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The Weekly Peak: The “Less Bad” Rally Is Looking for Something Good, by Peak Theories Research
I'll consider the tea leaves before fundamentals. Or even better yet.. just flat out guessing.
Yay! +85 million!
I prefer good old fashioned entrail reading.
You don't think the PPT doesn't know TA?
The HFT algorithms are trading based on TA. That's 70% of the market volume right there.
That alone makes TA valid.
They know T and A very well.
I see a bearish inverted dick and balls pattern emerging clearly from the crotch of the August highs.
Ha! That was actually quite funny.
i unjunk thee thrice
Yaaay! PPT is doing it's job. Go rally! The economy and the stock market have entirely disconnected from reality.
And the odds are 50/50.
Disclaimer on page 5 says it all. "subject to change without notice" Basically if I am wrong I warned you ..I think
the rate of negative growth is increasing...buy Buy BUY...
Woo Hoo , time to get a mortgage for a 500000 dollar house I can't afford, oh yeah, I saw a C6 vette on the turn table at the dealers, now whats their #.
he says above 1300 or 425........please a little more wiggle room in those estimates , eh 9999 and zero?
TA is no longer relevant.
TA is ALL that the markets trade on.
There is no fundamental trade anymore.
70% of traders are computers that run algorithms based on TA.Do you want to use the same methods as them?
Or do you want to make wild assed guesses?
Let me guess... you don't trade at all. You buy GOLD bitchez, right?
So really, if you don't know what you're talking about, why even make ignorant comments?
There is no denying that TA is the reality. The only thing lacking in TA is people's inability to use it.
Actually TA is extremely relevant. Pull up a 20 year monthly SPY. It couldn't be any clearer what's going on from a TA perspective.
notice those three solid bounces (underlined on chart) off of S&P 1040 a little while back. That is intervention at its most blatant.
how about ... it's just a case of traders covering their shorts at a level that had already proved to be very strong support at least twice before;
considering shorts have been on a hiding to nothing for a while now, this makes technical sense as no-one wants to get their ass kicked over and over again; on top of that the reaction from 1040 has been very strong (ie fast), which means if you don't cover soon (ie fast) enough, all your profit is gone!
Whether this is mainly because of a self-fullfilling/propagating fear that the PPT has 1040 as a line in the sand remains to be seen.
I personally will be covering at least half of my shorts again in that area should we get there, with a view of reinstating them should we break it with strength.
Also bear in mind that the more times this area holds, the harder (ie faster) the follow through to the downside will be, as anyone still long will likely cover (ie sell) their existing long position. Of course, should 1040 hold again, then the reaction north will (should) be equally strong.
That is just my humble view of course although i do agree with the mainstream sentiment (in here at least) that suggest a skewed market with debatable data releases and rallies on less that good news.
The three superball like bounces directly off of it, in the space of several days seems unlikely. The small rally since then seems organic, for lack of a better term, but that period of time seems REALLY bogus. I was watching it happen. Who knows. Maybe it is a self propagating line in the sand at this point.
you are absolutely correct with the "self-propagating" line in the sand; for example if enough traders are convinced that a fib retracement level is a good shorting/longing opportunity, the level will become important and the market will hold/turn; it's not the fib line that makes the market hold/turn, it's the collective mindset of all the participants
Hi "aint no fortuna..."
I'm not sure if you're replying to me or sethco;
In case i did not make it clear, I don't believe this is a market i can buy into, hence why I only trade it from the short side; should the market overcome the 4 obstacles highlighted below, i will cover my shorts and stand by looking for a better opportunity to reshort higher.
I believe in my analysis but i'm not going to get slaughtered in front of a fast moving train purely for "this market should go down" reasons
Not very high quality. At all. Look at the footer on every page.
'Peak Theories Research .... dedicated to providing investors with a macro long-term view ...'
Then follows it with a load of very unsophisticated short term TA. Utter nonsense.
You're right - its very unsophisticated TA.
