Daily S&P 500 INDEX TRACKER

[ananda77]

...the Fed yes, its their policy since 2008 and it has not changed so far. The Fed will not let this market go unless they have achieved economic recovery.
... and that's the point: economic recovery in the age of finance capitalism means something completely different than under industrial capitalism.

kind regards

[Hoop]

Yes Ananda...the monetary policy way :)...The Economy has recovered years ago..The leading sectors have been booming for years now and they just have to stay booming for several years yet to allow that trickle down effect to enter into the consumers pocket which is theoretically always the lagging sector of any Economy..

Often by the time the consumers finally get the tickle down rewards the leading sectors of the economy have past their peak and "black clouds" are starting to appear...so one could say that the economy will never be exactly right, or at best, right for a brief period in time only...

We have see different disciplines (usually political) trying to "cheat the cycle" by kick starting an economy by prematurely throwing money into the lagging end, it may give a quick short term consumer boost but that method has proved to produce a longer term "pay the piper" stifling effect. Australia is presently a good example of that with the money spent from its mining boom.. ..

Remember that in USA the destructive GFC evaporated a huge amount of public money..life savings, Real Estate, 401K funds etc..So the Monetary way is that the USA will need an extra long boom to replenish the public's financial hole and the FED is currently manipulating the hell out of the leading sectors to keep that boom running at full steam...

So far you have to give the FED 10 out of 10 for bubble management..It has so far created and is achieving its goals with artificial adjustments to minimising those associated risks....

Theoretically to prevent an economic collapse one creates an artificial bubble(s) (e.g very cheap credit)...and, I read somewhere in a past FED report that Bubble management can become hard to control if continued for too long as risk becomes harder to contain.

I have this feeling the FED never expected this to take so long..

I would love to go back in time to 2009 and ask Uncle Ben "how long does the FED expect it would be before consumer spending reached it's peak" (full economic cycle)..Would his answer been, "before 2014" ?

[ananda77]

Yes Ananda...the monetary policy way :)...The Economy has recovered years ago..The leading sectors have been booming for years now and they just have to stay booming for several years yet to allow that trickle down effect to enter into the consumers pocket which is theoretically always the lagging sector of any Economy..

Often by the time the consumers finally get the tickle down rewards the leading sectors of the economy have past their peak and "black clouds" are starting to appear...so one could say that the economy will never be exactly right, or at best, right for a brief period in time only...

We have see different disciplines (usually political) trying to "cheat the cycle" by kick starting an economy by prematurely throwing money into the lagging end, it may give a quick short term consumer boost but that method has proved to produce a longer term "pay the piper" stifling effect. Australia is presently a good example of that with the money spent from its mining boom.. ..

Remember that in USA the destructive GFC evaporated a huge amount of public money..life savings, Real Estate, 401K funds etc..So the Monetary way is that the USA will need an extra long boom to replenish the public's financial hole and the FED is currently manipulating the hell out of the leading sectors to keep that boom running at full steam...

So far you have to give the FED 10 out of 10 for bubble management..It has so far created and is achieving its goals with artificial adjustments to minimising those associated risks....

Theoretically to prevent an economic collapse one creates an artificial bubble(s) (e.g very cheap credit)...and, I read somewhere in a past FED report that Bubble management can become hard to control if continued for too long as risk becomes harder to contain.

I have this feeling the FED never expected this to take so long..

I would love to go back in time to 2009 and ask Uncle Ben "how long does the FED expect it would be before consumer spending reached it's peak" (full economic cycle)..Would his answer been, "before 2014" ?
...yes right. However, why should bubble management be hard to control, if there are a seemingly endless number of people, industries or governments willing to dive ever deeper into debt?
-Greed sticks- and the world is a large place to be financially engineered
kind regards

[skid]

The eternal (managed)bubble---That would be a first..(granted you can get alot more mileage out of debt than some other kinds of bubbles)

Meanwhile ,the price of oil is still falling ,but the Stock Market s rallying from a few words from the fed..

[ananda77]

The eternal (managed)bubble---That would be a first..(granted you can get alot more mileage out of debt than some other kinds of bubbles)

Meanwhile ,the price of oil is still falling ,but the Stock Market s rallying from a few words from the fed..

...and with no inhibiting nonense like a 'gold standard', the ONLY limit in money creation is inflation - and in an economy riddled with debt that's easy to manage.
... debt limits are naturally the amount of disposable income/profit available for debt service, which it is the banks job to control this kind of equilibrium. But again, the world is a big place with lots of eager people keen on upward mobility

kind regards

[ananda77]

...am trading now expecting a 10% correct for the US market (finally at last) and the 5000 mark for the Aus 200 (no time mucking around at last).
Building the Asian region
kind regards and be successful

[winner69]

4 straight down days - first time in 87 years

Good thing is tomorrow a certainty to be an up day then

http://kimblecharting.tumblr.com/post/107227538901/longest-streak-in-87-years-looks-to-end-today-the

[boring]

That's interesting KW, I'm doing the absolute opposite from you.

I'm not sure what style of trading/investing you do, but I guess the fact that I'm a fundamental long-term contrarian investor makes me look more to the ASX for value at the moment.

I was building up and accumulating my US positions from late 2009 until end of last year. I always make sure that I'm a net buyer of stocks throughout all market conditions. I just allocate my investment capital towards markets and companies I think have good fundamental value. During 2014, I found it difficult to find stocks (in my preferred sectors) that were reasonably valued from a historical perspective. Certainly from a dividend yield perspective anyway. For growth stocks, (that pay no dividends) I really have no financial model that tells me if a stock is cheap, whereas I do for dividend paying stocks. Hence, that's why I find ASX stocks a bit cheaper at the moment. Although it's still slim pickings because the majority of companies on the ASX are in sectors I don't like (resource & mining, banking & retail).

Totally agree that the US economy is on a roll. It's the only major Western economy that is on the upswing. Having come back from a 3-month visit there just recently, you can see how much more frenetic it is in the malls. Another good mainstream indicator is when Disney (DIS) increase its entry fees to the theme parks and there is still increasing attendance figures. If ever there was a discretionary purchase, it's a trip to a Disney theme park.

I do keep a separate satellite fund (10% of my total portfolio) for speculative growth stocks. That way I can satisfy my psychological need to take a punt on stocks with the potential for huge capital gains without permanent injury to my financial well-being. However, these stocks tend to be ones I hold for a very long time to allow by business thesis to play out (e.g. TRIP, BIDU, Z etc). The technicals on some of these stocks look awful (i.e. downtrend, trading under 200-day SMA), but I'm still holding because my business thesis about these companies remains intact. I generally don't use technicals. In 25 years of investing, never have. I'm a business guy.

[boring]

Looks like I'm not the only one who uses the "crowdedness" at the Disney Theme Parks as a Main Street indicator on the health of the US economy.

https://finance.yahoo.com/video/walt-disney-world-become-economic-124910239.html

As a long time DIS shareholder (over 15 years), I usually like to visit the theme park area to get a sense of how well they are doing. I don't always to go in to the theme park itself (an expensive proposition), but I at least pop in to the retail and restaurant precinct in Downtown Disney where's it's free to visit. Usually if Downtown Disney is crowded and humming, so is the theme park. When I was there about 6 weeks ago, it was a frenzy at the cash registers.

[winner69]

Hoop - I reckon a new high beckons next week with a number greater jan 2100

Log periodic advances working well

[ananda77]

...save trading 'long' above SPX 500 *2030. maybe the market will surprise us with a prolonged base building sideways action

kind regards

[winner69]

Hi Winner
It's not good news when copper drop as it is seen as an global economic indicator...You get political BS from time to time when USA has a crack at China..one was when China (not the sporting thing..old Chap) trickle dumped US$ and bought copper reserves during the early recovery...however from chart history that's what always happens..... Copper is a good leading indicator to show cyclic changes especially equity change from bear to bull (100% accurate so far in the last 100 years).

What is a very worrying sight is the pause in the equity markets...its like it being suspended and are defying gravity....a bit like those old cartoons when a character e.g Wle-E-Coyote runs of a cliff suspended in mid-air before gravity takes over:D
http://www.imageurlhost.com/images/9tzcd024ey0vzxpn2c5s.jpg

The chart below with the 3 indexes relating to each other shows a worrying divergence towards the S&P500 index

http://www.imageurlhost.com/images/ouhelowt3o7upk6ohz6.png

Hoop .....not looking good for Dr Copper at the moment

Things repeating themselves?

[ananda77]

...am trading now expecting a 10% correct for the US market (finally at last) and the 5000 mark for the Aus 200 (no time mucking around at last).
Building the Asian region
kind regards and be successful

...still think the market remains in a topping pattern leading to a at least 10% correction.
... to early to be sure, as the VIX and the NYA-index amongst others are in triangular formations

with a break out soon. Also, the NYA-index is in the process of testing a triple top. Personally, would not short the market outright because of the triple top test
... waiting for the break out and test result
... in the meantime, the bull's and bears are fighting it out as seen in yesterday's trading.
kind regards

[Hoop]

Hoop .....not looking good for Dr Copper at the moment

Things repeating themselves?

Hmmm...maybe

The investor herd is anxious and easily spooked atm...All it needs is a piece of systemic bad news, and voila...a possible stampede....

......Oh there we go.. a flash crash in Europe...Gee the herd are jumpy today..S&P500 futures suddenly dropped to below 2000.. methinks this is not a healthy sign Winner

[ananda77]

...still think the market remains in a topping pattern leading to a at least 10% correction.
... to early to be sure, as the VIX and the NYA-index amongst others are in triangular formations with a break out soon. Also, the NYA-index is in the process of testing a triple top. Personally, would not short the market outright because of the triple top test
... waiting for the break out and test result
... in the meantime, the bull's and bears are fighting it out as seen in yesterday's trading.
kind regards

...the positive sign yesterday in the US markets: gain/loss momentum indicator switching positive
...this was the handle for successful intervention tonight ...-otherwise the markets would have gone over the cliff
...the VIX, NYA, Liquidity Inflows successfully tested their respective triangular support tonight -no breakout has occurred-

...tonight's trading may have stopped the week long rout, but it's definitely to early to be sure.
kind regards

[winner69]

Early next week that 2100 will happen, then look forward to 2200. Log periodic ups and downs still happening

Today's impetus earnings driven too, nice

The worlds a happy place at the moment eh

[Hoop]

Early next week that 2100 will happen, then look forward to 2200. Log periodic ups and downs still happening

Today's impetus earnings driven too, nice

The worlds a happy place at the moment eh

Yep the world markets are indeed a happy place today.. There's a new supply of QE in town ... withdrawl symptoms easing... beautiful psychedelic hues everywhere...wow.. its driven by flower power..ahhh thanks Mr Draghi

[Baa_Baa]

Is anyone else keeping an eye on this, the 7 year cycle? The internet is littered with articles about it, here's one for an entre. http://www.kitco.com/ind/Kilbach/2014-10-17-Stock-Market-Seven-Year-Cycle-A-Correction-Ahead.html Not saying I believe in this but you can't deny the toppy look of the DJIA etc, and it's year 7. Anyway, interested to hear from anyone who's watching.

[Hoop]

Is anyone else keeping an eye on this, the 7 year cycle? The internet is littered with articles about it, here's one for an entre. http://www.kitco.com/ind/Kilbach/2014-10-17-Stock-Market-Seven-Year-Cycle-A-Correction-Ahead.html Not saying I believe in this but you can't deny the toppy look of the DJIA etc, and it's year 7. Anyway, interested to hear from anyone who's watching.

Yes Baa Baa I keep an eye on this cycle and many other bits and pieces.

Charting throws up all sorts of weird and wonderful cyclic stuff to which some events have nothing in common with each other..yet they work until their oscillations goes out of sync some time in the "unpredictable" future.

As a chartist I hunt around for correlating cyclic events to help me raise the probabilities of a future outcome (a little hobby of mine:))...Being a property investor for most of my life the 7 year cycle was one of my first cyclic events I researched as a chartist..My conclusion in trying to explain why the 7 year cycle pattern is so commonly found throughout history and has become one of those "rules of thumb" can be explained as some sort of long term human group behavioural reversal pattern...which affects group decision making..it not only effects business but individual personal lives as well...e.g the so-called 7 year itch..
Being a chartist I don't care if any of this stuff is relevant or not..I don't believe or disbelieve..I only believe in reoccurring events being in constant sync of each other..

I have mentioned this sort of stuff on ST before ..
With every set of two (or more) factors correlating or near correlating causing an identical event .. I call it a duck....Taking an individual event whether its a correlating cycle or near correlating or lagging leading inverse or differing oscillators syncing whatever, it's usually a good enough indicator to alert an investor ..but the old TA saying goes 'dont rely on one indicator (duck) alone" ...

With this Duck Methodology, the ultimate prediction power becomes apparent when all the ducks line up in a row just before that event occurs...(the ducks with differing oscillations and behavioural cycles all converge and come into a brief syncing period) e.g 2007/08 GFC..

Re diagram all the ducks lined up at the top.

http://www.nist.gov/public_affairs/releases/images/frequency_comb1.jpg

[Baa_Baa]

Thanks Hoop, hopefully more are also watching, the uncanny recurrence of boom and bust of the 7 year cycle.

As one who also takes cues from the charts, I agree that aligning the ducks, or indicators is important. Stepping back and observing the macro view is also helpful. There was no surprise in the GFC, it was forecast accurately by numerous concerned commentators. The internet was littered with 'doomsayers', and that time they were right, despite some who would say 'even the stopped clock tells the right time twice a day'. I remember the day when it actually happened, when GFC finally hit the news, my thoughts were, it's actually happening!

So as a starter for discussion, one can easily observe the correlation of the NZX to the DOW, and the 7 year cycle. One can also easily read all the views and their linkages to various mumbo jumbo and witchcraft, however sticking with the simple stuff ... year 7 of the bull is 2015 (Sept 2014 actually), and year 7 of the low is 2016. The DOW is undeniably toppy, and so is the NZX. People can take that for whatever they like, though ignoring it might be foolish.

For my part, I've just tightened up my stops a bit. Nothing too drastic, but there's no way I'm going to ride a GFC2 into the ground, if I can avoid it.

6709

[skid]

First step in the 7 yr cycle

http://www.reuters.com/article/2015/01/25/us-greece-election-cameron-idUSKBN0KY12320150125

[ananda77]

...the VIX, NYA, Liquidity Inflows successfully tested their respective triangular support tonight -no breakout has occurred

... the three markets remain in their formations, no breakout either way occurred. These markets are now very close to their respective Apex -be careful and hedge long positions until then-
kind regards

[ananda77]

... the three markets remain in their formations, no breakout either way occurred. These markets are now very close to their respective Apex -be careful and hedge long positions until then

...another cliffhanger just saved from oblivion - Cash flowing into the markets but it gets more difficult to create upside momentum
..below SPX500 *2029 lurks the Bear -
...wait for the breakout...
kind regards

[ananda77]

Yes Baa Baa I keep an eye on this cycle and many other bits and pieces.

Charting throws up all sorts of weird and wonderful cyclic stuff to which some events have nothing in common with each other..yet they work until their oscillations goes out of sync some time in the "unpredictable" future.

As a chartist I hunt around for correlating cyclic events to help me raise the probabilities of a future outcome (a little hobby of mine:))...Being a property investor for most of my life the 7 year cycle was one of my first cyclic events I researched as a chartist..My conclusion in trying to explain why the 7 year cycle pattern is so commonly found throughout history and has become one of those "rules of thumb" can be explained as some sort of long term human group behavioural reversal pattern...which affects group decision making..it not only effects business but individual personal lives as well...e.g the so-called 7 year itch..
Being a chartist I don't care if any of this stuff is relevant or not..I don't believe or disbelieve..I only believe in reoccurring events being in constant sync of each other..

I have mentioned this sort of stuff on ST before ..
With every set of two (or more) factors correlating or near correlating causing an identical event .. I call it a duck....Taking an individual event whether its a correlating cycle or near correlating or lagging leading inverse or differing oscillators syncing whatever, it's usually a good enough indicator to alert an investor ..but the old TA saying goes 'dont rely on one indicator (duck) alone" ...

With this Duck Methodology, the ultimate prediction power becomes apparent when all the ducks line up in a row just before that event occurs...(the ducks with differing oscillations and behavioural cycles all converge and come into a brief syncing period) e.g 2007/08 GFC..

Re diagram all the ducks lined up at the top.

http://www.nist.gov/public_affairs/releases/images/frequency_comb1.jpg
...Hoop, your cycle graph is actually fascinating. Do you know each length of the cycles when they all lined up??? How often has such an alignment occured historically???
The problem I find with cycle theory incl. Elliot wave is that the analyst always know in hindsight which cycle did what - top or trough-
...and there are so many cycles from 1000 years down to minutes that, in hindsight one or another cycle fits the picture always
kind regards

[ananda77]

... the three markets remain in their formations, no breakout either way occurred. These markets are now very close to their respective Apex -be careful and hedge long positions until then

...despite the nasty downside, especially for those who were lured into the silly ASX200 bullish wolfs den over the course of this week, not all is doom and gloom.
No breakout has occurred in the NYA, Liquidity Inflows.
The VIX closed at 20.29, while the current breakout point is above 21.35. However, no positive Close tomorrow, and markets will be in real serious trouble

kind regards

[ananda77]

...However, no positive Close tomorrow, and markets will be in real serious trouble

...OK, the markets bounced off nicely and closed positive.
Below SPX500 *2030/*2040, markets remain a high risk affair -no breakout has occurred-
kind regards

[Agrarinvestor]

Next week i expect a short squeeze for CGA:
http://www.sharetrader.co.nz/showthread.php?9282-CGA-the-most-undervalued-stock-on-earth
The reasons for my assumption is because of my fundament/investigative research and the first dividend what we received.

I have not so much knowledge abot chart technik and technical signals. Can someone with technical skills comment on that:
6727

[Baa_Baa]

Hoop can probably clarify but I think that 'electric field/wave' chart was an illustration of how cycles eventually converge (the perfect storm, or 'freak wave'), rather than actually showing an investment instrument price scenario.

As an aside, I do like Elliottwave, I have to admit, but don't talk about it much here ... because in NZX stocks which I am focused on, the volume IMHO is way too low and the timeframes way too short to realistically apply the method .. there is no 'supercycle' so it's just speculation to devolve that down to yearly or monthly price movements. Can't comment about forex, as I don't know. But for a long term commodity, like gold or silver for example, Elliott has worked OK for me. You really need secular bull/bear market scenarios for Elliottwave to work imho. But it does help in those situations.

The point is whether one buys into the theory of cycles per se, and if they do, whether the current cycle is near or approaching the end of an up-cycle period (bull) or at or in the beginning of the next period (bear).

I may be repeating myself but for my part, and saying again .. I'm focused on NZX stocks at present, I just accept that the current period is, regardless of its length, very top heavy, and correlated to much larger markets like the DOW/SP500, and because capital preservation is my #1 priority, ahead of yield, and ahead of capital gains .. I'm prepared to just tighten up my stops a bit in case of a surprise to the downside, which in hindsight won't be a surprise, because we were watching the cycles, we knew it would happen eventually, and we put in place some simple risk mitigations.

I don't like to over think this stuff, or buy into the witchcraft. It's a lot easier to just say ... 'hey, yes, it is toppy and has been on a stellar run, so how about covering my risk by putting in some tighter stops' ... whatever pony you choose to ride.

Thoughts?

BAA



...Hoop, your cycle graph is actually fascinating. Do you know each length of the cycles when they all lined up??? How often has such an alignment occured historically???
The problem I find with cycle theory incl. Elliot wave is that the analyst always know in hindsight which cycle did what - top or trough-
...and there are so many cycles from 1000 years down to minutes that, in hindsight one or another cycle fits the picture always
kind regards

[ananda77]

Hoop can probably clarify but I think that 'electric field/wave' chart was an illustration of how cycles eventually converge (the perfect storm, or 'freak wave'), rather than actually showing an investment instrument price scenario.

As an aside, I do like Elliottwave, I have to admit, but don't talk about it much here ... because in NZX stocks which I am focused on, the volume IMHO is way too low and the timeframes way too short to realistically apply the method .. there is no 'supercycle' so it's just speculation to devolve that down to yearly or monthly price movements. Can't comment about forex, as I don't know. But for a long term commodity, like gold or silver for example, Elliott has worked OK for me. You really need secular bull/bear market scenarios for Elliottwave to work imho. But it does help in those situations.

The point is whether one buys into the theory of cycles per se, and if they do, whether the current cycle is near or approaching the end of an up-cycle period (bull) or at or in the beginning of the next period (bear).

I may be repeating myself but for my part, and saying again .. I'm focused on NZX stocks at present, I just accept that the current period is, regardless of its length, very top heavy, and correlated to much larger markets like the DOW/SP500, and because capital preservation is my #1 priority, ahead of yield, and ahead of capital gains .. I'm prepared to just tighten up my stops a bit in case of a surprise to the downside, which in hindsight won't be a surprise, because we were watching the cycles, we knew it would happen eventually, and we put in place some simple risk mitigations.

I don't like to over think this stuff, or buy into the witchcraft. It's a lot easier to just say ... 'hey, yes, it is toppy and has been on a stellar run, so how about covering my risk by putting in some tighter stops' ... whatever pony you choose to ride.

Thoughts?

BAA


Hoop can probably clarify but I think that 'electric field/wave' chart was an illustration of how cycles eventually converge (the perfect storm, or 'freak wave'), rather than actually showing an investment instrument price scenario.

As an aside, I do like Elliottwave, I have to admit, but don't talk about it much here ... because in NZX stocks which I am focused on, the volume IMHO is way too low and the timeframes way too short to realistically apply the method .. there is no 'supercycle' so it's just speculation to devolve that down to yearly or monthly price movements. Can't comment about forex, as I don't know. But for a long term commodity, like gold or silver for example, Elliott has worked OK for me. You really need secular bull/bear market scenarios for Elliottwave to work imho. But it does help in those situations.

The point is whether one buys into the theory of cycles per se, and if they do, whether the current cycle is near or approaching the end of an up-cycle period (bull) or at or in the beginning of the next period (bear).

I may be repeating myself but for my part, and saying again .. I'm focused on NZX stocks at present, I just accept that the current period is, regardless of its length, very top heavy, and correlated to much larger markets like the DOW/SP500, and because capital preservation is my #1 priority, ahead of yield, and ahead of capital gains .. I'm prepared to just tighten up my stops a bit in case of a surprise to the downside, which in hindsight won't be a surprise, because we were watching the cycles, we knew it would happen eventually, and we put in place some simple risk mitigations.

I don't like to over think this stuff, or buy into the witchcraft. It's a lot easier to just say ... 'hey, yes, it is toppy and has been on a stellar run, so how about covering my risk by putting in some tighter stops' ... whatever pony you choose to ride.

Thoughts?

BAA

...yes this makes perfect sense

I do use the Elliot Wave because their analysis of pivot points, support and resistances are useful. When it comes to the count scenarios, honestly, I dont need a theory to tell me in how many directions the market can move. My thinking is, that the Elliot Wave or Hurst Cycles or any other theory based on a back-analysis is only as good as the person who's looking at it.

Trading and investing is a psychological phenomenon, where self-confidence, fearlessness, creativity, determination, knowledge (general and self) and ...CASH...creates winning profiles. Others would probably add 'greed' as main ingredient, and I would not argue with that. However, people usually driven by greed have a lack of self-control, over-inflated egos, use drugs which, in the end will create a loosing profile.

kind regards

[Hoop]

...Hoop, your cycle graph is actually fascinating. Do you know each length of the cycles when they all lined up??? How often has such an alignment occured historically???
The problem I find with cycle theory incl. Elliot wave is that the analyst always know in hindsight which cycle did what - top or trough-
...and there are so many cycles from 1000 years down to minutes that, in hindsight one or another cycle fits the picture always
kind regards
Know in hindsight?....yes usually what happens:) when determining a behaviour of a cycle..but for those people watching a group of cycles which may (assuming no sudden altering changes) reach towards some sort of near convergence, it does give everyone a warning sign to be cautious..ie not the time to sell your house and plonk it all into the sharemarket....but..yeah it's the curly bit happenings (reversals) at the end of each cycle wave that's hard to time (predict) as its always the case in real life situations those waves may not have a constant frequency..but at least a probability rate can be determined

My personalised project is to use many related markets cycles that interact in someway with each other using the Equity Market as the central focus ..All cycles I use are orientated to the long or very long (secular) term as longer term cycles have more trending predictability because the secondary drivers whipsawing the market on a short term temporary basis are filtered out..Therefore the primary driver Inflation is left to dominate together with the secular primary driver the Annualised PE Ratio trend

As my personal TA Investor discipline requires >70% probability I usually don't bother using any of these shorter term disciplines unless my discipline throws up a decision problem.).... Using a shorter term cycle (time frame) it comes with more risk as the probability rate decreases due to secondary/tertiary drivers dominating the marketplace eg unexpected whipsaws due to noisy media etc..I'm not a great fan of Elliot waves when it reaches the subwaves in predicting short term outcomes ..Harmonic Trading (http://“Imagine” Lennon) is better (less risky if used on a much long term chart)..using Fibonacci numbers to determine chart patterns such as Gartley, Butterfly,Bat, Crab, etc...but I cant identify most of those harmonic patterns using my chart eyes.....so if its all too hard I don't bother.....simple !

Back on topic..
The S&P500 has broken up out of its 6 week down trending channel..so TA wise expect it to test its all time highs with a good chance it will form another record high

[ananda77]

...Back on topic..
The S&P500 has broken up out of its 6 week down trending channel..so TA wise expect it to test its all time highs with a good chance it will form another record high

...now in agreement, although no NYA, VIX, or Liquidity breakout of the triangular pattern has occurred and chances for another swift shake-out are as good as a breakout to new highs.
...would not mind another swift yummy equity shake
kind regards

[Hoop]

8th February 2015 post#1549
......................
Back on topic..
The S&P500 has broken up out of its 6 week down trending channel..so TA wise expect it to test its all time highs with a good chance it will form another record high

Didn't have to wait long
As I type the S&P500 is at 2095.73, record breaking above the primary resistance of 2093.55 (the previous intraday record top of 2093.55 set on the 29th December 2014)

2100 looking good..eh Winner

[winner69]

Didn't have to wait long
As I type the S&P500 is at 2095.73, record breaking above the primary resistance of 2093.55 (the previous intraday record top of 2093.55 set on the 29th December 2014)

2100 looking good..eh Winner

Then we look forward to 2200 by Easter

[winner69]

I see the Nasdaq is back to where it was in 1999

Good eh

[winner69]

All good .... 2100 beckons this week and 2200 by Easter

She will ensure she does nothing to spook the market ... can'thave a down market with presidential elections coming up can we

[Hoop]

There we have it... closed at a record high...2100 on the knocker :)

[kiora]

https://au.finance.yahoo.com/news/goldman-markets-going-nowhere-182920889.htmlWho knows ?

[Hoop]

I must admit when I read today that the NYSE suffered a "black Squirrel" event during trading (8th July 2015) (http://www.marketwatch.com/story/nyse-outage-is-a-black-squirrel-event-2015-07-08).... I rushed to Mr Google as I had no idea what a Black Squirrel was..
Mr Google wasn't much help....
Digging deeper into the realms of cyberspace searches..I got a possible answer..

It seems "black squirrel" may have been coined by Chuck Jaffe back in 23 August 2013 in a video interview (http://www.wsj.com/video/nasdaqs-black-squirrel-event-what-can-you-learn/D96EA5F9-0399-43A4-B722-990136E0C36E.html).
Chuck's Black Squirrel Event is a sudden shutdown of services which at the time of happening is unexplained..It is not a rare event..but some notable events in Stock Exchange History were Dec 1987 and Aug 1994 when the NASDAQ suddenly shut down due to squirrels gnawing through power lines and charring themselves in the process...hence the imaginative named event:D

[noodles]

I follow the S&P500 closely from a fundamental and technical viewpoint. It is highly correlated to the NZX.
7487
(sorry about the size).

So whatever the S&P500 does, you can bet we will follow. The trend on my twitter account has been all about market breadth (or lack of it). While we have recently had a new high, it is only the larger components of the index that are also making new highs. Apparently, market breadth is very important. Divergences in breadth in the past resulted in major market crashes.


Also, of note is that the transport stocks are also falling.


This is what Hussman says.
http://www.hussmanfunds.com/wmc/wmc150720.htm

[winner69]

Interesting and ominous

http://www.masterdata.com/Reports/Combined/ADLine/Daily/$SPX.htm

[noodles]

Lance Roberts brings all your bearish articles into one place.
http://streettalklive.com/index.php/blog.html?id=2815

Here is one to panic over
http://www.thefiscaltimes.com/Columns/2015/07/21/Nasdaq-Flashing-Dot-com-Era-Warning-Signal

Winner69, How much downside protection do you have in your portfolio?

[winner69]

Lance Roberts brings all your bearish articles into one place.
http://streettalklive.com/index.php/blog.html?id=2815

Here is one to panic over
http://www.thefiscaltimes.com/Columns/2015/07/21/Nasdaq-Flashing-Dot-com-Era-Warning-Signal

Winner69, How much downside protection do you have in your portfolio?

Noodles, not into hedging / options if that is your question

So in theory none - just sell when the squiggly lines say so and sit it out on the sidelinesu

What do you do?

[noodles]

Noodles, not into hedging / options if that is your question

So in theory none - just sell when the squiggly lines say so and sit it out on the sidelinesu

What do you do?
I short the index. I'm about 15% hedged ATM.

[Hoop]

Dated 21st September 2014 Post#1431

Rising wedge + falling Volume = your guess :)

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP50019092014.png (http://s458.photobucket.com/user/Hoop_1/media/SampP50019092014.png.html)

UPDATE: As of 24th July 2015

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP%20500%2024072015a.png (http://s458.photobucket.com/user/Hoop_1/media/SampP%20500%2024072015a.png.html)

[Hoop]

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP500%2024072015.png (http://s458.photobucket.com/user/Hoop_1/media/SampP500%2024072015.png.html)

[winner69]

I short the index. I'm about 15% hedged ATM.

Noodles, what does this insurance 'cost' you?

[noodles]

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP500%2024072015.png (http://s458.photobucket.com/user/Hoop_1/media/SampP500%2024072015.png.html)

Thanks Hoop,

My biggest challenge at the moment is to formulate a strategy to hedge my portfolio against the inevitable bear market. I am thinking that the S&P500 provides enough correlation to the NZX. Now the challenge is to build a short position. I plan to add short positions as evidence of a US Bear market develops. The lack of market breadth in the US markets could be the first sign that this bull is nearly over (or even over as we speak).

But I'm not confident enough to load up yet. I am looking for confirmations to add shorts. Perhaps a break below 2094 would be a good point as it would mean a lower high.

What would you be looking for?

[Hoop]

Thanks Hoop,

My biggest challenge at the moment is to formulate a strategy to hedge my portfolio against the inevitable bear market. I am thinking that the S&P500 provides enough correlation to the NZX. Now the challenge is to build a short position. I plan to add short positions as evidence of a US Bear market develops. The lack of market breadth in the US markets could be the first sign that this bull is nearly over (or even over as we speak).

But I'm not confident enough to load up yet. I am looking for confirmations to add shorts. Perhaps a break below 2094 would be a good point as it would mean a lower high.

What would you be looking for?

S&P500 has a descending broadening pattern in play, a useless pattern as it can break up or down with 50/50 probability..however the last correction attempt (another cry wolf) which should've reached 2020 got arrested at and respected the MA200 line (resistance) so now its heading back up to its record top again...Arrested falls can be bullish as they sometimes signal a near future pattern breakout...so chances are, in the short term it wouldn't surprise me to see it reach at least 2130 again which is the top boundary of the broadening pattern.

Going nowhere behaviour without a trading pattern (rectangle) and crying wolf can be a bitch for everyone, the long and the short investors and for chartists..if the S&P500 chart doesn't know where it going, neither will the Chartist....

Noodles, you have been been in the share market game for a while now and not being confident demonstrates that you are trying very hard to find a bearish reason yet your inner self knows that now is not the time...so listen to you instincts.....the charts will tell you when a downtrend becomes established (lower high, lower low) and by then your instincts will confirm...................don't let cognitive dissonance rule as this behaviour is the enemy..

[noodles]

S&P500 has a descending broadening pattern in play, a useless pattern as it can break up or down with 50/50 probability..however the last correction attempt (another cry wolf) which should've reached 2020 got arrested at and respected the MA200 line (resistance) so now its heading back up to its record top again...Arrested falls can be bullish as they sometimes signal a near future pattern breakout...so chances are, in the short term it wouldn't surprise me to see it reach at least 2130 again which is the top boundary of the broadening pattern.

Going nowhere behaviour without a trading pattern (rectangle) and crying wolf can be a bitch for everyone, the long and the short investors and for chartists..if the S&P500 chart doesn't know where it going, neither will the Chartist....

Noodles, you have been been in the share market game for a while now and not being confident demonstrates that you are trying very hard to find a bearish reason yet your inner self knows that now is not the time...so listen to you instincts.....the charts will tell you when a downtrend becomes established (lower high, lower low) and by then your instincts will confirm...................don't let cognitive dissonance rule as this behaviour is the enemy..
Yes, I think you are right. I have a few "issues" to work through. lol
I'm not sure I trust my instincts, so I was really looking for a mechanical approach. Lower high in place. Waiting for lower low before adding to the short.

I can't give you any more reputation, so maybe someone else can do it on my behalf.

