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| johnpaulca 12,036 posts msg #96269 - Ignore johnpaulca |
9/15/2010 10:24:06 AM shorts taking a spanking. |
| taylorsk 106 posts msg #96270 - Ignore taylorsk |
9/15/2010 10:42:23 AM IN and out of SKX. Enter $22.95 Scale out $23.05 $23.18 $23.41 Done for today....Thank you TRO! |
| johnpaulca 12,036 posts msg #96272 - Ignore johnpaulca |
9/15/2010 11:54:07 AM TNA....long at $42.29 |
| johnpaulca 12,036 posts msg #96273 - Ignore johnpaulca |
9/15/2010 1:48:31 PM The past six months have been quite choppy for the stock market. After the infamous "flash crash", last May, the Dow has moved up and down 500 to 1000 points with relative ease. In just the first two weeks of September, the market has moved up 6%, prompting analysts to suggest the indices have hit resistance and are ready to pull back. A decline from here might happen. In fact, I'm hoping for it. However, by the title of this article, you already know what I think. The most telling of the six bullish points I'm going to make is technical. I offer that perspective near the end of the article. So I encourage you to read to the bottom for a very interesting analysis. 1. Seasonality: History shows that some of the worst stock market declines have come in September and October. If you look at the past twenty years, however, that hasn't been true. Most years that had declines in the summer had very nice rallies in the fourth quarter. Sixteen of the past twenty years have had very significant up moves from the summer lows, most over 10% and some exceeding 20%. The one blaring exception to that was the bear market in 2008, which remained in free fall straight to the major bear market low of March of ‘09. So seasonality is favorable. 2. Geopolitical issues: The two big issues that could have been negative factors for the stock market have passed, at least for now. Israel chose not to attack Iran's reactor before fueling began. And Greece's debt problems are also now on the back burner, with Norway's sovereign wealth fund investing in Greek Government bonds. Greece's Papandreou also has said that "No new austerity measures were needed to avoid default. So, for now, the problems in the Euro zone, especially for the "PIGS" (Portugal, Ireland, Greece and Spain) should not be in the headlines. For these major issues, however, we may only be in the "eye of storm." 3. U.S. Politics: It's been no secret that the Republicans are going to make huge gains in this off-year election. Odds are quoted as high as 70% that the Republicans retake the House. Nevertheless, the stock market took quite a hit this summer; making me question if the election really mattered. The market tone is much better now, coinciding with changing political rhetoric. President Obama has proposed tax incentives for small business and is hedging on letting Bush's tax cuts expire (except for the rich). The truth is the democrats are on their heels and Obama is being forced to the center. The avoidance of tax increases and help for small businesses will be very positive. Also, if you assume a conservative win will be favorable for the stock market, the dire employment situation is going to help. The unemployment rate is up 2% since Obama took office. And it was just reported that people living under the poverty level has jumped from 13.2% to 15% of the population. So for a large segment of voters, sentiment is quite sour, with jobs very hard to come by and unemployment insurance running out. Obama's economic policies, thus far, has done little to nothing to help the situation. If anything, long-term, Obama's polcies have destroyed job creation. Now conservatives have a lot of proving of their own to do, having completely lost credibility under Bush. That said, you have to figure a big percentage of those unemployed or underemployed voters are going to show up to the polling place and swing to the republicans. It won't mean easily undoing Obama's policies. But just a whisper of ending what has been unfettered momentum of the "left" is bullish for business. Additionally, Obama has proposed investing $50 billion in badly needed repairs to infrastructure. This has already given a lift to steel, machinery and materials stocks. Though the idea is politically motivated, adds to deficits and will be heavily debated, it will help those market sectors and is a positive. So, overall, the prospects of the republicans winning at least the House, combined Obama's responsive actions to keep them from winning, are positives. 