First of all, the timing of this inverse pattern is a problem. Most of the reliable, high probabily breakouts from such patterns come from extreme oversold bottoms, such as what we would have seen in the major March 2009 bottom. They rely on a total washout of buying interest. Success of a breakout move from an elevated market where the SPX has rallied 450 points higher 18 months since the low, and which is showing clear signs of exhaustion and extremely low volume is not typically where an inverse H&S launches from, despite its being touted as a BUY by the media shills and TBTF high frequency trading manipulators.
Equity mutual funds have had net outflows for the past 18 consecutive weeks... without one single exception. Last week 9+ Billion went out the door, a doubling from the prior week. This year to date equity funds have had over $50 Billion in net outflows - $62 Billion to be exact.
Please explain to me where the stealth accumulation to fuel such an impending up thrust is in THOSE numbers.. are the algos holding for 2 microseconds rather than their customary 1 microsecond? Please explain to me where the firepower will come from to push this market into an explosive upthrust when Joe Q is crawling for safety under his bed? Joe Q. is busted, broken, scrambling for cash. So who is left to buy? The HFT's? The FED? Who else is left?
In my view this is not the high probability set-up for a breakout move from an inverse H&S.. that type of move starts from a bottom, not near a top.
I agree with what you're saying about the reverse H&S starting from a bottom, and not a top.
Monthly charts aren't oversold enough for a pattern like that to play out.
Then again, I think we can see a move higher considering that we decisively broke a consolidation triangle yesterday, although I see some overbought indicators on short term charts.I could have sworn we'd be down today, and that didn't come to play out.
I still expect some down action in the markets very soon, but I think that we go higher over the long term.
could still happen; the day is still young and the daily/weekly close will be all important
That is true.
Edit: Damn, look at that swoon that happened right as we were talking!
I really, really thought that the market would be down today. Maybe it will be?
S&P futures & Dow futures have both yet again kissed their 200 DMA (1105 & 10393 respectively) and retreated from it;
i would have more confidence in my shorts if we close below 1099.75 on S&P futures tonight (where the trendline from the previous 2 tops is) and this would also be the 4th/5th rejection of the 200 DMA;
if the PPt exists, i'm sure they are looking at the same + 1100 is a lovely psychological number so a great deal of effort will be made by both sides to close above/below on a weekly basis
I see a rising super wedgie for anyone long equities for more than a few hours.
To heck with hemlines. I use the Highway analysis method. The basic tenant is trucking and rail activity always picks up in the early stages of a rally due to rising material orders. The highway I live by sounds so quite you could her a pin drop at the moment. Believe it or not this has served me well over 3 decades of investing.
On a side note. My wife went to apply for a cashiers job a a grocery store last week. Over 600 applicants showed up and their was nowhere to park. Bullish Indeed.
The highway comment is telling (my sister is in trucking) and she says that business up but only because so many trucking firms went out of business. BUT, the railfax numbers may tell a different story.
I was convinced early on that the pickup was just Chinese transhipping from Long Beach across the US and then out to Europe and Latin America from the East Coast. Now I think that there may also be some (unwanted?) inventory build going on as well although yesterday's import export numbers are puzzling.
Auto deliveries picking up but even with discounting the dealers reportd ~5% more cars on their lots last month. The stores I have been in have may lookers but few buyers - everybody is waiting for the discounts.
I think that this is part of the 'saw-tooth' economy - up and down and up and down, with very little overall growth if any.
The holiday shopping season may actually give an idea to how bad things really are.
Nice link. Thanks. I think you are right on all points with Sept. being the up and Oct. being...........................well you know the history, and then the January effect which actually starts in Decemb er. Historical dud.cow
My step father inlaw (no really) sells loads across the Southeast and the only loads he is selling are headed for stimulus projects, and the shippers are waiting to be paid, other than that, business is down overall by 60%but has picked up some from last year. He didnt go out of business yet so thats very bullish for equities. I have three people in my house who are looking for work right now, no luck in the past 6 months.
In this case follow the Dow Transportation Index at it is often the leader of all the indices; it needs to overcome 4 potential hurdles all roughly at the same level:
200 daily moving average
50 fib retracement
retest of the head in its current possible head & shoulder pattern
The close this week on all major indices will be interesting, as the Dow, the S&P, the German Dax are all showing similar setups.