[winner69]

I reckon 2134 will be good support after the S&P500 reaches new highs again

Things will be OK this year, Janet will see to that

[noodles]

I reckon 2134 will be good support after the S&P500 reaches new highs again

Things will be OK this year, Janet will see to that
S&P500 has just dipped below 200EMA in after hours trading. We may have already had the high for 2015.

[winner69]

US markets been weak(ish) since Ali Baba IPO .... that was probably when this bull cycle ended

NZ in similar mode .... possibly look back later in the year and say yes things did start looking bad in February and its been all downhill since then.

these things take time to unfold

[noodles]

S&P500 has a descending broadening pattern in play, a useless pattern as it can break up or down with 50/50 probability..however the last correction attempt (another cry wolf) which should've reached 2020 got arrested at and respected the MA200 line (resistance) so now its heading back up to its record top again...Arrested falls can be bullish as they sometimes signal a near future pattern breakout...so chances are, in the short term it wouldn't surprise me to see it reach at least 2130 again which is the top boundary of the broadening pattern.

Going nowhere behaviour without a trading pattern (rectangle) and crying wolf can be a bitch for everyone, the long and the short investors and for chartists..if the S&P500 chart doesn't know where it going, neither will the Chartist....

Noodles, you have been been in the share market game for a while now and not being confident demonstrates that you are trying very hard to find a bearish reason yet your inner self knows that now is not the time...so listen to you instincts.....the charts will tell you when a downtrend becomes established (lower high, lower low) and by then your instincts will confirm...................don't let cognitive dissonance rule as this behaviour is the enemy..
Breach of 2040 will knock out recent support and long term trend line. I'm not the only one watching that number.

[noodles]

Breach of 2040 will knock out recent support and long term trend line. I'm not the only one watching that number.

It's happened, breach of 2040 and long term uptrend broken. The bull is probably dead.

[winner69]

Carnage ... and is not even October

[sb9]

Holy cow, is the world ending soon??? Or is it the big instos dropping a hint to Fed "no rate rise".

[noodles]

It's happened, breach of 2040 and long term uptrend broken. The bull is probably dead.

Over the last few weeks I've placed some non-expiring short positions on the S&P500. This is purely as a hedge against my NZX/ASX portfolio. I've become more aggressive as the technicals have deteriorated.
2099, 2096, 2063, 2030.

I can't predict what will happen on Monday, but a relief rally up to 2040 would be normal behavior.

[noodles]

A interesting read here. Basically saying that certain sectors drop first, then the whole market fails a few months later. I wonder if that applies to the NZX/ASX? The Tech, Banking, resources, and mining services have lead the ASX.

http://seekingalpha.com/article/3452676-a-bear-market-has-2-phases

[winner69]

Holy cow, is the world ending soon??? Or is it the big instos dropping a hint to Fed "no rate rise".

I've always held view Janet is not going raise rates until well into next year. If she does they will be small and irregular nobody will notice.

They say 'Janet, no real turmoil in the markets until the elections'

[winner69]

http://www.businessinsider.com.au/socgen-investors-style-bear-market-2015-8

High probability of a bear ....indicator highest since the Great Recession.

[winner69]

Still in a BULL market

http://www.businessinsider.com.au/tom-lee-on-why-stocks-will-rally-2015-8

[Xerof]

Thats a Lee, talking housing.......:D

does that count?

[winner69]

Just normal behaviour

No need to panic -- we be alright by Xmas

Some dude posted this chart on twitter - all the pull backs since 2009

[winner69]

^VIX shot up to 28 ...the Fear Factor kicking in

Implies that the S&P will go up or down 8% in the next 30 days.

[Baa_Baa]

It's happened, breach of 2040 and long term uptrend broken. The bull is probably dead.

Sure does look ominous. The Monthly log chart gives perspective, bull and bear markets take years to unfold. The 38.2% fib retrace is uncannily sitting right on the double tops (now support) of the past 15 years. I certainly don't share any of the short term optimism for equities as others amongst us, in fact some have been preparing for this for a while, and now it's happening or certainly appears to be.

7544

[noodles]

^VIX shot up to 28 ...the Fear Factor kicking in

Implies that the S&P will go up or down 8% in the next 30 days.
The VIX may have exploded up, but Call Options around 2100 are really cheap. I think we have reached the point of capitulation. Thus I've bought an Oct expiry call option at 2110.

My S&P index shorts remain.

[winner69]

Read somewhere that the Taylor Rule said the Fed should have started raising rates in 2011. Implication by not doing so is pain ahead that could have been avoided

[Hoop]

From Chart of the Day
http://www.chartoftheday.com/



Chart of the Day




With Q2 earnings largely in the books (over 97% of S&P 500 firms have reported), today's chart provides some long-term perspective on the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today's chart illustrates the dramatic nature of the earnings plunge during the financial crisis as well as the recovery that followed -- a recovery that took earnings from levels not seen since the Great Depression to a new record high. Over the past two quarters, however, S&P 500 inflation-adjusted earnings have declined by a significant 12% from their record highs -- a significant concern going forward.

Notes:
Where's the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron's recommended charts of Chart of the Day Plus (https://www.chartoftheday.com/secure/signup/).


http://www.chartoftheday.com/20150909.gif

[Valuegrowth]

Read somewhere that the Taylor Rule said the Fed should have started raising rates in 2011. Implication by not doing so is pain ahead that could have been avoided

I don’t think Fed will raise interest rate in this September. Most probably they will have a systemic and gradual approach to it from 2016 onwards. USD could become number one bullish currency in 2017/18. I believe after this sell off and volalliilty S & P500 could climb back breaking its all time high towards end of this year.

http://www.usatoday.com/story/money/markets/2015/08/24/fed-excuse-not-raise/32272705/

Fed gets new excuse to not raise rates

[Valuegrowth]

http://www.reuters.com/article/2015/09/11/us-markets-stocks-usa-idUSKCN0RB18820150911

Wall Street climbs, S&P 500 posts best week since July

[frostyboy]

Technically the S&P500 needs to break down 1906-1915 on momentum, to go lower. I've covered my shorts, i) I don't take a trade that's too obvious ii). We are far away from moving averages that can have intervention. This doesn't mean I will go long, one of my money managements is don't go against the primary trend when trading.

http://iforce.co.nz/i/wkjz50mh.qry.png (http://www.iforce.co.nz/View.aspx?i=wkjz50mh.qry.png)

[kiora]

Technically the S&P500 needs to break down 1906-1915 on momentum, to go lower. I've covered my shorts, i) I don't take a trade that's too obvious ii). We are far away from moving averages that can have intervention. This doesn't mean I will go long, one of my money managements is don't go against the primary trend when trading.

http://iforce.co.nz/i/wkjz50mh.qry.png (http://www.iforce.co.nz/View.aspx?i=wkjz50mh.qry.png)

Heading there to 1915.Is the momentum indicating it will get there in the next month ?
If so how low will it go?
What do you think FB ?

[frostyboy]

Heading there to 1915.Is the momentum indicating it will get there in the next month ?
If so how low will it go?
What do you think FB ?



It closed at 1932 and has put in a bottoming tail.
Type of momentum that could take it lower:
i) A failed move up/bull trap. This could happen within the 1910-1990 trading range
ii) A negative news event whilst the index is hitting support at 1910

I would rather take a trade on i) than ii)
I don't know if it will be lower next month and how low it will go. I think it will be lower 1 year from now and we are currently in phase 1 of a bear market

[frostyboy]

Follow the leaders:
http://iforce.co.nz/i/kv2ut2un.w02.png (http://www.iforce.co.nz/View.aspx?i=kv2ut2un.w02.png)

[kiora]

Has sentiment changed ?Yellen flags bias to increasing interest rates by end of year & the S &P doesn't drop !
https://nz.finance.yahoo.com/news/bonds-weaker-us-flags-dec-230219351.html
https://nz.finance.yahoo.com/q?s=^GSPC

[kiora]

Follow the leaders:
http://iforce.co.nz/i/kv2ut2un.w02.png (http://www.iforce.co.nz/View.aspx?i=kv2ut2un.w02.png)

Maybe oversold?

[kiora]

Maybe oversold?

No ,not oversold :) 1870 for the S&P coming up before Xmas ?
The fluctuations in Volatility (fear index) is showing decreasing osculations since 2007.
https://nz.finance.yahoo.com/echarts?s=%5EVIX#symbol=%5EVIX;range=1y
Is flash trading loosing its touch,60% or more of the market

[winner69]

No ,not oversold :) 1870 for the S&P coming up before Xmas ?
The fluctuations in Volatility (fear index) is showing decreasing osculations since 2007.
https://nz.finance.yahoo.com/echarts?s=%5EVIX#symbol=%5EVIX;range=1y
Is flash trading loosing its touch,60% or more of the market

Before Xmas?

Maybe today at this rate

[winner69]

Maybe oversold?

When BABA floated and had a great few days the S&P hit 2130 - the high at the time and just beaten again.

Some said all this stupid and such stupidness signals the high of the S&P in this cycle - the end of the bull run

Looks they were right

[kiora]

When BABA floated and had a great few days the S&P hit 2130 - the high at the time and just beaten again.

Some said all this stupid and such stupidness signals the high of the S&P in this cycle - the end of the bull run

Looks they were right

Agrees W 69,It really just makes a mockery of recommendations
https://nz.finance.yahoo.com/q/ao?s=BABA

[kiora]

Is S&P 500 the little train that could make it past 1900,Williams % indicating over sold and VIX dropping?

[Hoop]

Is S&P 500 the little train that could make it past 1900,Williams % indicating over sold and VIX dropping?

Yeah...past 1900 to close at 1920...but I'm bearish because the Dead Cat Bounce pattern is now a reality and chances are there is a 75% probability (Bulkowski) the S&P500 will drop to form a new low <1867....

Kiora .. William %R oscillator will swing on any sort of rally, whether it being a relief, sucker, or resumption...For Example during the 2008 - 2009 bear market cycle the William %R was in oversold territory a lot of the time with some periods lasting for a month or more...during the bear cycle back then, any William %R buy signal had to viewed as a caution because even a leveling out period after a wave down got the Williams excited and triggered buy signals

Also..the VIX...It is a forward volatility indicator but it has been dramatised by the media as a fear index but this is not its true indicative function..The media is fixated on the VIX because they refer back to only the 2008-2009 severe Bear market cycle where the VIX went extreme...but looking further back to the previous severe bear market cycle 2001-2002 the VIX had a much calmer time and in actual fact there was not much difference between the 1998 - 1999 Bull period compared with 2001-2002 Bear....But in saying this.. there is a correlation as extended periods of calmest seem to occur during a Bull Market cycle...

The monthly chart below shows S&P500 in green and VIX in black

http://i458.photobucket.com/albums/qq306/Hoop_1/VIX%20long%2001102015.png (http://s458.photobucket.com/user/Hoop_1/media/VIX%20long%2001102015.png.html)

[kiora]

Yeah...past 1900 to close at 1920...but I'm bearish because the Dead Cat Bounce pattern is now a reality and chances are there is a 75% probability (Bulkowski) the S&P500 will drop to form a new low <1867....

Kiora .. William %R oscillator will swing on any sort of rally, whether it being a relief, sucker, or resumption...For Example during the 2008 - 2009 bear market cycle the William %R was in oversold territory a lot of the time with some periods lasting for a month or more...during the bear cycle back then, any William %R buy signal had to viewed as a caution because even a leveling out period after a wave down got the Williams excited and triggered buy signals

Also..the VIX...It is a forward volatility indicator but it has been dramatised by the media as a fear index but this is not its true indicative function..The media is fixated on the VIX because they refer back to only the 2008-2009 severe Bear market cycle where the VIX went extreme...but looking further back to the previous severe bear market cycle 2001-2002 the VIX had a much calmer time and in actual fact there was not much difference between the 1998 - 1999 Bull period compared with 2001-2002 Bear....But in saying this.. there is a correlation as extended periods of calmest seem to occur during a Bull Market cycle...

The monthly chart below shows S&P500 in green and VIX in black

http://i458.photobucket.com/albums/qq306/Hoop_1/VIX%20long%2001102015.png (http://s458.photobucket.com/user/Hoop_1/media/VIX%20long%2001102015.png.html)

Thanks Hoop.I'm still learning after all these years :)

[kiora]

Hmm,where will it end up this year>
http://finance.yahoo.com/news/wall-street-perennial-optimists-strike-135031629.html

[Baa_Baa]

An encouraging week for the perma-bulls, nice updraft this week, though nipped in the bud at the 50% not-a-fib retrace. More interesting will be whether there is a follow-on to the 61.8% fib which co-incides now with the 50EMA.

So the way I see it is there is stern resistance around 16750 and massive overhead resistance in the 17200-17400 range. Break that, and stay above, and you could say the Bear is dead, but keep an eye out for the steps in between. Which if to the downside is 16000 support, horizontal and rising ST trend line.

All the indicators shown suggest an upside test in the short term.

7636

jmho as always, dyodd
BAA

[Baa_Baa]

That previous chart was the DOW. Here's the SP500, however my commentary is very similar except the next test is the 38.2% fib. The 50EMA is very close to the 50% not-a-fib providing overhead resistance. Again though, all indicators shown suggest an upside test to come in the short term.

7638

[Valuegrowth]

Goldman’s new target is 2000.

http://www.cnbc.com/2015/09/29/going-down-goldman-cuts-forecasts-for-sp-500.html

Going down: Goldman cuts forecasts for S&P 500

[frostyboy]

Just went short at 1990,
http://iforce.co.nz/i/0kz0hufo.omk.png (http://www.iforce.co.nz/View.aspx?i=0kz0hufo.omk.png)

1) Transports haven't rallied with the market
2) Volume is mediocre and break outs on the ftse aren't really confirmed etc
3) Rally has lasted a few days and due for a breather.

Main reason is more downside profit amount compared to upside profit.

[Hoop]

Great drop to well below the channel (1976) after you went short.....very sharp and short lived...Did you exit before it climbed back up through and ended above the channel (1996)

[frostyboy]

Great drop to well below the channel (1976) after you went short.....very sharp and short lived...Did you exit before it climbed back up through and ended above the channel (1996)


I haven't handled this trade well, I should have took some profits earlier. When the S&P500 hit the 50 day moving average at 1998 I was still short my original 1990. I covered half at 1982 after the daily low at 1977, so I'm still a bit short.

If I didn't have this position I would only go short if futures pre New York open were clear north of 2,000

[Hoop]

That previous chart was the DOW. Here's the SP500, however my commentary is very similar except the next test is the 38.2% fib. The 50EMA is very close to the 50% not-a-fib providing overhead resistance. Again though, all indicators shown suggest an upside test to come in the short term.

7638

Not shown on BaaBaa's chart is the 6.5yr Bull cycle primary trendline coming into view on the right hand bottom of the chart which the S&P500 touched both times on 25 August (1867) and 29th September (1871)..This gives the Bull investors great joy as it reinforces their argument against the cyclic reversal brigade that this market weakness is just another bull market correction...

However this bull/bear fight is not over and the outcome is not clear yet..

The S&P500 is banging on the old dead cat bounce ceiling (also a year old resistance level) at 1996/1998..and it could turn down here...if it pushes on through the next hurdle is the 61.8% Fib at ~2013...61.8% Fib areas are invisible areas where for some unknown instinctive reason investors (as a herd) start to get the Willies...If this area is breached it would be another victory to the Market correction supporters..but the Bull/bearfight would still continue until a record high is achieved.....up until then the risks are high.. very high around resistance areas such as we are experiencing now.

Frostyboy...better next time ..that might not be very far away..eh?

[Baa_Baa]

... the 6.5yr Bull cycle primary trendline coming into view on the right hand bottom of the chart which the S&P500 touched both times on 25 August (1867) and 29th September (1871) ...

I can find that trend line using a weekly chart arithmetic scale, closing price basis, but it's there alright, running parallel and above what I would call the primary trend line from Mar'09.

