4:58pm
I recommend reading my comment about bonds on the thread that I just posted. People are mistaking the relationship between bonds and stocks. We are in a special time where when there is more demand for bonds, there is also more demand for stocks due to inability of our government to finance itself. This is a very unusual time, but that’s how it’s working these days unlike when we fell last year.
2:20pm
I have a meeting and will have to leave for the day but right now i’m looking for stocks that were overbought 3 days ago on a 60 minute timeframe, and are now no longer overbought on a 60 minute AND oversold on the 10 or 30 minute timeframe. Those are stocks I want to hold for a potential rally to the 1000 SPX…please post on the intraday commentary if you have any of those stocks in mind!
2:05pm
I love what the dude (Zen Brown) on CNBC just said.. he said that since the 5 yr auction had such a hard time.. the 7r auction will probably not go well… and I agree.. I think we might see a sell off before hand.
1:58pm
Inverse H&S forming on the 1 minute SPY right now ahead of the beige book. One question that was asked to me, is what would you go long at 961 (retrace of the breakout point), and my answer would have to be, anything that is oversold on a 30 minute candle. My question to you guys is, what stocks do you see are oversold on that time frame?
1:43pm
Market is trying to stay hopeful before the beige book comes out at 2pm… the SPY has found some support, but the volume every other minute has fallen slightly..
1:36pm
I’m waiting for one flush lower to take some profits on my puts..
1:31pm
On your left, a bigger consolidation pattern on the ES.. with the bottom of the channel will be around 960-963…It’s still a bull flag.. I will be looking to get long around 961 ish…. and a stop below 959 on the ES. On your right you have BIDU 1 minute showing pennant formation.
1:28pm
New lows… hitting the bottom of my ES channel of consolidation.. a break of that will yield even more sellers, and will turn the consolidation into a potential reversal sell off..
1:25pm
The market has formed a small 1 minute SPY inverse H&S but i think it will break down since it’s the 3rd test of support.. and we could just shoot lower..
1:21pm
SPY 5 minute forming what could be a bullish consolidation pattern (over the last few days), descending resistance and flat support. The ES is forming a descending channel bull flag bounded by my 2 red lines.
1:11pm
Rifin forming a H&S which could be breaking.. the SPY now hitting days lows… and we’re finding support… GS (don’t have it short anymore) still holding up in comparison to the market (over the last hour)… CM and BIDU much weaker..
1:00pm
Demand on 5-yr bonds are a little depressing.. HORRIBLE… (CNBC hasn’t gotten it yet)
12:59pm
5 yr auction will be a mover in the markets… we’ll have to see if china bought our bonds… we have been consolidating for a potential move higher so far.. but we’ll have to see… you never know!
12:42pm
SPY breaking higher right here… some people are hoping the 2 PM fed beige book will bring some optimism to the markets, we 97.75 is the next really strong resistance.. and a break of that would probably mean we’re moving higher until 2 pm at least.
12:23pm
GS so far is bouncing but it looks a little bit like a bear flag her… i’m waiting to see if it can break the 10 minute SMA or the 1 minute 200 SMA… if it can i’ll cover my PUTS and call it a nice profit… BIDU still looking very weak.. i’d like to hold it a little longer… The SPY is showing an inverse H&S with a break of the 1 minute 200 SMA at 79.50 ish.. but on the 10 minute we could still be showing a bear flag formation.
12:16pm
CM bounced back pretty vigorously.. i’ve decided to put a stop at $60.50, for a profit.
11:51am
USO or OIL is getting hammered, and showing no signs of recovering as the asian markets got hammered in today’s trading… that’s definitely putting a heavy weight on the S&P.. and the dollar is sitting pretty right now, 3% off a bounce already.
11:23am
For the first time in 3 days, market seems to not hold it’s gains.. and inverse H&S on the 1 minutes are failing.. there’s another inverse H&S on the 10 minute.. a break of 97 on the SPY to the downside will fail it too.
11:10am
Market is showing a very visible triangle formation in the intraday chart of the S&P… a break to the upside of 976 on the SPX would also be an inverse H&S breakout. GS STOP at 159.30, BIDU STOP AT 346.30, CM i’ll be holding longer..
3:58am
After hitting the bottom of my conolidation channel, the market has managed to bounce back… china was down close to -5%!
