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Share your thoughts, links and charts for the weekend… where are we headed next week?
Today we looked at the action that the bulls gave us to save many of the charts that were breaking down. This doesn’t mean that we won’t see a breakdown on monday, but it makes it more ambiguous as to what we will see next. In this video i provide different levels for you to watch out for if you want to play this market both to the downside or the upside. We look at SPY, XLF, JPM, GOOG and AAPL.
Here are Ian Gordon’s economic forecast. “We’re in a depression.” He predicted gold going to $1200 in 2009. He predicts that by 2013 the Fed as we know it will be shut down:
http://watch.bnn.ca/squeezeplay/december-2009/squeezeplay-december-17-2009/#clip247767
Food for thought.
On Wall Street, Many Investors Seem to Believe in Santa Claus
http://www.cnbc.com/id/34500782
[excerpts]
‘November through January tends to be the best three-month span for stocks. Over the past four decades the average gain from Nov. 20 through the end of January has been 4.2 percent’
Has CNBC been looking at my ST blogs? I published this study http://stocktock.ning.com/profiles/blogs/a-44year-time-study-of-the, with the results that OTM puts (>15%) will expire close to worthless if you buy them on Nov 1st and cash them in Jan 1st, in 97.72% of the cases since 1964.
The S&P has increased an average of 1.5 percent during the seven trading days that start with Christmas Eve and end with the first two days in January since 1950.
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December 20th, 2009 at 8:37 pm
Sell in May and go away
Sept and October are usually the most bearish months
All these patterns have not played out this year so why not smoke everybody banking on a Santa rally?
CNBC boys all seems to be talking about a 10 to 15 percent correction after the first of the year. There never right so it’s either now or a lot latter down the road.
December 20th, 2009 at 9:31 pm
very good point.
December 20th, 2009 at 10:19 pm
True, but you have to have parameters in your dada
‘Sell In May:’
If you back test the data and include a IF statement ‘which is you only include years that the market sold off >10% from Jan1st to May1st’ , and see how profitable it is to sell in May and go away , I’m sure you will get negative results.
As for the fall months being bearish.. from september1st-october31st the market rallied 3% from the lows.. which isn’t that much..
And you have to backtest the data using parameters like (given a market correction of 50%, how bearish is sept/october.. i’M SURE your not going to see large corrections)
So in the current situation.. given a +20% rally how likely is it that we will rally in December..? Guys the average rally 1.5%.. it could happen, were not talking about 30% gains just 1.5%!!
December 20th, 2009 at 10:33 pm
yup 1200 here we come
A the end of the day NO ONE KNOWS! We have bears here who are hoping for DOW at 5000. The EW guy is predicitng the end of the world. The chartists have their fibs/trendline/support/resistence at every penny of a stock. Everyone else is clueless…we just place our bets and hope for the best
Its a calculated gamble
and we all love it.
December 20th, 2009 at 10:12 pm
Which means pay less attention to the EW and play the market day by day. Nimble wins. I’m looking for long plays this week. Hopefully with light volumn and unexpected economic news there wil be volatility and good enrty/exit points.
December 20th, 2009 at 10:20 pm
Probabilities the only thing we’ve got.
EWT has not been back tested, neither has fibs. How do you know it works?
December 20th, 2009 at 10:26 pm
Technical analyst David Aronson writes:
Author of
Evidence-Based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals
I’m planning to buy his book over the holidays and read this.
The author writes:
The Elliott Wave Principle, as popularly practiced, is not a legitimate theory, but a story, and a compelling one that is eloquently told by Robert Prechter. The account is especially persuasive because EWP has the seemingly remarkable ability to fit any segment of market history down to its most minute fluctuations. I contend this is made possible by the method’s loosely defined rules and the ability to postulate a large number of nested waves of varying magnitude. This gives the Elliott analyst the same freedom and flexibility that allowed pre-Copernican astronomers to explain all observed planet movements even though their underlying theory of an Earth-centered universe was wrong.
December 20th, 2009 at 10:46 pm
I find EW theory hard to understand. Everytime you think you’re right, you’re wrong, and they always tend to redo their ‘count’. I can say 90% of the times they can only tell the pattern once the move is finished. Fibs are more reliable, and even then, you’re still messing around with numbers.
December 20th, 2009 at 11:39 pm
Only my 02 cents…
Something that I don’t like about Ellioticians…they want to explain every movement in the market…it is not possible at all
However when you find some reliable patterns, yes you can forecast moves with a good level of accuracy.
This is the reason when I suggested some folks in this site to read some books that I found very interesting….
If you look at SPX from March, you will find that it makes a low every 41 days (approximately). Based on cycle analysis, I am bullish about next week. Also, historically, there has been a Santa rally this time of the year.
I am in cash and will probably stay that way until January 1..I hope for a 2 week rally then i will get a better entry on EDZ.
December 20th, 2009 at 11:54 pm
If you are trying to enter Jan 1 with a short then why not ride it up till then?
POT downgraded to sell with a target of 85 bucks by Soleil. Ouch. That’s a haircut.
STT and NRS (banks) both upgraded to outperform with targets raised. STT in the past has moved nicely with an upgrade.
Don’t see any economic news due out tomorrow. Looks like the reports start coming in on Tues AM.
December 20th, 2009 at 10:49 pm
Oh- And the futures are up so far both in the NAS and DOW. OK. Many hours until the open and everything can change.
December 20th, 2009 at 11:19 pm
True Valerie as I type it is up about 30 points. I have noticed the last few weeks that when the futures are up the market follows and vise-versa when futures down market goes down. However this has not always been the case but then most everything going on with this market has not been the case. Things can and do change which seems to be how this market runs especially with low volume.
December 20th, 2009 at 11:37 pm
Correction. NTRS Northern Trust upgraded.
One last thing and then I’m shutting down for the eve. Be sure to step over to the videos here on ST and watch InTheMoney’s vid for the week ahead. Compliments Idan’s and talks this wk’s key S/R’s.
Cheers.