slack

...so far, liquidity keeps the market primed while the step up consolidation pattern wears off some of the extreme oversold condition. However, profit margins are geting more and more squeezed making an exposure into this market a high risk adventure unless a decent draw-down offers a more reasonable investment approach - portfolio protection at 90%

Kind Regards

[ananda77]

Trader Update -data point 1 March 2012

SPX 500 Chart: http://www.spx500dailyindextracker.blogspot.com
...after the 29 February 2012 SPX 500 price action sets a new multi month intraday High *1378.04, price distributed down to an intraday Low *1363.81 just above the 17 February 2012 High *1363.40. After today, risk are high for the market to range trade down to the *1355/*1351 support range before testing current short term trendline resistance *1375 in the hourly frame. A rejection in that level and follow through downside that violates the *1355/*1351 support range will set the index up for a 19 January 2012 High *1315.49 challenge

...portfolio protection at 90%

Kind Regards

[ananda77]

Dear Reader,

due to increasing workloads, unable to continue updating the website. Thank You for Your patronage

Best wishes and Kind Regards

[Hoop]

A77
Wish you all the best and hope to see you back sometime in the future
cheers Hoop

[ananda77]

Trader Update -data point 22 March 2012-

COT Chart: http://www.spx500dailyindextracker.blogspot.com
...commercial traders at inflection point:

-if they commit to higher prices ahead, their strategy will show an accumulation of puts to be maximum short positioned at a future market top
-if they commit to lower prices ahead, their strategy will show an accumulation of calls to be maximum long positioned at a future market bottom
-a consolidation period may be proceeding the final direction

Kind Regards

[ananda77]

Trader Update -data point 22 March 2012-

COT Chart: http://www.spx500dailyindextracker.blogspot.com
...the Nasdaq 100 picture perfect of a large hedged commercial position signalling high risk, everyone else will be going to the chopping block

-go long at your own peril here-

Kind Regards

[ananda77]

Trader Update -data point 3 April 2012-

SPX 500 Chart: http://www.spx500dailyindextracker.blogspot.com
COT Chart: http://www.spx500dailyindextracker.blogspot.com
COT Chart: http://www.spx500dailyindextracker.blogspot.com

...the teaser market up continues with no one in sight to sell to - no substantial corrective sell-off as cash get shuffled around from one market into the other - providing excellent trading opportunities in the short term frame

Kind Regards

[ananda77]

Trader Update -data point 5 April 2012-

SPX 500 Chart: http://www.spx500dailyindextracker.blogspot.com
...accumulating long positions below *1400 (-)

Kind Regards

[ananda77]

Trader Update -data point 10 April 2012-

-COT Chart: http://www.spx500dailyindextracker.blogspot.com
as expected, commercials reducing the fully hedged short position into a sell-down with large traders selling
COT Chart: http://www.spx500dailyindextracker.blogspot.com
-interestingly enough, large traders moving out of the Nasdaq and appear accumulating into the SPX 500 at the same time, since the public can not be taken to the chopping block

...as a result, although the market has set an interim Top *1422.38 on 2 April 2012, until the public will be teased back into the market, it is very unlikely the current advance has come to an early end

SPX 500 Chart: http://www.spx500dailyindextracker.blogspot.com
...todays SPX 500 market supported at the 29 February High *1378.04 coinciding with trendline support drawn off the the 4 October 2011 Low *1115.68 and confirmed with the 25 November 2011 Low*1158.66 - short term frame very oversold justifying a long trade or careful long accumulation off the *1378 area - however risks are, the market wants to test its 50-dsma current *1371.33, just a stroll away, and coinciding with the 13 March 2012 accumulation market Low *1371.92 - no demand at this level and a correction appears inevitable with high risks of selling-off to the *1300

Kind Regards

[Hoop]

Quote from Post #1186 24 Feb 2012

Ananda quote..."...whatever, in terms of risk, the markets remain extremely overbought in the longer term frame with high risks of a sudden drop in liquidity inflows - portfolio protection at 90%..."

I agree...S&P 500 closed on it's 1363 resistance line. Risk v Reward shows far too much risk. Chart formation rising wedge is bearish. Most commentators/investors are too bullish and too complacent (low VIX 16.8).....that indicates most are already "in the market" reducing the amount of future buyers in the short term future (bearish).



Updated Chart from that one at the top of this thread page
closed 1359 broken its 1363 support
The S&P 500 cyclic Bull has been wandering the Secular Graveyard so it wouldn't surprise me if it has died.....

Testing and rebounding off its 1310 TA target would suggest that the index is recovering from a bull market correction and all is well
Breaking the 1310 would send a warning that the cyclic bull could be sick

http://i458.photobucket.com/albums/qq306/Hoop_1/SP50010042012.png

[ananda77]

Hoop:
http://i43.tinypic.com/257ln50.jpg

...am consider the SPX 500 *1320_*1340 area strongly supported

Kind Regards

[Hoop]

Yes Ananda, I had that red dotted in as a support area ..I failed to mention it ..It would seem that it would need extra downward pressure to push down thru this zone...It will interesting to see what happens from here as it is the season for this typical American catch cry...... "sell in May and go away"

[Hoop]

A simple but informative TA article from Matchwatch website this morning (NZtime) http://www.marketwatch.com/story/vix-points-to-more-volatility-2012-04-20?dist=afterbell.

By Lawrence G. McMillan (lmcmillan@optionstrategist.com)
MORRISTOWN, N.J. (MarketWatch) — The broad stock market is in a relatively tight trading range. There have been some quite volatile days of late, but all within the confines of the trading range.
This can be seen via the Standard & Poor’s 500 Index SPX +0.12% (http://www.marketwatch.com/investing/index/SPX?link=MW_story_quote) . After SPX broke down through 1,390 over a week ago, it had one swift move downward, but since then the market has swung back and forth on an almost daily basis. Many of these moves occur without seemingly much logic behind them. In fact, the CBOE’s Volatility Index VIX -5.01% (http://www.marketwatch.com/investing/index/VIX?link=MW_story_quote) might offer the best clues as to how to view market direction.
The SPX chart still shows heavy resistance at 1,390. That level was challenged on five out of six consecutive trading days. So far it has held, thus making it a very strong resistance area.. The 20-day moving average of SPX, which is now declining, is also just above 1,390. These resistance areas are not defined precisely, so one would have to allow for a slight overshoot (to 1,400, say) and still say that SPX was encountering resistance.
On the downside, the major support is at 1,340. For the first time, that level is below the major bull market trend line that defines this bull market over the last six months or so (see chart below). In fact, this week’s lows have been nearly touching and then bouncing off of that trend line. As a result SPX has been “pinned” in a an ever-narrowing range between the resistance at 1,390 and the support of the major bull market trend line.
Therefore, if that 1,340 level is tested, it will be an extremely important test, for that will mean that the trend line is being broken as well. It might well be the case that 1,340 will hold and thus there would be a new bull market trend line at a lesser slope, but if 1,340 were to give way, a much more bearish scenario would unfold.

http://ei.marketwatch.com/Multimedia/2012/04/20/Photos/mcmillan/spx.JPG?uuid=2c254b48-8b1b-11e1-82e5-002128049ad6

Equity-only put-call ratios remain on sell signals, which originated a week ago. These ratios are now climbing their charts swiftly, solidifying those previous sell signals. Since they emanated from such a low point on the chart, they could prove to be long-lasting signals.
Market breadth had become very oversold just over a week ago. The ensuing rally (three strong days out of four) was partly in response to that heavy oversold condition. The breadth oscillators have now turned to buy signals. This is the only indicator that has rolled over from bearish to bullish, but breadth signals have flip-flopped back and forth for nearly two months now, so its value is somewhat suspect.
Now that the market is suddenly volatile and active now (especially in the last two weeks), it can be seen in the breadth figures. On six days out of seven “stocks only” breadth was greater than +2,000 or less than -2,000. To me, this means that there is once again a great uniformity of daily activity amongst big traders. The correlation of stock moves to the broad market moves tend to increase in periods like this — much to the chagrin of “stock pickers.”
The volatility indexes VIX -5.01% (http://www.marketwatch.com/investing/index/VIX?link=MW_story_quote) XX:VXO -4.83% (http://www.marketwatch.com/investing/index/VXO?countrycode=XX&link=MW_story_quote) have not responded with roaring enthusiasm to this week’s rally attempts or to selloffs either, for that matter. Consider the chart of VIX below. It has risen back into the 17-21 trading range, which previously held sway back in February. As long as VIX is in this range, I would expect the market to be quite volatile, but probably without much definitive direction. A breakout over 21, however, would be quite bearish for stocks. Conversely, a breakdown below 17 would be bullish for stocks. This is the guideline that I was referring to when I said earlier that VIX might a good guideline for market direction. In other words, despite the market’s volatile one-day moves, if VIX is still within the 17-21 range, I wouldn’t chase those moves. But if VIX breaks out, then so should the stock market.

http://ei.marketwatch.com/Multimedia/2012/04/20/Photos/mcmillan/vix%20%282%29.JPG?uuid=2fbcd668-8b1b-11e1-82e5-002128049ad6

Another indicator that is important is the Composite Implied Volatility (CIV) of all stocks’ options. This indicator gave a sell signal back on April 4, just as SPX was braking down below 1,400. That sell signal remains in effect.
The term structure of the VIX futures has been bullish for quite some time now. The VIX futures are trading with substantial premium and the term structure slopes steeply upward. This positive construct has lasted so long that one might be tempted to think it will never change, but it eventually will — just not yet, apparently. Meanwhile, the April VIX futures expired this past Wednesday (last trading day was Tuesday), and so May now becomes the front month. May is trading today with a premium of 2.40, which is slightly high, but not overly so — especially considering where premiums have been in the last few months. Longer-term futures premiums are still very large. October, for example, settled at a premium of 8.75 over VIX.
In summary, SPX is bouncing back and forth between support at the trend line and resistance at 1,390. It is suggested that one observe VIX as a clue to which direction the market might take on a breakout.

Lawrence G. McMillan is president of McMillan Analysis Corp. He is an experienced trader and money manager and is the author of the best-selling book, “ Options as a Strategic Investment (http://www.optionstrategist.com/products/options-strategic-investment-4th-edition) ” and editor of the “ MarketWatch Options Trader (http://store.marketwatch.com/webapp/wcs/stores/servlet/PremiumNewsletters_MarketWatchOptionsTrader?dist=I BFHM1AYM) ” newsletter.

[ananda77]

Trader Update -data point 23 April 2012-

SPX 500 Chart: http://www.spx500dailyindextracker.blogspot.com
...the SPX 500 market most likely heading for a second test into the current *1363/*1355 support area with high risk of dipping further into the fortified *1340/*1320 range

COT Charts: http://www.spx500dailyindextracker.blogspot.com
...again, in the absence of anyone to take to the chopping block, equity markets are merely consolidating for the next move higher above *1340 fortified support - a break below *1340 would weaken the bullish bias down to *1320
...at this stage, the market is expected to hold in the *1320/*1340 support range

Kind Regards

[ananda77]

Trader Update -data pint 25 April 2012-

SPX 500 Chart: http://www.spx500dailyindextracker.blogspot.com
...the 23 April 2012 bounce off the *1358.79 intraday Low continues into today's Close *1372.04 with expectations, further gains into the short term overhead resistance area *1400 are likely considering the positive tone in the market

Kind Regards

[ananda77]

Trader Update -data point 3 May 2012-

SPX 500 Chart: http://www.spx500dailyindextracker.blogspot.com
...the SPX 500 market continues its step-up consolidaton pattern reaching out towards the 2 April 2012 High *1422.38 - currently, any violation of the *1400 level would weaken the bullish resolve to take out the April 2012 High - a Close below the strongly supported *1394 level introduces high risk for the market to re-test the strongly supported *1358 level at a minimum

Kind Regards

[dumbass]

i am currently trading from the short side on the sp500, closed 2x short positions (+60 SPX points ) on friday as im expecting a rally from current oversold levels , this should provide an excellent short entry next week.

price should not exceed 1400 so will look for a good short entry below this level with a target around 1320 , its a C wave so should be swift and violent.

[Entrep]

Thanks for the chart dumbass

[ananda77]

Trader Update -data point 7 May 2012-

SPX 500 Chart: http://www.spx500dailyindextracker.blogspot.com
..after breaking the *1394 support, the SPX 500 market continued lower - now heading towards the fortified *1363/10 April 2012 Low *1357.38 support as the next logical target in the vicinity. A Break below the 10 April 2012 Low *1357.38 on a Close basis would set the index up for a 6 March 2012 Low *1340.03 challenge with potential to reach lower into the *1320 support range

COT Charts: http://www.spx500dailyindextracker.blogspot.com
...again, in the absence of anyone to take to the chopping block, equity markets are merely consolidating for the next move higher above *1340 fortified support - a break below *1340 would weaken the bullish bias down to *1320 - in the longer term frame, the bulls continue to drive this market into new Highs.

Kind Regards

[Hoop]

Pushing to new highs.....I have differing views to that of Dumbass and Ananda.

My view stems from repeated historical facts and Secular cycle disciplines ...Previous S&P and DOW Secular Bear Market Cycle Charts have all shown waves of equal tops....so while this Secular Bear Cycle lives on, history says that anything above 1383 has to be considered a low chance. The previous large accumulating wave in this S&P500 cyclic bull market ran it past 1383 up to 1420...but that proved unsustainable even with unexpected better company profit announcements. The annualised PE Ratio is the downward pressure culprit and sharemarket theory has proved that the PE Ratio is the primary driver of any sharemarket....While this secular bear is alive the annualised PE Ratio will keep on a downtrend....

Investor attitudes during secular bears is one of wanting better yield rates than before and a lower appetite for speculation.

See my Post#256 page 18 21-Feb-2012 Investing Strategies and Bear Markets thread Note the Minyanvales DOW 104 year chart (http://www.sharetrader.co.nz/showthread.php?5171-Investing-strategies-and-secular-bear-markets/page18)

[dumbass]

i am currently trading from the short side on the sp500, closed 2x short positions (+60 SPX points ) on friday as im expecting a rally from current oversold levels , this should provide an excellent short entry next week.

price should not exceed 1400 so will look for a good short entry below this level with a target around 1320 , its a C wave so should be swift and violent.

The market showing resilience in the face of adversity at present.

holding shorts from 1364 and will maintain a target around 1320 area. europe is selling any rallies and the us is buying dips , when this resolves

i think this market is going rally to new highs , so starting to think long entry position build around 1320 - 1340.

[ananda77]

Trader Update -data ppoint 15 May 2012-

SPX 500 Chart: http://www.spx500dailyindextracker.blogspot.com
...the SPX 500 market now closing in on the lower range of the support band with the index nearing extreme oversold in the daily frame - besides, the rainbow financial press are getting hot on Europe disasters and fanfaring bearish overtones to herd everyone to short the market

...time to collect on the long side -the trend is your friend only for so long amigo-

Kind Regards

[dumbass]

i am currently trading from the short side on the sp500, closed 2x short positions (+60 SPX points ) on friday as im expecting a rally from current oversold levels , this should provide an excellent short entry next week.

price should not exceed 1400 so will look for a good short entry below this level with a target around 1320 , its a C wave so should be swift and violent.

holding shorts from 1364 currently 1330 heading into potential reversal zone around 1320 area where i will exit shorts.

i am now starting to think long entry and as i have picked up a lot of points on the way down i can afford an agressive entry.

this could be a multi month long to new highs.

[Entrep]

Busted right through 1320 - whats your thoughts dumbass?

SPI looking even worse!

[dumbass]

hi entrep , targets hit over night on shorts , i anticipated we see a bottoming process around 1320 , there was heavy fib clusters
around this area, to see no bounce at all with a gap open suggests we are moving down to 1290 if this area does not hold then
my desire to long would be reviewed. hope this helps.

[Hoop]

Quote from Post #1186 24 Feb 2012


Updated Chart from that one at the top of this thread page
closed 1359 broken its 1363 support
The S&P 500 cyclic Bull has been wandering the Secular Graveyard so it wouldn't surprise me if it has died.....

Testing and rebounding off its 1310 TA target would suggest that the index is recovering from a bull market correction and all is well
Breaking the 1310 would send a warning that the cyclic bull could be sick

http://i458.photobucket.com/albums/qq306/Hoop_1/SP50010042012.png

This present downtrend (correction?) on the S&P500 came as no surprise to TA people. The commentary on this thread became increasingly negative back in February.

I posted that updated chart on 11th April...It is still amazingly relevant 36 days later... That chart was a snapshot which outlined the near future expectancy of the investor group at that precise moment in time...the chart still being relevant 36 days later indicates that the S&P500 is experiencing a systematic orderly sell down with no panic and no surprises....everything is still going according to plan...so far!!:)

This "orderly/ still going according to plan" correction drop so far also suggests that perhaps this present day Greek/French media frenzy event was one of the many variables already factored in the market as a near certainty back then in February..

TA is made up of diverse discipline groups. Dumbass and Ananda have different disciplines to me, 1320 was on their radar (actually the wave shows either 1321 or 1310,,doesn't it??)...on my radar (36 days ago chart) was a 70% chance that the TA target 1310 would be reached, with a rapid drop in % chance going lower than that S&R area just under that 1310 level and another big % chance drop below that 1285 support area....so using 11th April chart the risk of S&P500 falling below that 1308ish area was low.

Theoretically, atm, this "orderly" market should be perceiving that 1300 area as the bottom for the time being because disciplined buying would recommence and raise the index again.

36 days later the variables on my old chart (above) have obviously altered... If this 1300-1310 area that we are at is breached that chances the index falling to 1285 would be very high, but below that 1285 there are a number of S&R areas so the risk of another large percentage fall is still very low.

Also an investor should take in historical facts......A bull market correction can be up to 20% but its usually around that rule of thumb 10% area ....1420 - (1420 x 10%) = 1278

Most disciplines are concurring around that 1320 /1310 area (including the contrarions who suggest a less than 10% correction) So chances are we are near or at the bottom

EDIT:- The DOW has a TA Target of 12100 (Post #842 DOW thread) (http://www.sharetrader.co.nz/showthread.php?6114-Dow/page57) chances may be lower than 70% in this case as there is a strong support area around the 12240. Presently at 12442 so just less than 2% drop to reach that support area...(possible bottom??)..This 2% further drop would relate to 1280ish for the S&P500 close to the 1285 support area

Another feasible scenario is a continued downtrend of another 3% to that DOW TA 12100 target area....this would relate to a 3% fall on the S&P500 index to 1264 which happens to be another big support area.

[ananda77]

Trader Update -data point 18 May 2012-

SPX 500 chart: http://www.spx500dailyindextracker.blogspot.com
...the SPX 500 market broke out of the *1340/*1320 support zone making its way towards its 200-dsma (still rising but in danger of levelling out and turning down) current *1278.04 - the market needs to hold the range above the 200-dsma and consolidate with a rise back into the green support zone on a Close basis in order to set the first signal of a potential end to the downside.


VIX chart: http://www.spx500dailyindextracker.blogspot.com
...the VIX finally broke out of its 5-mnth old trading range heading towards its 200-dsma (still sloping down) but in danger of levelling out and rising. The market is at inflection point and need to consolidate below the 200-dsma and close inside the trading range to set a more positive tone in the market.

...accumulate on the long side with responsible stops in the 200-dsma approximity.

Kind Regards

[winner69]

Hussman says another 25% to 35% to come .......he says 'As for my opinion about market conditions, I have to agree with Richard Russell, who said last week "I think we're now in the second half of the primary bear market that started back in 2007. It won't be pretty." '
http://www.hussmanfunds.com/wmc/wmc120521.htm

A bit of DOW theory included as well

[dumbass]

hi entrep , targets hit over night on shorts , i anticipated we see a bottoming process around 1320 , there was heavy fib clusters
around this area, to see no bounce at all with a gap open suggests we are moving down to 1290 if this area does not hold then
my desire to long would be reviewed. hope this helps.

reversal at 1290 nailed entered long 2 positions , its a little early to say if this is the bottom of the downtrend but looks promising so far.

needs to clear 1360 pivot to give complete confidence in long position.

im going to run this as a long term trade into the 1500's.

[Entrep]

Thanks again for the new update dumbass. TBH found myself a little overexposed on this pull-back/correct/whatever it is and your analysis is reassuring (I am bullish too).

Cheers

[Hoop]

1500 Hmmmmmm...It seems unsustainable profit increases combined with a downtrending annualised PE ratio is not problem for you guys...eh?

[Hoop]

All went well today S&P500 rising up on the back of 1.8+% increases in Europe Equities then...oooops:(...sudden drop.....1310 (that magical number...eh:D) saved the day by bouncing off it to finish at 1317 up 1 (+0.05%). They are a nervous bunch over in Wall St atm...eh

Last night would have been a little disapointing for you wouldn't it Dumbass??.. The good news is that it seems the short/medium term retracement (pullback) still looks bullish up to 1360..... although my personal view is the longer term outlook looks crappy.

As you say that 1360 area is the place to watch..

[dumbass]

Off the low that was the largest rally this month , 1313 pivot held which is a 50 % retracement , stops now moved to sit below this pivot

and if im wrong ive still made money, so not much to be dissapointed about.

would be nice if it just went staright up but markets dont do that normally, 1330 is now the swing pivot so this area a little more important

[ananda77]

Trader Update -data point 24 May 2012-

SPX 500 chart: http://www.spx500dailyindextracker.blogspot.com
...the SPX 500 market appears to be supported at the 27 October 2011 High *1292.66:

18 May 2012 *1291.98

21 May 2012 *1295.73

22 May 2012 *1310.04

23 May 2012 *1296.52 The 200-dsma avoided falling into the abyss to continue its up-trend adding approx.0.5 points to the upside at present. Unfortunately, risks for more downside have not abated yet as the market failed so far to close back into the green safe area -better yet, inside the lower part of the 'line in the sand' oval point. However, with 404 stocks out of 500 in the negative, more downside remains a desperate push

VIX chart: http://www.spx500dailyindextracker.blogspot.com
...the VIX floated back into the trading range below the bearish inspired *23.4 and its 200-dsma returned falling again

...as a consequence, unless the SPX 500 market pushes below the 200-dsma confirmed, long accumulation/hold with appropriate stops in the 200-dsma vicinity remain strategy

Kind Regards

[dumbass]

a reasonably constructive day, i am still following my bullish count with 3 full positions on , a little bit of intra day trading but main holding is long from 1298 and 1312 and 1313 with stops at 1295.

i would be concerned if 1303 support didn't hold , to me it feels like this market is going to eventually rally , fingers crossed.


3988

[ananda77]

Trader Update -data point 28 May 2012-

http://www.spx500dailyindextracker.blogspot.com
...a violation of the 25 May 2012 Low *1314.23 would signal the bullish upward push is loosing strength introducing high risk for a test of the 200-dsma current *1282.11 ahead - while a Close inside the safe green zone, better still taking out the 22 May 2012 High *1328.39, is adding strength to the bullish resolve

Kind Regards

[ananda77]

Trader Update -data point 30 May 2012-

SPX 500 chart: http://www.spx500dailyindextracker.blogspot.com
...the SPX 500 market closed the index well into the safe green zone settling above the 22 May 2012 High *1328.49 - the next immediate hurdle to take out is the 15 May 2012 High *1344.94, the point from where accelarated selling pushed the index to the 18 May 2012 Low *1291.98.

VIX chart: http://www.spx500dailyindextracker.blogspot.com
...the VIX remains below the bearish inspired *23.4

...watch for weakness ahead with a respective Close below the SPX 500 developing trendline and above the VIX developing trendline

Kind Regards

[Hoop]

Posted 23 May 2012

....................................oooops:(...sud den drop.....1310 (that magical number...eh:D) ................

Closed at 1310

The S&P500 should write a song about it's current activity.....damm... Britney beat you to it

[Hoop]

KW + others

I will mention this again...The stock market is not correlated to the economy. The main driver is the PE Ratio (annualised)

The Media is a bad teacher.... you apply logic from media information and more often than not it results in false logic.

Dont believe me ...eh?

The S&P 500 is in a secular bear market cycle, therefore, do not expect the S&P 500 to rally into a strong primary uptrend when the economy comes "right".

Crestmont Research (http://www.crestmontresearch.com/stock-market/) proves this beyond all doubt... scroll down to "It's not the Economy" and view item or click here (http://www.crestmontresearch.com/docs/Stock-Economy.pdf)....note the non-responsiveness of the DOW Index with each economic growth cycle (GDP) during the secular bear market phases.

Now you see why I have a longer term bearish outlook with the S&P 500.....it's not because I think the economy will shrink......

[winner69]

Hoop's view is a long term view, KWs inflections and all that are shorter term views than Hoops. They are talking about different things

Say market earnings are 10 with a PE of 20 the market is 200 ..... say ten years later the earnings have done very well (maybe from an growing economy) and doubled to 20 but punters only want to pay 10 times earnings so the market is still 200 --- thats Hoop secular bear market and a long term view

KW has studied his inflections etc and seen the short term ups and downs over that 10 years (the bull and bears within a secular market)

That is how the markets (particularly the US) have behaved this century

[ananda77]

Trader Update -data point 3 June 2012-

SPX 500 chart: http://www.spx500dailyindextracker.blogspot.com
...the market crashed the index through its 200-dsma followed by widespread expectations, the Close below this bull/bear divide will lead to follow through lower to challenge the 28 December 2011 Low *1248.43/29 December 2011 Low *1249.72 - a break below these inflection points will open the market down to the *1200 mark

VIX chart: http://www.spx500dailyindextracker.blogspot.com
...the VIX found strong support at the bull/bear divide *23.4

... markets are heavily oversold in the hourly frame, reaching now into oversold on the weekly with potential to overextend, but give nothing away in terms of oversold in the daily. Since the SPX 500 200-dsma remains trending up and the VIX 200-dsma still trending down, the market is now at an important inflection point

Anyway, the market needs now to take out the 21 May 2012 Low *1295.73 quickly to restore some sort of positive tone

Kind Regards

[Hoop]

Yes Winner... mine relates to the longer overall term...however those longer term secular pressures always apply to the market every single day...it's just we don't think about it so it is an invisible theoretical force......For most investors what you can't see doesn't exist, so when the market fails to perform to investors expectations over a period of.. say, a few months. the investors and the media look for excuses and usually apply false logic to conclude that the market is irrational and will eventually see sense and self-correct...

Secular bear markets last an average of 16 years and theory has it that the normalised PE Ratio trends downwards during those 16 years...well...in real life lately these normalised PE Ratios have been hitting speed bumps these last 3 years and its all due to this prolonged low inflationary low interest environment. Normally the later stages of the secular Bear cycle is plagued with higher inflation (yet to come??) which pressures the PE Ratio lower to below 10 (yet to come)...however this ongoing unusual period of low inflation / low interest rates (LILI) has kept the PE Ratio at a higher level than it should be at this latter stage of this Secular bear Cycle.

As at 31 March 2012 the PE Ratio was around 15.4.... Due to unsustainable earnings it was normalised higher to around 21-22 These figures are considered fair value within a LILI Environment therefore the S&P500 at 1408 was considered "near fairly valued by Crestmont Research.

Winners example made me think back to my post Page 44 POST #654 on the 11th Sept 2010 (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page44) on this thread
At that time the S&P 500 was (in secular theory) undervalued in relation to its low inflation/low interest rate (LILI) environment at 1130..... This was also the time when many thought the Bull market had died.

I have reposted it below...it serves as an example why equity investors should not get hopes up when the economy comes "right" within a Secular Bear Cycle...When the economy eventually comes right, higher inflation/higher interests will return pushing the normalised PE Ratio lower....from 20 to maybe 10 or lower....earnings will increase with the boom but with high inflation it is theoretically possible for the Equity Market to "ignore" those earnings increases and fall........MR Market is irrational....nah!!! ..

11th September 2010

I have written this post to cheer up Belg + others and you too Winner :):)

Apparently history has it that if you average the PE Ratio of the S&P500 during the other times of Low inflation/low interest environments LILI (as the USA is experiencing now) the reported PE Ratio figure comes out at 22.5.

Looking at Winners chart of the day post... the reported PE looks like about 17 and the close of S&P500 on Friday at 1110 gives an estimated reported profit of 1110/17 = $63.
Now we know that the 30th June reported profit was $64...so the chart of the day is accurate because we know that chart works off reported events at the time.

Now the question!!! ...Is the S&P 500 overvalued or undervalued??....research shows using history as a reference that during times of LILI the S&P500's PE Ratio is averaging 22.5........

.....so using the theorical calculations EPS x PE = Index... we get 64 x 22.5 = 1440

Therefore my valuation of S&P500 for this present LILI environment is 1440 therefore at 1110 the S&P500 is significantly undervalued.

Interesting to note...is that there are variables at work...contrary to belief.. high inflation or high deflation and interest rates are high or negative respectively pulls down the values of the PE Ratio to below 10 and during the height of the equity market boom times the LILI environment usually operates in raising the values of PE ratios to above 20. If you don't believe me don't recite the media to me..go study up the facts and figures....actually look at Winner 69 chart of the day during the mid 1970's to mid 1980's when high Inflation and high interest rates existed HIHI... the PE Ratio then was around the 10 mark or less for a decade.

Having just had a GFC the investor uncertainty and shyness towards equities is very noticeable and probably the reason why the S&P500 is so undervalued.

Will the S&P500 correct to its valued figure of 1440? ...perhaps.. even with stagnant zero growth and continued LILI going into 2011 the S&P500 index value will still be 1440 because nothing has changed.

However if company profit growth returns and the FED bumps up the interest rate to control inflation it is possible there could be no increase in the S&P500 index valuation (the paradox) but the investors may feel better and start buying in and push up the S&P500 to a point that it is fully valued or overvalued..

If say (hypothetically) that next year investors push the S&P500 from today's 1110 to 1440 because they are very confident with the post recovery big increases in company profit growth from say (hypothetically) today's $64 to $90... that scenario would see the reported PE ratio fall lower than now (paradox).... 1440 / 90 = reported PE Ratio 16...however, depending on the extent of the switch from a LILI to a HIHI environment, the 1440 in the post recovery next year at a PE ratio of 16 may be fully valued or overvalued. That overvaluation occurs because in a HIHI environment the average PE ratio is around 10 or less

The paradox is that the S&P500 may be fairly valued at 1440 now under stagnant economic conditions but next year in much better times that 1440 may then be considered overvalued.

You can see now how the layman and especially the media would not understand how this could be possible.

[winner69]

Staggering turn around after lunch in the US .... phew that was a close call to a wipe out .... well done to the Fed

[ananda77]

Trader Update -data point 7 June 2012-

SPX 500 chart: http://www.spx500dailyindextracker.blogspot.com
...today's price action pushed the index right passed the psych resistance cluster:
-the 18 May 2012 Low *1291.98
-the 21 May 2012 Low *1295.73
-the 23 May 2012 Low *1296.53
taking on the end of May *1319.74 with a Close *1315.13. As a result, the tone in the markets turned positive albeit based on hope
- nevertheless, price action of the last three trading days confirmed the 200-dsma current *1286.64 up-trending as the all-out bull/bear battle line and another violation of the 200-dsma and the upside market goes history.
Early signs of weakness ahead will be a dive back into the recent resistance cluster on a Close basis, but in the meantime, the 24 May 2012 startegy, "unless the SPX 500 market pushes below the 200-dsma confirmed, long accumulation/hold with appropriate stops in the 200-dsma vicinity" remains valid. To lock in profits so far, the stops have moved up to the 21 May 2012 *1295.73

...short-term markets are now overbought and for the positive tone to continue, down moves within a consolidation need to be limited to the 21 May 2012 *1295.73

Kind Regards

[Hoop]

Spain has asked for 100m euros to reinforce some spanish banks and will get it.
Serious talk about Ecb issuing euro-bonds.

Will be interesting to see how global markets respond to that news. Should be good all round.

The Equity market reacts favourably to loose credit until it's all gone :)....

Sounds like Spain is on the brink of financial collapse? Rumours have it that Spain was to be frozen out of the bond market if there was no financial help at hand.

The downside to this E100B injection is that this money is added to the already awful National debt figure....Hmmm Sounds like a shot of adrenaline (but not the cure) to a critically ill patient....eh?

Equity Market relief rally (already in progress) may be short lived..How long will it be until the market refocuses back onto Greece, Italy, China's problems and the US Company profits topping out for now.

[ananda77]

...watch the crude market - so far moves opposite equities and most likely best indicator that markets expecting a deepening global recess - however with favorable equity returns where else do U want to park the cash - do not worry bout worst case scenarios unless U head over heels in debt
Kind Regards

[Hoop]

...watch the crude market - so far moves opposite equities and most likely best indicator that markets expecting a deepening global recess - however with favorable equity returns where else do U want to park the cash - do not worry bout worst case scenarios unless U head over heels in debt
Kind Regards

S&P 500 started Monday trading up 10 to 1336 under the influence of a Spanish injection...that was the end of the good news as the markets then refocused...it was all downhill after the opening
Later in the afternonn when the short term trading support around the 1315 broke it free-falled and stopped at 1309 (down 17) due to the end of the day bell.
The next test in the fall was/is the 1295 support.

Crude oil is falling to close in on those 9 month lows (support area).
Watch copper..it is bouncing around on its lows at 3.30 major support area...its a good economic indicator and in times like these it can be a leading indicator for Equities.............

Edit: 12th June close ... All 3 markets up Oil Copper ............S&P500 bottomed out soon after opening (1307)and closed up at 1324 (+1.17%)

[ananda77]

Trader Update -data point 18 June 2012-

chart http://www.spx500dailyindestracker.blogspot.com
...after a week long consolidation, the Friday SPX 500 market closed the index *1342.84 outside the green strong resistance zone - the market now appears to have sufficient strength to challenge the 50-dsma current *1248.45 with potential to trade up into strong overhead resistance marked by the 14 May 2012 High *1351.93_11 May 2012 High *1365.66

chart http://www.spx500dailyindestracker.blogspot.com
the market operated the current up-move off the 4 June 2012 Low *1266.74 from an extremely low short term inflowing liquidity position

chart http://www.spx500dailyindestracker.blogspot.com
and institutional net Buy/Sell now shows cautious accumulation - however,

chart http://www.spx500dailyindestracker.blogspot.com
long term trending Fed. liquidity, institutional investors, foreign liquidity inflows remain diappointingly stuck in contraction territory with no higher High 14 June 2012 (awaiting fresh data for Friday 15 June 2012)

...as a result, the short term positive tone continues but long term, the SPX 500 bull market remains a high risk affair. To lock in profits so far, the stops have moved up to the 22 May 2012 *1328.49 Thank You market for a nice 4 June 2012 Low birthday present

Kind Regards

[ananda77]

Trader Update -data point 19 June 2012-

chart http://www.spx500dailyindestracker.blogspot.com
...Friday 15 June 2012: institutional net buy_sell volume levels shows a stronger commitment

chart http://www.spx500dailyindestracker.blogspot.com
...no higher high: long term trending Fed. liquidity, institutional investors, foreign liquidity inflows ...

Monday 18 June 2012: rather than follow through Friday's accumulation hike, the market flatlines - remains in a volatile position

Kind Regards

[ananda77]

sorry sorry sorry, but link works now correct

Trader Update -data point 3 July 2012-

chart http://www.spx500dailyindextracker.blogspot.com
...the market followed through Friday's 29 June 2012 accumulation surpassing the 19 June 2012 interim High *1363.46 with Mondays 2 July 2012 Close *1366.35

chart http://www.spx500dailyindextracker.blogspot.com
...the bullish advance pushed long term trending Fed liquidity_institutional investors_foreign liquidity inflows into low liquidity expansion to resume its uptrend

chart http://www.spx500dailyindextracker.blogspot.com
...institutional net buy-sell up-trending

chart http://www.spx500dailyindextracker.blogspot.com
...the VIX traded below the bullish inspired *18 level and the advance remains save below this line. Since the bullish advance is in its early stages and strength levels are still indicating caution, a VIX Close above 18 would raise a red flag in the market

chart http://www.spx500dailyindextracker.blogspot.com
...based on institutional support, the bullish advance has the potential to move up to the May 2008 peak (current +9.07%) according to the institutional 'Core' holding index - if the index can clear hurdle #3 overhead resistance current 0.77% to 1.08% away

Kind Regards

[ananda77]

Trader Update -data point 12 July 2012-

chart http://www.spx500dailyindextracker.blogspot.com
...the SPX 500 market testing critical support in the *1330_*1340 range bouncing off an intraday Low *1333.25 to close in the upper support level *1340 range - the bullish advance starting 25 June 2012 off the *1309.27 Low and confirmed 28 June 2012 off the *1313.29 has basically run out of leeway on the downside with today's intraday Low *1333.25 - the bulls need to show their hands now and keep the index from slipping any further into the red zone to avoid concerted bearish action on the short side

chart http://www.spx500dailyindextracker.blogspot.com
...the VIX Close *17.95 barely keeps a bullish tone in the equity markets alive with its 50-dsma already rising

chart http://www.spx500dailyindextracker.blogspot.com
...long term trending Fed. liquidity_institutional investors_foreign liquidity inflows back into upper contraction territory, but still technically uptrending

...as a result, another violation of today's intraday *1333.25 would indicate further weakness and motivate the market to challenge the 28 June 2012 Low *1313.29 at a minimum

Kind Regards

...off into THE WILD MIND till 6 August 2012

[Hoop]

Chart Update from post 1216 18th May 2012 (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page82)

S&P500 is in another rising trend, another unsustainable rising wedge. Todays close is at the Resistance and downtrend conjunction (again). It successfully broke the 61.8 Fib retracement at 1363 which also happens to be the old primary resistance level this is a major feat and is bullish...However the 1374 short/medium resistance and the short/medium downtrend conjunction is another major hurdle to overcome and then there is the major resistance zone 1405-1420. Volume accompanied with buyers has to increase to give momentum to push the S&P through these resistance areas..at the moment the volume is too low and predicts a failure to break out upwards to make new highs (1420+).


http://i458.photobucket.com/albums/qq306/Hoop_1/SP50018072012-1.png

[Hoop]

Quote....SAN FRANCISCO (MarketWatch) —"....A rash of selling on Friday wiped out July gains for both the Dow Jones Industrial Average and the Nasdaq Composite Index as investors reacted to earnings-driven developments and resurfaced European concerns...."...20th July 2012....

The S&P closed on its lows at 1363 down 14 (-1.01%) The 1363 is the major support line...so the major support held...saved by the Bell ...yet again....

No technical damage done, the S&P500 short/medium term uptrend has been weakened but still intact

I have edited my previous posting chart by adding the S&R figures 1374 and 1363 to clarify the importance of Fridays Close.

[Hoop]

This morning (NZtime) Technical damage occurred

S&P 500 closed 1338 (-12)

There's a good chance the S&P 500 will continue falling towards it's new target price 1343 - (1374-1343) = 1312........back to test the 1313 and 1310 supported areas

[winner69]

Chart be looking good now eh Hoop

[Hoop]

Chart be looking good now eh Hoop
Hi Winner, Yeah... from June to now it has been a choppy 10% increase which is good news.
The Million Dollar question .... Is the future news going to keep being good news???

My short term outlook is OK and if the S&P500 hangs around the 1250 -1350 for the next few months or a year I'm still OK with that but It seems the S&P500 is going to test the 1420 and beyond and with that my medium term outlook changes, the higher it goes the more increasingly bearish I will get.... The index becomes more restrictive as it climbs up the rising wedge formation and will eventually break bearishly.

This is where my TA views and outlooks part company with some others + some well known TA predictors who are bullish in the longer term.

Crystal ball gazing is a dangerous sport that can ruin reputations, it doesn't matter which discipline you use it is impossible to accurately predict the future. However as a cyclic bull cycle matures and the question is asked "Is this still a cyclic bull market or the start of the next cyclic bear market? I begin to rely more on Secular Cycle pressures in my decision making to achieve the best chance scenario. These secular pressures are invisible forces on a chart and are nearly always overlooked when using TA. They are considered not to exist at all when it comes to Fundamental Analysis (FA) as they are often seen as in total conflict when mentioned.

Secular pressures???? These are long time periods of investor trading behaviour Secular bull cycles equilvalent to swimming downstream in a river with the favourable current flow... it's easy and the good feeling is to take on more risk and lower yields stocks to get capital gain.....During a secular bear market cycle (as the SP500 has been in since the year 2000) any rise above the previous cyclic bull market peak is equivalent to swimming upstream in a river against the unfavourable current flow and the further up you go the stronger that unfavourable current flow against you gets, and eventually at some point you stop (exhausted) and (reversal point) resign to go with the unfavourable flow down the river.. I've marked the 1363 rightly or wrongly (I have to start somewhere...eh:) ) as the starting point of when this downward secular current seems to start flowing and that same current progressively gets stronger until at the 1550 area the downward current is very strong and would need some exceptional buying momentum to keep the SP500 rising above it. This exceptional buying momentum against the strong secular (bear) flow period is very unlikely but not impossible as was the case with the huge cyclic bull market increases on the ASX indexes leading up to 2008 GFC.



http://i458.photobucket.com/albums/qq306/Hoop_1/SP50007082012.png

[ananda77]

Trader Update -data point 13 August 2012-

chart http://www.spx500dailyindextracker.blogspot.com
...the SPX 500 market following the 11 July 2012 Low *1333.25 kept images of intense bull/bear battles alive, but never violated the 11 July 2012 Low again on a Close basis - instead went up right past the 2007-2012 fan line epic centre of resistance - currently trying to take out multiple resistance in the *1400_*1415_*1422 range with *1390 short term support. At this stage in the game, backstaged by a weak economic outlook, the market remains capped by the 3 May 2012 breakdown *1406.33

...as a result, above the 27 July 2012 High *1389.19 and long term trending Fed liquidity _institutional investors_foreign liquidity inflows upticking in expansion territory, the market remains motivated to trade past multiple resistance in the *1400_*1415_*1422 range with a Close past 1-year trendline resistance *1412.07 in the daily time frame another strong trigger to reach out for higher ground

Kind Regards

[ananda77]

Trader Update -data point 16 August 2012-

chart http://www.spx500dailyindextracker.blogspot.com
..the SPX 500 market remains capped by the 3 May 2012 breakdown *1406.33 - the 14 August 2012 attempt at the 1-year trendline resistance current *1413.34 in the daily time frame motivated swift selling action

chart http://www.spx500dailyindextracker.blogspot.com
...NYSE new highs are shrinking

chart http://www.spx500dailyindextracker.blogspot.com
... the inverted VIX down side cross-over with its weighted 5-dma - in the past this pattern motivated a 4/6 day sell down

chart http://www.spx500dailyindextracker.blogspot.com
...the ratio of very strong stocks to very weak stocks is on a decline - 10.9:1_7.33:1 - range trading with no higher high

...as a result, the market appears in need of a fresh boost of energy to get out of stalling mode to charge higher past multiple resistance in the *1400_*1415_*1422 range - the SPX 500 50-dsma currently ideally situated *1357.16 just below the upside breakout level *1360/*1366 for a re-test


Kind Regards

[ananda77]

OK folks, basically think the top is in or very close. Adding to portfolio protection

Kind Regards

[ananda77]

Trader Update -data point 23 August 2012-

chart http://www.spx500dailyindextracker.blogspot.com
...basically think, the top is in and a test of the 50-dsma is on he menue

chart http://www.spx500dailyindextracker.blogspot.com

chart http://www.spx500dailyindextracker.blogspot.com

chart http://www.spx500dailyindextracker.blogspot.com

Kind Regards

[ananda77]

Trader Update -data point 4 September 2012-

chart http://www.spx500dailyindextracker.blogspot.com
...the Friday 31 August 2012 suffered another rejection at the SPX 500 *1413/*1415 resistance level and closed the week on a weak note *1406.58 below the 7 August 2012 High *1407.14/22 August 2012 Low *1406.78 support

chart http://www.spx500dailyindextracker.blogspot.com
...the stealthlike distribution continues until the market takes out *1418 with a weekly Close

Kind Regards

[Hoop]

Bollinger Bands have rapidly squeezed up on the US, European and Aussi exchange indexes....been some while since I've seen them close up this rapidly (2weeks) and with so many exchanges all at once....It could be fireworks time with either a big leap up or sudden fall.... With the odd sell signals appearing this may not be a good sign.

It may be prudent to batten down the hatches folks...better safe than sorry.

[winner69]

What normally happens in Spetember Hoop .... that might indicate which way the leap is going to be

[Hoop]

What normally happens in Spetember Hoop .... that might indicate which way the leap is going to be

Hmmm..seems to be slightly more downs than ups......ahhh.. the famous 50% capitulation (the dreaded C wave) started in Sept 2008 ......Sept 1929 market turned downwards before the crash.

Oh ..No... The Hindenburg Omen (http://en.wikipedia.org/wiki/Hindenburg_Omen)was triggered 3 times during July 23 to 25/ 2012...expect a crash within the next 40 days .....phew!!! :)... It expired on 3rd September yesterday.... panic over???

EDIT: .....Apparently the articles I read were in error the Hindenburg Omen (HO) was not triggered in July 2012. (http://www.thedisciplinedinvestor.com/blog/2012/07/25/no-the-hindenburg-omen-did-not-trigger-some-clarification/) Hard to believe that there are a group of TA bloggers (http://seekingalpha.com/instablog/357305-albertarocks/543261-hindenburg-omen-blog-april-24-2012) out there on HO watch at the moment..they disagreed as well .....Actually, the HO got very close to triggering in early August and again a few days ago. It is very rare to have all the conditions met to trigger an HO alert..being very close obviously creates a HO watch which is whats happening atm.

from wiki .....Though the Omen does not have a 100% success rate, every NYSE (http://en.wikipedia.org/wiki/NYSE) crash (http://en.wikipedia.org/wiki/Stock_market_crash) since 1985 has been preceded by a Hindenburg Omen. Of the previous 25 confirmed signals only two (8%) have failed to predict at least mild (2.0% to 4.9%) declines.

http://www.investopedia.com/articles/trading/07/HindenburgOmen.asp#axzz25Z5HMMVE

(http://www.investopedia.com/articles/trading/07/HindenburgOmen.asp#axzz25Z5HMMVE)
(http://www.investopedia.com/articles/trading/07/HindenburgOmen.asp#axzz25Z5HMMVE)

[ananda77]

It may be prudent to batten down the hatches folks...better safe than sorry.

...agree, but at present, looking at the strong rise in small caps and oil overnight, there is a strong deluded QE3 trade pushing the market around -just look at the gold freaks- although it seems unreal to push a QE3 through when the market is high and property appears in recovery mode. More real would be an actual QE3, when the market goes to custard -that's definitely a 'BERNANKE NO NO'-

...anyway, portfolio protection in place - just playing around with %ges

Kind Regards

[ananda77]

Humpf! Read that one wrong. Still, no losses incurred, just missed out on a few % points of gains. Such is life.

Hi Belgarion,

...yes the warning of a rise was signaled by the strong rise in small caps and oil - and there is still room for further upside into the next resistance SPX 500 *1450/*1483 area - but because a lot of QE3 is already discounted for, am keep adding protection into strength - keep twisting the %ges

Kind Regards

[dumbass]

http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER&p=374444&viewfull=1#post374444

even though a little sceptism from the boys, its trucking a long quite nicely , 1500 is not too far away, but could be a good time to take profits at the upper trendline.

1290 +1310 long 2 trades 260 + points

[Hoop]

Hi Dumbass....ahhh how boring life would be without a bit of Sceptism...eh? :)

I would say a lot of investors would like to see it keep rising...but 1500 is not reached yet.
The secular bear downward pressure becomes increasingly stronger as it rises. It will require a lot more buyers than in a secular bull market to keep it rising.

Secular triple tops (1530ish) are on the cards so we have nearly arrived at this point now..so it was 1520 in year 2000 1560 in 2007 and now?

Equal tops in a secular bear market cycle is a distinguishing formation feature...however rare oddball things do happen. AORDS 2003 to 2007 reached the stratosphere within its Secular Bear cycle...due to rising shares prices and falling PE Ratios happening at the same time....US Equity markets who knows ??... but the odds are well against a big rise from this level...but I would be pleased to be awe-surprised and proved wrong to see it going up into the stratosphere...I nice thought though to be making money during the process of being proven wrong:D

The reason why?....the same as my post at the same time as yours 23 May 2012


1500 Hmmmmmm...It seems unsustainable profit increases combined with a downtrending annualised PE ratio is not problem for you guys...eh?

[winner69]

The job numbers fiddles to hell and still they disappoint .... but that good for sharemarkets because now it is certaim there will be a QE3 .... and the S&P500 will be up up and away

.... god for now but not for later .... as Mauldin implied when he quoted TS Eliot T.S. Eliot ‘This is the way the world ends, Not with a bang but a whimper’ .... the share market of course

[dumbass]

The job numbers fiddles to hell and still they disappoint .... but that good for sharemarkets because now it is certaim there will be a QE3 .... and the S&P500 will be up up and away

.... god for now but not for later .... as Mauldin implied when he quoted TS Eliot T.S. Eliot ‘This is the way the world ends, Not with a bang but a whimper’ .... the share market of course

i am of the opinion the US markets and probably the world markets are getting close to their current bull market peak, my feeling is QE3 is a done deal but will not have the anticipated effect everyone is expecting.

just that weird reaction that the market will do the EXACT opposite to what the concensus is expecting, 1550 area is my long term target but i think it will be a messy grind up to it.

[4be]

Hi Dumbass....ahhh how boring life would be without a bit of Sceptism...eh? :)

I would say a lot of investors would like to see it keep rising...but 1500 is not reached yet.
The secular bear downward pressure becomes increasingly stronger as it rises. It will require a lot more buyers than in a secular bull market to keep it rising.

Secular triple tops (1530ish) are on the cards so we have nearly arrived at this point now..so it was 1520 in year 2000 1560 in 2007 and now?

Equal tops in a secular bear market cycle is a distinguishing formation feature...however rare oddball things do happen. AORDS 2003 to 2007 reached the stratosphere within its Secular Bear cycle...due to rising shares prices and falling PE Ratios happening at the same time....US Equity markets who knows ??... but the odds are well against a big rise from this level...but I would be pleased to be awe-surprised and proved wrong to see it going up into the stratosphere...I nice thought though to be making money during the process of being proven wrong:D

The reason why?....the same as my post at the same time as yours 23 May 2012

Hoop,

Do you not think the ALLORDS was in a secular bull from early 90 to 2007 and the secular bear started during the GFC? Can't see how the market was in a secular bear state from 2003 -2007 as the formation isn't right? Interested in your views.

Cheers
4be

[Hoop]

Hoop,

Do you not think the ALLORDS was in a secular bull from early 90 to 2007 and the secular bear started during the GFC? Can't see how the market was in a secular bear state from 2003 -2007 as the formation isn't right? Interested in your views.

Cheers
4be

Often a secular bear change can be seen on an index chart when it usually coincides with the start of a cyclic bear market. Looking at the Aords index chart below an oddity happened, the secular Bear cant be seen because it started during a cyclic bull market.

Secular Bulls and Bears are not measured by the market index they are measured by the market Annualised PE Ratio..
Secular Bull cycles can last for 25 years as it did I think for the Aords 1974 -1999. The average Secular bear cycle is about 16 year.
However secular cycles are measured by distance traveled not by time ..on rare occasions a secular cycle could end very early (a few years)due to a large event.

Usually the market index reaches higher highs and has higher lows during a secular bull cycle.
Usually the index wavers within a trading pattern (flat tops) during a secular bear cycle but it can (not always) have lower lows
..so secular theory has it that the S&P500's current cyclic bull market cycle should the peak around 1500 area ....but theoretical and practical are sometimes different because there ain't no such thing as a perfect world...occasionally an abnormal event happens (big profits increases) and that was the case with the Aords secular bear cycle before the year 2008 which creating higher highs....

Note: It's important to understand that research has proved that the performance of the economy is no better off nor no worse during either Bull or Bear secular cycles. However a high inflationary period is a characteristic feature of a late stage mature Secular Bear Phase.

NOW the Million Dollar Questions..The Aords 2004 - 2007 freak show is over and it is still in the secular bear cycle so, which top do we expect the next cyclic bull market to peak at, the 5000 top or the 7000 top..the distance traveled is showing that the secular bear is close to ending (Annualised PE below 10 for a length of time longer than an adverse event happening) but probably could have another cyclic bull and bear cycle left to go yet before the secular change.

Referring to the Annualised PE Ratio distance traveled..the Aords secular bear market cycle is at a more mature stage than the US markets at this moment in time...but an adverse event could change this.

Dont be fooled by the charts upward median line (suggesting 7000 is easily achievable)..normally (in theory) the median lines are horizontal or slight downtrending during the secular bear cycles.....but Aords is (or was) not normal this (secular) time around.

My Annualised PE Ratio chart is a bit dated and it is for the ASX200...maybe if we ask nicely and say Please!! Winner69 may give us an updated version :)

http://i458.photobucket.com/albums/qq306/Hoop_1/Aords11082012-1.png

http://i458.photobucket.com/albums/qq306/Hoop_1/ASX200PERatiochart-1.gif

[winner69]

Heres the All Ords PE chart from Nicholsons data Hoop


Draw some lines on it and see what you make of it ..... are we in the early stages of a secular bull market ... if so that was a very short secular bear market through to 2008 eh

Love to see your lines mate

[Hoop]

see http://www.sharetrader.co.nz/showthread.php?6971-All-Ords-Index&p=381060#post381060

[4be]

Often a secular bear change can be seen on an index chart when it usually coincides with the start of a cyclic bear market. Looking at the Aords index chart below an oddity happened, the secular Bear cant be seen because it started during a cyclic bull market.

Secular Bulls and Bears are not measured by the market index they are measured by the market Annualised PE Ratio..
Secular Bull cycles can last for 25 years as it did I think for the Aords 1974 -1999. The average Secular bear cycle is about 16 year.
However secular cycles are measured by distance traveled not by time ..on rare occasions a secular cycle could end very early (a few years)due to a large event.

Usually the market index reaches higher highs and has higher lows during a secular bull cycle.
Usually the index wavers within a trading pattern (flat tops) during a secular bear cycle but it can (not always) have lower lows
..so secular theory has it that the S&P500's current cyclic bull market cycle should the peak around 1500 area ....but theoretical and practical are sometimes different because there ain't no such thing as a perfect world...occasionally an abnormal event happens (big profits increases) and that was the case with the Aords secular bear cycle before the year 2008 which creating higher highs....

Note: It's important to understand that research has proved that the performance of the economy is no better off nor no worse during either Bull or Bear secular cycles. However a high inflationary period is a characteristic feature of a late stage mature Secular Bear Phase.

NOW the Million Dollar Questions..The Aords 2004 - 2007 freak show is over and it is still in the secular bear cycle so, which top do we expect the next cyclic bull market to peak at, the 5000 top or the 7000 top..the distance traveled is showing that the secular bear is close to ending (Annualised PE below 10 for a length of time longer than an adverse event happening) but probably could have another cyclic bull and bear cycle left to go yet before the secular change.

Referring to the Annualised PE Ratio distance traveled..the Aords secular bear market cycle is at a more mature stage than the US markets at this moment in time...but an adverse event could change this.

Dont be fooled by the charts upward median line (suggesting 7000 is easily achievable)..normally (in theory) the median lines are horizontal or slight downtrending during the secular bear cycles.....but Aords is (or was) not normal this (secular) time around.

My Annualised PE Ratio chart is a bit dated and it is for the ASX200...maybe if we ask nicely and say Please!! Winner69 may give us an updated version :)

http://i458.photobucket.com/albums/qq306/Hoop_1/Aords11082012-1.png

http://i458.photobucket.com/albums/qq306/Hoop_1/ASX200PERatiochart-1.gif


Thanks for the reply Hoop,

Interesting discussion, I have just re read the whole thread on this. I recently read Matthew Kidmans books and can't remember anything about the annualised p/e ratio factor in his definition of secular markets (more along the lines of formation -in hindsight) so the falling P/E since early 2000's makes sense for a secular bear on the XAO.

[winner69]

As expect Ben rides into town and breathes a bit of life into the market and keeps it alive for a bit longer

Up up and away .....1500 tomorrow and then 1600 ....and then???

[Hoop]

As expect Ben rides into town and breathes a bit of life into the market and keeps it alive for a bit longer

Up up and away .....1500 tomorrow and then 1600 ....and then???

and then????...no more Ben

[ananda77]

Trader Update -data point 17 September 2012-

Charts: http://www.spx500dailyindextracker.blogspot.com
...US Indices, especially the small cap US Russell 2000, now reaching into over-extension - high risk trading environment for an intermediate trading top forming

Charts: http://www.spx500dailyindextracker.blogspot.com
...closing below the SPX 500 *1440 signals weakness with high risk of further downside to challenge the 21 August 2012 High *1426.48


Kind Regards

[ananda77]

Hoop:

...given the distortions created in markets by QE's, especially perceptions of inflation/hyperinflation just around the corner, am thinking that sentiment indicators could have an edge over other technicals at present. Your opinion, and I know, if there is evidence for that, you may be the one who could back it up or not by research

Kind Regards

[Hoop]

Hoop:

...given the distortions created in markets by QE's, especially perceptions of inflation/hyperinflation just around the corner, am thinking that sentiment indicators could have an edge over other technicals at present. Your opinion, and I know, if there is evidence for that, you may be the one who could back it up or not by research

Kind Regards

Hi Ananda.
I take the view with TA charts/indicators that Mr Market has everything factored in...E.g I don't know all the news when analysing a 1984 chart so I take the same view that I don't need to know all the news in analysing a chart now in 2012.... therefore ignore everything that's not on the charts ..except I'm still undecided what to do with flash crashes.
Which are the best indicators??? Charts have individual behaviours some TA indicators work well on one chart and badly on another...I guess sentiment indicators apply as well.

Ananda which sentiment indicators do you refer to There are huge number of tradeable instruments out there that can be used The VIX is the most commonly used one I can think of...there's a lot of bull /bear ratio type funds... options and call /puts type stuff as well.

I recall somewhere that sentiment indicators may have a quicker reaction time to a possible trend change than that of TA indicators.

I seldom use sentiment indicators unless they are an option on a software charting program mainly because I have become lazy.
I don't know most of the codes anymore and new ones pop up all the time.

I have got over spending heaps of time pouring over zillions of indicators ...I have a few favourites that have treated me well so I tend to stick these nowadays and apply the KISS strategy.

The Charts below
I did a simple analysis involving an old timer instrument The % of stocks on the New York Stock Exchange that are above their MA200 line (NYA2000R)
To make this so-called sentiment indicator (NYA2000R) more potent I used 3 TA indicators on it. MA50 ROC and KST (know sure thing)
The two charts below: the first is the sentiment indicator NYA2000R index with TA buy/sell signals
...............................the second chart is the S&P500 and I added NYA2000R TA buy/sell signals to it

The S&P500 is showing no sentiment sell signals yet ....so according to the NYA2000R percentage index the S&P500 rally looks likely to continue.

Ananda I have used slow indicators on a long term chart as my example...I used to be a long term FA investor and habits are hard to break....However there seems to be plenty of shorter term stuff around for your shorter type of investment strategy...Even my example would probably still work OK using 60 minute bars I would assume the signal responses would be quicker too.

I noticed perusing around the internet that some are combining several sentiment indicators together to create a Z type value and selling the package.

Now watch MR Market prove me wrong...eh:p The chart result below is using only one sentiment indicator (NYA2000R)...Using only one indicator and relying on it is always a dangerous investment strategy.

Ananda I've probably not totally answered your questions and probably gone off the track somewhat :) ...I don't think there are any right or wrong answers here and preferences would probably differ with each cycle. With the huge amount of resources out there on the global market I have no idea which works better with what....

http://i458.photobucket.com/albums/qq306/Hoop_1/NYA2000R17092012.png

http://i458.photobucket.com/albums/qq306/Hoop_1/SP50017092012.png

[ananda77]

Thank You Hoop, will take some time to read your text carefully - guess what bugs me most at present is the fact that we have a 'long' market only, most likely interrupted by boring sideways trending action

My trading system -regression trend overlays in different time frames- has been very reliable in the past, but guess with the new market reality at present will only be reliable in the short term hourly time frame, since in the longer time frames, the market will always be close to ovebought or overbought

Guess, for a couple of years the QE madness will keep makets supported, but at some stage in the futue, there will be a top. Therefore, have started looking for an indicator that signals an super extreme overbought condition. Now sentiment would have to be at super extreme levels with no bears in sight for a long mile. Another, rather conservative indicator which would be suited for the task, would be the DMI+/DMI-/ADX-system with the DMI+>45_DMI-<10_ADX>45 !!in the monthly timeframe!! in combination with the regression trend overlay system spanning a 5- to 10 year period

Kind Regards

[ananda77]

Trader Update -data point 20 September 2012-

Charts: http://www.spx500dailyindextracker.blogspot.com
...the SPX 500 market remains in an intermediate overbought condition while small caps leading short term weakness together with a crash-like rout in oil - based on exteme imbalances in the markets, one thing is fo sure: the Fed timing of QE3 into an overbought market sucks big time - a sell down to challenge the 21 August 2012 High *1426.48 with futher downside potential into the *1400 level would clear the overbought condition and make way for the next rally up into all time Highs past the presidential election

...a sell-off would be consistent with a 4% drop in the SPX 500 the last time the Fed announced QE2 on 3 November 2010

Charts: http://www.spx500dailyindextracker.blogspot.com
...the descending VIX signals another plausible scenario that has the SPX 500 market in a sideways move into its apex - the end of the presidential election week- before a break-out would determine future direction

...at this stage, there is simply no alternative to some potection to mitigate the risk in a trading environment fraught with extreme imbalances and a Fed timing that sucks big time


Kind Regards

[Hoop]

............ Another, rather conservative indicator which would be suited for the task, would be the DMI+/DMI-/ADX-system with the DMI+>45_DMI-<10_ADX>45 !!in the monthly timeframe!! in combination with the regression trend overlay system spanning a 5- to 10 year period......


The DMI /ADX happens to be one of my favourite indicators....It's treated me well :)

[Hoop]

The market is retreating from its top....1442 down 15 (-1.02%) Media talking about bull market corrections...

Too early to tell chartwise
That previous NYA200R chart I posted is unable to pick bottoms but seems good (so far) at picking near tops and it hasn't triggered a top yet ...indicating the rally could still be intact..(?)

http://i458.photobucket.com/albums/qq306/Hoop_1/SP500NYA200R24092012.png
http://i458.photobucket.com/albums/qq306/Hoop_1/SP50024092012.png

[ananda77]

Trader Update -data point 26 September 2012-

Charts: http://www.spx500dailyindextracker.blogspot.com
...finally, concerted action to correct an extreme overbought situation in the SPX 500 market as the index got pushed lower into the first serious short term support range close to the 7 September 2012 High *1437.92

Charts: http://www.spx500dailyindextracker.blogspot.com
...institutional selling spiked into last weekend with just a bit more selling into yesterdays Close - so the selling rout did not happen unexpected with a crowd unable to support a market without institutional buying support

Charts: http://www.spx500dailyindextracker.blogspot.com
...in the hourly frame, the market hit extreme oversold and may consolidate at todays closing level for a while

Charts: http://www.spx500dailyindextracker.blogspot.com
...but, in the intermediate daily, more work needs to be done to work off the overbought condition further in the SPX 500 market

...as a result, since the overbought condition in the SPX 500 market just started to correct, there is a good chance for a follow through selling action to challenge the 21 August 2012 High *1426.48 with futher downside potential into the *1400 level - however, protection needs to reflect a highly likely 'long' market into new all time Highs and therefore the sell-side protection should slowly give way to a positive biased protection level, each time the index reaches into another support level

Kind Regards

[ananda77]

Trader Update -data point 2 October 2012-

Charts: http://www.spx500dailyindextracker.blogspot.com
...consolidation/accumulation in the 24 August 2012 High *1426.68_7 September High *1437.92 will keep the bullsh outlook alive in the the SPX 500 market - but note! for the last 14 days, institutional investors have continued to reduce their exposure and currently run neutral in the market - by the way, small caps upside remained rather subdued on attempted rally moves for the last 14 days

Charts: http://www.spx500dailyindextracker.blogspot.com
...the VIX keeps the *14 bottomline leaving this bull in the weak box compared to rally moves during the 2006/2007 bull ticking along between *9_*14

...as a result, -CAUTION- a VIX trading up past the *18 level with a SPX 500 market unable to support *1440 would signal further weakness ahead as institutions, fund managers, money managers would keep pushing for lower entry levels

Kind Regards

[ananda77]

Horrifying, Graphic Video of Iranian Leader Savagely Abusing Jews
http://www.globalresearch.ca/horrifying-graphic-video-of-iranian-leader-savagely-abusing-jews/

Kind Regards

[Hoop]

No sell trigger yet on my experimental NYA200 sediment indicator... but caution as 2 of the 3 indicators have fired off but need all 3 to fire for the sell trigger.
Therefore no correction in progress yet (just weakness)...no chart formation breaks yet.... Points to watch 1419... and as A77 pointed out the 1438

http://i458.photobucket.com/albums/qq306/Hoop_1/SP50003102012.png
http://i458.photobucket.com/albums/qq306/Hoop_1/NYA200r03102012-1.png

[ananda77]

Trader Update -data point 16 October 2012-

Charts: http://www.spx500dailyindextracker.blogspot.com
...so far, the SPX 500 market successfully bounced off the upper level in the *1400_*1430 support zone coinciding with the rising 50-dsma current *1429.36, setting up the 2 April 2012 High *1422.38 as short term pivot support - today's bounce passed through the 12 October 2012 High *1438.43, but unfortunately with today's High *1441.31 did not make it passed the 3 October 2012 Low *1441.99 - today's bounce looks corrective rather than game changing

Charts: http://www.spx500dailyindextracker.blogspot.com
...as a result, the market remains mired in weakness below trendline resistance current *1468 in the daily frame while institutions remain in distribution - until the market takes out *1468 with institutional support, challenges to the lower level in the *1400_*1430 support zone coinciding with a challenge of the rising 200-dsma current *1370.33 remain distinct potentials

Kind Regards

[Hoop]

There's been talk for a while now about a market correction...which until now has failed to happen. Poor earning results is expected news so the market has already factored in what is expected to happen.
TA wise the S&P500 chart is still intact ...but...the chart is showing trader nervousness by it sitting on the edge of a cliff, so any unexpected bad news will be the trigger to push it over the edge. 1419 is the support line TA trigger, so this is the area to watch...

My experimental sediment indicator has fired all 3 sell signals however one is still very marginal (orange) if there is any downward movement tomorrow onward I will consider it RED and then the chances of an expected Wall St market correction would be high.....a drop of between 10 - 15% is common for a bull market correction
EDIT ..SP500 chart is today's (late intraday) Closed 1434 up 1 (+0.06%) NYA200r is fridays chart
http://i458.photobucket.com/albums/qq306/Hoop_1/SP50022102012.png
http://i458.photobucket.com/albums/qq306/Hoop_1/NYA200r19102012.png

[ananda77]

Trader Update -data point 23 October 2012-

Chart: http://www.spx500dailyindextracker.blogspot.com
...the SPX 500 index closed at *1433.82, a fraction below its (still) rising 50-dsma current *1434.03 after bouncing off the 2 April 2012 High *1422.38 with a intraday Low *1422.06 in late trading - the violation of the 2 April 2012 High *1422.38 causes concern as institutional investors remain stubbornly sitting at the sidelines leaving inflowing liquidity boosts in the realm of the HFT-team - the market appears likely to continue to yo-yo until the election result becomes clear or earnings motivate institutions to take the plunge and support a market featuring a below average P/E around the *14-mark

...as a result, Closes above the 50-dsma paint a bullish inspired scenario but continued rejection at this point will see the trade delve deeper into the green zone with potential of a 200-dsma current *1373.90 challenge

Kind Regards

[Hoop]

red.............................

[ananda77]

...usually do not sell any stock because of dividend income stream, but bought ASX200 short contracts yesterday at *4561 - am expecting an up day_consolidation tonight just to lure more people in 'on hope' - good opportunity to add short contracts

...anyway, do not think another bear cycle will happen soon and will add SPX500 long contracts starting at the *1390 level

Kind Regards

[ananda77]

Trader Update -data point 23 October 2012-

or earnings motivate institutions to take the plunge and support a market featuring a below average P/E around the *14-mark

Kind Regards

...inteersting article re: market valuation in contradiction to the P/E theory - Where Are We with Market Valuations?
http://www.gurufocus.com/stock-market-valuations.php

Kind Regards

[ananda77]

Trader Update -data point 5 November 2012-

Chart: http://www.spx500dailyindextracker.blogspot.com
...following a second failed challenge of its 50-dsma, the index closed weak *1414.20 below first line strong support *1427
while Long Term Trending Fed. Liquidity_Institutional Investors_Foreign Liquidity Inflows remained net positive, the SPX 500 long term strength is negative_down trending

...as a result, the index remains mired in weakness below its 50-dsma, but above *1400, potential for further short term upside moves remain - the index remains in a high risk condition for a break below the *1400 support

Kind Regards

[Hoop]

red.............................
This experimental warning system prediction using the NYA200r sentiment index was right again :)

[ananda77]

...nice one Hoop!!

http://i47.tinypic.com/bijv53.png ...and as expected, the SPX500 testing its 200-dsma closing *1377.51 below current *1380.71

...as result, high risk of further downside with an intermediate *1316 target after a potential rebound off its 200-dsma stops short at swing pivot *1410

Kind Regards

[ananda77]

Trader Update -data point 14 November 2012-

...todays fail *1390 together with a potential negative Close (market still open at present) adds weakness to a nascent attempt to consolidate just below *1390 resistance. Chances are there will be another attempt on *1390 following todays soft accumulation pattern, but unless *1390 is taken out confirmed, bets remain to the downside

Kind Regards

[ananda77]

Trader Update -data point 16 November 2012-

Chart: http://www.spx500dailyindextracker.blogspot.com
...the SPX 500 now entered the July 2011 *1350 support range with 81% of very strong stocks negative and a 200-dsma on the verge of breaking negative as well a 10% correction so far from the *1470 Top - intraday trading shows accumulation around the 2011 July Highs

...as a result, good potential for a short term bounce off support for another challenge of the March 8 2012 *1365.45 Low which could lead to a renewed challenge of the 200-dsma current *1382.00 if successful - reclaiming of the 200-dsma would indicate, the market is seriously considering ending the current correction
-on the flip side, failing *1365 straight or the 200-dsma, introduces high risk into the market for more downside to the *1300 level at a minimum

Kind Regards

[dumbass]

http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER&p=374444&viewfull=1#post374444

even though a little sceptism from the boys, its trucking a long quite nicely , 1500 is not too far away, but could be a good time to take profits at the upper trendline.

1290 +1310 long 2 trades 260 + points

i took profits on the upper trendline and would now like to make the case for another long term long entry.

http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER&p=380801&viewfull=1#post380801

the market has come off in aggressive fashion but there are a few technical clues which make provide a low risk entry to the long side.

its a risky trade and a little more confirmation would be good but risk is defined and profit would be huge in relation to risk so worth a look.


from the technical theory i trade with there has been five waves up from the june low which means a 3 wave correction will follow.

the strongest reversal point for the 3 wave correction will occur at the 61.8 fib of the 5 wave move this occured and price respected 1343 a day ago.


looking at the internal wave structure of the correction what i look for is strong fib realtionships between the waves to give my count more credence.

we have C = 2.61 A B= 76.4 A c= 1.61 a v = 1.61 i v = .61 i-iii all within 1343 pivot

so im long from friday 1345 stop loss of 7 points from pivot 1336 with a target of new highs.

any thoughts ??



42114212

[dumbass]

i took profits on the upper trendline and would now like to make the case for another long term long entry.

http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER&p=380801&viewfull=1#post380801

the market has come off in aggressive fashion but there are a few technical clues which make provide a low risk entry to the long side.

its a risky trade and a little more confirmation would be good but risk is defined and profit would be huge in relation to risk so worth a look.


from the technical theory i trade with there has been five waves up from the june low which means a 3 wave correction will follow.

the strongest reversal point for the 3 wave correction will occur at the 61.8 fib of the 5 wave move this occured and price respected 1343 a day ago.


looking at the internal wave structure of the correction what i look for is strong fib realtionships between the waves to give my count more credence.

we have C = 2.61 A B= 76.4 A c= 1.61 a v = 1.61 i v = .61 i-iii all within 1343 pivot

so im long from friday 1345 stop loss of 7 points from pivot 1336 with a target of new highs.

any thoughts ??

nice, still going at the bell

[ananda77]

...am watching *1390 behaviour very carefully - a decisive rejection there is super bearish and vice versa

Kind Regards

[dumbass]

i will never look a gift horse in the mouth i'll take my profit here at 1385 , still some work to do to truly convince me of a bullish break. i am never a great fan of the spike rally , i would like to see a more signifcant base build around the 1343 pivot.

[Hoop]

i will never look a gift horse in the mouth i'll take my profit here at 1385 , still some work to do to truly convince me of a bullish break. i am never a great fan of the spike rally , i would like to see a more significant base build around the 1343 pivot.
Well done Dumbass you nailed it....

[dumbass]

Thanks for the kind words

[ananda77]

Trader Update -data point 22 November 2012-

http://i47.tinypic.com/2rppb3k.png

...initial decisive action on 20 November 2012 *1390 pushed the price below its 200-dsma, but the market supported *1377.04 and drove the index back into the *1380/*1390 congestion range with a *1387.81 Close just below the *1390 Psych barrier
...todays Close *1391.03 is not exactly awe inspiring since the intraday High *1391.25 still sits below the 9 November 2012 High *1391.31 and the 30 July High *1391.74 - however, viewed in conjunction with long term trending Fed. Liquidity_Institutional Investors_Foreign Liquidity Inflows extending in expansion territory, todays Close keeps a short term bullish bias alive and well

...as a result, base building in the *1380/*1390 congestion range signals the markets resolve to push the index further up into the *1400 resistance zone with a view to challenge the 50-dsma current *1426.80 - to keep this outlook alive, *1377.04 needs to hold - a violation of *1377.04 signals weakness ahead and a Close below *1365 and the mouse is dead

Kind Regards

[Hoop]

It had 5 attempts to crack that 1391 level today 4 failed and the market closed on its 5th attempt...Hmmm.

[peat]

turkeys acting as resistance? ;+)

[ananda77]

It had 5 attempts to crack that 1391 level today 4 failed and the market closed on its 5th attempt...Hmmm.

...agree and strategy is easy: if portfolio is long, short protection necessary at this pivot till direction is clear

Kind Regards

[dumbass]

looks like price breaking down , but bigger picture indicates 5 waves up which signals further gains for sp500.

short on at 1394 very tight stop at 1396 targeting 1374 or maybe 1362 and then look to enter long again.

[ananda77]

...short-term support now sits *1390 - another challenge *1390 can not be ruled out once market volume back to normal; especially consider the current advance during an extended holiday WE.

Kind Regards

[ananda77]

What if Money didn't matter?
http://pragcap.com/what-if-money-didnt-matter

Kind Regards

[winner69]

This guy says 40% to 70% overvalued

Some good secular stuff here as well hoop

http://hussman.net/wmc/wmc121126.htm

[ananda77]

Trader Update -data point 29 November 2012-

charts: http://www.spx500dailyindextracker.blogspot.com
...following script, the push into the *1400 resistance followed base building apparent in the *1380/*1390 congestion range - the 28 November 2012 index traded higher intraday *1409.84 accumulating off *1385.43, just ticks above current 200-dsma *1384.09
...as a result, further upside is expected to challenge the 50-dsma current *1423.36 as a minimum with view to test descending trend line current *1459.87 drawn off the 14 September Year 2012 High *1474.51

Kind Regards

[ananda77]

Trader Update -data point 10 December 2012-

charts: http://www.spx500dailyindextracker.blogspot.com
...the SPX 500 traded past its *1416 pivot to close the 7 December 2012 Trade *1418.07 following apparent support *1398.15 on the 5 December 2012 - further upside is expected for a test of the descending trend line current *1456.17 drawn off the 14 September Year 2012 High *1474.51

...the bull market continues to limp along - just- and hangs on by a thread at this stage

Kind Regards

[dumbass]

i have spent some time over the last few days looking over the charts and it does look like the storm clouds are gathering , it looks like there is a fair chance we are back into a bear market.

next couple of weeks should confirm !

[ananda77]

Trader Update -data point 3 January 2013-


http://www.spx500dailyindextracker.blogspot.com
...WOW...right up for the 2012 TOP test

http://www.spx500dailyindextracker.blogspot.com
...following Long Term Trending Fed. Liquidity_Institutional Investors_Foreign Inflows since November 2012, the scary moment happened in a short break of the short term support line - comparing liquidity inflows with institutional buy_sell patterns for the same period, it has become abundantly clear, the Fed QE3 program, like before provides the CASH to not let this market go to waste...well until an unemployment rate of 6.5%

Kind Regards and A Successful New Year

[ananda77]

Trader Update -data point 9 January 2013-

http://www.spx500dailyindextracker.blogspot.com
...the SPX500 consolidates below the 2012 *1474.51 Top with the 21 December 2012 High *1444_the 21-dsma current *1433.96 (= the 50% retrace of *1467.94/*1398.11) as attractive immediate short term targets

...a successful defence of the target area will propel the index past the *1474.51 Top with an intermediate *1521 in view

...failing the immediate short term targets signals weakness followed by a test of the 2 January 2013 Low *1426.19 as a minimum

Kind Regards

[ananda77]

SPX 500 http://i49.tinypic.com/4fg5i.png

...a break for the market in process -in for a bit of protection-

Kind Regards

[ananda77]

Trader Update -data point 21 January 2013-


http://www.spx500dailyindextracker.blogspot.com
...past the 21 December 2007 High *1475.83, Friday's *1485.98 slightly above Thursday's *1485.16 - bullish consensus determined to tackle the 14 December 2007 High *1523.57 ahead

http://www.spx500dailyindextracker.blogspot.com
- sweet and while the break in the market continues to prepare, the short term overbought last week correcting to reach out towards the 14 December 2007 High *1523.57 ahead

http://www.spx500dailyindextracker.blogspot.com
- however, while the market may continue its bullish ascend towards the *1523 mark, the market is exuberantly complacent with close to 91% stocks in positive strength

http://www.spx500dailyindextracker.blogspot.com
- while inflowing liquidity eats up most selling since November 2012, institutions have been sellers into the trend

...as a result, instead of holding up the basket for more to come securing the harvest for a downpour appears to make sense

Kind Regards

[ananda77]

Trader Update -data point 5 February 2013-

http://www.spx500dailyindextracker.blogspot.com
...moving along, the index traded past the 7 December 2007 wkly High *1510.63 with yesterday's High *1514.41, on way to take out the wkly 14 December 2007 *1523.57 as the next upside target ahead - as the market has been trading higher, availability of stocks has declined to the extend that only a pullback can provide the logic for the market - currently testing trend line support *1494_1500 (drawn off the 8 January 2013 Low *1454.63)

http://www.spx500dailyindextracker.blogspot.com
...long trending Fed. liquidity_institutional investors_foreign liquidity inflows have supported the advance at very high levels and as long as inflow levels remain above support, the market will extend into new all time Highs above the 5 October 2007 wkly High *1576.09

...for the time being, a sideways correction above the 21-dsma current *1484.54 will improve the availabilty of stock - however improbable, a decisive break below the 21-dsma would indicate further weakness ahead and challenge the continuation of the current bullish advance

Kind Regards

[ananda77]

Trader Update -data point 20 February 2013-

...maybe-maybe not the market prepares for an exhaustive, violent up-move to hit against the October 2007 wkly High *1576.09
...however. at this stage, the market definitely not a bargain and risks are very high for a corrective move

Kind Regards

[Hoop]

Last warning post #1291 23rd October 2012 (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page87)

Warning..... using my experimental NYA200r indicator (one day out of date).
It needs all 3 red arrows to forecast a correction...so far two have fired red on the NYA200r chart


SP500 tested and bounced off its 1500 (1497/8 ish) short term support intraday today (21 feb)..Closed at 1502..Chartwise the SP500 is still intact, no breaks yet.

Results so far with this experiment shows very accurate sell warning just before the decline starts (recorded only one failure so far)...however the buy back in signals are late.


http://i458.photobucket.com/albums/qq306/Hoop_1/SP50021022013.png
http://i458.photobucket.com/albums/qq306/Hoop_1/NYA299R200220130.png

[ananda77]

...after the 2008 spx500 Low. (2 standard definitions below long running trend), price action now most likely testing the 15-yr long running trend line just above the *1481 level - returning below the line confirmed will introduce some violent down side price moves - watch out!!!!
...on the flip side, hitting past *1530 confirmed, will see new all time highs ahead

Kind Regards

[Hoop]

Two weeks since my last orange warning....not red yet
Has the warning past with the S&P still rising.....NO its still there.... the third indicator is in suspended animation ...It needs all 3 red arrows to forecast a correction...so far two
have fired red on the NYA200r chart

SP500 broke its 1498 short term support and fell, tested and bounced off the more important 1475 medium term support ....Chartwise the SP500 is still intact, no breaks yet.


http://i458.photobucket.com/albums/qq306/Hoop_1/SampP50007032013.png
http://i458.photobucket.com/albums/qq306/Hoop_1/NYA200R080320130.png
Results so far with this experiment shows very accurate sell warning just before the decline starts (recorded only one failure so far)...however the buy back in signals are late.

[winner69]

Bit more to yet

http://www.chartoftheday.com/20130313.htm?T

[Hoop]

Bit more to yet

http://www.chartoftheday.com/20130313.htm?T

Interesting bull cycle comparisions Winner.....I've noticed in my readings that there is often a large sudden correction just before the end of the bull cycle....it recovers quickly
and rises to form a new high (The last) but not as high as those other rallies in the same bull cycle..it should disappoint but the Euphoria and optimism of the booming economy
everyone assumes its only a pause in the new rise up ...
This fools many into thinking that the party is far from over.
I was pleased to see that the chart of the day showed this reoccurring event very clearly

http://i458.photobucket.com/albums/qq306/Hoop_1/ChartPostmassiveBearMarketrallies.gif

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Still in Warning caution stage.

My post post 8th March) showed 2 red out of 3... we waited for the 3rd shoe to drop and when it did the other two red indicators turned blue then red and orange (neutral)
As of the 28th March the Warning bells of 3 clear red arrow breaks still haven't appeared together....Note: It may be showing the edge of the cliff stuff on the NYA200r..yet
the S&P Chart is showing no signs of reversals nor break downs.......Hmmmm .interesting!!!

EDIT: 2/4/2013..On the chart notice the lowering Volume trend.


http://i458.photobucket.com/albums/qq306/Hoop_1/SampP50028032013-1.png
http://i458.photobucket.com/albums/qq306/Hoop_1/NYA200R28032013.png

[winner69]

JUST AS WELL THIS TIME IT'S DIFFERENT - ELSE CARNAGE - BUT NO WORRIES THIS TIME

from our mate Hussman who has been talking like this for years -

Overvalued, overbought, overbullish. When in history have we seen the Shiller P/E (S&P 500 divided by the 10-year average of inflation-adjusted earnings) above 23, the S&P 500 over 60% above its 4-year low and 10% above its 52-week average, with investment advisory bears below 20% for at least two weeks running? Three times: the April 2010 peak, the March-May 2011 peak – both followed by corrections approaching 20% – and today. Even if one ignores the historical evidence suggesting the potential for significant bear market losses over the next couple of years, speculators should be aware that present conditions have been hostile even in the context of the recent bull market advance.