12:00am
The futures are slightly lower but we do have a potential INVERSE H&S we keep having a dip in early morning and a push higher in the afternoon. So far, it seems a lot like consolidation for another move higher but I really like BIDU, CM short, and I think GS is still great for another few %. Can anybody else think of some other stocks that are overbought, and what indicator are you looking at?
ES 15 minute showing consolidation and inverse H&S… I will only get more bearish if we break below the consolidation support:
any thoughts on UNG?
time to get in to TBT!
Just broke the neckline of the HS on the RIFIN……
moved neckline to the wicks and bounced off……
There is some really good sup right at this neckline.
$VIX chewing away at the bullish wedgeline. Now over 26 and +4%.
====
1:13 PM The Treasury sells $39B in 5-year notes at 2.689%. Bid-to-cover ratio of 1.92 compared with 2.37 previously.
If the DOW drops below 8960 and the SPX drops below 968 I’ll be stopped out of my long hedges. I have already reduced my long hedges down to <5% of my portfolio as the SPX seems to have trouble getting over my Level 1 bear market channel resistance (at 980 today). I am adapting to what I see today.
Triangle busted.
its gone
I dont know but whoever made that call on this board about market being up till the treasury acution _one of the best calls ever bang on !! congrats man
Yeah, that was one heck of a call. Kudos to the person who called it. I was surprised by today’s actions too. Fortunately I didn’t get caught on the wrong side of it as I had been building my short positions in preparation for this possibility over the past several days.
Fritz – care to share what short positions you are bulding ?
Comparatively, it is a weak sell-off. I mean we were up 12% in 2 weeks, and now the bears are cheering for a 0.8% decline? But I guess we’ll take what we can get.
I guess but the close is more important –daily chart looks really bad now
We are highs of the YEAR.. How is this bad Gary?
depends on your timeframe
“Alternatively we just start P3 on Friday after Chevron’s earnings and the GDP report. I don’t think the government can hide the facts about the economy any longer.”
I agree with Fritz. If Shanghai, Hong Kong and the Nikkei fall hard tonight, and Europe follows through, then we may already have started P3. Someone earlier mentioned the 30-year and all the other auctions coming up; if there’s no demand–or demand only at much higher yields–then we may be in (5)[1] as the UberBears have been saying. [Warning: Newbie here who still can't count Elliott Waves.]
No, the government can’t hide the facts anymore. Perhaps our domestic Bulls can believe the propaganda for a while longer but global investors have had it with this nonsense. Ben’s shit is hitting the fan.
In 2001, when GDP when positive, the market still sold off 40% more and didn’t bottom until 2003.
Shanghai ALREADY fell hard last night. Down as much as -8% before it bounced back to close -5% down.
I think the drop in China last night was caused by internal Chinese factors, notably the fear that the central government has cut off liquidity to the banks (which have been speculating in the markets instead of making loans). Wait until tonight when the punters see what happened here today.
1:35 PM WSJ MarketBeat says as new rules force banks to bring off-balance sheet assets back home, the effects – on capital ratios (and lending), and on the calculus of credit ratings – may be harder to predict than people seem to think.
That would mean disaster for banks like Citi, Morgan Stanley, et. al. Most of their risk is in off-balance sheet assets and SIVs. If you remember, at the beginning of this crisis in 2006/2007, Citi had to bring back on their balance sheet many of the SIVs that were highly levered to subprime. There are many other things there like credit default swaps, etc.
C + SIV = DOA
Mr. Idan
What longs are you planning on taking if it gets to 961 ?
Thank you
I have still not decided.. i’m in no hurry to play long at 961… i don’t want to catch the knife either..
Idan – what long positions are you eyeing – scalp play or swing trade ?
Both… but more of a swing trade for us running to 1000
By Eric Martin and Michael Patterson
July 29 (Bloomberg) — The Dow Jones Industrial Average is
sending a buy signal that has foreshadowed gains of 18 percent
during the past nine decades.
The 30-stock gauge climbed to more than 10 percent above
its mean level from the previous 200 days, rebounding from 34
percent below the so-called 200-day moving average in November,
according to data compiled by Bloomberg. Eighteen of the last 21
times the Dow rallied from at least 10 percent below the 200-day
level to 10 percent above, it posted gains during the next 12
months, Bloomberg data since 1921 show.