If the robots like it I like it.
Head and shoulders is the last refuge of the scoundrel. As far as I can tell, a H&S is merely a consolidation pattern that tells you nothing about which way it will break. Just three more humps on chart that is a series of 3 hump moves.
....but i have lost all faith on technicals.....
Absent HFT, PPT activities, the DOW would be at 3,000. Why didn't he mention that?
For someone who thinks we will see S&P 100 when all is done as she has stated, playing a bounce on a possible head-and-shoulders bottom formation seems to be akin to shorting the Nasdaq in the run up to 5,000.
Cant have 'something good' happen in a 'worse news is, better for stocks because guaranteed printfest', so now any good news is death.
I had been saying the S&P would see 1300 by end of the year, what you call less bad I call shrugging off bad news. Sentiment was so poor at the time no one thought a rally was possible. The market is run by several other than empirical elements, currency, POMO, HFT, companies borrow money and buy back shares. Credit is dirt cheap. So there's really nothing to stop the rise, the point of least resistance is up, and low volume is the weapon of the bull, and broken bear market technical signals (rising wedgies) is the visual pattern.
Now I'm not so sure, because the moving average lines are proving a lot more difficult than the bulls would have hoped. We should have blown through the 50 and 200 ma's and we didn't. We're going up every day, but not much, pattern suggests, 5 or 6 up days wiped out by one bad day. Sounds familiar?
The head and shoulders is the most overplayed, unreliable tech signal ever observed. However the gold stocks are still leading. Looks like this market will churn its way to exhaustion, and then another trap door drop. There are some solutions to the economic problems, which is wall street plugging up the banking system. The political class is too timorous to meet the challenge, some of them don't know what it is. Basically they need to do an end run on the banks they bailed out, which are now the problem. They can get small business lending going if they simply let the regionals, locals and credit unions, do lending, and SET rates at their own local level. We'll see, meanwhile Christmas has been cancelled this year. Now that we're all living in the Chinese worker bee society, would you expect anything different???
Equilibrium is always regained, undeniable law of the universe. At some point rather soon I believe, there will be some sudden event that throws everything out the wondow, markets will be closed, bank accounts seized. Act now before you get caught up in this guaranteed event. It has to happen, and will happen, doesnt matter how much people believe reality can be suspended indefinitely.
the corporate business model is in its death throes, the multinational corporation is too dependent on a steady stream of profits, (in an environment where competition reduces profits, and everyone in an industry is trying to sell the same thing in the same manner) and government by association, which depends on corporate suppliers to provide uniform products and supply. The supply lines are too long, too vulnerable to disruption, and require too much maintenance. the corporation is too large to function in a shrinking world. the end of one thing the return of another.
Somebody actually flagged that post? What an idiot. We need a crash to flush all these permbull fuktards out of zerohedge for good. Used to only be a couple morons around here, now the place is infested with em like bedbugs.
When you make posts based on nothing, expect them to be junked.
The banks are going to shut down? The markets are going to end?
And you wonder why you were junked.
Reality is nice this time of day.
Johnny, youre the lead fuktard around here, stuff a cork in your piehole moron.
Expect this low volume melt-up to continue for at least another 2 months. If the GOP gets control of Congress the market will go wild. Trying to fight thid melt-up will be futile. Save funds or stay long and enjoy the ride. The ten year will easily get back to 3%, and if it gets to 3.5% the SPX will be around 1200.
Thats the dumbest thing Ive ever heard. The economy is dead, and you believe in some wild melt up over all time highs? Youre a danger to yourself and those around you.
If the GOP gets control of Congress the market will go wild....
Exactly, WHY?? Because all the american people suddenly LOVE repulicants?? Since WHEN?? LMAO, its PAT!!
Look at this way. The market is moving up with Bad news Good news ratio. Usually (B)4 data-points of bad news to (G)1 data-point of mildly good news that some would refer to as outliers or statistical noise would be a BG of 0.25 so we get into the green slightly by say ..hey 25 points... A upending of a political party is so nebulous it could be worth G5 nonsense news stories. If unaccompanied by any bad data-points, it should put the BG ratio at 5 or 500 points on the Dow as opposed to the normal piss warm 25 points with a 0.25 ratio.
