Daily S&P 500 INDEX TRACKER

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

Bond Market:
U.S. 10-year TIPS sale awarded at 1.51%, firm cover 3.12, indirect bid 44%
Treasury yields rebounded after firm TIPS, options trade faded Friday rally

Stock Market:

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

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

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

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

in contrast: a long-term BUY/HOLD Strategy with personal regards ("Ananda, I feel a bit mean featuring your posts like this, but maybe there is something we can all learn from it."
Regards, Phaedrus.) from no other than 'The Greatest Phaedrus' (see attachment)

...there is a difference between 'trading stocks' and 'holding investments' (Core Holding); depending on income needs (dividends), investments are hardly ever sold. but need to be hedged wisely;

example of a hedge strategy: 10% (+) hedged in daily up/down market conditions (see attachments)

...and keep enjoying those dividends...

Kind Regards

US Calendar:
-quiet Tues -weekly store sales
-$39 bln 3-yr note auction

Bond Market:
Treasury yields turned higher with positive tone on stocks, pending 3-year supply
U.S. 3-year auction expected to benefit from cheapening, relative value on curve

Stock Market:

...SPX 500 is extending its rebound today after a successful defense of the 31 August Close *1020 and the 50 MA *1016; the index surged higher to take out the initial up target 1041 decisively, possibly coming to a temporary stop as high as *1069 intraday

...around the *1070 zone, a mild slide back to test the *1041/*1048 area is possible; if this support is successfully defended, further gains include a second go at *1080 initially with potential to test the important *1100/*1119 upper barrier range

...the USD is extremely oversold, so any short- to medium term correction (possibly up to 10%) will quickly stop the equity markets' seemingly unstoppable advance

Trading Strategy:

-CONSERVATIVE-
Marty Chenard: “I am now staying in cash on the long side.” The C-RSI is still positive so there could end up being a whipsaw to the upside, but the odds are that we are going to see high whipsawing volatility that no-one likes to invest in. Staying in longer right now, is only for people who like "rolling the dice".)

-CONTRARIAN-
Q&A with Prechter (EW)
http://www.tradersnarrative.com/qa-w...ysis-3091.html
Marc Faber: “Monetary policy in the United States will stay expansionary”
http://www.creditwritedowns.com/2009...ansionary.html

DAY TRADER:
-short-term bullish over the next up to 10 days with bias for a double top pattern followed by 20% (+) correction > target SPX 500 *869
-personal strategy: no equities; holding investments currently neutral to 10% (+) capital hedged
-David Rosenberg: equity markets so overvalued, it is not funny
-Financial Insight and daily Market Timing Signals: current posture >cash

DUMB MONEY:
-fully invested -no worries mate-

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

So in summation, you'd be using the current short-term rally to roll off some or all of your long equity exposure (presumably at a solid profit).

Thanks for your thoughts again.

Quote:

---

Originally Posted by Lego_Man

So in summation, you'd be using the current short-term rally to roll off some or all of your long equity exposure (presumably at a solid profit). Thanks for your thoughts again.

---

...yes quite right (did the last stock trade sometime last week), one of the main reason why I do not want to trade Australian stocks now is that the US markets seem to be top heavy and the Australian market opens after the US markets close; other reasons are, the USD is extremely oversold and the increasingly obvious divergence between the US bond and US equity markets; not quite sure about the impact of the latest RBA 0.25% interest hike on equity markets but it seems that someone in there is thinking that the world economy does rather well;

...still hold on to my investment (it is correct that I have not sold one investment share even during the 2007/2008 crash) and use index hedges for capital protection (you may also go to the derivative market and sell your investment holding 'short' during downtrends (you still receive the dividend stream), but this option is more expensive because you need to pay the monthly ASX-fee to hold the portfolio' short';

...but even so I hold no equities to trade, I can still play the upside in the markets with index long positions which can be executed at any time day or night

...also remember: my trading horizon is more often than not extremely short

Kind Regards

Quote:

---

Originally Posted by ananda77

DUMB MONEY:
-fully invested -no worries mate-

---

...re: Dump Money -according to 'Technical Take'-

1. The "Dumb Money" indicator looks for extremes in the data from 4 different groups of investors who historically have been wrong on the market: 1) Investor Intelligence; 2) Market Vane; 3) American Association of Individual Investors; and 4) the put call ratio.

-The "Dumb Money" indicator remains extremely bullish, and it actually ticked up this past week- The "dumb money" or retail investor (sorry, no offense meant to those who have been right for the last 3 months) continues to buy the dips aggressively.

2. The "smart money" indicator is a composite of the following data: 1) public to specialist short ratio; 2) specialist short to total short ratio; 3) SP100 option traders. The "smart money" is neutral and has yet to tip its hand. Company insiders continue to sell shares to an extreme degree (4:1 ratio -data point 04 October 2009)

...and as the market has shown so far this week, the up tick in the "Dumb Money" indicator and the extremes seen in the Rydex asset data would suggest continued buying on the dips. The upward bias in prices remains until the extremes in bullish sentiment are unwound.