The CHART OF THE DAY tracks the difference between the
Dow’s last price and its 200-day average since 1989. The lower
panel displays the measure’s price, along with the buy signals
it sent near the start of rallies in 1991, 1999 and 2003.
“This rally, while it will have its fits and starts, is
the beginning of a new trend, not just a bounce,” said Michael
Williams, managing director of New York-based Genesis Asset
Management, which oversees about $2 billion. “It is a
significant opportunity.”
The Dow posted an average advance of 18 percent during the
12-month period following buy signals since 1921, Bloomberg data
show. In the six-month period, there were 17 advances for an
average gain of 8.2 percent. In three months, it climbed 18
times, averaging an increase of 5.7 percent.
Returns by the Dow Jones Industrial Average 12, 6 and 3
months after the buy signal.
Buy Signal 12 Months 6 Months 3 Months
June 11, 2003 13.36% 8.98% 3.01%
Jan 8, 1999 19.49% 15.38% 5.75%
March 5, 1991 9.05% 1.21% 1.11%
Jan 27, 1989 10.18% 13.46% 4.14%
Sept. 3, 1982 31.38% 23.02% 11.67%
July 18, 1980 3.78% 5.34% 3.48%
Aug. 9, 1978 -3.74% -7.76% -9.83%
March 7, 1975 26.43% 8.63% 9.11%
Dec. 7, 1970 4.73% 12.75% 9.69%
May 8, 1967 1.02% -6.60% 1.41%
Jan. 25, 1963 15.20% 1.18% 5.68%
July 24, 1958 33.51% 19.91% 8.53%
Dec. 13, 1949 16.26% 15.04% 3.15%
Nov. 6, 1942 16.66% 18.21% 8.29%
Sept. 11, 1939 -16.61% -4.49% -5.20%
July 6, 1938 -3.05% 10.95% 7.49%
Feb. 18, 1935 43.10% 19.09% 8.06%
Apr. 19, 1933 54.47% 23.53% 51.63%
Aug. 29, 1932 37.72% -31.68% -21.87%
Aug. 18, 1924 35.82% 14.36% 5.46%
Dec. 12, 1921 21.89% 12.53% 8.12%
Average 17.65% 8.24% 5.66%
******************************
Contrarian alert, anyone?
Reply in TF forums to this post: How does the “buy” signal work when you seasonally adjust for government manipulation? Is that how it works? Borrow money to pump the market until a buy signal is triggered? And then tout the results?
Fools.
Buy when massively overbought. Gotcha.
This is not 2003, sorry to say.
1932: helluva buy signal, eh?
Bear flag RIFIN 10m.
want to know why dillan ratigan got fired from cnbc…
http://www.youtube.com/watch?v=gAtSmR7Z-Kg
If you were running the government and the markets, and you see horrible demand for 5-yr note and can foresee a horrible 10-yr note auction, what would you do to boost demand for 10-yr note?
Crashing the market seemed to work well post-Lehman.
I think Paulson/Bernanke will go down as the greatest bonds salesmen of all time.
Where can we find out the upcoming bond auctions ?
http://treasurydirect.gov/RI/OFAnnce
Can someone please explain to me why falling bond prices are bad for stocks!!
During the free fall days (July to Oct)..bonds were soaring and people were looking for safety and every single bear on this site including Mohan used it as a leading indicator to short…
Well this is how it works:
Back when we were free falling.. when bond prices fell (yeilds rose) it meant that money was going from the safe heaven of bonds back into stocks and it rose stocks.
Now… we are worried that the US won’t be able to finance it’s debt anymore due to lack of interest from foreigners (i.e. dollar is too weak, foggy outlook for the economy). So when the bond auctions go out…the government (due to lack of interest) is forced to sell the bonds at a higher yield, which means they are only pushing their debt back a few years. This nervousness causes the stock market to fall, due to grimmer outlooks of the economy if the US were to lose it’s AAA status on bonds and won’t be able to finance its debt.
Idan;
Yeilds fell from July to Dec and bond prices went up! Stocks in the mean time went down the tubes!
I think you might be confusing bond prices with bond yields. Bond prices rise = bond yields go down and vice versa.