[winner69]

OMG just read the rest of the article ...he reckons back to 2009 levels ... JUST AS WELL THIS TIME IS DIFFERENT EH

Haussmann went on to say this -

We strongly expect the ending of the present market cycle to wipe out the majority of market gains since 2009 (even a standard, run-of-the mill bear market wipes out more than half of the preceding bull market gain). We already know that the market is strenously overvalued, overbought, and overbullish. We know that these conditions have historically made trend-following measures unreliable. What we don’t know is precisely when today's compressed and complacent risk premiums will crawl or spike higher, and one thing we’ve learned from testing hundreds of investment methods over a century of data is that many approaches that perform beautifully over the long-term would often have felt intolerable at a day-to-day resolution. To some extent, that’s the problem with much of the research and evidence that we’ve presented involving long-term data.

[winner69]

Echoes back to the great depression ...

jeez cheer up belg ... this time its different

Like the governments the world over are stealing depositers money ... in Cyprus they just openly steal it .... places liek UK and USA are more sophisticated and subtle and the punters don't notice their savings slowly eroding from things like QE etc - theft in a more subtle way

[Hoop]

All arrows on the NYA200r 5th April chart are now red...Still no S&P500 chart breaks....(Post #1333).... The KST indicator is just marginally red (still indecisive) I have factored in the rule of clear decisive breaks before signaling a possible correction (reversal)...This very simple experimental method I use has had just one failure so far (~90% accuracy).

...It's still a caution but at a heightened level.
The MA50/1530 support cards is now the only cards holding up the house (of cards)

[Hoop]

Bottoming process Hoop ... Them bond holders are getting just a tad more nervous and have started diversifying ...

Yep...

I have added DR Copper as it has signaled that the world major economies could be turning to crap ....

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP50008042013.png

[winner69]

A guru called Sornette has a thing called a “log-periodic bubble” which arrives after a series of increasingly frequent but shallower dips, ending in a nearly uncorrected upward ramp in which virtually every dip is purchased as soon as it emerges. (fancy way of saying the dips bit the opportunities come quite frequently)

Here's the current state of the S&P

[winner69]

Here is what happened to the DIJA when it experienced a Sornette bubble a few years ago

Predicted recent collapses in the price of oil and gold as well .... more pretty pictures
http://www.hussmanfunds.com/wmc/wmc130415.htm

[Hoop]

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Still in Warning caution stage.

My post post 8th March) showed 2 red out of 3... we waited for the 3rd shoe to drop and when it did the other two red indicators turned blue then red and orange (neutral)
As of the 28th March the Warning bells of 3 clear red arrow breaks still haven't appeared together....Note: It may be showing the edge of the cliff stuff on the NYA200r..yet
the S&P Chart is showing no signs of reversals nor break downs.......Hmmmm .interesting!!!


Yesterdays steepest drop of the year failed to break down any technicals on the SR500 My accompanying % of companys above the New York 200 moving average index indicators still show 2 out three clear breaks...
For six weeks now this methodology has been showing a CAUTION warning but still no indication of a S&P 500 reversal yet.

[Hoop]

Yesterdays steepest drop of the year failed to break down any technicals on the SR500 My accompanying % of companys above the New York 200 moving average index indicators still show 2 out three clear breaks...
For six weeks now this methodology has been showing a CAUTION warning but still no indication of a S&P 500 reversal yet.

Another drop today to close at 1552 (-1.43%)

Still no technical breaks... so no sirens going off yet atm...just increasing degree of caution.

My accompanying % of companies above the New York 200 moving average index indicators still show 2 out three clear breaks (red)...but the third is turning red without a clear break....just the S&P500 MA50 indicator left to confirm the Warning System and it is still blue (turns red at 1540)...
Getting closer to the edge of the cliff though.....a drop to under 1540 may trigger the technical sell signals and turn my system totally red. Under 1530 it will definitely set off the sirens to "get the hell outa there".

[Hoop]

But why would this happen, Hoop? ... I can't find anything new (or getting worse) from what's been well known for at least 12 months.

I think this is a combination of a bunch of minor factors (profit taking, May, NK, Europe, Japan, Boston, etc.) that is causing the weakness ... Just can't find anything significant (at present) to stop the bull.

The one thing that could upset things is a full blown round of "beggar-my-neighbour" currency devaluations ... ala Global QE.

Makes me think I'm missing something ... (clearly I am if all signals go red!) ... ;)

The NYA200r indicator I'm using is known as a sentiment indicator... Sure nothing much has changed in USA in 12 months the business cycle is still booming ahead but the Equity bull cycle has breathers when the market runs ahead of itself and becomes temporarily overvalued which usually results in av10% bull market corrections every now and then..10% does hurt and if an reasonably accurate warning system can be found it would add to investors profit efficiency and lowers investor risk immensely.....

Whether this time it could be a cycle change or just another bull market correction I can't say...however using other secular disciplines/law of averages it would seem that the odds of a cycle change is getting rather high as the cyclic bull is 4years old and as the cyclic bull lifespan averages 3.8 years it can considered it is on bonus time now.. extreme old age can be 6 to 7 years but that is extremely rare and more rare if not impossible when there are secular bear pressures at work as well...

On a more FA approach...markets are more forward looking...investor anticipation on what is going to happen in 6 months time usually effects the "now".
A good article arrived in my email this morning..Titled .."Are earnings Expectations Realistic..courtesy of John Mauldin's investorinsight (http://www.mauldineconomics.com/outsidethebox)If you are not a subscriber you may not be able to read all of it....can join for free...well worth the finger exercise. Even though earnings may rise to more record breaking heights its slow down from the unsustainable growth rate may be disappointing to what the investors are anticipating now.
Also you have the sharemarket physics to deal with....fussier investors chasing high yields lowering the Av PE Ratio the threat of an ending of QE thereby increasing the strength of other financial competitors resulting in the decreasing the amount of available money investors are willing to invest with in Equities..Investors more adverse to accept more debt due to low inflation levels and psychological niggling of possible deflation issues.....etc...etc

[winner69]

Hoop one thing that struck me in that article you linked was the table that showed earnings etc 4Q earnings (over the S&P500) were only up 0.4% on the previous year .... and the forecast earnings for 1Q13 are DOWN 2.3% on pcp

So its all how things go against 'consensus' eh .... so it all a big con game eh

[winner69]

Who needs trend lines

From http://www.hussmanfunds.com/wmc/wmc130422.htm

Just as well this time its different eh

[Hoop]

Who needs trend lines

From http://www.hussmanfunds.com/wmc/wmc130422.htm

Just as well this time its different eh.

Yep...we wont see a bull leaping through the air on a pogo stick this time..pogo sticks are sooooo out of fashion these days.

[Hoop]

Jeez, useful article. Much appreciate the re-post.

Hussman is huge...he's a legend
Back in 2007 Winner noticed I was interested in long term cycles we both sensed a market change for the worst but Winner must have thought I was in need of some serious guidance..having read some of my earlier posts lately I realise now (but not then) he was right :) ...Back then Winner introduced me to some very valuable websites which included some material that was so heavy it took me about a hour to read one page ..I then realised I was on a steep learning curve:)

Hussman was on Winners list and it was a relief to read his articles they was clear and even with my small brain I was able to comprehend what he felt...It is amazes me how great experts can make things seem so easy to understand.

I still have that same article bookmarked that Winner PMed to me back in December 2007..

http://www.hussmanfunds.com/wmc/wmc071210.htm

Remember that Hussman wrote this article before the sh1t hit the fan ...the S&P500 had just came off its record high back in Early December 2007 and everyone was exuberant and expected the S&P 500 to crack the 2000 mark...there was a small scattering of permabears that were making noises as they always do,,.Hussman is not a permabear but black financial clouds were on the horizon and he knew what was causing them and the massive damage that could happen.

Hussman is again firing out warnings...

[winner69]

The market is really efficient these days .... reacts to news instantly ... even the computers show emotion

http://www.smh.com.au/it-pro/security-it/white-house-explosions-twitter-hoax-shakes-us-markets-20130424-2idbc.html

[winner69]

OMG our friend Hussman quotes this guy Albert Edwards at SocGen "is not optimistic. Last week, he reiterated his concern that the S&P 500 would ultimately establish a low at 450" Yes 450 .... not 1450

Jeez some people talk a load of crap .... but then again, just maybe, he could be right

http://www.hussmanfunds.com/wmc/wmc130429.htm

[Hoop]

OMG our friend Hussman quotes this guy Albert Edwards at SocGen "is not optimistic. Last week, he reiterated his concern that the S&P 500 would ultimately establish a low at 450" Yes 450 .... not 1450

Jeez some people talk a load of crap .... but then again, just maybe, he could be right

http://www.hussmanfunds.com/wmc/wmc130429.htm

I think the important thing to take from this article is the fact they agree that in the longer term it's possible that high company earnings are not the primary driver in the PE Ratio its the PE Ratio as a whole that is the primary driver in the Share market. There is a misconception amongst investors that increased earnings would automatically increases the share price and the S&P index..it is true in the short term but in the longer term is not always true as the author portrayed by fiddling around with the PE Ratio equation.. other secular factors are at work such as investor sentiments.

110/450 = PE 4.1..S&P 500 crash from 1600 to 450 seems a drop too far..The only couple of scenarios that I can think off for company earnings to hold at near record highs and a crash to 450 would either be a major governmental systemic crisis or a sudden jump to high inflation or both.
Using past experiences up to todays perception I find it very hard to imagine a 450 S&P index....

However you just don't know what the future holds.

If you in January 2008 walked in to Greek Stock investment company looking for a job ...And they asked you what do you think will happen to the Stock market in the next 5 years and you replied that the ASE is going to crash from over 5000 to 600 and only recover to about 1000 by that time frame....Would you think they would give you the job...HELL NO!!!!!!!!!

[Hoop]

Update from the 28 March 2013 charts... Post 1333 (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page89)

As the Warning never fired off I hadn't posted.
However with this enthusiasm of a rising of the S&P 500 index which seems to defy any bad news atm ,,it seems a few commentators think it's now bullet proof and it will keep rising ,,while the other camp think a disaster is waiting around the corner....It seems the media like the drama of up or down but not the go nowhere scenario...too boring ..eh?

Well technically from my sentiment indicators it been all drama and suspense...The S&P 500 for the last couple of months has been at the top of a cliff threatening to jump off it....In the middle of April It looked like this was going to be it with 10 toes over the edge but it decided to take one step back (FAIL) and that is where we are at atm.

so it is still a Warning Caution..no clear 3 breaks (red arrows) on the NYA200r chart and no MA50 break (red arrow) on the S&P 500 chart.

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP50029042013.png (http://s458.photobucket.com/user/Hoop_1/media/SampP50029042013.png.html)
http://i458.photobucket.com/albums/qq306/Hoop_1/NYA200R26042013.png (http://s458.photobucket.com/user/Hoop_1/media/NYA200R26042013.png.html)

[Hoop]

Hoop, as a very amateur technician I thought I might share this link with you

http://www.moneysense.ca/2010/02/09/predict-the-next-crash/

The guy at the post says the 125MA/365MA is a useful indicator of predicting crashes.

Now, I haven't the foggiest idea whether he is right or not about "crashes", but it is very interesting to note that using the above shorter 125 day chart lines, the maximum gap for the DJIA over the 125EMA has been about 1000, and about 1100 for the 125MA (just the simple moving average) . After that, we seem to get some corrections, as has indeed happened since 2010 on regular occurrences.

At the moment, we are around 850 over the 125EMA and around 1050 for the 125 day simple moving average.

Do you read much into the moving averages for the indices like this? I have chosen the Dow, because it seems to me that if there is a bigger correction coming, it will probably start there first.

http://finance.yahoo.com/echarts?s=%5EDJI+Interactive#symbol=%5Edji;range=2 y;compare=;indicator=ema(125)+sma(125)+volume;char ttype=area;crosshair=on;ohlcvalues=0;logscale=off; source=undefined;

There are a lot of interesting things that happen on a chart which as an investor you might not pick instinctively...Sparky I think you can see how some people start charting as a hobby being an amateur sleuth playing around manipulating indicators to find predictive patterns, and occasionally you do find something and you get a real buzz out of it ...can become rather adictive.
I had a look at your chart Sparky..not sure if I could handle the time period about the gap showing the next correction as you could waiting a month or two and miss out on the continuing uptrend before the correction...also like most indicators it is prone to bull and bear traps..however I did find something exciting when using the charts time slider... . The maximum gap occurred repeatably during the first 4 months of each year when the DOW was in a bull market cycle....so your chart can predict with some confidence that the sma125 and ema125 will start closing the gap with the DOW index starting next month as the DOW is again in a Bull market cycle...this could be a useful confirmation indicator.
.
I had a look at the MA125 MA365 crossings as shown in Money sense.....MA crossovers are well known to chartists and different period manipulation to suit certain share behaviours can work extremely well...Some years back I think it was Footsie?? used MA crossovers with great results ...However 125/365 seems too long a period, the time lag would be its disadvantage...On the chart I made I compared it to the lagging Coppock indicator and the 125/365 was slower than Coppock to respond so you would know the bull was around before the 125/365 crossover would trigger the alert...The 125/365 was quicker at indicating end of Bull cycle than the end of Bear cycles...Coppock was not designed to signal end of bull cycles.

The quicker the warning the better the indicator my NYA200r sentiment indicator is very quick with the crashes (about 2 days before it happens) but too late with the recovery reversals (weeks late)

Sparky your gap methodology is not used as much as it should be .... all rather interesting stuff..have a crack at refining it ...keep me posted.

http://i458.photobucket.com/albums/qq306/Hoop_1/DOW30042013.png (http://s458.photobucket.com/user/Hoop_1/media/DOW30042013.png.html)

[Hoop]

Hoop, which site do you use for Coppock charting?

I use the Incredible Chart Software ...you can download it free... here (http://www.incrediblecharts.com/)..... it come with a 30 day premium trial that gives you all the bells and whistles...If you let the trial lapse the program reverts to the free version and some of the indicators greyed out and don't function..its still a very good free program.
The chart programs do have a basic draw function..however I save the chart and open it with the "open source" Paint.net

I use the free version...I would subscribe and pay my dough if they used a decent feed for NZ data. Yahoo NZ data is suspect at the best of times...the TWR data feed is broken atm

Once your chart program is up and running NZ stocks can be accessed e.g Fletcher Building .. Y_FBU.nz ( letters not case sensitive)

[ananda77]

...risk for an imminent correction is now extremely high.

Kind Regards

[ananda77]

Yeah has me worried too and have been liquidating portions here and there. Might switch 100% into utilities and the like. AAA Bonds? No. Cash? No. Some Corp debt looks nice - so maybe.

Hi Belgarion,

...am definitely not saying that's the end of it. Price structure Long Term quite a bit of potential in it - no excessive data sets yet - sometimes in the 1750 area a different story

Cheers

[ananda77]

Yeah has me worried too and have been liquidating portions here and there. Might switch 100% into utilities and the like. AAA Bonds? No. Cash? No. Some Corp debt looks nice - so maybe.

Hi Belgarion,

...am definitely not saying that's the end of it. Price structure Long Term quite a bit of potential in it - no excessive data sets yet - sometimes in the 1750 area a different story

Cheers

[ananda77]

So far correction off 1635 has been very shallow with good support above 1620 - at this stage 1600 appears almost optimistic
...shallow does not do much to wear off long term accumulated excess (overbought) but that's maybe the Fed is prepared to give due to the wealth effect operative
...anyway, accumulating insurance above 1635 since if one does not made it so far....

Kind Regards

[winner69]

Interesting view of 'sideways markets'

You'll love it hoops

http://www.mauldineconomics.com/outsidethebox/are-we-there-yet

[Hoop]

Interesting view of 'sideways markets'

You'll love it hoops

http://www.mauldineconomics.com/outsidethebox/are-we-there-yet

Yeah Winner I did like it....His thinking methodology is similar to mine.

I wonder why, though, he calls it a "sideways market" rather than a secular Bear market?

His explanation of how during a period of increasing economic growth business profit can stall is interesting ....high profit margins being mean reverting due to new competitive players entering into the market and pulls down margins....his example Samsung entering Apple's Market...I mentioned something similar in the NZX50 thread + rising interest rate expense

Overall his outlook is very bearish...eh!

[winner69]

Haussmann points out that aggressive and persistent fed easing was the cause of the 2001 and 2008 market declines - the 50% ones


http://hussman.net/wmc/wmc130603.htm

[winner69]

This was interesting in that Haussmann article -


since 1940, when the S&P 500 has been above its 200-day moving average, the total return of the index has averaged 14.2% annually, versus just 4.5% when the index has been below its 200-day average.

S&P still above the 200 ma so alls ok at the moment

[Hoop]

“If you’re not confused, you don’t understand things very well.” — Charlie Munger, talking about today’s economy.
http://blogs.desmoinesregister.com/dmr/index.php/2013/05/04/buffett-and-munger-share-thoughts-during-qa-at-annual-meeting/article?nclick_check=1

Sums up my view too. As Arb said on the GPG thread - when you don't understand an investment you once thought you did then you're best out.

If the market keeps going for another 10 or even 20% I'll not be surprised but the recent tank of markets at the mere suggestion that QE might end soon is enough to keep me in "winding down mode". The whole thing could be going Japanese - big time!

Edited: The GPG thing (and my other dogs) remind me of 2008 ... My dogs dropped before the overall market as (i'm guessing) investors gave up and went chasing better but over priced stocks. Time to be very cautious.

Belg..the golden stock MFT was also a leading indicator it broke its magnificent run back in end Feb/early March 2007 and the NZX50 index fell to bits 7.5 months later..after plateauing out and only going an extra 3% higher hampered by double (sub-formation multiple) tops

Now in 2013 MFT has again broken down in Early March...deja vu for the NZX50 in October 2013 ??

[ananda77]

So far correction off 1635 has been very shallow with good support above 1620 - at this stage 1600 appears almost optimistic
...shallow does not do much to wear off long term accumulated excess (overbought) but that's maybe the Fed is prepared to give due to the wealth effect operative
...anyway, accumulating insurance above 1635 since if one does not made it so far....

Kind Regards

...accumulating 'long' starting today *1624

Kind Regards

[Hoop]

Update from 30th April 2013
Since the 30th April caution post with 3 warnings out of 4 which started back in March, good news returned with May showing the all clear

However last week the S&P500 has once again went to the cliff edge...3 out of the required 4 warnings have once again been triggered (red arrows) indicating CAUTION
If the S&P 500 breaks the MA50 all 4 warning will be triggered...When all 4 warnings are triggered there is a very good chance of an imminent correction within the couple of days.....

EDIT PS....This present prolonged caution threatening and retreating over a period of several months in similar so far to the one that last occurred in March to May 2011 which in the end all 4 warnings fired to GET OUT within hours of the fall..there was a second chance (right shoulder) to get before the S&P500 corrected by 20% (see Charts)

http://i458.photobucket.com/albums/qq306/Hoop_1/SPX040062013.png (http://s458.photobucket.com/user/Hoop_1/media/SPX040062013.png.html)
http://i458.photobucket.com/albums/qq306/Hoop_1/NYA200R04062013.png (http://s458.photobucket.com/user/Hoop_1/media/NYA200R04062013.png.html)

[Hoop]

Agree. I'm watching my stocks like a hawk, waiting to hit sell as soon as they start breaking. So far everything is holding above the 200, and with quite a wide divergence between the 50 and 200 on many stocks it was expected that a correction would happen sometime. I wish Trackers would post that MSI chart update - where is he?

My big concern is that Australia is really going to the dogs for reasons unrelated to QE and this time won't follow the US indices, in which case the "correction" is the start of a nasty crash.

KW I cashed up nearly all my shares (mostly NZ shares) beginning a couple weeks ago...It took me up until Tuesday 4th to sell down...I've taken a defensive position of going from 5% cash to 85% cash...although my NZX TA Target is showing only a small/mild correction and the S&P500 going from caution to extreme caution and with today's drop still not triggering a get out warning...it is getting very close to busting that last of 4 indicators, that MA50 is only 4 points away now and another 5 or 6 = 10 to allow for margin of error (TA is not an exact science :)))....I take the view that I can always buy back in when the correction end is confirmed and the old bull lives on.

I'm also watching everything like a hawk.....The NZX50 is one of the few indexes left at the moment that is in sync with Wall St (S&P500, DOW). I suspect if Wall St melts down so will the NZX50... The AORDs used to be in sync, but not since 2011.....Atm the AORDs has already reversed its trend...this is not a good sign for the NZX50 as it is Australia is NZ's top trading partner.

Sooo...Wall St it is...Both (NZX50) indexes have 4.25 year old bulls ..both these bulls are living on bonus time now (median lifespan 3.75 years).

To try and gauge Wall St performance a little closer...and to avoid complexity with throws up too many conflicting arguments ...I have added another simple updated chart....This chart below is bias to momentum and trend reversals...Chandelier Exit indicator (green line) is a trailing stop/loss indicator but it can also be used as an indicator to detect trend reversals. I have added Commodity Channel Indicator as this momentum indicator also detects trend reversals although it can not be used in isolation as it is far too sensitive and on its own fires too many false signals.

Although not technically broken, the S&P chart is showing great concern.... the Chandelier exit indicator (green line) has intersected the price is well above the S&P price line high enough to be outside its margin of error zone...It would be safe to say that today's -1.38% gap down would be due to stop/loss positions being triggered and the sensitive CCI has confirmed it......In simple terms, short to possibly some medium term investors are exiting the market.....all now hinges on the MA50...that where my Sentiment Indicators NYA200r come in to play..and they have an extremely good record so far in predicting strong correcting down trending reversals.

Also of interest are reports coming out from various Analysts with conflicting views with Mainstream Media (with historical evidence to support) that QE does not directly help the Equity Market ..The Equities uptrend is based on mass investor positive sentiments towards QE ...Apparently history has shown that in its later stages prolonged QE is to blame for the reversal back to bear market conditions....Interestingly the USA is at this later QE stage now....The thought is now that QE can not prevent an Equity market downturn once investor sentiment turns....

http://i458.photobucket.com/albums/qq306/Hoop_1/SPX05062013.png (http://s458.photobucket.com/user/Hoop_1/media/SPX05062013.png.html)

[ananda77]

Hoop:

...your *1535 support also coincides with the median price line in the 2.5yr monthly time frame in my trading system - and price always shows tendency to retreat into the median over the longer term. Its a possibility, but chances right now for that are slim imo. Basically think around *1600 as the turning point. Under *1600, will give up strategy to accumulating 'long' started *1624.
There is just plenty of worry about the continuation of the bull and technically, its whimpering. But that's all the more reason to remain bullish until north of *1750/*1800 as a minimum.

Kind Regards

[ananda77]

...Basically think around *1600 as the turning point. Under *1600, will give up strategy to accumulating 'long' started *1624.

...convincing support off *1598 to close trading *1623
(support RIGHT ON TIME to avoid 'SELL' trigger in system)
...now looking for a successful test into *1616 to catapult index higher into the *1750/*1800 extreme overbought price data set area.
Risk for a major 10-15 (%) correction off *1750/*1800 extremely high.

...on the flip side, failing *1616 introduces more weakness into the market with a high risk of another *1600 test

Kind Regards

[Hoop]

...convincing support off *1598 to close trading *1623
(support RIGHT ON TIME to avoid 'SELL' trigger in system)
...now looking for a successful test into *1616 to catapult index higher into the *1750/*1800 extreme overbought price data set area.
Risk for a major 10-15 (%) correction off *1750/*1800 extremely high.

...on the flip side, failing *1616 introduces more weakness into the market with a high risk of another *1600 test

Kind Regards

Interesting...eh Ananda

Mid day turnaround bouncing off the 1598 support and closing at 1623 just shy of its resistance at 1625....now if it closed above the 1625 resistance I may be a bit more optimistic.

....I'm of the view that the S&P 500 has reached the altitude where the secular headwinds is affecting the upside.. Market physics is in play.... increasingly more buying energy is needed for it to maintain or advance on its upward trend..

....however I do admit, a daily reversal at 1598 cant be ignored as it is has to be seen as a positive for now. The successful test has strengthened that 1598 support. Todays TA type movement helps to reinforce the view that this is an orderly profit taking period not an illogical fearful melt down...so far the market is behaving like another healthy Bull market correction

http://i458.photobucket.com/albums/qq306/Hoop_1/SPXdaychart06062013.png (http://s458.photobucket.com/user/Hoop_1/media/SPXdaychart06062013.png.html)

[ananda77]

....however I do admit, a daily reversal at 1598 cant be ignored as it is has to be seen as a positive for now. The successful test has strengthened that 1598 support. Todays TA type movement helps to reinforce the view that this is an orderly profit taking period not an illogical fearful melt down...so far the market is behaving like another healthy Bull market correction

...agree with your post completely, but for now what's in the quote above is all that's apparent and need to go by that. Am keeping alert around behaviour in the *1616 area (if it comes to that, suspecting a straight slice through *1625 resistance).

Kind Regards

[Hoop]

A good rise today to close at 1643 +20 (+1.26%) The S&P500 has once again stepped back from the sentiment indicators cliff edge
Getting to the sentiment cliff edge is normally not a common event...so, with this repeating threat to jump but doesn't may create a dangerous situation "cry wolf" attitude with investors and give them a feeling that Wall St is bullet proof.

It seems the 1598 was a short term reversal point ...minor short term resistance points are 1650 1660 with the top major resistance of 1670...failure at 1670 would create a bearish double top... If it breaks through 1670 then Ananda's 1750/1800 area comes into play .... 1670 this is the next area to watch


Another interesting thing I've noticed is that MFG has hit an all time high today. If the market believes this is a crash, wouldnt you think this stock would be the first to fall over?

Mizuno? or the manufacturing data group.??
Either way ......Americans are feeling richer now since their property assets are increasing in value This has the effect of the past reduction of household debt behaviour giving way to increased spending and to take on more debt.
....and may prompt the FED to commence a more rigorous tightening to damper down these potential hotspots....Reserve bank /Treasuries have a thing about rising property markets. If and when the FED react it would effect the forward looking Equity Indexed Market before the Retail Market

[Hoop]

Yet again!!!!!!!!!!!!!!!!!............... the S&P 500 has gone to the cliff edge and threatening to jump (MA50)

Remember my experimental Sentiment Indicator needs all 4 to turn red to fire the "Get out" warning...3 have gone red a while ago now.. and the 4th (MA50) has been "crying wolf"

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP50012062013.png (http://s458.photobucket.com/user/Hoop_1/media/SampP50012062013.png.html)

[ananda77]

Hoop:

...got to keep cool - buying opps into the GLOBAL SUPER BULL ahead - not to be driven into fear by financial fairy tale nonsense, the press dishing out - SPX 500 *1530 represents a 10% correction, if it comes to that - next 'long' accumulation point *1600
Why? - to cover potential upside with index trades since 50% Cash waiting to be invested - gross yields in Australia again touching 10% in selected financials (way to go), utilities, (my favourites) - yummy

Kind Regards

[Hoop]

Hoop:

...got to keep cool - buying opps into the GLOBAL SUPER BULL ahead - not to be driven into fear by financial fairy tale nonsense, the press dishing out - SPX 500 *1530 represents a 10% correction, if it comes to that - next 'long' accumulation point *1600
Why? - to cover potential upside with index trades since 50% Cash waiting to be invested - gross yields in Australia again touching 10% in selected financials (way to go), utilities, (my favourites) - yummy

Kind Regards

Hoop is cool :cool::cool:.......Cashed up 3 weeks ago big time (the biggest cash up I've ever done..it took me about a week to get out:) DB made a fortune in sell fees so they would've been over the moon with me.) ....got 85% of my portfolio as cash in the Trading Account now ....up from 3% cash....best thing I've done all year ..so far my portfolio has been saved from a 5% drop...I'll probably buy back the same shares I sold when the buy signals reappear.

[Joshuatree]

Well bugger me a 23+ point rise on the 500, a 180 point rise on the DOW, Risk on , good economic data, time to test the waste disposal with my fingers again.:closed eyes:

[Hoop]

Well bugger me a 23+ point rise on the 500, a 180 point rise on the DOW, Risk on , good economic data, time to test the waste disposal with my fingers again.:closed eyes:
Amazing..huh Joshuatree ?
Last night news was an Asian Rout spreading into Europe bourses....I woke up this morning expecting the worst for Wall St..........but it went up to 1636 (+1.46%) !!!!! Go figure!!!

The S&P500 steps back one pace from the cliffs edge...yet again!!!!!!!

.......boy o boy what a fight...this old bull is very strong...it just wants to continue upwards and doesn't seem to want a decent healthy correction either....its respected its MA50 touch and bounced up off it, for the second time.

Early days yet, and it's too early to generate mass investor confidence, but with each failure to technically break down, reinforces the strength of the Bull to be able to kick start another move upwards away from this critical correction trigger area. This bull behaviour may see buyer momentum increase as correction fears slowly fade.

[Hoop]

Well...how about that....:cool:....what a strange coincidence
Hmmmm....interesting....kinda makes you wonder who reads ST...eh?

We are both using Sentiment Indicators (http://www.market-harmonics.com/tech_chart_descriptions.htm)

His prediction model tracks the percentage of companies in the S&P 500 that are in a P&F bullish pattern. ( topped out at 90%... 450 companies out of 500) .

My experimental prediction model I post on this ST thread tracks the NYA200r...the percentage of companies that have their price above the MA200 line (topped out at 82%).

sooo....there are no surprises .... we both have the same results :)

Point & Figure Patterns Warn Of $SPX Pullback
(http://www.traderplanet.com/commentaries/view/164239-point-amp-figure-patterns-warn-of-spx-pullback/?utm_source=newsletter&utm_medium=email&utm_content=7&utm_campaign=1637)by Joseph Kalinowski (http://www.traderplanet.com/commentaries/view/164239-point-amp-figure-patterns-warn-of-spx-pullback/?utm_source=newsletter&utm_medium=email&utm_content=7&utm_campaign=1637)

[ananda77]

Hoop:

- SPX 500 *1530 represents a 10% correction, if it comes to that - next 'long' accumulation point *1600
Why? - to cover potential upside with index trades since 50% Cash waiting to be invested - gross yields in Australia again touching 10% in selected financials (way to go), utilities, (my favourites) - yummy

Kind Regards

...well this strategy paid off well so far - index 'longs' feeding into the bottom line while 50 % cash waiting. The market may well be driving the SPX 500 up to the *1700/*1750/*1800 area, but the long term oversold state of the index remains a deep concern - as a consequence, risks are extremely high for a double digit correction, which will hurt hurt hurt if ignorant of the risk north of *1687.
Maintaining a Cash reserve and continue feeding the bottom line remains the favourite strategy

Kind Regards

[winner69]

Poor Ben - dug himself a hole so deep he can't get out of it

Stop qe - a disaster for the rich

Continue qe - just delays the inevitable and makes it worse

So lets just muddle along - and hope

[ananda77]

...will start buying smallish today for a start - CNU - WPL first candidates
...nice rout following a prolonged period of extreme high risk set-ups in the market
...as market wisdom goes:
managing risk not returns = key

Kind Regards

[Hoop]

...will start buying smallish today for a start - CNU - WPL first candidates
...nice rout following a prolonged period of extreme high risk set-ups in the market
...as market wisdom goes:
managing risk not returns = key

Kind Regards

Youre very Brave Ananda...My portfolio is 85% cash and I've got no intention on entering any markets atm including the NZX50 stocks until I identify a possible inflection point and then wait for a clear reversal evidence...In simples words wait until those buy signal re-emerge....temption to buy "cheap" is a mirage atm

My experimental sentiment charts has triggered all 4 indicators today with regard to the S&P500 which indicates.....

GET OUT STAY OUT *
this is only the beginning
* This is Hoops analysis..use your own when deciding to invest

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP50020062013.png (http://s458.photobucket.com/user/Hoop_1/media/SampP50020062013.png.html)
http://i458.photobucket.com/albums/qq306/Hoop_1/NYA200r20062013.png (http://s458.photobucket.com/user/Hoop_1/media/NYA200r20062013.png.html)

[ananda77]

...not really. Am just think *1530 for it to be over, if it comes to that

Kind Regards
.

[winner69]

This guy thinks the perceived good times acoming in US is flawed

Suppose having a nick name Lord Vader says it all

But belg is well positioned with 100% cash

http://www.mauldineconomics.com/images/uploads/pdf/2013_06_25_OTB2.pdf

[Hoop]

Gross domestic product expanded 1.8% from January through March, down from an earlier estimate of 2.4% (http://www.marketwatch.com/story/us-stocks-rally-to-extend-prior-day-gains-2013-06-26)
Just when everyone was starting to think good times were ready to roll too..damn......Text book bad news for the Equity Market...huh??....Nah!!! the Wall St junkie (who started to suffer withdrawal symptoms) got promised another QE fix....wow, cool, dude lets party on...yeehaa!!
DISC TA charts still broken

[ananda77]

...not really. Am just think *1530 for it to be over, if it comes to that

...quite sure, with consistent bull bashing below *1630, the bears remain in control and will drive the index into medium term median price around *1530 - consistent with wearing off the extreme long term overbought situ on the index

...a successful *1530 defence will then re-ignite the super bull

Kind Regards

[Hoop]

The SP500 is showing promise.....It is continuing to confirm that the latest fall was a Bull Market Correction and a lessening chance that it is a cyclic reversal to the Bear Cycle.
There is now a descending Broadening wedge pattern established and todays close (1640) has touched the top of this wedge...we will have to wait and see if the index respects this wedge boundary and reverses downwards again or it breaks out towards its target of 1700....
Descending Broadening Wedges are bullish patterns and have a 79% breakout on the top side....Whether it breaks out this time at 1640 or the next time we have wait and see.

http://i458.photobucket.com/albums/qq306/Hoop_1/SP50008072013.png (http://s458.photobucket.com/user/Hoop_1/media/SP50008072013.png.html)

[ananda77]

Hoop:

SORRY! but should have started with - without a decent correction

...caution still warranted, since the late push last Friday is Fed made without convincing institutional support. As a matter of fact, the 'institutional index of Core Holdings' still has been unable to take the 11 October 2007 High to-date. As a result, this divergence between the SPX 500 and Core Holdings makes for an extremely high risk market with potential of a serious Blow-Out ahead -in days, weeks, months - ???

...another interesting bit of news is the fact, that according to SoberLook:

"...Implied rate hike date moves to October of 2014. The Fed Funds futures curve steepened again on Friday, bringing forward the implied date of the first rate hike by the Fed
The date is now closer to October of 2014 as opposed to May of 2015 - an immense steepening in such a short time. That means the market now expects the current securities purchase program to end before the start of the fourth quarter of 2014.

...anyway, happy with a nice profit in CNU and WPL and now cashed up again in the meantime, awaiting the break-out/down of the insto Core Holdings

Kind Regards

[winner69]

Ben talks and the markets love it ....another record high coming up

QE done little to stimulate the economy but the financial world just loves this liquidity - trading amongst themselves that is. Not much gets down to the productive businesses .....economy stutters along while asset prices increase at a great rate.

Sustainable?

[winner69]

Hoops mates a Crestmont say for this secular bear market to end the s&p should be 700 now or about what it is now in 4 to 5 years.

Ben can't stop that

[MAC]

You guys can be so often full of doom and gloom, just sit back and enjoy the ride.

This guy has it spot on, ..................... http://www.cnbc.com/id/100879942

[Hoop]

Hoops mates a Crestmont say for this secular bear market to end the s&p should be 700 now or about what it is now in 4 to 5 years.

Ben can't stop that

Shhhh..don't give our Uncle Ben any ideas.



Looking for the double top ...

Hmmmm.....me too.. but I can't identify whether its a media fed emotional feeling or an instinctive gut feeling...

...So lets rely on the day by day charts....
ATM, Cyclically its full steam ahead. The old bull is responding very well to another dose of Uncle Ben's viagra :D.. so its onwards and upwards again :t_up:, 70% chance of reaching at least 1700, ....When it comes to bullish behaviour, the breaking of a primary resistance has to be classed as one of the biggies....

...On a secular front however, the S&P500 is a bug in search of a windshield.

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP50012072013.png (http://s458.photobucket.com/user/Hoop_1/media/SampP50012072013.png.html)

[winner69]

You guys can be so often full of doom and gloom, just sit back and enjoy the ride.

This guy has it spot on, ..................... http://www.cnbc.com/id/100879942

No not full of doom and gloom mac

Being aware of where all this might end up is important .....we must make the most of this madness ....make as mauch as we can out of it ..... but make sure we keep most of the gains if and when it all turns to custard


Its all up up and away .... but keep a close eye on those charts

[peat]

...On a secular front however, the S&P500 is a bug in search of a windshield.

Hey Hoop
you construct a rational case and then undermine it with an emotive comment. :confused:

[Hoop]

You guys can be so often full of doom and gloom, just sit back and enjoy the ride.

This guy has it spot on, ..................... http://www.cnbc.com/id/100879942

Advising or advertising ???................Confucius says.."beware of man in smart suit giving free advice".

Mac..Timing is everything ....if only you posted this back in 2009....but hey, that character on CNBC.. would be "advising" for you to buy bonds then ... eh??

[Hoop]

Hey Hoop
you construct a rational case and then undermine it with an emotive comment. :confused:

"...On a secular front however, the S&P500 is a bug in search of a windshield."

Ummm...emotive??? ...Sorry I don't follow....but I will plead guilty to using colourful terminology:D

[peat]

I just don't see any reasoning behind the bug/windshield comment,
you've said that "the breaking of a primary resistance has to be classed as one of the biggies" so why negate that.
Is it because your bullish statements are shorter term than your comment regarding secular front +bug/windshield.

I've always struggled a bit with the word secular which you use a lot in your postings. To me its always meant 'not religiously affiliated' as in our education system is secular, but only recently I realised it would appear the word can have the meaning of long term. So you're saying short term bullish but long term splat ??

[omad]

Advising or advertising ???................Confucius says.."beware of man in smart suit giving free advice".

Mac..Timing is everything ....if only you posted this back in 2009....but hey, that character on CNBC.. would be "advising" for you to buy bonds then ... eh??

Man in smart suit says – "Over time, the market should be rising in line with growing corporate profits, he said, and predicted that the S&P 500 could hit 1750 by year-end."

Market pricing says there is approximately 30% probability of the S&P 500 being at 1750 by Dec 31. So that's 70% probability that it won't. Which side of that bet do you want?

[MAC]

Now, we should really consider that the world may not be exclusively full of gloomers and that the end may not actually be neigh. You can get such an awfully sore neck looking out for meteors;

David Kostin articulates very well a forecast that represents an analysis based on present economic fundamentals. I guess you would have to be able to convey a message well to get to be both the Chief US Equity Strategist at Goldman Sachs and a man in a smart suit. No I don’t think the top equity strategist in Goldman would purger himself on global television, advertise, well of course why else would he agree to be on TV.

The economic fundamentals do though appear to support his position really rather well ……….…

Hoop, if you think the Goldman Sachs Chief US Equity Strategist is wrong and you are right, would like to explain to us all why ?

[Hoop]

Man in smart suit says – "Over time, the market should be rising in line with growing corporate profits, he said, and predicted that the S&P 500 could hit 1750 by year-end."

Market pricing says there is approximately 30% probability of the S&P 500 being at 1750 by Dec 31. So that's 70% probability that it won't. Which side of that bet do you want?

Did you notice the interviewers (smart cookies) tried to mention that economic growth causes negative corporate profit pressures but the fast talking Man in smart suit dismissed their comments and talked his way around those side-issues. He was a man on a mission with a set agenda and the interviewers noticed this.

I don't know about Market pricing probabilities.. that game seems rigged, Omad ................It's hard enough trying to predict what will happen tomorrow with a single variable e.g the S&P500 index... less alone trying to predict what each of the hundreds of variables and networked variables will do by years end in the market pricing process... how on earth can anyone get a probability of 30% or any probability for that matter.

That Man in smart suit from Goldman's Sachs , David Kostin, he used all the logic and knowledge he had plus expensive models to predict all the variables and still got his 2012 year prediction (http://au.businessinsider.com/goldman-sachs-david-kostin-sp-500-target-2012-3) wrong...so he was on the wrong side of his probabilities too. :D..

There are some intelligent beings out there on cyber space that have very good track records ..One character sends his emails to over 1 million recipients to keep us informed.

[winner69]

Did you notice the interviewers (smart cookies) tried to mention that economic growth causes negative corporate profit pressures but the fast talking Man in smart suit dismissed their comments and talked his way around those side-issues. He was a man on a mission with a set agenda and the interviewers noticed this.

I don't know about Market pricing probabilities.. that game seems rigged, Omad ................It's hard enough trying to predict what will happen tomorrow with a single variable e.g the S&P500 index... less alone trying to predict what each of the hundreds of variables and networked variables will do by years end in the market pricing process... how on earth can anyone get a probability of 30% or any probability for that matter.

That Man in smart suit from Goldman's Sachs , David Kostin, he used all the logic and knowledge he had plus expensive models to predict all the variables and still got his 2012 year prediction (http://au.businessinsider.com/goldman-sachs-david-kostin-sp-500-target-2012-3) wrong...so he was on the wrong side of his probabilities too. :D..

There are some intelligent beings out there on cyber space that have very good track records ..One character sends his emails to over 1 million recipients to keep us informed.

Must be a different Kostin hoop .... the real Kostin is never wrong

He must have been on special pills last year ....a renowned bull becoming bearish .....never

Interesting gs people all seem to have different views

Just keep an eye on those charts as the s&p heads to 1750

[winner69]

Better looking than your charts hoop

http://au.businessinsider.com/chart-goldman-sachs-sp-500-forecast-2013-5

[Hoop]

I just don't see any reasoning behind the bug/windshield comment,
you've said that "the breaking of a primary resistance has to be classed as one of the biggies" so why negate that.
Is it because your bullish statements are shorter term than your comment regarding secular front +bug/windshield.

I've always struggled a bit with the word secular which you use a lot in your postings. To me its always meant 'not religiously affiliated' as in our education system is secular, but only recently I realised it would appear the word can have the meaning of long term. So you're saying short term bullish but long term splat ??

Hmmm ...no short answer here Peat... Ed Easterling had to write a book to explain it. I will try to summarise it below and then add a couple of URL links.

Secular cycles are either Bull or Bear.......Nearly all the long term charts you see are price indexed and cyclic market cycles can be easily identified.... As Secular Cycles are measured by the trending of the Annualised PE Ratio they are invisible on those charts.

Annualised??? ...A formula is used to smooth out the volatility and distortions of the PE Ratio.
Why is it called Secular?.... PE ratios cycle usually are over a long period of time 5, 10, or 20+ years.
Is a secular bear cycle all bad?....No... secular cycles contain cyclic bull and bear cycles...also economic growth is not any different whether Bull or Bear.
If you can't see it and it takes forever to spin around one cycle why should I a medium/long term investor have to worry about it?...Half of the time during Secular Bull market cycles there's no need to worry about it...however a signature of a secular bear market cycle is a very long trading range (rectangle) pattern....Superannuation/ life insurances involving Equities and long term "buy and hold" strategies perform poorly during secular bear cycles..I personally believe there are some exceptions to the bear signature (e.g AORDs 2003 to 2007) however exceptions are rare. At this moment in time Wall St NZX AORDS and some Europe Markets sharemarkets in a Secular Bear Cycle are reaching/bettering their previous highs and are considered at the top their theoretical rectangle pattern boundaries signature....the secular bear is saying these sharemarkets are due to top out and reverse cycle back to cyclic bear.
A S&P500 chart making Secular cycles visable
http://i458.photobucket.com/albums/qq306/Hoop_1/PERatioshillersp500.png (http://s458.photobucket.com/user/Hoop_1/media/PERatioshillersp500.png.html)
Does a falling PE ratio always relate to a falling sharemarket index price?...Often.... but not always, an example is Earnings could increase at a faster rate than price increase.
When does a secular bear cycle end?....when the PE Ratio value rises up from below 10 and goes higher past 10.
Can a secular bear die at a higher than 10 and rise up again?...theoretically No A secular bear can only die below 10..if PE ratio reverses up the bear is deemed to be in hibernation .eg 2010-now

Peat when Tricia tried to read about this I recommended he had a few ports beforehand...your thinking has to be flexible....take time to read it all.... a few days and a case of port:) http://www.crestmontresearch.com/
After this read... google around..you can then spot and avoid the websites that have a poor grasp (knowledge) on Secular cycle theory.

[Hoop]

Better looking than your charts hoop

http://au.businessinsider.com/chart-goldman-sachs-sp-500-forecast-2013-5

Yep sure are..... obviously my happy pills can't be as good as his....
I've bookmarked the page for future reference :)

[omad]

I don't know about Market pricing probabilities.. that game seems rigged, Omad ................It's hard enough trying to predict what will happen tomorrow with a single variable e.g the S&P500 index... less alone trying to predict what each of the hundreds of variables and networked variables will do by years end in the market pricing process... how on earth can anyone get a probability of 30% or any probability for that matter.


Probabilities are what they are, can't be rigged when you can take either side of the trade.

You would be surprised how well the probabilities work out, my trading is based on it, fundamentals and news are totally ignored, chart patterns and indicators, no thanks. Based on those rigged market pricing probabilities I control my win/loss percentage and month in month out the numbers turn out where they should.

For the record I'm not all doom and gloom and I'm not saying S&P won't be at 1750 buy end of year, makes no difference to me as long as we get some volatility in the mean time.

[Hoop]

Probabilities are what they are, can't be rigged when you can take either side of the trade.

You would be surprised how well the probabilities work out, my trading is based on it, fundamentals and news are totally ignored, chart patterns and indicators, no thanks. Based on those rigged market pricing probabilities I control my win/loss percentage and month in month out the numbers turn out where they should.

For the record I'm not all doom and gloom and I'm not saying S&P won't be at 1750 buy end of year, makes no difference to me as long as we get some volatility in the mean time.

Hi Omad..it seems you have a system that works for you..good on ya...:) ...Thanks for your useful post...as we all on ST strive to be more successful...

[MAC]

Wise words Winner, I found a man in a suit for you too, everyone should have one ...........

http://www.cnbc.com/id/100874564

[Hoop]

Wise words Winner, I found a man in a suit for you too, everyone should have one ...........

http://www.cnbc.com/id/100874564

Yep good suit...but his happy pills seem to have given him secular side effects :)

[winner69]

Yep good suit...but his happy pills seem to have given him secular side effects :)

must tune in to sharetrader that guy with his up up and away

and that white haired youngish guy in a suit further down the page looks real dodgy .... bet you even his mother doesn't trust him

[peat]

Hmmm ...no short answer here Peat...


Can a secular bear die at a higher than 10 and rise up again?...theoretically No A secular bear can only die below 10..if PE ratio reverses up the bear is deemed to be in hibernation .eg 2010-now

Peat when Tricia tried to read about this I recommended he had a few ports beforehand...your thinking has to be flexible....take time to read it all.... a few days and a case of port:) http://www.crestmontresearch.com/
After this read... google around..you can then spot and avoid the websites that have a poor grasp (knowledge) on Secular cycle theory.

Thanks for the post Hoop. Appreciate the effort.

My first thoughts would have to question the assumption that a secular cycle change has to reach 10 before it could make a major turn.
Maybe its different this time? :p

But at least I know why bugs should be watching out for windshields.

[ananda77]

...crucial SPX 500 *1680 in sight - a Close below and the much needed double digit correction will be closer to real

...flipside - *1700 brings *1800 closer to real

...market excessively overbought - Insto Core Holding STILL unable to take out 2007 Top - large divergence in strength across the main boards sets the index up for high risk trading

Kind Regards

[Hoop]

For all those who think the market is overbought, here's a technical perspective on why it isn't


http://dragonflycap.com/2013/07/24/wed-am-30/


I must admit, a fascinating insight, and from Dragonfly Capital no less...

And the next day this same writer Greg Harmon shorts the S&P500.......tells the public one thing and tells his subscribers another I am Short the SPY (http://dragonflycap.com/2013/07/25/thur-am-5/)

Back to this right angled descending broadening wedge Click here (http://thepatternsite.com/rabfd.html)...quote Bulkowski "...worst performing chart pattern in a bull market. The breakeven failure rate is high and the average rise is meagre......."
Greg Harmon would know this being a Technical Analyst...so what's his game ...eh?

Why is the RADBW pattern so unreliable with small bust outs that could turn and fail.........Being a broadening pattern and over a great deal of time other more powerful patterns can be "hidden" within this pattern...A chartist with this knowledge and a keen eye can often see something that the casual observer misses. e.g..this could be the middle of a head and shoulder pattern...with a 10% rule head at 1760 before the drop to form the right hand neck....only time will tell... but as Ananda and I keep saying on this thread the risk is getting really high and caution rather than blind optimism should be used here

The 2 rules of thumb and using the KISS method.............. beware of W shape features
.................................................. ...................................This is a very old mature bull market nearly 4.5 years old...the previous two bulls (see Harmons chart) lived for 5 years and 4 years....

[ananda77]

...yes Hoop, risks are very high right now, but at this stage, would expect a substantial correction ONLY not the end of the current bull.
Based on current liquidity inflows into options, the market looks like having a 'GO' at another high above the *1700 mark.
Personally, my orders are to add more protection starting at *1725 and am approx. 50% in cash

Will start setting Cash to work again starting at *1530

Kind Regards

[winner69]

Found this chart the other day. Market sees the S&P should be more correlated to Fed assets than to what the component companies are actually selling

Blue line change in S&P500 and the bottom red line the revenues growth figure

Of course it makes sense - this time its different

http://www.mauldineconomics.com/ttmygh/the-candyman

[ananda77]

Sunday Afternoon Studies: -Understanding Leverage- part 1_2_3 (Free Discourse)
http://intelligentoptioninvestor.com

Kind Regards

[ananda77]

Todays Close below SPX 500 1700 confirms the divergence in strength across the boards and instos hesitation to push the market. Look out for a break below *1684

Kind Regards

[ananda77]

...no change to the basic set-up in the market - the Fed keeps saving the day and instos not pushing the market higher
24 to 48 hours, it's either 1700+ or 1684 -
At this stage completely out of the market after a good run-up in Aussie
...expecting a double digit correction

Kind Regards

[Hoop]

...no change to the basic set-up in the market - the Fed keeps saving the day and instos not pushing the market higher
24 to 48 hours, it's either 1700+ or 1684 -
At this stage completely out of the market after a good run-up in Aussie
...expecting a double digit correction
Kind Regards

Yes I agree this correction could be sharper than the last one which was too shallow to vent that pressure off.
I too am 80% in cash..just short term dabbles to catch the temporary lifts with report announcements on the NZX..I have to stay amused some how...eh


Read something of interest the other day somewhere on a financial blog:

There are two ways stocks can correct: through price, and through time.

The pundits on the blog believed that instead of having a correction through price change, US stocks could simply mark time in a sideways pattern for 12 months, until they looked cheap again relative to earnings.
Food for thought.

These guys hedge their bets Sparky there are over a 100 chart patterns about a third are downward...so why not pick sideways...these guys hope it is because they can make heaps of money in a rectangle pattern...its the traders favourite pattern....they don't call it a trading range for nothing..eh?


10yr treasury marches up - S&P down.
Yes psychologically bad for equities this time around with an aged bull to boot..
The FED are doing the right thing..they have a plan to taper ... they release or leak cryptic information in an attempt to prevent the market adjusting suddenly....but will this plan work?


My Experimental correction indicator has flashed red (GET OUT) on the DOW and has a reddish glow with major caution on the S&P500...Another drop tonight and it will be 90+% probability a correction has started.
Charts to follow later

[JBmurc]

Yes psychologically bad for equities this time around with an aged bull to boot..
The FED are doing the right thing..they have a plan to taper ... they release or leak cryptic information in an attempt to prevent the market adjusting suddenly....but will this plan work?

No big 87 style Crash coming to the Dow/S&P .....PM sector will trade inverse of the action as they are coming out of major Bear trend

[Hoop]

Yes psychologically bad for equities this time around with an aged bull to boot..
The FED are doing the right thing..they have a plan to taper ... they release or leak cryptic information in an attempt to prevent the market adjusting suddenly....but will this plan work?

No big 87 style Crash coming to the Dow/S&P .....PM sector will trade inverse of the action as they are coming out of major Bear trend

I agree JB ..Out of all the options available I don't consider a crash to be very high on the list of possible outcomes ...crashes are usually unexpected beasts and they are relatively rare events...Whats happening now could be that healthy expected correction we have been waiting for... it is expected to be bigger than the last one because that correction was very mild and was too short for the market to get much corrective benefit from.

Ananda's view is that the correction will end with the bull market still intact...my view is the bull may survive but I wouldn't be surprised if we see a cyclic reversal..A change from Bull to Bear is not dramatic as the media makes out...often its a couple of months after the reversal before investors realise that the bull had died.

...you never know... we may experience a stage 1 Bear market cycle being in Neutral......with many many months in a trading range pattern as mentioned by Sparky..there's nothing to fear about that scenario..actually traders would love it.....eh Ananda:)

[ananda77]

Ananda's view is that the correction will end with the bull market still intact...my view is the bull may survive but I wouldn't be surprised if we see a cyclic reversal..A change from Bull to Bear is not dramatic as the media makes out...often its a couple of months after the reversal before investors realise that the bull had died.

...you never know... we may experience a stage 1 Bear market cycle being in Neutral......with many many months in a trading range pattern as mentioned by Sparky..there's nothing to fear about that scenario..actually traders would love it.....eh Ananda:)

....one never knows...but bear scenarios remain unlikely within current banking strategies. Despite QE, interests been rising based on improving economic indications, logically, its time to taper.

...as for the markets, instos have stubbornly resisted to push the SPX 500 past *1700 and have been sellers into sideways *1684_*1710 for the last few weeks, forcing lower entry levels.
Am expecting a test, potentially down into *1550/*1585 (= 10% approx.) with an off chance, the market will correct into *1420 (=20% approx.). Only *1420 would be a satisfactory correction for the current, extremely overbought condition in the long frame, as the market would be heavily oversold.

*1420 would be sweetest, so keep fingers crossed. However, as said before, this bull is far from dead!!!

Kind Regards

[Hoop]

The S&P500 Has marginally broken the MA50 to trigger the GET OUT signal on my experimental sentiment indicators...Personally it's still in the marginal zone ..I need to see 4 clear breaks and so far its 3.5;). Monday or tuesday would decide.....but personally (being safe rather than sorry) in theory Friday was the day to GET OUT as the sister market the DOW has clearly broken its MA50 line

http://i458.photobucket.com/albums/qq306/Hoop_1/NYA200r16082013-1.png (http://s458.photobucket.com/user/Hoop_1/media/NYA200r16082013-1.png.html)
http://i458.photobucket.com/albums/qq306/Hoop_1/SampP50016082013-1.png (http://s458.photobucket.com/user/Hoop_1/media/SampP50016082013-1.png.html)

[ananda77]

...correction in the *1630 zone likely - a bit oversold in the 1hr frame - expecting a *1680 zone test - sell into the bounce would be my strategy, had I something to sell - currently 'long' derivative with 10% exposure

Kind Regards

[winner69]

This guy reckons QE is going to lead to a catastrophe

http://teapartyeconomist.com/2013/08/23/bernanke-explained-in-simple-english-australian/

[Valuegrowth]

Globally some stock markets, sectors, currencies, housing markets and commodities are over priced now. Definitely NZD and AUD are two of the overpriced currencies in the world. Even Australian and New Zealand stocks markets are somewhat overpriced now. Still over priced markets can go up due to crowd behaviour and other factors. On other hand there are undervalued markets, sectors, currencies and commodities. It is time to identify and rotate stocks and commodities in next promising markets, commodities, and currencies.

Globally we had strong rally in some developed, emerging and frontier markets during last two years and what we are seeing now is market correction and pullback. We will see more volatility in markets in the coming weeks.

For some falling currency is a boom for them. For example Indian textile, garment, tea and information technology sectors are going to benefit lot. They will have smile in their face. On the other hand their import oriented industries will hit hard.

There are market cycles, business cycles and industrial cycles. Who know our next attractive investment will have in our breakfast, lunch or dinner or may be in our next province?

When markets are hot many will neglect underappreciated assets and out of favour sectors. These types of assets and stocks’ will become next great winners.

In advance I expected gold and currency crisis. We are having some sort of currency crisis as well. These types of pull backs, correction, and crisis are part of market journey.

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

[MAC]

Ha, that's truly a classic Winner.

Fred’s totally come such a long way from the farm, now he’s a top simple Australian.

[ananda77]

...correction in the *1630 zone likely - a bit oversold in the 1hr frame - expecting a *1680 zone test - sell into the bounce would be my strategy, had I something to sell - currently 'long' derivative with 10% exposure

Kind Regards

...closing below *1657 would confirm another leg down into the *1580_1530 space underway, while a successful defense of the pivot would keep bull pressure on the correction into the *1680_*1694 space

Kind Regards

[ananda77]

...closing below *1657 would confirm another leg down into the *1580_1530 space underway, while a successful defense of the pivot would keep bull pressure on the correction into the *1680_*1694 space

Kind Regards

...am expecting the real test in the bull/bear battle further up

Kind Regards

[winner69]

Markets on fire. ...... 16000 smashed .......17000 not that far away

Only problem the bigger the rise the greater the fall

So make the most of it while you can ...and keep an eye on the charts

[peat]

Markets on fire. ...... 16000 smashed .......17000 not that far away

Only problem the bigger the rise the greater the fall

So make the most of it while you can ...and keep an eye on the charts

Yes it's very difficult to reconcile all time stock market highs with the worlds current economic conditions - which seems to instruct that one shouldn't try to do so ;+)

And being in uncharted territory means there are no historical S/R zones. So we sailing off the edge of the world and only have Ben flying his untested prototype helicopter as the Search and Rescue

I'm thinking major resistance at 1815 based on http://www.sharetrader.co.nz/showthread.php?2814-Gartley-Butterfly-patterns&p=428421&viewfull=1#post428421 however no sign of that yet.

[Hoop]

Monday marked the beginning of the 18th government shutdown in US history. For some perspective, today's chart plots the average S&P 500 performance for the 20 trading days (approximately one calendar month) before and 60 trading days (approximately 3 calendar months) after a government shutdown began. As today's chart illustrates, the stock market has tended to struggle prior to and during the initial three days following a government shutdown. Following this, the stock market has (on average) trended higher over the ensuing three months. One explanation for this particular average pattern is that the market abhors uncertainty. So as the shutdown approaches, investors fear for the worst. However, after the shutdown begins and investors notice that the economy continues to function coupled with the fact that the shutdown may be short-lived ultimately encourages a stock market rally as investors worst fears are not realized. It should be noted that today's chart is an average performance chart and that following the last 17 shutdowns, the stock market traded up 60 trading days after a shutdown on 10 out of 17 occasions (i.e. 58.8%) with the average shutdown lasting 6.4 calendar days.

http://www.chartoftheday.com/20131002.gif

http://www.chartoftheday.com/20131002.htm?H

[winner69]

Economic news not that good .....QE last longer ....market roars ahead

Oh well the rich get richer and the poor get poorer ......that's the way it is meant to be .....Until it all turns to custard. .big time

What can one do ......just play the game in this stupid and evil world

[Hoop]

Economic news not that good .....QE last longer ....market roars ahead

Oh well the rich get richer and the poor get poorer ......that's the way it is meant to be .....Until it all turns to custard. .big time

What can one do ......just play the game in this stupid and evil world

History, Statistics, lies and more lies...................Sell in May and go away? Historically speaking yes ...but, not this year. The S&P 500 was up +11.2% in the last six months.
Historically November, December and January are the best months to be invested in the S&P 500............Hmmmmmmm

[winner69]

Bugger ....bugger. ....economy healthier than we thought .....bugger. ....markets weaken


It's not going to plan ....what a bugger

[blackcap]

Bugger ....bugger. ....economy healthier than we thought .....bugger. ....markets weaken


It's not going to plan ....what a bugger

Thats a pretty cynical view at first glance Winner but I think I am starting to finally grasp what is going on and what is happening behind the scenes.

[winner69]

That Janet doing well eh ......keeping the merry go round going rond and round longer

S&P at 1800 ....Hecht how she going it'll be 1900 by Xmas

And all the time the economy not getting much better but who cares about that

[peat]

Two months ago in post #1448 I suggested 1815 might be a resistance level. As we have achieved that - close enough - I have closed out the long position I had in the Nasdaq. Looking a bit extended for the present, divergence on RSI, and a wedgish shape forming

[Valuegrowth]

Definitely financials and technological stocks are over valued now. Even in technology stocks in frontier and emerging world are over valued now. We may see correction in technology stocks sooner than later. We should avoid overvalued markets, sectors, commodities, currencies and other assets and it is time to go behind undervalued out of favour sectors, stocks, commodities, and currencies. For example some commodity stocks are cheaper than commodities now. Both NZD and AUD are over valued now. We may see sell off in stocks during next six months. In short we can see some bubble in few sectors.

I believe we may see some sell-off in overvalued markets sooner than later.

I will take the funds from selling some shares and redeploy them into the new stocks I have researched and written about.

In any market be it developed, emerging or frontier market we need seasonal adjustments to our portfolios. I believe this is the time to readjust portfolios, do some rotation and identity next winners in the commodity, stock and currency markets globally. Globally some markets, sectors, commodities and currencies are under valued. Similarly some markets, some sectors, commodities and currencies are over valued.

We may have correction in some overvalued markets during next six months. It is time to identify next winners.

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

[winner69]

Heaps more jobs .......bad news and markets weaken

Then the good news .....service sector weakest for long time with consumers not spending as expected ..... And the markets recover

It's all still going to plan

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11167222

[winner69]

Phew ....that was a close call. Better than expected jobs data could have been bad, really bad. But as this guy said it was a number that appeased ordinary joe as well as Wall St ..... "US Jobs Stronger than Expected, but not Enough for Fed to Taper," was the title of a note from Brown Brothers Harriman.

[boring]

It's either a Goldilocks job number (not too hot, hot too cold), or we're seeing the beginnings of a polarity change, where good economic news now makes the markets stronger.

If market participants no longer fear the taper, then we'll need companies in 2014 to show stronger earnings through stronger revenue growth, rather than better profits because of cost cutting measures and refinance savings.

I'm wondering about debt limit early 2014. Are we going to avoid the fiasco of another Government shutdown.

[winner69]

It's either a Goldilocks job number (not too hot, hot too cold), or we're seeing the beginnings of a polarity change, where good economic news now makes the markets stronger.

If market participants no longer fear the taper, then we'll need companies in 2014 to show stronger earnings through stronger revenue growth, rather than better profits because of cost cutting measures and refinance savings.

I'm wondering about debt limit early 2014. Are we going to avoid the fiasco of another Government shutdown.

then we'll need companies in 2014 to show stronger earnings through stronger revenue growth, rather than better profits because of cost cutting measures and refinance savings. ......isn't that the problem though

[Hoop]

then we'll need companies in 2014 to show stronger earnings through stronger revenue growth, rather than better profits because of cost cutting measures and refinance savings. ......isn't that the problem though


We all wish for economic good times....so when it happens you end up getting what you wish for......a series of seemingly paradoxes...that's another problem

[winner69]

We all wish for economic good times....so when it happens you end up getting what you wish for......a series of seemingly paradoxes...that's another problem

Hoop - you saying the markets not that strongly correlated to economic growth?

[boring]

S&P 500 is actually a poor measure of how well companies in the US domestic economy are performing. Although S&P 500 represents 80% of market capitalisation, it has the following issues when using it as a proxy measure for how well the economy as a whole is doing:
1. Obviously excludes unlisted companies, which far out number of number of listed companies.
2. S&P 500 has the largest companies, which derive a good percentage of income from offshore subsidiaries. In many cases, the biggest companies often derive more than 50% of income offshore.

Even if you extend to the Wilshire 5000, same issues arise.

The good old fashioned GDP may still be the best metric we've got. Here's a good chart posted a few months ago showing the divergence between the S&P 500 and the GDP growth forecasts. We know the share market should be anticipatory, so it's interesting to see an increase in the S&P 500, all while GDP forecasts are falling.

http://www.businessinsider.com.au/gdp-growth-expectations-vs-the-sp-500-2013-8

I give up trying to work out the logic of the markets many years ago. Also gave up trying to predict the market, except for knowing that during the history of the US stock market, it has never failed to make a higher high, even after the worst of crashes.

Best approach if you are a buy & hold/monitor investor is to take the psychological approach to investing. Buy good quality companies you are happy to hold, even if the stock price falls 40%. Then you won't be panicked out of the market. Yes, these are all simple cliches, but has worked for me over 2 decades in the market (going back to the day I actually had to physically ring a broker and speak to a human before I could buy stocks).

[Hoop]

Hoop - you saying the markets not that strongly correlated to economic growth?

Yes and No........Ha I covered all bets :D written like a true politician...

Seriously....Common sense tells one to say No and referring (share market growth, economy growth) of two points over a very long time period statistically the market v Economic growth are strongly correlated...but as you know Winner Crestmont Research (http://www.crestmontresearch.com/stock-market/) says its the PE Ratio that drives the sharemarket not the economy although the economy does have an effect in increasing the E part of the PE

...therefore over the medium and short term (the time period that most people on Share Trader refer to) the answer is yes the two are not correlated.

I dragged this off Google search, it doesn't matter if its not quite accurate as the shapes on the 60 year chart are similar to those I've seen and the ones I have misplaced (lost inside my computer somewhere).
http://angrybearblog.com/wp-content/oldimages/angrybear/4/-9ThjkrG03Lk/TdBy6ang2MI/AAAAAAAAAnI/UtBVd3OiSGc/s320/sandp5001.bmp

As one can see with the chart ...the two are part of the mean reverting process and as expected the S&P500 has reversed and closed the GDP gap.
So has the S&P500 still got legs and rise to 2000? from this chart it looks possible...however the present secular bear PE Ratio downtrend shown on this 145 year chart dampens that possibility...http://advisorperspectives.com/dshort/charts/valuation/PE-ratio-overview.html?SP-and-PE10.gif but this is another story....

Higher revenue = no increase in profit during a fully recovered economy ..a seemingly paradox.....................this can be explained.....more competitors entering the "now perceived" lucrative market lowering existing profit margins....supply/ demand price rises for raw materials...extra demand creating a shortage of raw materials .... increased debt costs as interest rates rise (monetary tightening to combat inflation), increased labour costs hiring of staff...more overtime (Laws of Diminishing Returns) ..intra-structural change costs in accommodating extra workers/management (the stages of company growth hurdles)...supply and distribution lines (logistics) becoming stretched due to increasing demand......etc etc

[Hoop]

.................................I give up trying to work out the logic of the markets many years ago. Also gave up trying to predict the market, except for knowing that during the history of the US stock market, it has never failed to make a higher high, even after the worst of crashes.

Best approach if you are a buy & hold/monitor investor is to take the psychological approach to investing. Buy good quality companies you are happy to hold, even if the stock price falls 40%. Then you won't be panicked out of the market. Yes, these are all simple cliches, but has worked for me over 2 decades in the market (going back to the day I actually had to physically ring a broker and speak to a human before I could buy stocks).

Hi Boring..This is the buy and hold argument which sounds good in theory but is horribly flawed.
What stuffs up the argument is the fact that many good quality companies that have been around for a 100 years or more collapse during a bad recession....
All it takes is one in your portfolio to cease to exist and the job to recoup the portfolio loss during the next bull market becomes even more difficult ,,,eg,,, If the stock market loses 40% it takes a 67% rally to get the market back to even....Now your portfolio with one company gone bust has probably suffered a bigger loss ...lets say 50% then you need a 100% rally to get your portfolio back to even... a cyclic bull market cycles average about 100% before the next bear strikes when means your portfolio could be underwater for the next decade....a very undesirable financial situation to be in if you are 60+ years old like me

Now I hear you say I can pick good companies that won't fail...OK but the problem is that another company can also pick good companies especially when severely undervalued and after the worst is over and a hostile takeover occurs your portfolio takes a unforeseen hit.....

A better argument is to buy and hold an index fund.....but cyclic and secular timing is needed...and that's another story too

[boring]

I hear what you are saying, and in many respects don't disagree. However, I had carefully thought through these arguments many years ago and have decided I'm very comfortable with the downsides of this strategy. I have business rules in place to mitigate the downside, and the timeless diversification strategy helps avoid risk of ruin.

I'm the first to admit, the classic buy and hold/monitor strategy is NOT for everybody. However, it does work well for the type of cash flow business investment strategy I have chosen to use. The most common argument against this strategy has always been the "takes a greater return to break even after suffering a large percentage loss".

The Wall Street and Brokerage institutions were pushing the message "buy and hold is dead" very strongly and very convincingly during the GFC. But I've heard these arguments over and over again every time there is a Wall Street crash. They want punters to trade, they want punters to buy their buy and sell signals because they want their fees and commissions.

I don't advocate the "purchase and prey" style of investing. That's for mugs, and those that don't want to put in the time and effort to monitor their holdings should just buy an index fund as you suggest. I personally prefer buying good businesses that return money to shareholders in the form of growing dividends, monitoring them for any secular trends that may warrant selling out of the business, but holding on if your original thesis for buying them in the first place remains intact.

For example, I've held dividend aristocrat Procter and Gamble for over 15 years. During the tech wreck, I saw the price of the share fall 50%. However, the business remained solid, people were still going to buy Tide laundry detergent, still going to shave using Gillette razors and still largely continue to buy P&G's household staples at the supermarket. Sure, it took years for it to regain it's original share price, all the while I was collecting a growing stream of dividends. Dividends that would one day replace my salaried income. I am also a net buyer of stocks, so it just gave me an opportunity to buy more at better yields. I keep a diversified portfolio of about 30 good business all paying growing dividends.

Because I know my businesses very well, I sleep very soundly during market corrections and crashes. I think during the GFC, I saw my portfolio value fall by about 30%, but I still slept like a baby.

This is not to say I've never sold out. For example, I sold Intel several years ago when I though they took the eye off their business. Same with Hewlett Packard when they struggled and floundered around trying to redefine exactly what business they were in (hardware, consultancy services and/or bureau services). When it comes to secular headwinds, you usually get plenty of time to exit before the slow and steady decline in share price. At the moment, I'm monitoring the main secular headwind that faces Procter and Gamble, that's the rise of private label/store brands. If I think this becomes a prominent threat to the business, I'll sell out and buy companies like ConAgra that manufacture private label brands. In contrast to secular headwinds which usually result in a slow and steady share price decline, a general market crash takes everything down with it, but only from a price perspective. As a net buyer of stock, this is always an opportunity.

Buying a holding an index fund is an excellent strategy for capturing capital gain. But for me, I want the dividend cash flow, so I'm looking at yields that are greater than the market yield. Usually short-term share price weakness creates these opportunities. I hate going out to work as an employee at some large company, so the dividend strategy was the strategy I chose to provide me financial freedom.

I've always said there is no single best way of investing and trading the market that suits everybody. The best way is the one that suits your individual goals and personal psychology, as long as you follow a coherent strategy. You don't even need to beat the market, you can still make tons of money making below market returns (as I can probably attest to that, I've probably under-performed the market many years in succession).

Because of the business rules around my dividend-growth strategy, it tends to favour mature, large-capitalisation companies (the behemoths). These companies are usually the ones doing the takeovers, so crystallising capital losses during a hostile takeover is less of an occurrence. It also tends to favour companies in the consumer staple and energy sectors. I have to monitor my sector weighings carefully to make sure I have a good cross-section of sectors. Surprisingly, I found I've always been underweight the Utilities sector, because they fail the growth side of the dividend equation.

Some people are very successful at trading in and out of the market and picking tops and bottoms of individual stocks. It's not for me, and I wouldn't be successful at it (actually, I've tried short-term trading using technicals and I'm hopeless at it. Don't have the psychology for it, and too lazy to learn and master the proper psychology).

If several decades of investing and trading has taught me, that's:
1. The best investment/trading strategy is one that suits your goals and personal psychology.
2. There is no single best strategy, all strategies over-perform and under-perform during different phases of the market.
3. I would never be so bold as to think that I had the ability to chop and change strategies to optimise market returns.
4. The market will humble you whenever you get over-confident.
5. You can still make tons of money in the stock market even if you under-perform the market index.

[Hoop]

http://www.sharetrader.co.nz/images/buttons/viewpost-right.png (http://www.sharetrader.co.nz/showthread.php?p=448125#post448125) 5. You can still make tons of money in the stock market even if you under-perform the market index.

Could you explain that a bit more please? Thanks.
Hi Belg..I responded to the other but not you..don't feel offended but you did ask a very hard question :confused::D.

I'll take the chance, not to go completely off topic on this thread

Boring... that statement could be true during secular bull market cycles...however as the rising/falling of the tides tend to raise/lower all boats you can safety say that during the secular bear cycles if you underperform the market you lose money..At the moment many of the 1st world sharemarkets including the S&P500 are in a Secular Bear cycle and have been for 13 years now...this is the main reason why you hear many advisers and brokers not recommending the Buy and Hold Strategy now as B&H performs poorly during secular bear cycles.

Receiving a lump sum pension at the time of a cyclic bottom of a sharemarket during a secular bear cycle could be seen as theoretically the only way a B&H strategy would make money, but no-one apart from the fatalists would ever think of piling all their hard earned money that they need for the rest of their life into a sharemarket that is in capitulating turmoil. Even when the bottom has passed nobody knows that, as the new pensioner have seen previous rallies before and they have all been sucker rallies.. wisdom says "stay out"

I agree in full that one should use a strategy that they best feel comfortable with.

However...Boring you have an unusual psychological profile....I think most of us would lose lots of sleep being totally invested during a bear market with the fear of the unknown..especially during the c-wave..just the thought of waking up every morning and seeing another 1.5% knocked off my ever decreasing capital and another announcement by a company that due to hard times they are lowering/suspending the next dividend...just makes me shudder:(

..a worse thought... Having this "Smart" idea of realising your losses, let the market fall without you, and put what's left of my money in a bank on fixed deposit then wake up the next morning to hear the news that your bank has gone "tits up".:p

EDIT: List of Failed US Banks (http://portalseven.com/banks/)

[boring]

Thanks Hoop, I do have an unusual psychological profile and I take pride in that. A lot of how I think I put down to my mentors and personal development coaches I have had the honour to work with over my lifetime. I also enjoy our discussions about our different approaches. I certainly understand and appreciate your approach, it's very sound as well.

My strategy is not a capital appreciation strategy, it's a growing passive income strategy. Most are told to invest in growth companies so you have a huge nest egg at 65 years old, all while reallocating your growing funds over time to more conservative bonds. Then apply the 4% withdrawal rule on retirement and hope you don't outlive your money. This is the "traditional" message from financial planners.

My mentor always told me to "start with the end in mind". So when I thought about my financial freedom end point, I wanted a continuous, sustainable, and growing flow of passive income that would exceed by living and discretionary expenditure, as well as having money left over to continue to be a net buyer of stocks. So the dividend-growth strategy was right up my alley, and I have used this strategy for a couple of decades. This means I have remained invested all through secular bull and bear markets. But people have to understand that I can only invest in a certain type of company.

As mentioned, most companies in the S&P dividend aristocrat index and the NASDAQ Dividend Achievers index are large capitalised, steady-eddy dividend growth payers. When I look at the yields on original purchase cost for some of my long-term holdings, you can easily end up with a 20% yield. Warren Buffet gets his original purchase cost of his Coke shares back every single year in the form of dividend payments.

This is why I say you can still make tons of money in the stock market, even if you under-perform the indexes over a long period of time, because the indexes are capital indexes and don't take into account dividends. And dividends can be a huge component of market return over the long-term.

When it comes to secular bear markets, the share price of large dividend-growth companies tend to hold up well at the beginning of the correction, but then start a slow secular price decline. This is how it is important in this strategy to remain a "net buyer" of stocks. Yields on dividend-paying companies rise, you get more income, all while waiting for the secular bull market to return.

If I was smart enough to sell my entire portfolio before the beginning of a secular bear market, I would need to put that money somewhere in order to make a decent income. Usually, (not always), bond yields become very low as the reserve banks respond to weakness in the economy by reducing interest rates. that's why boring, stodgy dividend-paying companies have been so successful over the last few years, those ruddy retired-boomers are seeking yield.

To mitigate bear markets using this strategy, you need to make sure your dividend-paying company has a payout ratio of less than 60%, has a track record of still increasing dividend payments during previous recessions (because of the payout ratio margin of safety). It is also key that the income you earn from dividends, has money left over for reinvestment. This is how you can combat the psychological influence of falling share prices. Because you are a net buyer of stocks, you can pick up good solid dividend-paying stocks cheaper and at a higher yield.

The other thing to note is that I am an Australian resident, so capital gains tax applies. That's why I want to avoid a selling if possible, because that would trigger a significant capital gain payment for some of the shares I have owned for 2 decades. I believe you don't have that issue in New Zealand, so it is easier to apply the stop-loss capital preservation strategy.

When it comes to reinvesting dividends, I actually have a systematic quantitative method that helps me work out how much stock to buy, and how much to set aside in cash for future purchases. That's because in a raging bull market, stocks become expensive. Over the last 12 months, I have only been able to re-invest 20% of funds, so I'm retaining the 80% of reinvestment moneys as cash. That is because dividend-yields are historically low. So I'm waiting for the next secular bear market so I can put this cash to good use.

I'm not trying to convince anyone that this is a superior strategy, nor is it original. I'm just letting people know that this is a strategy that his worked well for me over the last 2 decades, where I have experienced several bull and bear markets. People can take out of it what they want. If someone thinks "that's a crap strategy, I really like mine better", then these posts have been of service to people, because it has reaffirmed their belief in their own strategy.

To be fair, there are quite a few nuances to my strategy, I have a personal white paper documenting my strategy that is 80 pages long. I treat my investing as a business and follow my entry, exit and monitoring rules religiously. At the end of the day, it's my livelihood, and I'd go hungry if I fail.

Van Tharp has always said you invest and trade your beliefs about the stock market. When it comes to trading, both Van Tharp and Schwager's research show that the best traders in the world use all sorts of different systems, so psychology is the differentiating factor on whether you are successful or not.

[cyclist]

Boring. A couple of exceptionally well written posts.

Your strategy seems to be in common with that taken by the writers of some of the popular financial independence blogs, www.bravenewlife.com (http://www.bravenewlife.com) being one of my favourites.

I am slowly entering the sharemarket after watching markets for many years, but not participating. Blogs like the above have helped me realise I have been neglecting the investment side of the FI equation. I can see myself taking a similar strategy as you, although I am entering the market very gently at the moment, for the same reasons you are current holding your excess dividends as cash.

[Hoop]

I agree with cyclist ....yes a quality post and thanks for you time to write it and share your investment discipline with us. I hope others STers see this post as your methods are valuable..
I enjoyed the debate.
cheers
Hoop

[boring]

Thank you Cyclist and Hoop. I love an exchange of ideas.

I am always heartened to hear from posters such as Cyclist who are embarking on their trading/investment journey. I'm sure experienced investments and traders such as Hoop will concur, the trading/investment journey is a most rewarding and sometimes frustrating journey. You really get to discover some insights about yourself and how you handle uncertainty, fear and greed. I'm sure neither of us could imagine life without participating in the markets.

Cyclist, if you are interested in a dividend-growth strategy for attaining long-term financial freedom, I will share the following poignant Chinese proverb: "The best time to plant a tree was 20 years ago. The second best time is now".

There is always a feeling of trepidation when you feed new money into the markets. If it's a raging bull market, you think "it's probably topped, lots of market commentators are talking about vertigo and an eminent correction". If it's a bear market, you think "it's only going to go lower, there's so much uncertainty and risk in the market".

So I concede that there is some wisdom in the financial planner "dollar cost averaging" approach. Get into the habit of saving, and get into the habit of regular investing. Build positions in good quality companies over time. But you must do your homework if you choose to invest in a portfolio of individual stocks. This type of investing is NOT a set and forget methodology.

If you want a set and forget growth-strategy, Hoop's S&P 500 index is the way to go. If you want a set and forget dividend-growth strategy, invest in an ETF such as the Vanguard Dividend Appreciation ETF (VIG) - tracks the performance of the NASDAQ US Dividend Achievers Select Index.

I like US stocks because these you get access to the biggest and most recognisable global companies. You can invest in companies whose products and brands you are familiar with and actually use (Buffet's circle of competence). You do open yourself up to currency risk investing in the US, but I am comfortable with this because I plan on spending 3 months of the year living in the US anyway.

The point is, you will never get comfortable about risk, until you put some real money into the game. If you lose money when you start out, consider it the cost of your education. And nothing is more valuable and a practical education. The faster you put skin in the game, the quicker you will learn about your own risk appetite.

My current Mentor suggested that I start giving back and helping others who want to undertake a similar journey. He is about 10-times more wealthy than I am, and people I've met with this amount of wealth speak in a totally different vernacular than I do. They talk about "giving in order to get", "being at service to ever greater numbers of people" ... very woo woo stuff. Hence why I've put some long posts on this forum. I probably should move to the Investment Strategy folder and lay out my methodology in a transparent way for the benefit for all to see. I thought about setting up a non-monetarised Blog, but I'm a bit too lazy for that. I'm a Gen Xer, and blogs are more a Gen Y thing !!

[kiora]

Great discussion as always Hoop and thanks Boring. Both your investing strategies definitely more thought full than the often posted oh its gone up /down every few minutes. Must admit I am a bit lazy on the trading as well Boring but quite happy over 30 something years of buying and mostly holding to have built up a sizable investment for retirement . If anything I admit I have been too slow to sell loss makers at a loss .I recommend adopt a system for getting out of losing positions, stick with your system and be very, very disciplined with the system that you adopt. I believe this has to be part of investing in shares ie when to take the loss/ when to ride the gains & not to sell out too early

[winner69]

Here is what happened to the DIJA when it experienced a Sornette bubble a few years ago

Predicted recent collapses in the price of oil and gold as well .... more pretty pictures
http://www.hussmanfunds.com/wmc/wmc130415.htm




Those log periodic thingies are getting shorter and shorter as the markets continue to rise ....and rise

Kaboom

[peat]

5175

Well indeed the S+P would appear - at least in this very short term - to be struggling with the 1812.
It will save the Booms for the end ;+)

[Hoop]

5175

Well indeed the S+P would appear - at least in this very short term - to be struggling with the 1812.
It will save the Booms for the end ;+)

Hi Peat
Is your chart on NZ time?:)

Todays trading the 10th Dec Wall St time (the 11th Dec NZTime) the index opened below the green 1808.82 tested that mark and failed ending the day at 1803 -5 (-0.3%) breaking the very short 1806 support....and it continues as you say struggling on the short term....
The technicals on the longer term chart (http://stockcharts.com/h-sc/ui) seem to have some bearish divergences developing so there's a hint that a downturn from its high could be in play...This short term weakness adds to the worry in that it could be creating a longer term double top pattern something which we should watch with caution in mind.

Will it be a boom or a kaboom :cool:

[cyclist]

I probably should move to the Investment Strategy folder and lay out my methodology in a transparent way for the benefit for all to see. I thought about setting up a non-monetarised Blog, but I'm a bit too lazy for that. I'm a Gen Xer, and blogs are more a Gen Y thing !!

Hi Boring. I have thinking a lot about these posts over the last few days. Definitely think it would be worth transferring this to a separate thread in the Investment Strategy area. I think your existing posts describe your strategy very well, and could just be repeated/copied over to the new thread. I'm sure there will be others interested in this discussion, who may have missed it as part of the S&P 500 thread.