7655

[ananda77]

...past 2020 confirmed, is the point to get bullish

[frostyboy]

...past 2020 confirmed, is the point to get bullish
Hoop: Yep risky times at this level

I find looking at the leaders help. From looking at some of them; if the SPX goes past 2020 this week, it probably won't have legs to go much higher. This is why I really would like to increase my shorts or go short (if I don't cover my existing position) if the SPX500 futures are north of 2,000 to this coming NYSE open.
Some leaders:
http://stockcharts.com/c-sc/sc?s=V&p=D&yr=0&mn=3&dy=0&i=t42794253658&r=1444255377655
http://stockcharts.com/c-sc/sc?s=BABA&p=D&yr=0&mn=3&dy=0&i=t92191360196&r=1444255403148
http://stockcharts.com/c-sc/sc?s=AAPL&p=D&yr=0&mn=3&dy=0&i=t09452655920&r=1444255474236
http://stockcharts.com/c-sc/sc?s=C&p=D&yr=0&mn=3&dy=0&i=t48322276469&r=1444255726070
http://stockcharts.com/c-sc/sc?s=JNJ&p=D&yr=0&mn=3&dy=0&i=t74443303131&r=1444255778108

I don't have an opinion oil but it will be hard for SPX500 to go north of 2000 without oil going up
http://stockcharts.com/c-sc/sc?s=USO&p=D&yr=0&mn=3&dy=0&i=t18833688995&r=1444255494219

[Hoop]

Hoop: Yep risky times at this level

I find looking at the leaders help. From looking at some of them; if the SPX goes past 2020 this week, it probably won't have legs to go much higher. This is why I really would like to increase my shorts or go short (if I don't cover my existing position) if the SPX500 futures are north of 2,000 to this coming NYSE open.
Some leaders:
http://stockcharts.com/c-sc/sc?s=V&p=D&yr=0&mn=3&dy=0&i=t42794253658&r=1444255377655
http://stockcharts.com/c-sc/sc?s=BABA&p=D&yr=0&mn=3&dy=0&i=t92191360196&r=1444255403148
http://stockcharts.com/c-sc/sc?s=AAPL&p=D&yr=0&mn=3&dy=0&i=t09452655920&r=1444255474236
http://stockcharts.com/c-sc/sc?s=C&p=D&yr=0&mn=3&dy=0&i=t48322276469&r=1444255726070
http://stockcharts.com/c-sc/sc?s=JNJ&p=D&yr=0&mn=3&dy=0&i=t74443303131&r=1444255778108

I don't have an opinion oil but it will be hard for SPX500 to go north of 2000 without oil going up
http://stockcharts.com/c-sc/sc?s=USO&p=D&yr=0&mn=3&dy=0&i=t18833688995&r=1444255494219

Hmmm ..they are all near their respective resistance levels...

Frosty boy I had to add www. in front of your urls to open them

[frostyboy]

Hmmm ..they are all near their respective resistance levels...

Frosty boy I had to add www. in front of your urls to open them

Sorry about that image thing.

If the SPX500 is just above its resistance level, but the leaders are just below their resistance levels, the SPX break up is a fake out.

I saw this in phase 1 of bear 2007/2008 when the SPX500 did a rally to 1458 ,finishing with a spinning top above resistance level that a few turned bullish at. Today the leaders are more of a mixed bag in regards to resistance compared to 2007/2008.

AT 1986 I covered half of the shorts I was holding, which now looks to early(1983)

[Hoop]

Yes Frostboy the fake out when the bulls apply their limited buying pressure to get the index past that resistance point which defines the sucker rally...

Looking at the S&P500 from another angle

Have a look here Frostyboy.....http://stockcharts.com/freecharts/gallery.html?$NYA200R.

NYA200R is the NYSE percent of stocks above their MA200...presently, its rather low (28%) as expected (For those in the Bull cycle camp, its not unusual to see <10% during a decent bull market correction). The NYA200R seems to be rallying again after its throwback to test the bottom (15.74%)....Observe the bullish island on the Candlestick weekly chart....Beneath is the PF chart which shows a breakout....but the target marked in as of "now" is 48%, this is a lower high, indicative that the new rally could be the sucker variety usually associated with cyclic Bear market cycles....That P&F 48% target would translate to about 2040/60ish...A bit higher than Ananda's 2020 intra day peak resistance and the 2035 gap resistance area..

But before the above scenario can happen, the S&P500 has to jump a very large hurdle (~1996)...but if it does go north of 2000 we could see that point in time when the Bear cycle brigade will have to endure a period of noisy Bulls chanting I told you so...

[blackcap]

Im not chanting yet but.... S&P is above 2000 :)

[Hoop]

Im not chanting yet but.... S&P is above 2000 :)

:D

It was hard writing my post last night...The TA was showing bullish signs of a resistance breakout yet as I was writing the Wall St futures (-0.4%) were tanking down from the 1996 resistance....but as usual in times of upset Mother Yellen comes to the rescue with a cuddle and soothing words..

Well... Wall St knows the earnings may be under pressure with this reporting round due to kick off.....Alcoa a lightweight metals manufacturer is the first kid of the block and came in with a poor result after the market closed..Alcoa futures dived down..The chart shows Alcoa as a cyclical stock presently struggling to get itself out of a newly formed trough..

Hmmm I wonder how Mr Market is going to react to the possibility of a poor reporting period

[frostyboy]

2000 cleared, phew it was just a healthy correction in a bull market : )

Todays headlines from http://www.marketwatch.com/
http://iforce.co.nz/i/so3rxjot.dqf.png (http://www.iforce.co.nz/View.aspx?i=so3rxjot.dqf.png)

[frostyboy]

2000 cleared, phew it was just a healthy correction in a bull market : )

Todays headlines from http://www.marketwatch.com/
http://iforce.co.nz/i/so3rxjot.dqf.png (http://www.iforce.co.nz/View.aspx?i=so3rxjot.dqf.png)

[frostyboy]

That was a joke : )

[frostyboy]

Intro:
The SPX500 above its resistance level, some commentators (i.e the articles on marketwatch) say that the worst is over now that the S&P500 is above 2000, but look at the leaders
http://iforce.co.nz/i/hq1nxehe.0yy.png (http://www.iforce.co.nz/View.aspx?i=hq1nxehe.0yy.png)

Who are the leaders: on Friday look at the biggest green on the map below. Secoundary leaders are other indexes: commodities, currencies or other big stocks on the map.
Charts of the leaders follow the map below in regards to resistance
http://iforce.co.nz/i/t1uajeog.ud3.png (http://www.iforce.co.nz/View.aspx?i=t1uajeog.ud3.png)

Stock leaders in regards to resistance:
http://iforce.co.nz/i/cda3atad.3yy.png (http://www.iforce.co.nz/View.aspx?i=cda3atad.3yy.png)

Secoundary leaders
http://iforce.co.nz/i/2lwnznw1.5pp.png (http://www.iforce.co.nz/View.aspx?i=2lwnznw1.5pp.png)


Those leaders were all tech, so how is tech doing?

http://iforce.co.nz/i/4il3bz2b.c2g.png (http://www.iforce.co.nz/View.aspx?i=4il3bz2b.c2g.png)


Conclusion
Volume up is weak.
The above slightly suggests its a sucker rally as leaders aren't above resistance like the SPX500. This game isn't about being right, its about making money. If it was anything more or less I would adjust my style accordingly. I will go short with 45 point stop-loss to 2060 or 1 week time out, whatever kicks in first. (2060 is high cause it is the SPX500 and there are stop-loss hunters).

[Hoop]

Thanks for the quality post Frostboy

[flying]

Us newer T/A people really appreciate the fine information that is provided, as by reading and re-reading and applying the information we can all learn more as this is a difficult topic. My gut feeling Frostyboy but so much better in charts.

[frostyboy]

You're too kind. I whipped that post together pretty quickly, that is just a method to apply for that scenario.

I'm not going to increase position size (it's already big enough). If the SPX closes above 2022, I should start scaling back position size.
http://iforce.co.nz/i/dufixq0i.hk3.png (http://www.iforce.co.nz/View.aspx?i=dufixq0i.hk3.png)


Oil is neutral. Russel 2000 suggests more downside, maybe a pause tonight first, who knows.
http://iforce.co.nz/i/i1y1gklb.euy.png (http://www.iforce.co.nz/View.aspx?i=i1y1gklb.euy.png)

[frostyboy]

I've only covered half my position with a loss. I will let it play out some more due to the following:

On Friday the SPX, NASDAQ and DOW broke above its resistance but leader components and indexes of other markets didn't i.e the futures for ASX and LSE this is divergence.

SPX500 break above resistance could be fake as:
1. The SPX500 trading on Thurs and Friday looked like short covering.
2. It was options and futures expiration on Friday so prices can be manipulated.

The SPX500 Advance/Decline and stocks above moving averages are true (no divergence)

This week bulls and bears are going to do some serious battle. There are going to be alot of earnings reports. I don't like to look for the catalysts. I like to look for the divergences, when there are enough any catalyst will do.

http://iforce.co.nz/i/yy3tcco5.vue.png (http://www.iforce.co.nz/View.aspx?i=yy3tcco5.vue.png)
http://iforce.co.nz/i/a2vnkys3.qqa.jpg (http://www.iforce.co.nz/View.aspx?i=a2vnkys3.qqa.jpg)

[winner69]

Jeez that Janet is a tease

Of course there won't be any rate hikes until next year ...if by chance there is one in December it will be so small nobody will notice

S&P approaching that high again

[Hoop]

:D

It was hard writing my post last night...The TA was showing bullish signs of a resistance breakout yet as I was writing the Wall St futures (-0.4%) were tanking down from the 1996 resistance..
..but as usual in times of upset Mother Yellen comes to the rescue with a cuddle and soothing words..

Well... Wall St knows the earnings may be under pressure with this reporting round due to kick off.....Alcoa a lightweight metals manufacturer is the first kid of the block and came in with a poor
result after the market closed..Alcoa futures dived down..The chart shows Alcoa as a cyclical stock presently struggling to get itself out of a newly formed trough..

Hmmm I wonder how Mr Market is going to react to the possibility of a poor reporting period

Q3 reporting data is coming through now and the reason for the rally is fundamental.....Many influential number cruncher's crystal balls were expecting a temporary fall back of earnings for Q3
and Q4 then earnings forecasted to move up again in 2016...Mr Market duefully topped out and corrected / cyclically reversed on this forecasted earnings fall scenario...however even the most
respected crystal balls can not predict the future and Mr Market had to turn around and correct again when the Q3 data started to show a surprising number of companies with better than
forecast results..

the diagram from Colin Twiggs linked article http://goldstocksforex.com/2015/10/25/sp-500-reporting-in-full-swing/
(http://goldstocksforex.com/2015/10/25/sp-500-reporting-in-full-swing/)http://static.incrediblecharts.com/images/2015/2015-10-26-reporting.png

[kiora]

Follow the leaders:
http://iforce.co.nz/i/kv2ut2un.w02.png (http://www.iforce.co.nz/View.aspx?i=kv2ut2un.w02.png)

Did you FB?

[frostyboy]

Did you FB?

Not really I got margin called at 2050. I exited my positions and I haven't put a trade on since, as I'm still bearish

http://iforce.co.nz/i/fnufjjdy.ryv.jpg (http://www.iforce.co.nz/View.aspx?i=fnufjjdy.ryv.jpg)

[Baa_Baa]

Not really I got margin called at 2050. I exited my positions and I haven't put a trade on since, as I'm still bearish

It's looking tougher and tougher to be in the bear camp, NAZ busting 15 year highs, DOW scorched through the descending trend line resistance and SP500 just smoked the massive rising trend line (resistance) today (now support again), currently right on 100% retrace of the August plunge! Impressive performances from the US markets. Perhaps we'll see SP500 take on it's all-time highs just above 2130? The TA pattern does look a bit 'bat'-like though ;)

[winner69]

S&P not far off the high of 2134

It'll go higher soon

[frostyboy]

S&P not far off the high of 2134

It'll go higher soon
http://iforce.co.nz/i/ju5kntls.5ys.png (http://www.iforce.co.nz/View.aspx?i=ju5kntls.5ys.png)

The SPX 500 does look strong. It is easy to find divergences in any action, anyhow here are some reasons to be bearish of such a strong SPX500

Divergences,
http://iforce.co.nz/i/lxhanblf.j4b.png (http://www.iforce.co.nz/View.aspx?i=lxhanblf.j4b.png)
http://iforce.co.nz/i/hzbvp5tr.d40.png (http://www.iforce.co.nz/View.aspx?i=hzbvp5tr.d40.png)
http://iforce.co.nz/i/eonugysk.qpi.png (http://www.iforce.co.nz/View.aspx?i=eonugysk.qpi.png)


Add other indexes if you like, oil is in a trading range as well. A shorting opportunity could be if the SPX goes above the 2135 and the Russell2000 and DOW transports are about to touch the 200MA. I'm waiting on the sidelines and I will want to see other signals to go short.

Another idea: If we breach 2135 on the SPX and make new highs for a month and the other indexes follow, there might also be an opportunity/divergence to buy Auckland property as it is held back by intervention.

[Valuegrowth]

S&P not far off the high of 2134

It'll go higher soon

Volatility and selloff in stocks during months of August and September created some great buying opportunity. Recently some stocks hit their all time high as well. There are more legs for global stocks.

[Hoop]

Q3 earnings update:
As of 6th November 444 companies have reported earnings
Overall so far, a slight decline in earnings growth.

Result data from Factset.com (http://www.factset.com/earningsinsight)

Forward earnings chart below

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP500%20earningsQ3%202015.png (http://s458.photobucket.com/user/Hoop_1/media/SampP500%20earningsQ3%202015.png.html)

[Hoop]

Looking deeper into the S&P 500 rise back up to near record levels shows signs of worry...

The chart below the S&P500 chart is NYA200R This chart measures the percentage of the 500 companies that have their share price above their SMA200 (simple moving average of 200days)
As you see, over this past year there are less companies (only 34%) contributing to the S&P500 bull market cycle...It's often stated that a stock is in a bear market status when it's price
breaks below the SMA200 line

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP500%2010112015.png (http://s458.photobucket.com/user/Hoop_1/media/SampP500%2010112015.png.html)

[Hoop]

My GET OUT WARNING has been triggered.
If the Wall Street Equity falls on Monday the American media will blame it on the Paris Terrorist attack....
Paris will have a negative effect, but it was not the root cause of the Stockmarket weakness this time around...My "Get out Warning" indicator was
triggered before the Paris Terrorist Attack**

**NOTE:....The Paris Terrorist Attacks started at 9.20pm which was 4.20pm in New York
Wall St bell is rung at 4.00pm..

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP500%2013112015.png (http://s458.photobucket.com/user/Hoop_1/media/SampP500%2013112015.png.html)

[kiora]

http://www.marketwatch.com/story/the-key-to-squeezing-a-10-gain-out-of-the-sp-500-next-year-2015-11-20?siteid=yhoof2

[winner69]

I love the 10th Man weekly post

http://www.mauldineconomics.com/connecting-the-dots/cracks-in-earnings-foundation-and-bear-market-strategies


He concludes - High valuations combined with shrinking profits are a dangerous cocktail that should scare the pants off anyone.

Take care

[kiora]

I love the 10th Man weekly post

http://www.mauldineconomics.com/connecting-the-dots/cracks-in-earnings-foundation-and-bear-market-strategies


He concludes - High valuations combined with shrinking profits are a dangerous cocktail that should scare the pants off anyone.

Take care

Yep winner ,it is all pass the parcel & keep the loo paper handy :)

[ananda77]

I wrote a reply yesterday, saying:

"am I going to be unhappy, now that the markets are giving way under the weight of over crowded trades?

No, this us the ONLY time accumulation makes sense ( even only in the short term for a start)

...and today, we all know why...

(don't know, why this post did not appear)

Kind Regards

[Hoop]

Winner...I respect John Mauldin..He rubs shoulders with the movers & shakers of the world and usually when he writes this stuff it usually echo's those peoples concerns...
I've been harping on lately about the dangers of forward earnings.. ....

You know which end of the Equity Market you're at when you analyse the results of past forecasts...At the beginning of the bull cycle the earnings are usually above forecasts and at the end of the bull market cycle the earnings are usually below forecasts...Nearly 7 years of bull market cycle have elapsed*** and are we seeing the signs of exuberant forecasting???...Crestmont Research figures show we are (see here for the Earnings trends: History & Future chart) (http://www.crestmontresearch.com/)...The insert box shows 24 months ago the S&P500 2015 forecast earnings were at $148 and the revised every 3 month figures since then those 2015 forecast earnings have been revalued downwards to be at forecast $98 now...That is inaccuracy at its best..eh?

So why is the S&P500 still hovering around its all time highs?....Inflation rate is the key driver..when the inflation is in its sweet spot of about 1% it can sustain an annualised PE Ratio of 20 to 23 % and that is where the S&P 500 is at the moment....also adding to this sustain ability is the continued exuberance that the 2016 forecast is projected to be at $120...so the market is optimistic that the S&P500 can go higher...

For the pessimists and some realists the problem is the height of the annualised PE ratio currently at 22-24% area...This is the figure where crashes start...but this crash has failed to materialise as the S&P500 has been in this 25 crash zone area for the last year or so now...Probably due to a lack of a trigger.. such as..no inflation rate movement..or no immediate problems or signs with the common 2 crash causing suspects, Banking or Property which have the ability to suddenly evaporate available money.....or ....the not yet realisation that the 2016 earnings forecast of $120 may not be achieved and therefore may get revised downwards,,which seems to be the forecast result trend at the mature end of bull market cycles***.