Bond yields will rise/prices will fall when people sell treasuries and buy equities. Bond prices will rise/yields will fall when people buy treasuries and sell equities.
You just need to note that bond prices and yields are inverse one another.
Put another way:
Price of a bond (cost to buy) will rise as demand for that bond rises. The yield (interest paid to the buyer) will decline as demand for the bond rises.
Make sense?
Tanya;
I understand the inverse relationship. I am just questioning the bears here why they think the market would go down if yeilds were increasing when the same bunch (shanky, Mohan, Idan) here were using the high bond prices (lowere yeilds) as a leading indicator for the market down turn during the july-dec time frame last year.
Just curios – no finger pointing
My apologies if that seemed facetious, then. I wasn’t paying attention to the treasury/equity relationship back then, nor this site’s arguments. Sorry!
I have no comment on the logic used last Fall, but here is what I think now. If bond yields start to rise, money will flow into bonds because govt. bonds are a safer (sometimes called “risk-free”) investment compared to equities. When interest rates on govt. bonds rise, this has a tendency to “crowd-out” equity investments. So, as the logic goes, money would rotate from equities into higher-yielding, safer govt. bonds.
Bonds are priced in $1000 denominations usually. So for instance, the 10-yr bond is like 3.25% for every $1000. Thus, you get $32.50 per year for every bond you have.
You get the $32.50 per year regardless of how much you paid for the bond. So if bond prices fall to $950 (quoted as 95.00), you still get the 32.50 per year, which makes the yield on this 3.42% (32.50/950). You also get capital gains, which isn’t included in the yield calculation, but definitely must be accounted for. So if you buy the bond for $950, after 10-yrs you get back 1000, plus $32.50 for every year.
Again, you are misreading what i’m telling you. Read it again john. What happen till march has reversed itself. Now the ultimate factor is not whether money moves from bonds to stock market, but at what YEILD the US is able to auction their bonds at. The lower the yield, the more demand there is for bonds… the equity market is NERVOUS that the US won’t be able to finance it’s debt. So the inverse relationship we use to have on the way down.. has reversed to a pure correlation. The more demand for bonds, the more positive the outlook of the economy due to easier financing, the more demand for stocks. This outweighs the transfer of money from bonds to stocks and vice versa based on fear
I am confused about that also.
Higher yields in effect causes higher interest rates (mortgages, car loans, business loans, etc.) High rates has always been a drag on growth. Imagine the housing “recovery” if rates today were 8% on a 30-yr fixed rate mortgage. Get the point now?
Foreigners hold a high percentage of our debt. The more they bid for our debt, the lower the Treasury yield (and thus lower interest rates, etc..etc..). The less they bid for our debt, the higher the Treasury yields go, just as we saw today.
Money saved in a bank is typically used to buy these Treasury debt/bonds/notes. In America, consumers mostly spend every dime they got on new cars/houses/etc, and don’t save as much. 30% of the income of an average Chinese person is saved in a bank (which that bank then goes out and buys our Treasury bonds and collects the difference between the savings rate he pays that Chinese person and the yield he gets from our Treasury bonds). The reason why they buy our bonds is because our credit rating is “AAA”, the highest available credit rating, which means there is a near 0% probability that we would ever default on our bonds. So the banks invest heavily in our stuff because its very safe and very easy to make money (they make ~4.5% from our Treasury bonds and pay out nearly 0.5% for a savings account nowadays, leaving them with a guaranteed spread of 4%).
If our credit rating is lowered below AAA, it could cause foreigners to stop buying our Treasury bonds, or atleast require a higher yield on our bonds to make up for the lower credit rating risk. If we don’t have anybody to loan us money (through buying our bonds) then our gov’t can’t work since we run such a high annual deficit.
The yield is what the US have to pay in annual interest costs. This is currently calculated at $5 billion PER DAY. A small uptick in yields that foreigners require can mean quite a bit of money in interest charges (we owe collectively about $12 trillion in long-term debt).
Class Dismissed!
Let’s put it this way: the “powers that be” will sacrifice the stock market in order to save the bond market.
You know how the “PPT” is often expected just around now to bring the stock market back up? I don’t expect there to be a “candlestick save” today (in fact the opposite because I think they’re shorter than I am); the government simply cannot afford for yields to go up because that would totally stomp out any “green shoots” still out there. The Obama administration will seek its own survival, Goldman Sachs withstanding.