You could equally sub in Geithner found in back alley with knee pads on with Male prostitutes and get a 5 out of that. But it may be a B5 as opposed to a G5 because Wall Street depends on him so much. So then we may go down by 500 points provided we are at least 500 points above 10,000.
Does that make more sense? It certainly doesn't to me, but then again, none of what else has happened since March of 2009 has made much sense either. So I figured ...wtf, I'd toss my nonsensical TA/FA hybrid ratio in there just to see what happens.
Companies are already lowering their overinflated earnings outlooks. We will revisit 2008/09 cliff dive shortly. Please have crash helmets near by.
Not a chance. maybe next spring at the earliest
Right, because the melt-down is always a year away or so for you bubble chasing morons. I pray for the day theres another flash crash or world incident that causes all this fakery to fly apart and all you bubble chasers get pulverized. Because its guys like you that are the reason this country is so pathetic.
People actually have convinced themselves that while equities are overvalued by 50% at least, theres some wild melt-up coming due to a fake politics scam? Really some of you people should check yourselves into a good mental facility. All this criminal activity by the govt has twisted your perceptions badly.
I bet you were super bearish at the march 09 lows too. A fool and his money .....
I pray 24/7 for some unseen event to come blow this fakery all apart and ruin bubble chasing loonies such as yourself, as you are the reason all this fraud and corruption can be pulled off by these central banskter criminals, I hope it happens soon and grinds all your bones to dust instantly.
That's funny. I pray every day for the economy to improve, so that people can get back to work and live happy, productive lives again.
Why would you want things to fail? So you can feel better about your wacky conspiracy theories?
Some of us like to live good lives, not worried about roaming bands of thieves and gangs and the end of the world as we know it.
Well Johnny I can see your point, thats why youre lead bulltard idiot around here!
USA's Failed 75% Borrow and Consume economic model, dead. The last GE plant just closed. And somehow even Zerohedge types have convinced themselves we're in store for some wild melt-up? Remove the insane baseless printfest and market manipulating computers and what do you have? S&P 400 by close today. I really do hope you people are crushed in the coming implosion, you deserve it, you people are the root of americas problems. Stupid, dumb, bubble chasing morons.
I'm a bearish on the economy as the next guy, but nothing is trading on fundamentals. there is a vested interest in keeping the market moving higher from a lot of entities with a lot of firepower. that will eventually end, but not yet. those that keep shorting are the ones who help keep it going higher. you're a frustrated short, why not go with the flow and make money instead of losing it?
LOL good luck with that! Now they need to print MOUNTAINS of fake cash just to keep it all even! HOW LONG do you really think that goes on for HUH? Youre an IDIOT permabull 'tard who does not see the runaway train screaming towards you! And BTW Im no 'short' you idiot! I wouldnt touch any of this toxic manipulated crap with a 10 foot pole!
Why don't you try reading what i said dickhead ! I'm not at all bullish, let alone a permabull. The problem that a lot of people here have is that they think the market should go down every day. sorry, it don't work that way. and if you're not short, what the hell difference does is make to you if the market goes up or down. you haven't got enough brains to figure how the system works, until you do, sit on the sidelines and shut the hell up.
Very very nice.
There's reality, and then there's "WORLD TO END TOMORROW!!!11!!! S&P to 450!!! Gold to 450000000!!!"
The markets can't go up or down in a straight line ever. Yet some people cry manipulation when it actually makes logical moves.
You can be bearish, but have to expect some up days too.
You can be bullish, but have to expect some down days.
Anything else isn't realistic.
Oh, the market made a logical move? When was that?
A wasteful read.
going with the flow is like being comlocit in a crime
it mean you condone their actions.
This criminal activity has to end as sheep says
It goes much deeper than that
I see this bullshit EVERYWHERE
I work in abig oil field compnay and the people are treated like slaves in a lot of ways.