4. Merger and Acquisition: Though the credit crunch had M&A activity quite slow in the first half of this year, activity has picked up in recent months. Art Cashin, director of floor operations at UBS, recently made two interesting observations. First, the increase in M&A shows that companies are confident the economy will improve. And companies are mostly using cash for their acquisitions, suggesting they believe their stock prices are too cheap to use as currency. These are excellent points and a positive for the stock market. 5. Investor Sentiment: There are a lot of ways to read market sentiment. The most common are measures of bullishness or bearishness of advisors, traders or investors. Recently the commonly watched AAII sentiment index shows market optimism has moved up to levels previously associated with market peaks. That could be a short-term negative. However, I'm watching a bigger picture. For the past five months, coinciding with the recent stock market corrections worldwide, there has been a dramatic move into US treasuries, pushing yields to historic lows. The action of these two markets has been a return to the inverse correlation between stocks and treasuries we've seen for well over a decade. Strength in treasuries has also been related to problems with Europe sovereign debt. So, worldwide, major investors have been acting like they been very fearful, pouring funds into safe havens. As I mentioned above, there is at least short-term relief for European countries now. Also, on August 30, I posted an article in greenfaucet.com entitled, "Relief for bond Bears", in which I pointed to several technical reasons for a top in bonds. Since then, treasury bonds have declined and the top is confirmed. This is a major bearish signal for the credit markets. For all of the reasons I have given above, I see sentiment shifting, bringing a reversal in the flow of funds; out of bonds and into stocks. When this really catches on, the rise in stocks will be quite swift. 6. Technical: I have included a Monthly chart of the Dow Jones Industrial Average (DJIA) that goes back to 2001. There are three very bullish aspects to this chart. 
The first thing to look at is the 21-Month Moving Average. Notice that this moving average was support for the previous bull market, which began in 2002. Once this moving average was broken in 2008, the bull market was finished and a collapse began. Also notice that the first leg of the bull market peaked in early 2004 and corrected into the end of 2004, bottoming just above the 21-Month MA. Though the timeframe is a bit shorter today, the current pattern is very much the same as the one that led to the second leg of the 2002-2007 bull market. Additionally, this MA is just turning upward for the first time since the downturn in the bear market; quite positive. Next, note the diamond pattern that has formed over the past eight months. Many market technicians have looked at this as a head and shoulders top formation. However, H&S tops rarely have a deeply down-sloping neckline. It is much more probable that this is a diamond continuation pattern. To be proven, the market will have to rally above the downtrend line, now at 10,750, with increasing volume. The coinciding breakout on the S&P 500 is around 1165. That could still take some time. Supports are now at around 10,000 on the Dow and 1000 on the S&P 500. The next and what I think is the most exciting aspect of this chart is the cycle analysis. A cycle is measured from low to low. I marked off important lows with blue vertical lines. Between the lines I placed the monthly cycle lengths. You will notice an astounding repeating pattern of lows. The low of the bear market that occurred in late 2002 was tested in early 2003. From that low the stock market began the first leg of the 2002-2007 bull, which I noted earlier, corrected in 2004. That was 19 months from low to low. You'll notice a similar cycle pattern, of 19 months, in 2005-2006, which was leg two of that bull market. The cycle that contained leg three was 18 months from low to low. This cycle formed the start of the bear market. The next cycle contained the majority of that bear market, lasting 15 months. Notice how the two monthly cycles contained a "Head and Shoulders top. The declining cycle fails early ("left-hand translation"), forming the right shoulder, bringing a big decline. For candle stick readers, you can see a perfect "evening star" formation in the three months that formed the top, a powerful signal that the bull had died. Another bearish confirmation was the rally to the 21- month moving average in 2008 that failed quickly. That brings us to the present bull market. Notice how the rally from the low in 2009 came amazingly right up to the 61.8% Fibonacci retracement level. The following correction, in May and June of this year, brought the monthly cycle to 16 months from low to low; within the average range of cycles over the past decade. Go back and look at the 2002-2007 bull. You'll