Thanks Professor.
This still didn’t answer the original question.
Lower bond prices = higher yield = higher interest rates = higher mortgage costs = lower affordability = less homes purchased = less economic activity = job loss = recession.
http://seekingalpha.com/article/143129-benflation-will-bring-higher-energy-prices
and
http://seekingalpha.com/article/141881-10-year-treasury-yield-gone-parabolic-mortgage-rates-oil-to-rise
Wow – great lesson .:)
That is the most staggering part of it … “The yield is what the US have to pay in annual interest costs. This is currently calculated at $5 billion PER DAY. A small uptick in yields that foreigners require can mean quite a bit of money in interest charges (we owe collectively about $12 trillion in long-term debt). “
Oops typo, I got that wrong. It is 0.5 billion dollars per day. My bad.
It was cited at $500 mil per day in this WSJ Article:
http://online.wsj.com/article/SB124882436513388423.html
Nice:
2:10 PM Noam Scheiber proved that the foreclosure moratorium has become the consensus explanation for the housing uptick, so the moratorium’s end means more sliding prices.
Are you saying that sliding home prices is nice?
No, but the media just ran with the rising prices headline without considering this may have been a significant contributing factor. More like “nice job mainstream media, you blew it again.”
So, the foreclosure moratorium was the reason for the housing uptick. As a result, you are saying that if the moratorium ends, prices will slide.
This is not necessarily true (as anyone who has taken Logic 101 could tell you). You are saying X (the moratorium) caused Y (the housing uptick). If that statement is true, the only other thing that must be true is the contrapositive of that statement which is “If no Y then no X” or if there is no uptick in housing prices, there must not be a moratorium.
Your analysis ignores the possibilty that another trigger may keep housing prices from falling.
It’s not me saying it.
As a mathematician would say “holding everything else equal” … (i.e. there are no other random variables).
Descending wedge on the 2-day. Uh oh.
http://i32.tinypic.com/1z2ogg7.png
I’ve been watching that form too. Should break down…about…now…
It could actually break either way … be careful ..
market wants to crack. its done with the whipsaw
weak hands are bye bye
940-950 here we come.
Oil at lows
Financials at lows
S135;
I am really surprised at how the market is behaving with a 6% drop in crude. Has crude decoupled! if it did then it is good for the bulls.!
Market with catch up imo.
“Stocks that were overbought 3 days ago on a 60 minute timeframe, and are now no longer overbought on a 60 minute AND oversold on the 10 or 30 minute timeframe”
Anyone?
Not now, son. Not now.
“Not now, son. Not now.”
Uh, what are you trying to say? Do you have any specific trades to recommend? I see that you post lots of links but I don’t see any trades in your posts.
Oh come on, Morris. Give me a fucking break, will you? I’m new to StockTock and to TA in general. I don’t daytrade. I am here to learn about the markets and post links that might be of interest to investors like me. If you don’t want to read my posts, skip them.
970 crackin’
960 sup.
Any thoughts on DXO after oil taking this hard fall today?
wait for the 100sma daily. it matches the uptrend line.
http://i27.tinypic.com/2vkfgv7.png
S135,
Wasn’t able to view this link till now. Thanks for your reply.
It’s just about time to start checking the Manhattan phone booths to see if the PPT are changing into their green capes and getting ready to save the day once more. Fly you heroes of manipulated markets to wage your battle against economic fundamentals.
http://www.youtube.com/watch?v=7XRil07h5uE
+1
Awesome, S135! Awesome!
Panic Line is at 960, so perhaps not yet.
US Treasury announces $250TRILLION one-week bond auction.
150 Chinese delegates show up in Washington to ‘chat.’
Shanghai, Hang Seng drop 5%, 2.2% respectively.
10-yr note sale sees indirect bidders account for 25% less than previous auction.
Art of War, anyone?
Well, Billion anyway.
Haha. Oops. Can’t get quarter-trillion out of my head, so there I mistype.
I remember reading on a blog some while back that this whole thing is not about the USD or even about the markets. It’s about power.
Outsorucing of America to China…
A better PPT vid, plus he gets some tang at the end:
http://www.youtube.com/watch?v=2uKapPkp77A
Looks like afternoon comeback again.