*** Disc: I personally believe the DOW and probably the S&P500 have been in Stage 1 Bear market cycle for 5 months now... Todays close up 2%

[ananda77]

Hi Hoop, if you think the US markets are in the first stage of a bear market, then there will be no new highs. The problem I have with this is the new high in the Nasdaq

Furthermore, none of the major US and European markets had their respective uptrends (weekly) challenged during the Thursday sell-off and Fridays sharp really up looks like a strong uptrend confirmation

Consequently, I think, the US markets are in their last stage of the nearly 7 year old bull market with at least one more high in front



Kind Regards

[ananda77]

..so far, so good, rescue ops successful - if markets not sold off last hour
...next stop: new highs

Kind Regards

[ananda77]

... closing markets right at support points? and not close to the day high or above?

institutional investors keep the large positive divergence, e.g: their selling versus central bank cash bazookas intact

all is wait and see for more - position accordingly -

Kind Regards

[JohnnyTheHorse]

Lots of technicals smashed. Futures currently sitting on the bull/bear trend line - this could be it folks :confused:

[Hoop]

Maybe this time, maybe not.... Johnny time will tell...If the S&P 500 is in a Bear market cycle then expect a few down waves to start appearing. The severe forms are termed capitulations...
At the moment
Europe is ugly today currently down -2.5 to -3.2%
China keeps shutting their shop (2nd time)..Hoping that will stop the slide.... -7% seems to be the circuit breaker point

S&P500 actions have been a lot milder but todays futures have more claws currently at -2.4%.....But they say "No Worries" there is a feel good economy going on and they have Aunty Yellen comforting them and its Election year..so everything is Hunky Dory..............however 3 lower lows and lower highs have occurred since beginning of November and now the 4th lower low is in progress...this action reinforces my belief that the DOW & S&P500 has probably been in a bear market cycle for 6 months now....This latest down wave is waking up some investors to question if the bull is still alive.

One of the very few Global Stockmarkets, still definitely in a Bull Market cycle is the Commodity dependent Country called New Zealand...go figure???

Ananda ..your thoughts now....

[winner69]

At this rate come next week S&P will be 1800 something

What happens then Hoop?

Bounce back to 2100 odd like it has done a few times in the past?

[winner69]

The 1900 mark held strong today

That's a good sign

[JohnnyTheHorse]

The 1900 mark held strong today

That's a good sign

It's below the bull/bear trend line though. That's not a good sign eh?

Oh well, 1900 will hold us for today anyway. I reckon it'll close on it. 1875 will hold us tomorrow, so all good aye winner.

[winner69]

Looks like today another up day

That's 2 in a row

That's a good sign

[Entrep]

Timmmmmmmmber 1,900 gone

[Baa_Baa]

Timmmmmmmmber 1,900 gone

1879 support

[JohnnyTheHorse]

The bull/bear trendline has been convincingly broken. I am waiting for the key 1875 support zone before calling a confirmed bear market though, as its still possible to recover from here. I do expect 1875 to put up a strong fight.

Short agressively if broken.

[Valuegrowth]

We can expect at least 10% upside potential in S & P 500.

[ananda77]

Maybe this time, maybe not.... Johnny time will tell...If the S&P 500 is in a Bear market cycle then expect a few down waves to start appearing. The severe forms are termed capitulations...
At the moment
Europe is ugly today currently down -2.5 to -3.2%
China keeps shutting their shop (2nd time)..Hoping that will stop the slide.... -7% seems to be the circuit breaker point

S&P500 actions have been a lot milder but todays futures have more claws currently at -2.4%.....But they say "No Worries" there is a feel good economy going on and they have Aunty Yellen comforting them and its Election year..so everything is Hunky Dory..............however 3 lower lows and lower highs have occurred since beginning of November and now the 4th lower low is in progress...this action reinforces my belief that the DOW & S&P500 has probably been in a bear market cycle for 6 months now....This latest down wave is waking up some investors to question if the bull is still alive.

One of the very few Global Stockmarkets, still definitely in a Bull Market cycle is the Commodity dependent Country called New Zealand...go figure???

Ananda ..your thoughts now....

On the linear regression (mth), US and Europe markets have not even made it to their respective median price. Below, spells 'bear'.
Only the AUS ASX 200 has fit the criteria since August 2015 (short)
Also Oil at 25 and possibly no more FED rate hikes in 2016, pressureing the extended US$, still favor 'net long'

Kind Regards

[ananda77]

On the linear regression (mth), US and Europe markets have not even made it to their respective median price. Below, spells 'bear'.
Only the AUS ASX 200 has fit the criteria since August 2015 (short)
Also Oil at 25 and possibly no more FED rate hikes in 2016, pressureing the extended US$, still favor 'net long'

Kind Regards

I should add:

Japan went to 'bear' in January 2016

German DAX testing 'bear' 9400

US NDX100 605 to 'bear'
US SPX 500 185 to 'bear'

Honkong went to 'bear' July 2015

Kind Regards

[winner69]

Be back to 2134 in a week or two?

[Baa_Baa]

Chartists might find this analysis interesting http://www.zerohedge.com/news/2016-02-07/what-charts-say-now-time-worry

[Hoop]

Chartists might find this analysis interesting http://www.zerohedge.com/news/2016-02-07/what-charts-say-now-time-worry

Yes..A good analysis..Baa Baa

[ananda77]

OUT OF AMO
http://www.economist.com/news/leaders/21693204-central-bankers-are-running-down-their-arsenal-other-options-exist-stimulate

...IF it happens, hold on to your seats

Kind Regards

[Hoop]

If you think Central Bankers and Politicians don't know what they are doing...then you should add Company management to that list..

One of my "ducks" is US share buybacks which correlate well with the market index...
The BOA/Merrill Lynch chart below (sorry a year out of date**) just goes to show that us investors should not think positively about a company buying back its shares when times are good...A flurry of share buy backs could suggest the market is near the top of it's Bull Market cycle

**....Note the S&P500 was higher then than now
https://woodfordfunds.com/wp-content/uploads/2015/07/s-and-p500-co-buy-back.png

[peat]

If you think Central Bankers and Politicians don't know what they are doing...then you should add Company management to that list..


Maybe we shouldn't we expect company directors to be good speculators?
:p

[ananda77]

Psychology during bear market rallies seems to follow a fairly consistent pattern. “During secondary reactions [upward] in bear markets,” wrote DOW Theorist Robert Rhea in the 1930’s, “it is a fairly uniform experience for traders and market experts to become very bullish.”

...well, who knows if the US markets already are in bear territory. Fact is, it was a lot less risky to take a long position at 1812 then at 2000. The US market is overbought and it's time for a retreat. So in terms of risk, short the pivot points for short term trades on further upside...

kind regards

[peat]

Back to the 61.8% fib now.


7931

[Hoop]

Back to the 61.8% fib now.


7931

Yes interesting times now...Peat

If an Investor assumes that Wall St is in stage 1 of a bear market cycle, then this Wall St one month old rally nudging those key resistance levels including that conjunction area (2000/2020) would have those investors full attention :)...

Although the S&P500 high point was last May it is still "officially" in its 7 year Bull Market cycle as it has not "officially" entered a Bear Market Cycle by dropping more than 20%....
Some say this is a Bull market Cycle correction..a lengthy one which indicates the bull is sleeping.
Some say this is a Stage 1 Phase of a Bear Market Cycle.
Detecting a cyclic reversal from Bull to Bear is difficult to pinpoint at the time or a small period of time (easy with many months of hindsight)..At the time of a possible happening some analysts use break points as confirmations points to prove one way or the other..the other being that Wall St is operating in a Stage 1 of the new Bear Market Cycle. A common bear cycle signature is failed rallies..however a sucker rally can rally back to nearly another record top and break through many resistance levels as happened in November 2015...

I posted back in August 2015 that I think Wall St has had a cyclic reversal to a bear market cycle and the first down wave is happening ..I still believe this assumption as all cyclic reversals start with bear tides well before the "official" ~_20% accumulative drops...Actually all stage one Bear Market cycles occur before the official Bear Market confirmation ..The corresponding November rally would see most investors not believing that Bear Cycle assumption and accompanied with the return of the feel good factor (Lets dive back in folks..All this worry has turned out to be bull****...the bad news never eventuated..it was all stupid talk from the doomsayers)...and they got suckered...

Now in March we have reached another similar scenario...Question:..Is this another sucker rally within a Bear Cycle that still has not yet been "officially" confirmed?..... or... Is it the real deal this time...could it be that the Wall St sleeping bull has woken up???.....Has this long term bad news not eventuated... again!!! ?

Hmmmm..latest figures say the reported earnings disappointed and forward estimates revised down 8%....but hey America is all good and healthy and will go from strength to strength..I know because Mr Trump told me so

So the Bulls v the Bears fight continues..
http://i458.photobucket.com/albums/qq306/Hoop_1/SampP500%2010032016.png (http://s458.photobucket.com/user/Hoop_1/media/SampP500%2010032016.png.html)

[winner69]

Hoop, a new all time high not far off eh

[Hoop]

Hoop, a new all time high not far off eh

Nice one Winner..:D

A honest unbiased answer from this bear orientated investor is................Only 5% away Winner so it could happen and it's always possible another bull rally could send the index into the blue skies from that point...

We have to keep an open mind don't we....who knows what can happen..The S&P500 could shoot off into the stratosphere going from todays 2020 to 3300 with a PERatio of 30...not impossible because it has happened once before.

Its possible this Secular Bear could stay in hibernation for another year or so...This secular bear has already shown wide ranging abnormalities so maybe another abnormality doesn't matter..eh?

Herd behaviour and ingrained beliefs can be idiotic if certain conditions allow.

This Eric Bush guy seems to write some interesting blogs (http://blog.gavekalcapital.com/?p=7851)...He has noted that this present Cyclic Bull market Cycle is the longest on record within the current operating Secular Bear Cycle (Eric Bush calls it Structural instead of Secular)..He goes on to write "...The average duration of a cyclical bear market has been 401 days, while the average duration of a cyclical bull market has been over twice that at 920 days..." I find his cyclic Bull market figure somewhat low. Most commentators average out at about 1350 days (3.75 years)
This present Cyclic Bull Market is the fourth longest since 1900......It seems no Wall St Cyclic Bull has lasted longer than 8 years..so there's an opportunity here to break all records..eh?..

One thing you and I agree on Winner is that there are more cyclic bull markets within a Secular Bear Cycle than in a Secular Bull Cycle..this surprised Eric Bush...

Anyway time to stop mentioning this Secular stuff on this ST forum thread...eh Winner

So S&P500 breaks 3000 by Xmas you reckon;)..Maybe Aunty Janet will help you give it a nudge towards an all time record :)..Trump Clinton and Co are doing their bit this year..

[winner69]

Hoop, you mention abnormalities that make this cycle unusual.

We have discussed previously but company buybacks has been one of them.

Interesting article
http://www.businessinsider.com/buybacks-disappearing-could-mean-recession-2016-3

Since the beginning of the post-crisis bull-market run, the biggest buyer of equities hasn't been retail investors or institutions but companies themselves


According to a note from analysts at HSBC, buybacks have been the source of most of the demand for stocks since 2009.

The note said that for each of the past two years, companies in the S&P 500 have bought back nearly $500 billion of their own stock and a total of $2.1 trillion since 2010.

This huge amount of buying has been a massive source of upside for the stock market, said Liz Ann Sonders, chief investment strategist at Charles Schwab.

[Valuegrowth]

Thank you for nice analysis here as well.

On Friday, Wall Street threw a birthday party. So far Janet Yellen is doing a good job. When we don’t trust this bull market, it will roar. I can remember someone was saying that the great Obama bull market will roar till the end of 2016/17.We are in a historic bull market. This bull market should keep roaring ahead until we see end to the some stimulus packages, some government supports and some other factors etc.

If we have doubt about bull market, it is better to stay with strong stocks to beat both bull and bear.

We are going to see some life time high for some stocks globally. It is going to be very crucial during next couple of months.

[Baa_Baa]

Back to the 61.8% fib now.


7931

And the 50% Fib Extension from the 2009 low.

[Peitro]

Popcorn & coke ready for the bloomberg terminal tonight....

[peat]

This Eric Bush guy seems to write some interesting blogs (http://blog.gavekalcapital.com/?p=7851)...He has noted that this present Cyclic Bull market Cycle is the longest on record within the current operating Secular Bear Cycle (Eric Bush calls it Structural instead of Secular)..He goes on to write "...The average duration of a cyclical bear market has been 401 days, while the average duration of a cyclical bull market has been over twice that at 920 days..." I find his cyclic Bull market figure somewhat low. Most commentators average out at about 1350 days (3.75 years)
This present Cyclic Bull Market is the fourth longest since 1900......It seems no Wall St Cyclic Bull has lasted longer than 8 years..so there's an opportunity here to break all records..eh?..

I believe that as capitalism matures the cycles get larger and longer and so to me using historical durations as a baseline is not that useful. Fib's are of course percentages so remain valid - maybe logarithmic axis are relevant?

[Hoop]

I believe that as capitalism matures the cycles get larger and longer and so to me using historical durations as a baseline is not that useful. Fib's are of course percentages so remain valid - maybe logarithmic axis are relevant?

maybe logarithmic axis are relevant?.....yes log should be preferred with large oscillations with the y axis...is there any chart programs around with log x axis?..interest thought Peat..

Interesting.. about the Capitalism factor..Would capitalism effect the price and demand curve and the flow of goods and services (supply factor)? Probably does as we know Socialism can e.g introduction of subsides.. restrictions ..etc....

With QE/Central Banks influence I have long wondered if regulated markets extended the length of Bull cycles as regulation warps the Price/supply and demand curve.

In My Opinion The biggest factor in the future won't be regulation or Capitalism cycles but the rapidily increasing presence of the nearing Technological Singularity.

There is thinking that as we get closer to the Technological singularity (due 2045).. All systems which have be speeding up logarithmically since Humans walked the earth will reach the point (year 2045) when humans will no longer keep up/understand/control the global technological changes...That would imply that Market cycles will become increasingly shorter in duration

[Hoop]

From Chart of the Day (http://www.chartoftheday.com/20160316.htm?H)

Today's chart illustrates the price to earnings ratio (PE ratio) from 1900 to present. Generally speaking, when the PE ratio is high, stocks are considered to be expensive. When the PE ratio is low, stocks are considered to be inexpensive. From 1900 into the mid-1990s, the PE ratio tended to peak in the low to mid-20s (red line) and trough somewhere around seven (green line). The maximum price investors were willing to pay for a dollar of earnings increased on several occasions since the late 1990s (e.g. dot-com boom, dot-com bust and financial crisis). Over the past year, corporate earnings have been trending lower. This has resulted in the PE ratio surging to a level often associated with significant stock market peaks.

Notes:
Where's the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron's recommended charts of Chart of the Day Plus (https://www.chartoftheday.com/secure/signup/).


http://www.chartoftheday.com/20160316.gif

[winner69]

From Chart of the Day (http://www.chartoftheday.com/20160316.htm?H)

Today's chart illustrates the price to earnings ratio (PE ratio) from 1900 to present. Generally speaking, when the PE ratio is high, stocks are considered to be expensive. When the PE ratio is low, stocks are considered to be inexpensive. From 1900 into the mid-1990s, the PE ratio tended to peak in the low to mid-20s (red line) and trough somewhere around seven (green line). The maximum price investors were willing to pay for a dollar of earnings increased on several occasions since the late 1990s (e.g. dot-com boom, dot-com bust and financial crisis). Over the past year, corporate earnings have been trending lower. This has resulted in the PE ratio surging to a level often associated with significant stock market peaks.

Notes:
Where's the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron's recommended charts of Chart of the Day Plus (https://www.chartoftheday.com/secure/signup/).


http://www.chartoftheday.com/20160316.gif


Easy to see the major up and down trends eh Hoop. Yes they coincide with secular bull and bear markets.

Just as well this tines it's different - else S&P500 is heading 1,000 or less.

[tomblu]

Interesting article here on why China is stuffed.

http://economyandmarkets.com/economy/debt/empty-buildings-and-wasted-debt-the-chinese-economic-miracle/

Also - does anybody have a view on Harry Dent ?

[Hoop]

Somewhere back in my posts years ago on Winner69 Investing Strategies and Secular Bear Markets Thread (http://www.sharetrader.co.nz/showthread.php?5171-Investing-strategies-and-secular-bear-markets) I have mentioned Harry Dent... I remember, because his name reminded me of the Hitchhikers Guide to the Galaxy (Arthur Dent):)

Dent is a different type of Guy he is not a Perma Bear so he doesn't work of being right twice a day (the stopped clock idea) He is an Extremist and when markets hit irrational extremes as they sometimes do these types of people become Famous overnight...His methods are sound e.g the DOW and the S&P500 could theoretically drop to 6,000 or 700 respectively at reach their secular bear market lows (CAPE 7) Crestmont Research has the theoretical distance to travel to reach the next new secular bull market (adjusted PE Ratio 10) at 800 page 9 of 20 PDF file The P/E Report (http://www.crestmontresearch.com/stock-market/)

(http://www.crestmontresearch.com/stock-market/)

[Hoop]

A reoccurring annoying glitch.....Vince.. I can't write on after adding a link as it keeps highlighting the same link..

Continuing on from my last post.....

The problems with people who use sound theory to predict an outcome is that Mr Market never plays nice and obeys to "Experts"..In summary "it ain't a perfect world".

In reality there are too many invisible factors in play which effects the theoretical visible factors..e.g A lot of Secular Market behaviour is invisible..it's invisible because the Media are reluctant to write about it, as on the surface, it comes across as paradoxal and seemingly ridiculous to it's readers..

However markets when trading at their maximum limits are known to trade for a long time at this level and go more than their maximum limits (or lower) to extremes, even when the news is bad (or good)..The traders begin to believe the market is not at maximum and dismiss the Market Theorists (harping on for a few years now) that the Equity Market is overcooked and should be correcting..

Usually the theoretical (but not viewed that way by the traders) overcooked market lags and the bad news is not on the media radar (until the sh1t hits the fan)..At this stage all that is required to cause a market correction is a catalyst...

Personally I believe in the butterfly effect behaviour...the catalyst which the media blames for the market fall from grace could be something insignificant (disturbed air from butterfly wings) and unfortunately results in bad education to their readers, as the real reason for the Market fall is due to the theoretical overall factors finally starting to correct back to their mean values and sometimes goes below their mean values (cyclic reversal) and the process repeats at the other end of the spectrum.


EDIT: Thats why markets get jittery when a bombing occur....investors dismiss it as market noise, and an excuse for the dipsters to buy "cheap shares".................. but maybe, just maybe........

[tomblu]

Thanks Hoop, good to be mindful of "irrational" market behaviour.

Also how prevalent (and/or significant) is manipulation by the central banks etc (a la The Big Short)

[Hoop]

Thanks Hoop, good to be mindful of "irrational" market behaviour.

Also how prevalent (and/or significant) is manipulation by the central banks etc (a la The Big Short)

I really enjoyed that Film.....and yes Central Banks regulating (manipulation) some market variables...Back in my day at Uni when Muldoon ruled Middle Earth (straight after the dinosaurs ruled planet earth :))..in retrospect I'm sure the dinosaurs were better rulers :()...the lecturers always said that regulating certain market variables heightened the risk of breaking down the market forces communication channels thereby distorting those markets surrounding the overall economy...Hmmm I hope they know what they are doing..eh?

[Hoop]

Another informative Chart of the Day..

Go to http://www.chartoftheday.com/ to subscribe to get the free chart of the day emailed to you....

The chart of the Day

With Q4 earnings largely in the books (98% of S&P 500 firms have reported), today's chart provides some long-term perspective on the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today's chart illustrates the dramatic nature of the earnings plunge during the financial crisis as well as the recovery that followed -- a recovery that took earnings from levels not seen since the Great Depression to a new record high. More recently, however, S&P 500 inflation-adjusted earnings are trending lower and are now 19% off of their record highs.

Notes:
Where's the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron's recommended charts of Chart of the Day Plus (https://www.chartoftheday.com/secure/signup/).


http://www.chartoftheday.com/20160323.gif

[winner69]

For Q1 2016, 94 companies in the S&P 500 have issued negative EPS guidance and 27 companies in the index have issued positive EPS guidance. If 94 is the final number of companies issuing negative EPS guidance for the quarter, it will mark the second highest number of companies issuing negative EPS guidance for a quarter since FactSet began tracking guidance data in 2006. The current record is 95, which was recorded in Q4 2013.


AND THE S&P HEADS TO A NEW RECORD HIGH

[Aaron]

For Q1 2016, 94 companies in the S&P 500 have issued negative EPS guidance and 27 companies in the index have issued positive EPS guidance. If 94 is the final number of companies issuing negative EPS guidance for the quarter, it will mark the second highest number of companies issuing negative EPS guidance for a quarter since FactSet began tracking guidance data in 2006. The current record is 95, which was recorded in Q4 2013.


AND THE S&P HEADS TO A NEW RECORD HIGH
Are there any limits to company valuations for companies making even a tiny profit if interest rates go negative.

[winner69]

Weird world

@michaelsantoli: A year ago yesterday, the S&P 500 closed at 2067 and forward earnings forecast was $124. It's now at 2067, with forward forecast of $124.

And

@JeffCNYC: @michaelsantoli Yep. More interesting is that GAAP numbers are unchanged from 2011 (when S&P was 1250). https://t.co/8eRLhfhHUT

[Hoop]

Weird world

@michaelsantoli: A year ago yesterday, the S&P 500 closed at 2067 and forward earnings forecast was $124. It's now at 2067, with forward forecast of $124.

And

@JeffCNYC: @michaelsantoli Yep. More interesting is that GAAP numbers are unchanged from 2011 (when S&P was 1250). https://t.co/8eRLhfhHUT

The more scary things are the big global giants...they are getting bigger and bigger..a lot bigger than in 2011

Just think of this scenario...how would the S&P 500 earnings look if the bottom 100 companies all record a loss in 2016.....highly unlikely this would happen...

but...

..lets look at an equivalent....Apple is larger than those bottom 100 companies combined!!!!...how likely is Apple not to make a yearly profit within the next few years??? How well do we know these Global Giants??..How well can they weather a Global Recession??...We don't know, as they weren't giants back in the last recession 2008-2009..Apples total assets are now 6 times larger than back in Jan 2010

Apple is the largest giant but there are others..Alphabet etc....

Maybe, these quick growing very successful giants are making Wall St a weird world

[winner69]

The more analyst earnings downgrade the better - Factset again

As the bottom-up EPS estimate for the index declined during the quarter, the value of the S&P 500 increased during this same time frame. From December 31 through March 31, the value of the index increased by 0.8% (to 2059.74 from 2043.94). This quarter marked the tenth time in the past 12 quarters in which the bottom-up EPS estimate decreased during the quarter while the value of the index increased during the quarter.

[kiora]

This sounds understandable.Are we better off here than the USA ? Probably not by much as our currency is perpertually overvalued due to carry trades?
https://nz.finance.yahoo.com/news/fed-god-failed-george-gilder-130625700.html

[Baa_Baa]

It might take a while to unfold, but lower lows and lower highs, are the clue.

[winner69]

Heading to new all time high ... Think 2134 is the current record

No far away

[winner69]

Less than 2% from a new all time high

Everybody super happy. Looking good

[Aaron]

Less than 2% from a new all time high

Everybody super happy. Looking good
Not everybody, I am still waiting for a major crash.

[Hoop]

Less than 2% from a new all time high

Everybody super happy. Looking good

Yep..earnings less than last year but we are promised big things in 2016 -2017 onwards... because America is great and has the force on their side ..and Aunty Janet is there to help us too..

May the force be with you

https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcTfypBYgQGybHQpxfVYDroOiGZvGb4My mCxvxrCcyk2gDL1JbxY https://encrypted-tbn2.gstatic.com/images?q=tbn:ANd9GcRSpJUpE_EL_rKh7CVOTNEp9MO1D46DT qu-ZHSRrkFfJt_PxKIM

[winner69]

Yep..earnings less than last year but we are promised big things in 2016 -2017 onwards... because America is great and has the force on their side ..and Aunty Janet is there to help us too..

May the force be with you

https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcTfypBYgQGybHQpxfVYDroOiGZvGb4My mCxvxrCcyk2gDL1JbxY https://encrypted-tbn2.gstatic.com/images?q=tbn:ANd9GcRSpJUpE_EL_rKh7CVOTNEp9MO1D46DT qu-ZHSRrkFfJt_PxKIM

Yes, Janet is doing a good job and doing as they command - keep it going to the election

Post election - goodness knows ....but Aaron's wishes might eventuate but a long wait

[stoploss]

Not everybody, I am still waiting for a major crash.

I seem to remember Olly Newland publishing a book circa 2004 saying how he had sold all his Auckland residential property as it was going to crash ......"the day the bubble bursts"
How much if at all did Auck property come off over the GFC ?
I suppose what I am trying to say is "the market can stay irrational longer than you can stay solvent " So be careful if you are trying to short Equities Aaron.

[Aaron]

Not trying to short equities too risk averse with no limit to your loses if asset price inflation continues indefinitely. Actually I should learn how to short shares. I have been meaning to sign up with a firm like Interactive brokers for awhile. I am just waiting patiently for an opportunity to buy assets cheaper. Whether I will recognise a bargain in the middle of a crisis is another story.
I believe in the theory that 2008 was a debt problem that has been solved with more debt which isn't really a solution at all. I have no idea what will happen in the future. The magic of inflation may make things alright and prices will never come down only increase and debt will vanish. This is what central banks and govts are working towards.
I understand the great depression was caused by excessive debt, this time round economic theory says that if we keep expanding the money supply and debt we won't have any problems I think this is still economic theory. We have got to negative interest rates and really the next step is helicopter money but at some point money becomes meaningless. I hope there is a drop in asset prices first otherwise I will be caught with worthless currency.

[winner69]

The S&P 500 Total Return Index, hit its previous all-time high of 8523.61 on July 20 of last year. It surpassed that record last week

NZ counts divies so why shouldnt the S&P

All time highs then - good eh

[winner69]

Needs another kick up the backside to get it to 2134

Hope it comes soon

[Aaron]

When is the crash happening? getting impatient.

[winner69]

When is the crash happening? getting impatient.

They told Janet to make sure nothing too drastic happens until after the election ....and she is doing a sterling job up to now

[Valuegrowth]

They told Janet to make sure nothing too drastic happens until after the election ....and she is doing a sterling job up to now

As I said before Madam Janet is smart and intelligent. She and her team know how to take decisions according to the situation.

[winner69]

Q2 one month in and analyst EPS forecasts for the quarter already being lowered

declining EPS - rising market - good stuff eh

[Valuegrowth]

http://money.cnn.com/2016/04/29/investing/stocks-2nd-longest-bull-market-ever/

New milestone for bull market: 2nd longest ever

[winner69]

Gaynor on share buybacks.

In USA a practice rife for the wrong reasons?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11631082

[noodles]

With the S&P500 at key support levels (2040), this might be the catalyst for those levels to be broken.
http://www.bloomberg.com/news/articles/2016-05-14/china-s-economy-loses-momentum-in-april-clouding-policy-outlook

[Hoop]

With the S&P500 at key support levels (2040), this might be the catalyst for those levels to be broken.
http://www.bloomberg.com/news/articles/2016-05-14/china-s-economy-loses-momentum-in-april-clouding-policy-outlook

Hmmm Yes Noodles it could be a major confirmation point...
I haven't seen this mentioned in the media but on closing prices Friday both my charts (stockcharts & Incredible charts) show a marginal neck break which means a head & shoulder pattern may have formed**...It's a close thing so keep in mind the margin of error thing because if one uses intraday highs and lows instead of closing prices then the H&S pattern is not yet formed...

H&S patterns have an outcome failure rate (falls of <-5%) of 4%...

If there a established H&S pattern then the investor has to work out whether the S&P500 is currently in a very long Stage 1 Bear Cycle or still in a very long trading patterned Bull cycle (sleeping Bull)..the probabilities differ a lot..
Bulkowski Book.. Encyclopedia of Chart Patterns..has this H&S pattern statistical data table (designed for the S&P500)

Decline (%).... Bull Market.... Bear Market
5 (breakeven)......4%.............. 1%
10 .................. 15%.............. 5%
15 ...................35% .............17%
20 .................. 54% .............33%
25 ...................68% .............49%
30....................78% .............63%
35 ...................86% ............ 71%
50 .................. 97% ............ 93%
75 ................ 100% ........... 100%
Over 75...........100% ........... 100%

My opinion has not changed since August 2015 so I still think Wall St is in Stage 1 cyclic Bear Market cycle...therefore...if a H&S pattern has formed beyond the margin of error there's a 50/50 chance this next fall will be bad, at least -25%.
If I'm wrong and the S&P500 is still currently in a cyclic bull cycle then a 50/50 chance fall of -19% or less keeps the drop as another bull market correction and the longer term roller coaster for the Dipster Investor continues in an upward trend

The H&S pattern is not the only bearish event in town...EMA50 has been broken (also in margin of error) and a host of TA medium term indicators...also the Bollinger Bands have released their squeeze with the S&P500 trend reverting downwards
This is not good news for the 2040 bull/bear support line as these indicators show this support is currently enduring immense S&P index downward pressure...

All in all ...The S&P500 is currently at the TA cliff edge..There has to be some exceptionally good news to entice the large buyers back, otherwise another down day will see major TA damage occurring..

** The DOW is also confirming a S&P500 H&S pattern

Note:..My sentiment indicators I post on this thread has fired 3 of 4 warnings signalling Caution (need all 4 to trigger "get out" signal)..The last time my sentiment indicator fired all 4 "get out" warnings was back in early December 2015..it was also the last time the caution warnings fired off.

[Entrep]

Thanks for the comprehensive update Hoop, appreciate it!

[kiora]

Hmmm Yes Noodles it could be a major confirmation point...
I haven't seen this mentioned in the media but on closing prices Friday both my charts (stockcharts & Incredible charts) show a marginal neck break which means a head & shoulder pattern may have formed**...It's a close thing so keep in mind the margin of error thing because if one uses intraday highs and lows instead of closing prices then the H&S pattern is not yet formed...

H&S patterns have an outcome failure rate (falls of <-5%) of 4%...

If there a established H&S pattern then the investor has to work out whether the S&P500 is currently in a very long Stage 1 Bear Cycle or still in a very long trading patterned Bull cycle (sleeping Bull)..the probabilities differ a lot..
Bulkowski Book.. Encyclopedia of Chart Patterns..has this H&S pattern statistical data table (designed for the S&P500)

Decline (%).... Bull Market.... Bear Market
5 (breakeven)......4%.............. 1%
10 .................. 15%.............. 5%
15 ...................35% .............17%
20 .................. 54% .............33%
25 ...................68% .............49%
30....................78% .............63%
35 ...................86% ............ 71%
50 .................. 97% ............ 93%
75 ................ 100% ........... 100%
Over 75...........100% ........... 100%

My opinion has not changed since August 2015 so I still think Wall St is in Stage 1 cyclic Bear Market cycle...therefore...if a H&S pattern has formed beyond the margin of error there's a 50/50 chance this next fall will be bad, at least -25%.
If I'm wrong and the S&P500 is still currently in a cyclic bull cycle then a 50/50 chance fall of -19% or less keeps the drop as another bull market correction and the longer term roller coaster for the Dipster Investor continues in an upward trend

The H&S pattern is not the only bearish event in town...EMA50 has been broken (also in margin of error) and a host of TA medium term indicators...also the Bollinger Bands have released their squeeze with the S&P500 trend reverting downwards
This is not good news for the 2040 bull/bear support line as these indicators show this support is currently enduring immense S&P index downward pressure...

All in all ...The S&P500 is currently at the TA cliff edge..There has to be some exceptionally good news to entice the large buyers back, otherwise another down day will see major TA damage occurring..

** The DOW is also confirming a S&P500 H&S pattern

Note:..My sentiment indicators I post on this thread has fired 3 of 4 warnings signalling Caution (need all 4 to trigger "get out" signal)..The last time my sentiment indicator fired all 4 "get out" warnings was back in early December 2015..it was also the last time the caution warnings fired off.

Thanks for the warning Hoop

[Hoop]

Hmmm Yes Noodles it could be a major confirmation point...
I haven't seen this mentioned in the media but on closing prices Friday both my charts (stockcharts & Incredible charts) show a marginal neck break which means a head & shoulder pattern may have formed**...It's a close thing so keep in mind the margin of error thing because if one uses intraday highs and lows instead of closing prices then the H&S pattern is not yet formed..........................

..............................This is not good news for the 2040 bull/bear support line as these indicators show this support is currently enduring immense S&P index downward pressure...

All in all ...The S&P500 is currently at the TA cliff edge..There has to be some exceptionally good news to entice the large buyers back, otherwise another down day will see major TA damage occurring..

** The DOW is also confirming a S&P500 H&S pattern

Note:..My sentiment indicators I post on this thread has fired 3 of 4 warnings signalling Caution (need all 4 to trigger "get out" signal)..The last time my sentiment indicator fired all 4 "get out" warnings was back in early December 2015..it was also the last time the caution warnings fired off.

Wall St took a step back from the cliff edge... up about 1% at closing..that puts the H&S pattern in doubt for the time being...

[Hoop]

S&P500 (Wall St) holding up despite falling earnings is said to be because the market is forward looking and sees this drop in earnings as a temporary blimp and the next company reporting period should see a rebound and a recontinuation of the earnings upward trend.

So..Just released 30 minutes ago is this news of the Philly Fed index dipping again in May -1.8 (http://www.marketwatch.com/story/philly-fed-index-dips-to-negative-18-in-may-2016-05-19)..this could be viewed as a kick in the guts...lets see how the market responds..Note: - Wall St is still on the edge of a Technical cliff

[Hoop]

Since my last post...
My sentiment indicator never fired the required all 4 sell signals
The S&P500 has stepped back from the Technical cliff edge and testing the Dow Theory definition of a bull trend (trying to create a higher high). Closed at 2096
However the S&P500 testing to create a higher high today (trying to break resistance) has resulted with an appearance of a bearish candlestick.
A very simple quick and nasty candlestick rule for Dummys.. tails at a price high is bearish, tails at a price low is bullish.