The corportation owns us rather than we ownoing the company
These corporations exist to do a service forsociety not to make the CEO millions
Its absurd but unless we ALL speak out we will live in a 1984 type environment.
IS THAT WHAT YOU WANT?
if so keep buying stocks
if not vote with your cash and say enough of this bullshit.
Its not about making money its about standing up for whats right. Corporations have way tooo much power
DO NOT GIVE THEM MORE
These corporations exist to do a service forsociety
These corporations exist to do a service forsociety
maybe you live in cuba, but most of us live in free societies where corporations exist to make money for their owners.
some of them have been forced into becoming charities as well, but let's hope that gets corrected soon.
I actually think this RHS is a potential scenario this fall. Nothing seems to really hurt this no-volume, frustrating bullshit market anymore. Shorting does not work, long-short strats do not work either since everything is correlated > .8.
What to do? Here's what I'm gonna do: Buy silver and gold. Fuck the market. You can just tell it wants to go a bit higher, as ridiculous at it may sound to anyone with half a brain. Recently, since everyone's waiting for it to fall, it just keeps creeping higher.... a lot of people (hedgies etc) have made 0 money this year and are looking desperately to do so before year end. Retail money is not coming back in I think. Good call on their part.
I personally expect the macro to deteriorate severely by october/november, probably with an ISM print below 50. Usually there's a lag of 13-26 weeks from the breakdown of leading indicators until the ISM rolls over (Source: J. Hussman). That number might be a catalyst worth wating for on the downside -at that point, not even that annoying little twerp Simon Hobbes can stay bullish (ok, I'm sure he can). But for now, it's hard to be short.
But the market is now partly in denial as to the continued economic weakness(the permabulls) and partly composed of cynics waiting for the govt to provide a push for stocks (they may not get it because of political gridlock, but they are sure as hell expecting it by christmas) through new attempts at asset reflation, and then play that push.
In their hearts, the smart guys are deeply bearish, but a few are still playing, and more may very well throw money after a rising market, but then be very quick to scramble for the exits again soon after. And there will be no one to catch the next sharp fall, as the equity mutual funds have zero available cash and literally nobody is short stocks at this point (Source: Bespoke). Hedge fund money might buy QE2 but will probably pass on QE3. At which point gold and silver will be much, much higher than today.
So a very elegant trader may build short positions in cyclicals, consumer discretionary etc on the way up while simultanously selling off current long holdings, and then ride his shorts WAY down in 2011. I'm just not that good a trader, so I just buy gold and silver instead, which should benefit nicely from all the inane govt. efforts that will surely materialize going forward.
Please consider that trade in gold is also a bet on risk.
The pattern in the ramp up in gold over this past year is eeriy similar to the chart pattern in the AUDUSD pair. The pair trades as a commodity play and the AUDUSD is showing a pending parabolic top. When it reaches 0.9666, sell your gold with both hands.
The last time we saw this pattern, the currency dropped 3800-pips in less than six months. I think it is a sign that gold is just about done.
For what it's worth...
I can't help but despise those who encourage people to buy in to this criminal farce
If I'm on the board at GE and see this site, I'm sending a text to one of my dickless VPs to call Marla with a seven figure offer. The pissing matches on this thread are far more entertaining than anything on TV, except possibly Sabado Gigante and Don Francisco's hoochie coochie mammas.
Don't hold your breath! It could be very bad for one's health in this environment!
The Fed is hellbent on inflating - so are many of the other Central Banks. They have successfully viral-marketed the "Deflation" meme - so even cab drivers are talking about the dreaded Deflation to come!! If you believe that story - then by all means sit in cash or long treasuries. If you dont:
You clearly have to avoid bonds like the plague and start getting into hard assets ( including select equities) as opportunities present themselves. because the disaster scenario for the Deflationists is that they are wrong and you get accelerating inflation - and by then hard assets and quality equities would be sky high and risky to buy. Bonds of course are a disaster and cash a losing proposition.
Your analysis is spot on.
Expect to see a currency rally along risk lines as well over the next few weeks. Parabolic topping action all over the risk spectrum. The moves could really be something to behold.
Thanks much for your input. I appreciate it.
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