Okay, folks. I want a vote: me or Morris?
flatron says:
July 29, 2009 at 2:56 pm
“Stocks that were overbought 3 days ago on a 60 minute timeframe, and are now no longer overbought on a 60 minute AND oversold on the 10 or 30 minute timeframe”
Anyone?
Reply
Alex replied:
July 29th, 2009 at 3:00 pm
Not now, son. Not now.
Reply
morris replied:
July 29th, 2009 at 3:12 pm
“Not now, son. Not now.”
Uh, what are you trying to say? Do you have any specific trades to recommend? I see that you post lots of links but I don’t see any trades in your posts.
Reply
Alex replied:
July 29th, 2009 at 3:32 pm
Oh come on, Morris. Give me a fucking break, will you? I’m new to StockTock and to TA in general. I don’t daytrade. I am here to learn about the markets and post links that might be of interest to investors like me. If you don’t want to read my posts, skip them.
Alex…I will only vote if you post your trades like morris
I was just asking what you meant by the statement “Not now, son. Not now.”.
The guy was asking for ideas and you respond with that. It sounds condescending. What does it mean? What is the trade?
Do we need to revisit the first page today where you asked if I was still long ERX while also incuding its big drop today? That was rude. It was also ridiculous considering how well that trade has done thus far (even with the drop today).
“Not now, son. Not now”? Obviously you don’t have a wife and kids, you know what I mean? It’s a fucking joke but I’m sorry you didn’t get it.
Look back to your post about making profits on ERX: I said “Good trade!”
Your posts on your trades, quite frankly, are welcome because I can always get a view different from mine. Your tone, however, is almost always juvenile. Why don’t you go to Yahoo?
My tone is juvenile yet you are asking for a vote and using profanity?
Yes.
I rest my case.
I’m outta here, Morris. Good luck to you!
I bought FNFG yesterday, cramer likes it and it seems I make good money trading his stuff.
I agree with you Morris.
It hit me as condescending. I was asking for stocks and got that.
Really? Alex I like you but no reason to drag this out. Also, please remember to watch the language
blah, whatever. take the drama outside.
so anyone want to answer my (Idan’s) question about overbought stocks?!
Flattron: I think going long should be fine with these stocks for a daytrade.
Kenny has us going to 982 at least. He thinks we’ll have 1 last leg up.
If we are reaching the ‘so called top of the broadening top formation’, I don’t understand why go long on a long-term basis (Morris you are welcome to defend the bulls)..
Let’s say the broadening top formation actually occurs.. the top is 2-3% from here, while the correction lies at around 850 (yes this seems unlikely but this is what the chart says..)… Also we are approaching a key -middle- of a the 41-one day cycle. Today I think is around half of the cycle (day-21/22) meaning it should be a turning date, which coincides with Kenny’s prediction of a top, possible double bottom with the USD dollar, DZZ going up etc…
Good luck.
Bulls know that a pullback here is needed to have any real chance at sustaining a longer term rally. That being said, I am surprised at how well the market is holding up. I thought we would be pulling back harder this week.
I certainly wouldn’t suggest going long here with leverage. If you want to get long, there should be a better entry point coming. Good luck!
I agree … basically when we don’t have anything to add , we try not to write anything
There are people from many different cultural backgrounds and hence things can be interpreted differntly.
Also, asking someone else to leave and go back to Yahoo when they have been posting their trades and good ones at that !! is rude – it takes away from the value of the site and pisses off people … so definitely need to watch our tone ..
That said Alex … the posts you make are interesting – so keep those up ..
We are a community here and all grown ups lets continue to behave that way – rudeness and snide comments definitely don’t help …
Can agree with most, but Morris previously stated that he was going to look for another site, then has come back. I think that in itself, made a statement that he was unhappy with certain opinions here. Alex, on the other hand, has been working hard for many months to share the posts you are talking about and given a different view for all of us to appreciate. I don’t personally care about whether someone gloats about their victories, rather I appreciate the posts with charts of what could happen, then allow me to make my own investment decisions.
Well, I haven’t been posting trades here anymore but I have dropped in a few times (like today) to see how things were going. I wouldn’t say that I am “back” but old habits are hard to break.
I wasn’t unhappy with the opinions here; people are free to have whatever opinions they like. I was (and continue to be) unhappy with the lack of balance here. I agree that charts and links to news articles can be helpful but if they tell a bearish tale while the market keeps going up, then it is time for a change (if you have any desire to make money trading).
I am always happy to read posts that have well reasoned opinions that differ from my own. It is always a good to have your position challenged so you can really evaluate how strongly you feel about it (especially since money is on the line). I am also happy to offer criticism when I believe that a post is incorrect in its line of thinking.
I’m afraid the reality is that this will always be a bear site. I found this site when the market was crashing so I had no issue with the positions posted here. However, the site just never turned with the market in early March. I am one of the only people that was primarily bullish here since that time (which is sad).
The quote of the day comes from Professor Cyan Lite:
“I mean we were up 12% in 2 weeks, and now the bears are cheering for a 0.8% decline?”
Yep, same ole StockTock.
I truly do believe we are still in a secular bear market until 2012-2016 with MANY big rallies to come. The market will always be here for us to profit. Let this March 9th rally be a lesson learned for everyone..
It is not only StockTock which is bearish IMO.. The general sentiment was I recall at an extreme bear at 666 (CRAMER announcing 5000 on the DOW if hell breaks loose, and extreme bears at 869 with the H&S fakeout)..
One fault is that, there are too many posters calling the tops and ignoring TA rules.Throughout this move to 970, I kept on saying the downtrend is broken with a breakaway gap + the neckline failed..
People are anticipating moves instead of REACTING to them.. That’s stupid and does not lead to a succesful trader. How could you know were going to 820?
Also many of the posts on this site focuses on intraday 1minute trading which is useless IMO. Find the trend, ride it out, and exit when things looked topped.
Then Re-enter the counter-trend when you get the correct signals. Rince and re-peat. (Note: this message is mostly for retail investors with less than 25,000$ and who are paying fairly high commissions ($20), and who are day trading a ton of stocks everyday). 95% of you will go broke in 2 years (study has proven this).
To end, the trend is your friend, don’t fight it until you have true signs it has topped. If you bought at666 you’d be up 40%+ on the SPY, and up 300% on financials/tech stocks…
(End of Rant)
Wheewww, I’m glad my long hedges didn’t get stopped out. Are we on the way to end with another doji?
crap!
I almost bought spy calls at 3pm but I was like, too obvious!
This weeks market is very easy to read.
I should stop over thinking things.
Yeah, I guess. My SSO and DDM scalping orders didn’t get filled during the early morning selloff (that lasted less then 10 minutes), but I refused to raise my bid and actually DDM calls got filled later in the day
RIFIN almost hitting the upper BB on the 10m.
Let’s try again Thursday:
http://i27.tinypic.com/14ay9uc.png
There’s always tomorrow…
Could the late day rally have been mutual funds and smaller investors chasing the rally? This headline crossed at 14:45ET – *DJ ICI: Inflows to Long-Term Mutual Funds #11.0B In Latest Week
Two, debatably three hanging man candles in a row on SPX, bearish cross on the stochastic daily, daily RSI still high at 74.1, hourly DI- crossed over DI+, the VIX is up over 11% in 3 days…when (okay, IF) a selloff comes, I think it’s setting up to be at least somewhat violent.
Mutual Funds only trade at close, thats why you can’t trade them intraday like ETFs.
True, but the mutual fund managers can buy and sell stock at any time. All I meant by pointing that out is the fact that people investing in mutual funds, who are often smaller investors, seem to be chasing the rally if the $11 billion came in last week. From a contrarian point of view, that probably means it’s about time for a sell off.
970′ish seems like good support. We’ll probably eventually break it though.
Contrarion Indicators:
Newsweek having August 3rds weekly cover saying “THE RECESSION IS OVER”
http://www.newsweek.com/id/84653
PAUL M. Montgomery, with Universal Economics studied magazine covers back to 1923.
Whenever a positive major magazine cover story on the stock market ocame, 60-65% of the time the market has gained about 30% per annum over the first 1-8 weeks, 80% of the time, however, the market has then reversed within a year and sustained significant losses.