Kind Regards

...SPX 500/NYSE current support tests: data point 06 October 2009:

-SPX 500 Pivot Point Support Test (see attachment)
-SPX 500 Six Month Support Line Test (see attachment)
-NYSE October 2008 High Support Line Test (see attachment)

...all tests successful; however, it pays to be cautious because:

-Institutional Net Buy/Sell in Distribution!! It will be very interesting to see if Institutions will change their stance regarding equities in the near future or if they keep on net-selling into the current rally

Kind Regards

data point: 07 October 2009

-Institutional BUY/SELL still in distribution, closer to zero neutral (see attachment) (institutions responsible for over 50% of market action; to hold a position to the contrary means 'getting steamrolled' (caution!!)
http://www.sharetrader.co.nz/images/attach/png.gif
-liquidity inflows
http://www.sharetrader.co.nz/images/attach/png.gif
-NYSE Momentum
http://www.sharetrader.co.nz/images/attach/png.gif

Kind Regards

US Calendar:
U.S. MBA mortgage applications rose 16.4%; refis climb 18.2%, purchases up 13.2%
Consumer credit: Estimate -$15.B, consensus -$10.0B, prior -$21.6B
U.S. consumer credit sank -$11.9 bln in Aug, below median -$9.0 bln vs -$18.9 bln

Bond Market:
NY Fed purchased $1.3 bln Treasuries maturing betweeen Feb 2020 - Feb 2026
U.S. 10-year auction awarded at 3.21%, solid 3.01 cover, 47.4% indirect bid

Stock Market:
...SPX 500 little changed so far with market direction tilting to the bearish side with decliners comfortably outpacing advancers but cautious buying the intraday dips apparent on the NYSE throughout the session; despite the tilt, an intraday test of the Sep 29 Peak *1069 or the Sep 17 Peak *1074 remains a possibility before a shallow 1-2 day corrective pull-back could affirm *1041/*1048 congestion; consumer credit seems to be what the market is waiting for; Alcoa result after the Close
... if this support is successfully defended, further gains include a second go at *1080 initially with potential to test the important *1100/*1119 upper barrier range in a possible double top set-up
...failure to penetrate the important *1100/*1119 upper barrier range will leave the market wide open to a 20% (+) sell-off during most of Q4 targeting the July low at 869.

-Dollar charges back, moves higher against Japan's yen

-Trading Strategy:

CONSERVATIVE-
-Vanguard cautions investors on rally
http://www.marketwatch.com/story/sto...ors-2009-10-06
-Whalen: Q4 “Going to Be a Bank Bloodbath” (Institutional Risk Analysis)
http://www.ritholtz.com/blog/2009/10...e-a-bloodbath/

-CONTRARIAN-
Q&A with Prechter (EW)
http://www.tradersnarrative.com/qa-w...ysis-3091.html
Marc Faber: “Monetary policy in the United States will stay expansionary”
http://www.creditwritedowns.com/2009...ansionary.html

DAY TRADER:
short-term bullish over the next up to 10 days with bias for a double top pattern followed by 20% (+) correction > target SPX 500 *869 if *1100/*1119 upper barrier range cannot be taken out

DUMB MONEY (The Technical Take):
fully invested -no worries mate-

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards
http://www.sharetrader.co.nz/images/icons/icon7.gif

-(StockTiming.com)- data point: 08 October 2009

Institutional NET Buying and Selling Volume levels

http://i35.tinypic.com/28r1shy.jpg

Long Term Trending Fed. Liquidity and Foreign Liquidity Inflows

http://i33.tinypic.com/n5hqmd.jpg

NYSE Momentum and Srength

http://i34.tinypic.com/263ab8i.jpg

Bond Market:
U.S. 30-year reopening awarded at 4.009%, tepid 2.37 cover, 34.5% indirect bid

Stock Market:
...maybe visitng the Mangere/Otahuhu/Manurewa weekend markets will teach market pundits what real 'Bargains' look like because there ain't no bargains in the SPX 500 no more...

David Rosenberg: ...”even under the most generous of all valuation metrics coming out of recession, the fabled “normalized” P/E ratio using “smoothed” 10-year trailing earnings, now stands at 19x (versus 13x at the March lows), which is more than a 20% premium to the long-run average of 15x-16x. Assessing market valuation using the Tobin Q, equities are currently overvalued by 40%. And, never before have we seen the S&P 500 rally 60% over an interval in which there were 2.7 million job losses. What is normal is that we see more than 2 million jobs being created during a rally as large as this. In other words, we are witnessing a market event that is outside the distribution curve.

...SPX 500 laboured hard to break above the Sept 29 key resistance *1070 and managed an intraday High *1071; direction in the markets quite bullish but apparent '(+) tick buying power' remains zapped by bearish sell-off interference especially towards day end trading; advancers comfortably outpacing decliners, so if the market decides to take the expected shallow breather down to the *1041/*1048 congestion, this support looks it could be successfully defended;
...the result of a successful defense include a second go at *1080 initially with potential to test the important *1100/*1119 upper barrier range in a possible double top set-up
...failure to penetrate the important *1100/*1119 upper barrier range will leave the market wide open to a 20% (+) sell-off during most of Q4 targeting the July low at 869.

Trading Strategy:

http://i38.tinypic.com/72ytcn.jpg

...as long as Institutions remain in Distribution hedge is very tight with a 'short bias' although liquidity and strength remain positive; Institutions can be Distribution for quite some time without an major break in liquidity and strength

(as of tonight: the possibility SPX 500 day-trade)

-Financial Insight and daily Market Timing Signals: current posture >watch this space for 09 October 2009

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards