3:15pm EST from Unersaettlich
Blackhawk asks about adding SCO here with oil peaking. The following approach is possibly useful in a number of such situations, and will benefit from the visibility of a chart, so I will put it here.
When considering an investment, it is usually a good idea to compare it to alternatives, especially in the same sector. If oil is peaking, maybe oil&gas stocks are, too. Also, a number of funds and others will have loaded up on oil&gas stocks because of IRA contributions and additional inflows that happen at this time of year. This means that stocks might soon enjoy less buying and drop faster than the underlying commodities, which could stay expensive for a while. I live in Wisconsin and just saw temperatures of about 10F below normal on a weekly forecast, with much-below-normal temps forecast for the Confederate states for the next month.
One way of comparing two investments is to look at a chart of the ratio in their prices (SCO:ERY in this case), alongside charts of both single investments, similar to this:
If the chart of SCO:ERY slopes upward, SCO is outperforming ERY. That has been the case briefly, but you can see the negatively divergent indicators starting to hook over in toppish-looking fashion on the above hourly chart, with the 135-hour (=20-day) moving average (MA) also topping, along with resistance from the 20-hour (pink) upper Bollinger Band and hints of topping from the 13-hour = 2-day (white) exponential MA. Thus it seems that ERY may well start outperforming SCO again, but we should look at both to make sure ERY looks buyable here. In the above chart, both SCO and ERY could be finding support from their lower 135-hour = 20-day BB, but I would also look at a more detailed chart of ERY to see if it makes me feel like pulling the trigger:
Link to live chart (requires subscription):
http://stockcharts.com/h-sc/ui?s=ERY&id=p73535013815&def=N&listNum=2
ERY does look bottomish, but its bottoms also seem to take their time in developing, sometimes a week or so, so I would probably compare ERY to several alternatives, including some that may be in other sectors, perhaps waiting for oversold crossovers in the indicators and leaving those dangerous first few per cent to others. ERY could be about to deliver another 30% rise starting soon, but why not wait for a bit of confirmation from the indicators, and in the meantime, see if something else might be setting up for an even nicer pop?
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11:47am
Happy new year everyone, happy new decade!
The spy continues to go up, but we are getting closer to the 1142 Fibonacci topping area. Here’s a 120 minute Fibonacci target of 1142.. you can see how the 50% lands on the bottom of the channel and the 23.6% in the top, and the 38.2% right in the middle. With the SPX breaking the 50% retace of the bear market, we have to assume there could be more upside to the 61.8% retrace. That said it would not surprise me that we get a fake out to 1142 and move back down. Here’s the 120 minute SPX:
I am glad to see your 1142 call Idan. I know a lot of commercial traders using 1130 for their 50% line and recent action has them covering. 1142 should give the bears some peace. ;]
I see a strong resistance @ 18.50 for LVS, that said, there still a possibility of half a buck upside run, or bears can take advantage of shorting once that price target is near. Peace!
No way. this stock is going to crash down tomorrow
Sorry for not posting the link on the PIMCO selling:
http://market-ticker.denninger.net/archives/2010/01/04.html
PIMCO has also announced they would be net sellers of US treasuries in 2010. This is big news again as it shows a complete lack of confidence in the Fed in refrence to their ability to control debt.
Idan, others, thinking about adding considerable shares of sco at this point with oil close to $82 level. Thoughts?
blackhawk and others, see charts and discussion added to main blog above.
Sold HND.TO @4.93 (bought @4.60 yesterday) +7%. GL.
Here comes that miraculous EOD comeback. Sure feels like groundhog day anymore. Wanna bet we end up green??
Idan,
Any thoughts on FAZ? Finanicals are screaming higher today.
My thoughts on FAZ are similar to what you see above for ERY. It may well be nearing a bottom (and the bloodbath does seem to be turned flattish in the first after-market hour, with some of the usual shenanigans (both DRN and DRV are down slightly), but why not watch for more confirmation and evaluate a few alternatives instead of grabbing at what may be a falling knife?
As I told you guys from yesterday big boys are in XLF. I said they are going to push this to 15 and sure enough they did that. I am expecting one quick push up following a quick push down in coming day that would mark a reversal sign for me not only for XLF but also for brod market. I expect to see a very deep correction once reversal start. As always I said technical analysis is good but psychology and realizing where big boys are going is much more important, that is why I can predict the market very well without using technical analysis.
Great call Sam!
Sam – good call
Curious on why a push to 15 and not higher ??? Also, what told you the big boys were in this ?
If you look at the last several month price never break 14.00 in the donside and 15.00 in th eupside area and that is why I mark it as a target for myself. Basically big boys make money in different way for different sectors. For financial the way they make money is called sideway metrology and this sideway price is between 14.00 and 15.00. Since I like big boys that has been my metrology as well until that changes.
The “big boys” in this case are the institutions with stacks of cash from new IRA contributions and from selling into rises. These same big boys also use TA. Each investor is entitled to choose whatever methods he/she/it prefers, but I want as much info as possible before committing a lot of money, and am happy to look at fundamentals and psychology as well as charts, along with listening to people who don’t necessarily happen to agree with me (I might learn something from them).
Why not take advantage of multiple forms of analysis?
I don’t know if any one has seen the BS legislation before congress to make it up to the banks money market managers discretion whether you can pull money out of your money market when you want to.:
http://www.zerohedge.com/node?page=1
I just closed all my big bank accounts and moved them to the good ole small town bank. The whole system has gone wacko in the banks favor. Its all I can do to vote enough is enough.
A video of Miley Cyrus gets 100x more views than a viral video endorsed by HuffingtinPost.. (shakes head)
MOVE YOUR MONEY:
http://www.youtube.com/watch?v=Icqrx0OimSs&feature=player_embedded
boy, dead around here these days.
anyways, just a reminder to all the bears out there that we are going to 1200+.
You got that right….This market is going to fool many, the downdraft to 666 was a total fake, should never had gone that far, now we have the updraft that could go to 1332. I know folks in their 50s that sold all stocks in March and moved money to bonds, they are doing ok, but are very angry with the system and the missed opportunity. Many are baffled, I would say the current lack of interest in this blog is good warning many have given up on any p3, story lines…etc. The problem is with the EW bunch is their methodology does not work just like Cramer’s BS.
Face it guys…….Some lost thousands or millions they will never see…
The Creature from Jekyel Island just bite your head and ass off!