Yesterday, the price of spy and qqqq were dropped artificially at 4:15. Today spy was raised artificially at 4:00. Looking at the numbers, you would think qqqq and spy rose today. But, infact, qqqq fell a little and spy fell a lot. Who is doing this and why? What is the reason for this disinformation?
Makes the closing print look less “bad”. If this was OpEx, I could see why. The consolidated close determines whether or not options get exercised.
On June’s OpEx, the SPY closed at 92.01 (after trading well below $92 most of the day). Because it “closed” above $92, hundreds of thousands of option contracts got exercised. I’m sure that was the intent. The VWAP was at like $91.50
They dropped spy back to 97.65 at 4:15.
Can you explain what you mean … we all know about propping but it seems you are seeing something else ..
I do know that there are errors in data, which makes tbacktesting and charting not 100% accurate because the data is not 100% ‘clean’..
POSITIONS POSTED EARLY TODAY:
————- LRCX ——— OFF 3.5% AH
————- CERN ——– OFF 3.5% AH
———– BOKF ———– FLAT
————- RYL ————OFF 3% AH
————– ZRAN ——- held over OFF 1.5% TODAY
all look like money makers AH. see what morning brings.
————- ITC ————– filled later in day and did not have chance
to post as i was out enjoying my daughter’s skateboarding camp.
Idan says “We are in a special time where when there is more demand for bonds, there is also more demand for stocks due to inability of our government to finance itself.”
I am confused again, before(last year) there was an inverse relationship? What is the difference?
Last year when markets were crashing, people flocked into the traditional safe havens (US Treasury notes, bonds) and liquidated a lot of their stocks (deleveraging). Right now, stocks are not the safest place to be, but foreign investors are also questioning the Treasury bills. Foreign investors are growing increasingly concerned regarding the irresponsible spending and substantial printing of US money (de-value currency) that they’d rather look else where for investing their money. At the same time, mortgage rates typically follow the 10-yr note yield, so if the yield keeps getting higher, more delinquencies will result, dashing all hopes for economic recovery (although there was little to begin with). That is why the stock markets react negatively to horrible bond auctions.
When we begin the next wave of deleveraging (within the next few days I think), we will start to see some people getting back to bonds, so the yields should go down substantially because foreign investors will soon realize there really is no safe haven (but US government bonds are at least the safest amongst all investments in terms of getting your money back.)
Does, in your opinion, it matter how far out (i.e 7yr treasuries tomorrow, vs. 5yr today) or is it all a ball of wax (with a candle starting to burn?)?
Just found the answer to my question.
All clear now, thanks!
For those who are interested in 10-yr note yields and stock market:
http://social.stocktock.com/photo/2348194:Photo:33287?context=album&albumId=2348194%3AAlbum%3A33225
The first dip in the yield occurred on March 18 when Fed announced purchases of 10-yr notes to keep the mortgage rates low, and then yield rose again until June (head of the failed H&S), and then when yield reached 3.4% in early July, buy signals were triggered (and we all know about the short squeeze that took place afterwards). Sell signal? Ideally you’d like to see the yield go up to 4.5% before shorting everything, but I think we’re pretty close to the tipping point anyway.
Now check out the historical 10-yr note yield:
http://social.stocktock.com/photo/2348194:Photo:33289?context=album&albumId=2348194%3AAlbum%3A33225
See the pattern? Stock markets, commodities markets, and bond markets are all representations of fractals. The patterns repeat themselves and you can even take a small window and examine the patterns and find similarities. By comparing the patterns and extrapolate as to what could take place next, one finds that the 10-yr note yield could head back to 4% to make a double-top and then start heading much lower (sub 2%). A very possible way for this to take place is by repeating the Lehman experience at twice the magnitude (yikes!).
I read that mark-to-market practice is about to be brought back, so how about an overnight collapse of Citigroup, Wells Fargo, or Morgan Stanley some time in the next few months?
Hey, Fritz
Where did you read that about mark to market returning? I posted a link to a similar article here just a few days ago, but the confirmation and time line would be good to know. When you think about it, the removal of Mark to Market is the number one reason why this rally exists in the first place. Take it away and it’ll be like sweeping out the entire bottom row of a Jenga tower. Down she goes!!
The real question is if the FASB will have the balls to do it. If not, then they are just a paper regulatory tiger with no teeth, and we already have one of those… it’s called the SEC.