notice that if a cycle ended higher than it began, the following cycle took out the high each time. This happens over 70% of the time. That's an uptrend. When this pattern failed, in 2008, it brought a collapse. Today we have a situation where the monthly cycle has bottomed relatively early in the cyclical bull; in month 16. Of course, the market could take one more hit and bottom in month 18 or 19, then take off in the next up leg. However, the sum of all variables favors that the next rally has already begun. Whether the low is in place or comes after the stock market pulls back from here, this analysis says it is highly probable that the bull market high on the DJIA, at 11,245, will be surpassed in the next four to eight months. Above that, the next major resistance is at the old neckline, around 11,900 on the Dow. I see that level as the best possible outcome for the coming rally. OK, here come the caveats. The highly publicized "Hindenburg Omen" has been confirmed and is in play. Because of its name, this indicator seems somewhat supernatural or based on some metaphysical forces. However, it is really a very neat measure of stock market divergence. It's warning that investors' buying and selling is inconsistent and chaotic, simultaneously pushing some stock groups to new highs and others to new lows. That could mean one more trip down before buyers can gather forces in earnest. Another big problem is the issue of the mosque near ground zero. With Anti-Islam sentiment growing in this country, it is a powder keg. It seems no matter how this issue is resolved; there is a growing risk. If this explodes, and we get into a situation of civil unrest, it would completely derail the stock market and put off the rally. Another problem is that stocks are not cheap, with the trailing P/E at 20. Based on average earnings estimates for 2011, a move to 11,900 would take the P/E to a lofty 24. The market won't hold that valuation for long. So when the next cyclical up leg comes, investor should use it at a welcomed exit opportunity. I was really hoping to post this article while the market was in a declining phase, offering an easy buying opportunity. However, rarely obliging, the stock market is looking much better. So, for investors, I'd be nibbling while we're range bound; buying no more than 30% of the funds you intend for additional stock market commitment and adding on the breakout over 10,750. For ideas on what to buy, I'll be posting a follow up article soon, naming the stocks that have the most favorable chart patterns for the coming rally. For traders, while were still in the diamond formation, you have to be nimble, expecting the Dow's 10,000 to 10,700 range to hold until the market tells you differently. That could be in a matter of days or after the November 2, election. Source: STEVE MILLER ....Greenfaucet |
| johnpaulca 12,036 posts msg #96277 - Ignore johnpaulca |
9/15/2010 3:39:02 PM TNA....out at $43... +0.71 cents. |
| wkloss 231 posts msg #96284 - Ignore wkloss |
9/15/2010 11:23:31 PM johnpaulca Your post from Steve Miller brings a very compelling, thoroughly researched and well thought out analysis. The question I have is whether we are looking at a real market. More and more I hear of Fed (Treasury?) intervention in SPX each day to prop it up. I can see how it could be in the national interest to do that even though there should be no interference in markets or at least no attempt to keep them from falling. Making them rise seems very different. IMO, nothing has been fixed and a lot of what Washington has done will cause more damage. I would much rather have your economy up there than ours down here. What's stopping me from moving? Global warming. It just hasn't gotten up there yet. You have a shortage of palm trees. But seriously, if we do ge a big rally here, it will probably be followed by the Mother of all declines. Bill |
| johnpaulca 12,036 posts msg #96296 - Ignore johnpaulca |
9/16/2010 11:18:00 AM TNA...long at $42.22 |
| johnpaulca 12,036 posts msg #96297 - Ignore johnpaulca |
9/16/2010 11:35:48 AM TNA...added more at $41.58....support at 60-min chart but could continue further down. Stop at $41.45 |
| johnpaulca 12,036 posts msg #96299 - Ignore johnpaulca |
9/16/2010 12:48:42 PM Anyone able to connect to TOS ??? |
| Eman93 4,750 posts msg #96311 - Ignore Eman93 |
9/17/2010 8:22:15 AM Risk Off On News Ireland Negotiating WIth Bondholders Over Anglo Irish Default, As Country Prepares To Call In IMF The bears may have been saved. http://www.zerohedge.com/article/risk-news-ireland-negotiating-bondholders-over-anglo-irish-defa...ult-country-prepares-call-imf |
| StockFetcher Forums · Stock Picks and Trading · Intraday Alerts | << 1 ... 609 610 611 612 613 ... 1903 >>Post Follow-up |