Below is a link to 27th May 2016 Factset earnings insight PDF file (29 pages) (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&ved=0ahUKEwj9td2qrYXNAhVkLKYKHTTZAMQQFgg_MAU&url=https%3A%2F%2Fwww.factset.com%2Fearningsinsigh t&usg=AFQjCNFuZK8edzcwXyYfOp_ouZsOytyqrA&cad=rja)..
Quote.."....with 98% of companies in the S&P500 reporting earnings to date....."
It seems the Q1 earnings have come in better than expected...-6.7% ...the estimate was -8.8%

For the Dow Theory buffs.. page 1 chart is interesting..typical fear (pessimism) and greed (exuberance) example

[winner69]

@Macr0man: You know the market's addicted to monetary crack when it's at its highs, there's a 5 SD miss on payrolls, and VIX goes down

[winner69]

The low (and surprising) jobs numbers were probably 'managed' to keep Janet from raising rates in near future

[winner69]

The low (and surprising) jobs numbers were probably 'managed' to keep Janet from raising rates in near future

And its working --- getting close to an all time high

[winner69]

Some on this thread probably the "emotional" type

@RBAdvisors: Emotional investors might miss an earnings-driven bull market; https://t.co/gKaraBsNhz

[Aaron]

Some on this thread probably the "emotional" type

@RBAdvisors: Emotional investors might miss an earnings-driven bull market; https://t.co/gKaraBsNhz

Me definitely, too lazy to research. although I only skim read the link did RB give any reason why they are bullish on company earnings.

[kiora]

Some on this thread probably the "emotional" type

@RBAdvisors: Emotional investors might miss an earnings-driven bull market; https://t.co/gKaraBsNhz

Good post W69 :)

[Hoop]

Hmmm...Another advisor to add to the collection of investors that makes up Mr Market.....Mr Market has the S&P 500 PE Ratio at the lofty heights of 24.22 and a 12 month forward PE of 17.81 (http://www.wsj.com/mdc/public/page/2_3021-peyield.html)...Mr Market is obviously very bullish (or is it exuberish) about 2016-2017 earnings...Yet when we look back in hindsight to 2014 2015 2016 predicted forward earnings they have been devalued downwards with each future Quarter..If this tend continues it seems 2016 -2017 quarters should be no different as history shows over earnings value (optimsim) at top/start falling cycles and under earnings value (pessimism) at bottom/start rising cycles...I personally don't think Mr Market has factored in this possible trend....also...tell me whats wrong with a falling PE Ratio with a rising earning..Nothing!!..Its healthy for the market long term (prevents crashes)..however a healthy PE fall from 22 back to 18 with the predicted rise in earnings may upset some people (e.g Richard Bernstein) as the S&P500 may stay around the 2100 for another year...quashing his earnings fueled rally..however this is only one scenerio using earnings PE Ratio variables..We can change the figures of these 2 variables to produce other scenarios which could equally just as likely happen.

Question:..Being optimistic and using this predicted earnings outcome, will the S&P 500 go up with the so-called increased earnings?

Answer :..After my comment above the answer is yes, no, maybe...Lets look at it this way..At yesterdays close the PE Ratio of 24 is well above the average..its considered well overpriced..the only reason it's sustaining this high level is due to it's primary driver called inflation being in the sweet spot of ~1%...Even being within this sweet spot, if the S&P500 goes much higher it will be traveling in the PE~25 "cyclical reversal" zone where history says the bull always dies..Looking back into Richard Bernstein's past writings he always mentions that "this time" is never different (http://www.rbadvisors.com/)..interesting thing too I can't find anything on his advisory firm before 2009 at the start of the Wall St Bull market cycle...I maybe too harsh, but from what I've read on some of his twitter account (https://twitter.com/rbadvisors)..he seems very bias as if he has a "set in stone" attitude.. he dismisses all the bad news without thought and embraces all the good news like a reinforcing of his personal belief that USA is going to be just fine and dandy for the next few years..this attitude of his has worked for 7 years and..OK this could happen for the next 7 years..but at least we should analyse all those very black clouds on the horizon and have contingency plans in place..eh....just in case a black swan poops on you..and if you're luckily dodged the poop then you may not be as lucky with the on-going bear fight to follow ..right?

We all know about Bull market cycle reversals...They don't happen overnight..they linger.....We all say the market is fundamentally overpriced but the market keeps going up..and up ..and up..and one by one the fundamental bear commentators (including me) get discredited..Interesting thing I read today was Brian Gaynor article in January 2015 (https://www.tvnz.co.nz/one-news/new-zealand/nz-house-prices-could-fall-by-up-to-25-brian-gaynor-6221786) that the Auckland property prices were overvalued and a cause of concern (possible crash)..17 months later..it's 20% higher and still frothing..He did say it could take a while to correct...:)

At least Brian Gaynor is a smart guy and is aware and comments on possible downsides to overvalued markets..My feeling about Richard Beinstein is sadly different..

Changing track slightly towards overvalue markets...I have a lot of time for Prof Robert Shiller and his PE Ratio measurement is a bet measurement of market valuation...His reputation has seen better times too due to these well overvalued markets taking a long time to correct...The Shiller P/E 10 is (as of 9th June 2016) at 26.4 +58.1% higher than the historical mean of 16.7 (http://www.gurufocus.com/)****...That is scarily overvalued stuff..the only other times in the last 140 years this 26 level has been reached or gone higher was 1929, 1998-2001, 2005-2007, 2014-2016..we all know what happened back then..

****..may need to subscribe to this site

Completely off track..Shiller also values US property market....the US property crashed back to "normal" (still too high?) levels came as no surprise when looking at Case - Shiller Home price indices chart...eh!!...However that market lingered on for 7 years in uncharted over valued range before it crashed...Still some rises to come for Auckland and NZ Property market??...yes, no, maybe

https://upload.wikimedia.org/wikipedia/commons/thumb/b/b6/Case-Shiller_data_from_1890_to_2012.png/1920px-Case-Shiller_data_from_1890_to_2012.png

[Valuegrowth]

http://www.bloomberg.com/news/articles/2016-06-09/hedge-funds-trailing-stock-rally-may-be-s-p-500-s-next-big-buyer

Hedge Funds Trailing Stock Rally May Be S&P 500’s Next Big Buyer

[Hoop]

http://www.bloomberg.com/news/articles/2016-06-09/hedge-funds-trailing-stock-rally-may-be-s-p-500-s-next-big-buyer

Hedge Funds Trailing Stock Rally May Be S&P 500’s Next Big Buyer
Ugly stuff is happening...Looking at today's performance so far, they may be thankful they're out...

[winner69]

S&P back to where it was a month ago

No worries

[winner69]

@RBAdvisors: $Copper up today despite turmoil. Could Dr. Copper be forecasting #Brexit isn’t the end of the free world?

[Baa_Baa]

S&P back to where it was a month ago

No worries

S&P500 back to where it was 3 months ago, and falling.

No worries, pass the Tui.

[Hoop]

There are worries for me as my Sentiment Indicator GET OUT signal has been triggered..It happened Friday and my attention was elsewhere otherwise I would've posted this last Saturday..
Its been a while since the last Get Out trigger see post #1618 page 108 (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page108) Mid November 2015 Ive since changed the EMA50 to MA50as EMA50 seemed too sensitive.The November warning was a partial failure due to over sensitive EMA50..the first failure since I started using this indicator over 3 years now...My sentiment indicator gives usually a couple of days warning (not this time...shock happening but 2 warnings did trigger).
The indicator does not indicate how deep the correction could be..
http://i458.photobucket.com/albums/qq306/Hoop_1/SampP500%2027062016%20nya200r.png (http://s458.photobucket.com/user/Hoop_1/media/SampP500%2027062016%20nya200r.png.html)

[Hoop]

How useful to the NZ sharemarket is my S&P500 Sentiment Indicator ?...

The chart below shows for the most times over the last year the S&P500 and NZX50 correlated very well at 0.81 ..significant...However it was a little wobbly in May

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP500%2027062016%20correlation%20NZX50.png (http://s458.photobucket.com/user/Hoop_1/media/SampP500%2027062016%20correlation%20NZX50.png.html )

[Entrep]

There are worries for me as my Sentiment Indicator GET OUT signal has been triggered..It happened Friday and my attention was elsewhere otherwise I would've posted this last Saturday..
Its been a while since the last Get Out trigger see post #1618 page 108 (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page108) Mid November 2015 Ive since changed the EMA50 to MA50as EMA50 seemed too sensitive.The November warning was a partial failure due to over sensitive EMA50..the first failure since I started using this indicator over 3 years now...My sentiment indicator gives usually a couple of days warning (not this time...shock happening but 2 warnings did trigger).
The indicator does not indicate how deep the correction could be..
http://i458.photobucket.com/albums/qq306/Hoop_1/SampP500%2027062016%20nya200r.png (http://s458.photobucket.com/user/Hoop_1/media/SampP500%2027062016%20nya200r.png.html)

Thanks Hoop!

[winner69]

S&P500 back to where it was 3 months ago, and falling.

No worries, pass the Tui.

S&P500 back to about where it was last Friday, and rising

No worries

[winner69]

S&P500 back to where it was 3 months ago, and falling.

No worries, pass the Tui.

S&P500 just 3% off all time high, and rising

Even the VIX suggests ths could happen withthe next 30 days

No worries

[Hoop]

Yep could happen..re VIX analysis....Also one has to mindful that the VIX is a two edged sword..

Today the SPX closed on/near their major resistance levels

Just depends on how many "get rich quick" merchants got on board during the sell off.....Is there enough of them to affect the SPX when they dump at the next piece of media bad news...and take their profits?

Any idea where sell off points could be?...The FIB Retracement normally measures areas on the price chart when herd behaviour (investors) get the "willies"...FIB RET 38.2% successfully overhauled (~2038).. 61.8% got beaten last night (~2068) but the SPX close is still in that area (2071)..The 61.8% is an area where there is strong both short and long term resistance lines ( 2071 - 2075 )...a big hurdle here
So..strong buying pressure is needed to break through this 2071 - 2075 area...Any faltering of the price would see profit takers dominate and add reinforcing to make that resistance area stronger and harder to break the next time...

Breakout's???...Its summertime and this time of year usually has low volume...Chances are high that any breakout would be genuine. but have to watch carefully as low volume breakouts do have a chance of being bull traps.

After a breakout?...Another FIB is at 76.4% (~2085) is minor not much resistance around there...2100 long term resistance is a biggee. (Primary Resistance)

So there has to be a lot of buying to get to a new record high...The profit takers will be taking it day by day...remember the VIX (showing increased volatility atm) is a two edged sword.

Long term Fundamentals are playing no part in this current Equity game......been overpriced for a couple of years now...

[Valuegrowth]

Yes, within next 30 days we should see some direction. I expect strong activities in global markets in the coming months. No worries at all for those who have filled their baskets with strong companies globally.

S&P500 just 3% off all time high, and rising

Even the VIX suggests ths could happen withthe next 30 days

No worries

[winner69]

Another day like today and new high for S&P500

Solid rises of late

No worries

[Hoop]

Another day like today and new high for S&P500

Solid rises of late

No worries

yep...good stuff...broke one of the big resistances at 2070-75 area...now with the SPX at 2098 it's at the next big hurdle (~2100 area)...

Investors must be starting to think that Equity market will always bounce back from corrections and always go higher...eh... (not referring to you Winner)
There's a few on ST that believe this..those in red ink think they will be in clover in a couple of years...maybe they're right..maybe not...

Some Commentators say this is the 2nd longest living Bull in US Equity history at 7.5 years old. (http://money.cnn.com/2016/04/29/investing/stocks-2nd-longest-bull-market-ever/) (Shiller's table below disagrees) My opinion is Wall St has been a prolonged stage 1 bear for a long while now because of no higher highs ..Currently Wall St is testing its old highs (set at 2135 more than 13 months ago) in an attempt to create a higher high...Being so close I concede that a higher high is a real possibility..

So lets look at the Bull stats..The longest bull (12.3 years old) in history gained +~500% and occurred between 1987 and 2000..That bull got so overpriced it took the SPX index another 13 years to reach above that bull's valuation peak....In comparison this 2009- bull has gained +~300%...

The table below is 3 years old so the latest 2009- bull figures are outdated..

https://greenbackd.files.wordpress.com/2013/04/table_us_bull_markets_since_1871.png?w=640&h=456
Shiller 2013

[Hoop]

Some good news from Factset
Positive Shift in EPS Guidance for Q2 (http://www.factset.com/insight/2016/06/guidancequarterly_06.29.16?referrer=E-mail&email=hoop@orcon.net.nz&domain=companies#.V3W2BNdCYwI)

[Valuegrowth]

Thank you for the link.We should not forget that historically still interest rates are low. In addition, we see negative interest rates. On top of that there are government stimulus and global central banks support etc. I am bullish on world stocks more than before. Brexit panic created some great opportunities for some intelligent investors.

Some good news from Factset
Positive Shift in EPS Guidance for Q2 (http://www.factset.com/insight/2016/06/guidancequarterly_06.29.16?referrer=E-mail&email=hoop@orcon.net.nz&domain=companies#.V3W2BNdCYwI)

[Valuegrowth]

Defensive sectors such as consumer staples and utilities helped the S&P 500 Index to its best week in seven months.

[Entrep]

There are worries for me as my Sentiment Indicator GET OUT signal has been triggered..It happened Friday and my attention was elsewhere otherwise I would've posted this last Saturday..
Its been a while since the last Get Out trigger see post #1618 page 108 (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page108) Mid November 2015 Ive since changed the EMA50 to MA50as EMA50 seemed too sensitive.The November warning was a partial failure due to over sensitive EMA50..the first failure since I started using this indicator over 3 years now...My sentiment indicator gives usually a couple of days warning (not this time...shock happening but 2 warnings did trigger).
The indicator does not indicate how deep the correction could be..
http://i458.photobucket.com/albums/qq306/Hoop_1/SampP500%2027062016%20nya200r.png (http://s458.photobucket.com/user/Hoop_1/media/SampP500%2027062016%20nya200r.png.html)

How's it looking after last week's performance? Would be very interested to know if it snapped back.

[Hoop]

How's it looking after last week's performance? Would be very interested to know if it snapped back.

Hi Entrep
My overall sentiment indicator was designed specifically to warn investors early of an incoming correction. I should not say "my" as I did not invent it.. No indicator is perfect but this one predicts future corrections very well. Too well actually as it is sensitive enough to pick up very shallow corrections just before they happen

Unfortunately..It wasn't designed to predict end of corrections/ beginning of rallies and it does this badly, often triggering off late at the end of temporary relief rally.. ..

KST indicator (Know Sure Thing) is a collection of ROC (rate of change) indicators of differing periods and smoothed by moving averages..so it indicates late but early..Here's how that can be possible... KST picks up changes of momentum but because it is smoothed by moving averages it is less sensitive to sudden brief momentum fluctuations therefore can be a tad late to indicate the change..The signal line cross over (the red arrow) always occurs in positive territory (above the centre line) which means there are more buyers than sellers (a bull situation) at the time but the buyer momentum is weakening and this can lead to going below the centre line into negative (more sellers than buyers) which is a bear situation, so KST signals early...KST on its own doesn't indicate the S&P500 price is going to fall significantly (sometimes a signal line cross over occurs and the price keeps rising) but combined with 3 other indicators KST becomes powerful....Why these 4 combined indicators are not as powerful in predicting a rally I'm not sure in knowing the answer..

To answer your query..only 3 of 4 have fired blue arrows.. the KST is late and hasn't fired (yet)...so my sentiment indicator hasn't predicted this current rally.

[frostyboy]

Im expecting this pull back to make new highs for a week "The market is designed to fool most people most of the time" - Jesse Livermore. So I'm confused.

[Valuegrowth]

That is true.
Im expecting this pull back to make new highs for a week "The market is designed to fool most people most of the time" - Jesse Livermore. So I'm confused.

[winner69]

S&P500 just 3% off all time high, and rising

Even the VIX suggests ths could happen withthe next 30 days

No worries

Oh, so close today but near enough

Another 10% in this before the elections

S&P500 still rising

No worries

[winner69]

So close we may as well say a new all time high ....yippee

And on the back of Q2 earnings being down on last years number - 5th quarter in a row of declining earnings (earnings recession)

But the decline is generally less than expected - that's good and provides hope that things are going to get better

S&P500 still rising

No worries

EPS report. http://www.factset.com/insight/2016/07/earningsinsight_07.08.16?referrer=E-mail&email=Pxm299@yahoo.com.au&domain=companies#.V4FlppEaySM

[winner69]

S&P500 back to where it was 3 months ago, and falling.

No worries, pass the Tui.

S&P500 at all time high, and rising

No worries

[Hoop]

Yeah Winner a record high at close...2137
The 1Q earnings were tepid but were above market expectation..Mr Market liked that
Media will soon be focusing on 2Q when the majority of companies report their earnings results over the next few weeks..Mr Market is taking an optimistic view...

Factset Insight Research published an article yesterday...they will be looking at the Brexit impact on corporate earnings or revenue in future quarters.
The Article shows the results (Brexit mentions/effects) of 23 of the S&P500 companies that have reported 2Q results so far since Brexit (http://www.factset.com/insight/2016/07/earningsinsight_07.10.16?referrer=E-mail&email=hoop@orcon.net.nz&domain=companies#.V4QautdCYwI)

[Aaron]

So close we may as well say a new all time high ....yippee

And on the back of Q2 earnings being down on last years number - 5th quarter in a row of declining earnings (earnings recession)

But the decline is generally less than expected - that's good and provides hope that things are going to get better

S&P500 still rising

No worries

EPS report. http://www.factset.com/insight/2016/07/earningsinsight_07.08.16?referrer=E-mail&email=Pxm299@yahoo.com.au&domain=companies#.V4FlppEaySM
If earnings are going down how can the companies be more valuable. What am I missing. Are interest rates going down even faster?

[winner69]

If earnings are going down how can the companies be more valuable. What am I missing. Are interest rates going down even faster?

Thats how markets work sometimes - defies logic

One factor is that when profits are reported they are generally better than expected (not as bad as they thought they would be)

Gives rise to optimism / things are getter much better and earnings are going to grow. Markets are forward looking

You still waiting for the crash Aaron?

[Baa_Baa]

S&P500 at all time high, and rising

No worries

Futures at 2141 as I type this, all time highs! Remarkable, probably bots buying the technical breakout, like Hoop said. Buy the highs, what could possibly go wrong?

No worries indeed.

[Valuegrowth]

We should not forget about central bank stimulus as well. Central banks are the biggest market movers.

[winner69]

S&P500 over 2150 - and rising

Still another 10% to go in this burst

No worries

[Aaron]

Thats how markets work sometimes - defies logic

One factor is that when profits are reported they are generally better than expected (not as bad as they thought they would be)

Gives rise to optimism / things are getter much better and earnings are going to grow. Markets are forward looking

You still waiting for the crash Aaron?
Still waiting. It is really a buy everything or buy nothing decision for me at the moment(Patience will win again for now but how long can this go on).
I guess I'll have to join the revolution of the people who missed the boom and the young people who never had a chance to buy real assets with funny money. On the bright side October last year, just to sate a desire to do something/anything while everyone around me becomes a millionaire I bought small lots of OGC & NCM sadly the share parcels were so small the great results aren't making much difference to my net worth.
I admire your optimistic outlook.

[winner69]

Still waiting. It is really a buy everything or buy nothing decision for me at the moment(Patience will win again for now but how long can this go on).
I guess I'll have to join the revolution of the people who missed the boom and the young people who never had a chance to buy real assets with funny money. On the bright side October last year, just to sate a desire to do something/anything while everyone around me becomes a millionaire I bought small lots of OGC & NCM sadly the share parcels were so small the great results aren't making much difference to my net worth.
I admire your optimistic outlook.

Optimistic outlook for now .... Janet been told to make sure that happens

But a 'crash' will come one day and S&P500 will be <1000

Projected low term (10 year plus) returns on US equities are about 1%pa (in theory according to some commentators)

[winner69]

The S&P500 still rising - 2200 beckons next week as results beat expectations (ie not as bad as forecast)

No worries

This is a worry though -

The market meandered about for the next seven months going nowhere. It then suddenly dropped in January and February, falling 13% from its May 2015 high. This was unacceptable tocentral bankers around the globe who believe stock market gains are the only factor reflecting the health of our economic system. Maybe it’s because they are only beholden to bankers, oligarchs, corporate chieftains, corrupt politicians, and unaccountable bureaucrats. Central bankers from around the world have come to the rescue by buying stocks and providing unlimited liquidity to banks and corporations so they can buyback their own stocks. The result, is new record highs.

From this good piece. http://www.marketoracle.co.uk/Article55883.html

[winner69]

S&P500 still reaching new highs

EPS decline not as bad as expected

No worries

[Hoop]

Janet's pixie dust making the equity investors feel good..Powerful stuff that.

[Edwood]

worth noting VIX is below 12 - not a lot of fear out there....

[winner69]

S&P500 still rising

Earnings going to be down for 5th quarter in a row .......and analyst forecasts for Q3 have now gone negative as well

Bit the world is happy as can be so no worries

As of today, the blended earnings decline for the second quarter for the S&P 500 stands at -3.7%. Factoring in the average improvement in earnings growth during a typical earnings season due to upside earnings surprises, it still appears likely the S&P 500 will report a year-over-year decline in earnings for the second quarter. If the index does report a year-over-year decline in earnings for the second quarter, it will mark the first time the index has reported five consecutive quarters of year-over-year declines in earnings since Q3 2008 through Q3 2009.

http://www.factset.com/insight/2016/07/analyst-expect-s-p-500-earnings-to-sink-for-q3?referrer=E-mail&email=Pxm299@yahoo.com.au&domain=companies#.V5PWFpEaySM

[winner69]

worth noting VIX is below 12 - not a lot of fear out there....

Then again it's implying that maybe a 3.5% increase is possible

Not much but would take S&P500 close to 2250

No worries

[winner69]

@EddyElfenbein: Of S&P 500 companies that have changed guidance, nearly 90% have been HIGHER. That's the best rate in six years.

It's all about perception - reality doesn't come into it

So 2250 beckons and then 2500

No worries

[Hoop]

Winner..
I'm not sure what to make of this GAAP v non-GAAP reporting issue....My opinion with Marketwatch are that they are "Drama Queens" some good stuff mixed with total rubbish...Although GAAP reporting is compulsory MarketWatch are suggesting the companies highlight their non-GAAP results as those results are nearly always higher than the GAAP results. It makes the Company look better and the media focuses on Non-GAAP figures. MarketWatch also mentioned the use of made up unaudited figures in non-GAAP results. (http://projects.marketwatch.com/2016/gaap-nongaap-eps-2016q1/)

They say Wall Street analysts often measure forecasts with non-GAAP results...

Winner, Roger, others,...what do you all make of this??..
A Company Fundamentals are becoming very complicated for this kid to understand... all this financial spin doctoring...whew

[winner69]

Read this somewhere - seems to sum it up


Watching this market is like watching Trump’s candidacy. Everyone is waiting for both to crash and burn but they keep climbing to greater heights. Even Fox News appears to oppose Trump without much effect just as the stock market sets new records in the midst of gloomy economic news all around.

[Hoop]

Read this somewhere - seems to sum it up


Watching this market is like watching Trump’s candidacy. Everyone is waiting for both to crash and burn but they keep climbing to greater heights. Even Fox News appears to oppose Trump without much effect just as the stock market sets new records in the midst of gloomy economic news all around.
“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” ...Benjamin Graham.Question: how long does it take for a voting machine to turn into a weighing machine?

2 years now and still counting

Chart is factset but I got it from Marketwatch article (http://www.marketwatch.com/story/earnings-beats-are-concealing-bad-results-2016-08-05)

http://ei.marketwatch.com//Multimedia/2016/08/05/Photos/NS/MW-ET300_SPX_EP_20160805134802_NS.png?uuid=c19440e2-5b34-11e6-848a-0015c588dfa6

[winner69]

Good chart eh Hoop

S&P500 pushes to new record high. Lots of jobs apparently

Maybe the rise driven by those phoney normalised pro-forma earnings

No worries

[boring]

Every 6 months or so, I run some basic metrics to check the valuation of the S&P 500 in comparison to its historical average. I use this to as a guide to determine how much new investment capital to put to work in the US market.

The following pendulum graphs show the current S&P 500 earnings yield and dividend yield relative to the historical average. I've used a trailing 12-month earnings and dividend calculation from figures provided by Aswath Damodaran, Professor of Finance from NYU. The averages are calculated from 1961/62 onwards.

You can see that from a market earnings yield and dividend yield, the S&P 500 is expensive, but not in the excessive or sky high territory. We are still below 1 standard deviation above the historical mean. Growth investors will tend to look at the earnings yield metric while cash flow investors focus on dividend payments.

As of August 11, Thomson Reuters reported 71% of S&P 500 companies have beaten earnings expectations, 11% have matched expectations and 18% have reported quarterly earnings below the consensus estimate. So it would appear than a “disappointing earnings expectation initiated crash” is not in the immediate horizon. If we are due a crash, it's usually something totally unexpected (black swan) rather than the "usual suspects" the media get fixated on.

This stubbornly expensive market could be explained by the pendulum graphs you see on the bottom line. This shows the differential between S&P 500 earnings and dividend yields in comparison to the risk free rate. I have used the current interest rates on the 10-Year US treasury as a proxy for the risk free rate. In the past, the earnings yield as only exceeded the risk free rate by an average of 0.24%. However, in this exceptional low interest rate/low growth environment, we see the S&P 500 earnings yield exceed the interest rate on the 10 year treasury by whopping 3.29% compared to the paltry 0.24% it usually does. The dividend yield has lagged the risk free rate by a historical average of 3.4%, because most stock investors expect gains to come from increasing stock prices. They are happier to settle for much less dividend cash payments for much higher capital gains. Recent times have seen the market dividend yield actually exceed the risk free rate.

The extraordinary low interest rate environment of recent times provides a level of support and liquidity to the stock market. Investors have to put their money somewhere, and interest-bearing instruments have not been an attractive destination. Not everyone has the appetite to put their investment money in gold.

8221

The reason I post these graphs is to provide a relative basis for where the market currently is in relation to its historical averages.

I think you can agree that they support the view recently expressed by legendary investor Howard Marks of Oaktree Capital:
"Asset prices are full today. I don't think we're in a bubble. But I view them as on 'the high side of fair' which means nothing is a bargain - nothing is available at laughably cheap prices."

[Hoop]

Thanks Boring ...interesting post

[Joshuatree]

I believe there are always cheap stocks to be had; but i agree with the general mkt values being high.

this from KW is int
"August 12 "Last night all three major US stock indices closed at record highs for the first time since 1999. Does that mean 2000 is just around the corner again?"

[Valuegrowth]

Thank you Boring for your valuable post.
Every 6 months or so, I run some basic metrics to check the valuation of the S&P 500 in comparison to its historical average. I use this to as a guide to determine how much new investment capital to put to work in the US market.

The following pendulum graphs show the current S&P 500 earnings yield and dividend yield relative to the historical average. I've used a trailing 12-month earnings and dividend calculation from figures provided by Aswath Damodaran, Professor of Finance from NYU. The averages are calculated from 1961/62 onwards.

You can see that from a market earnings yield and dividend yield, the S&P 500 is expensive, but not in the excessive or sky high territory. We are still below 1 standard deviation above the historical mean. Growth investors will tend to look at the earnings yield metric while cash flow investors focus on dividend payments.

As of August 11, Thomson Reuters reported 71% of S&P 500 companies have beaten earnings expectations, 11% have matched expectations and 18% have reported quarterly earnings below the consensus estimate. So it would appear than a “disappointing earnings expectation initiated crash” is not in the immediate horizon. If we are due a crash, it's usually something totally unexpected (black swan) rather than the "usual suspects" the media get fixated on.

This stubbornly expensive market could be explained by the pendulum graphs you see on the bottom line. This shows the differential between S&P 500 earnings and dividend yields in comparison to the risk free rate. I have used the current interest rates on the 10-Year US treasury as a proxy for the risk free rate. In the past, the earnings yield as only exceeded the risk free rate by an average of 0.24%. However, in this exceptional low interest rate/low growth environment, we see the S&P 500 earnings yield exceed the interest rate on the 10 year treasury by whopping 3.29% compared to the paltry 0.24% it usually does. The dividend yield has lagged the risk free rate by a historical average of 3.4%, because most stock investors expect gains to come from increasing stock prices. They are happier to settle for much less dividend cash payments for much higher capital gains. Recent times have seen the market dividend yield actually exceed the risk free rate.

The extraordinary low interest rate environment of recent times provides a level of support and liquidity to the stock market. Investors have to put their money somewhere, and interest-bearing instruments have not been an attractive destination. Not everyone has the appetite to put their investment money in gold.

8221

The reason I post these graphs is to provide a relative basis for where the market currently is in relation to its historical averages.

I think you can agree that they support the view recently expressed by legendary investor Howard Marks of Oaktree Capital:
"Asset prices are full today. I don't think we're in a bubble. But I view them as on 'the high side of fair' which means nothing is a bargain - nothing is available at laughably cheap prices."

[kiora]

From Colin Twiggs
The S&P 500 is forming an inverted scallop below 2200. A rounding top requires more of a bowl shape with even sides, like an inverted "U". The inverted scallop looks more like an inverted fishing hook, with a much shorter leg on the right. A strong continuation pattern in bull markets according to Thomas Bulkowski, who ranks it 3 out of 23 (1 being best), with only a 4% break even failure rate. The pattern is completed by breakout above the high — 2200 in this case — and would only rally after testing support, around 2100 to 2130. Strong Twiggs Money Flow values suggest long-term buying pressure.

[winner69]

Interesting
http://www.forbes.com/sites/jareddillian/2016/08/31/the-stocks-you-think-are-safe-are-now-the-most-dangerous-of-all/#5649159dac83

As Jarrod says

In my experience, the worst body slams in the stock market don’t come from things that everyone knows about, like Brexit, and the China currency deval. They come from things that people don’t understand. Retail investors won’t understand what’s happening when the “safe” stocks they own are suddenly not so safe.

Over the past month, the min vol/high dividend strategy has started to underperform. I wonder out loud if it portends something more–dramatic.

[Hoop]

Interesting
http://www.forbes.com/sites/jareddillian/2016/08/31/the-stocks-you-think-are-safe-are-now-the-most-dangerous-of-all/#5649159dac83

As Jarrod says

In my experience, the worst body slams in the stock market don’t come from things that everyone knows about, like Brexit, and the China currency deval. They come from things that people don’t understand. Retail investors won’t understand what’s happening when the “safe” stocks they own are suddenly not so safe.

Over the past month, the min vol/high dividend strategy has started to underperform. I wonder out loud if it portends something more–dramatic.

People don't understand because they are media taught and the media is a bad teacher..
The Market Cycle has reached the point for investors to have to learn Market theory to continue making Capital gain..the days of having your Monkey as your Financial Advisor and a dart board in your office are numbered.

I've been trying to get people to learn Market systems recently and I have been socially shunned..Granted its hard for them to do so after several years of successful share investing they think they know it all and have gained experienced.....So for me its good to see this article get mentioned....

What scares me is I've seen this identical period in time happen over and over....This time its a different market metric to last time, as it always is and will be ... but the overall investor behaviour (as seen by high PE Ratios) outcome stays the same.. each time..

I've mentioned that common sense is flown out of the window and that has annoyed everyone from top skilled investors downwards who have this year been blinded and driven by yield greed...creating extremely overvalued stocks especially Utilities which are considered lagging stocks...and this time the excuse to greed is.. " where else can I invest to get a decent yield ?"
helped by the media driven low interest rate = higher PE media bull**** to reinforce that argument

Greed is Greed there's no excuse for that investment action...Emotion kills and greed is an emotion..

PE10 is up to 27 (S&P500).....This is crash territory folks!!..

...so anyone entering this extremely high PE Ratio driven market now using a long term investment strategy and relying on high yield to cover the medium term dips as an excuse has got rocks in their heads for brains.

Buying up Cyclical stocks with very low PE Ratios and reaping very high yield rate as an excuse, they also has rocks in their heads for brains.

If you can't understand, think its a paradox or disagree to what I said above ..then it's time to give the Monkey the sack..

[Hoop]

Amazingly... the US media hyped up this announcement all week expecting numbers of 180,000...once it was released (http://www.bls.gov/news.release/empsit.nr0.htm)it was quickly removed from the limelight and buried into the back pages....I guess the Media is in a period of Presidential good news and happiness at the moment..who wants to limelight 151,000 bits of bad news..eh.

Meanwhile, Wall St seated at the Mad Hatters tea party table is partying on knowing that the Queen of Hearts will now be reluctant to move on interest rates....."more tea anyone?:D:D"

There's been a lot of fuss about non-payroll data over recent years as commentators use it as one guideline to how the FED will react..
Below is a very long term chart which cancels out the media noise and shows the true facts and trends over the last 75 years.

The chart shows the recent period (since 2008) of slightly less growth which is compensated by the extra length of time between contractions..

Also noticeable is less volatility for longer periods between contractions since the 1960's..and especially so, since the mid 1980's...Viewing this recent run on the chart, Is the current low volatile run due to end soon?

Referring back to the September 2 non payroll data.Employment continued to trend up in several service-providing industries while it declined in manufacturing, mining and construction.

I'm personally trending towards primary sector investing atm so this mining data result is not a good result for me

http://cdn.tradingeconomics.com/charts/united-states-non-farm-payrolls.png?s=nfp+tch&v=201609022114n&d1=19160101&d2=20161231