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S&P Technical Update
Submitted by Nic Lenoir of ICAP
Keep your eyes on the support line. Yesterday at 1,041, the support for the S&P future is today 1,044. From the tops we had a perfect a-b-c zigzag, with a=c right on the nose as shown by the Fibonacci extension, so the move lower could have been a standard correction before a push higher. However for now the rebound from the initial test at 1,041 yesterday shows a confused price action, which looks more like consolidation before a break lower than the start of renewed strength and continuation of the bull move. That's what Elliott purists can observe here. Other technical observations show the MACD has turned momentum but we are not in negative territory just yet, quite a way from it. Certainly expect the market to attempt a run higher into the close to turns things around and not close the week in trouble.
Good luck trading,
Nic
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Nic, if you read this, can I ask what values you use for your MACD? (pic is too blury when I open it to view).
The MACD I use as standard is 12,26,9. Currently reads minus 1.225. But I too use the second derivative; when the value has topped out and ticked down, that's an indicator to get out (not waiting for a negative print).
Why does anyone do technical analysis anymore in these managed markets?
Good question...they've ramped them so
hard nobody's interested in playing
anymore short of at least a 20% correction to
Agreed: It's like playing roulette at a mob casino—you know you'll eventually lose big, even as you get suckered in by faked winnings.
Some research on effectiveness of MACD:
http://ibankcoin.com/woodshedderblog/2009/09/13/indicators-and-edges-mac...
Granted, this does not test it specifically over the SPX/SPY, but rather on a large variety of tradeable issues.
Yen breaks 90, free money.
Some research on the effectiveness of the MACD bullish cross.
http://ibankcoin.com/woodshedderblog/2009/09/13/indicators-and-edges-mac...
Granted, these tests were not specifically on the SPY/SPX, but rather on a large variety of tradeable issues.
Long story short, there may be a slight 1 day edge, but there is a negative edge going forward.
The converse of this is that a negative cross may have a slight bullish edge going forward.
Check out the credit cards; axp, v, ma
Looks like CC charge offs are a lagging indicator too...
edit
RIMM chasers (lol!) getting their comeuppance. Amazon next on this list, with a 60 times earnings rating.
Maybe this will take the wind out of the Banks' Stocks
Problem Loans Up 174% Show Bank Rally Too Optimistic, FBR Says
Sept. 25 (Bloomberg) -- U.S. losses on shared loans owned by banks are deteriorating at worse-than-anticipated rates, indicating that a rally in bank stocks has been based on “too optimistic expectations,” FBR Capital Markets Inc. said.
The Shared National Credit Review survey released yesterday by several regulators, showed “classified assets,” or loans that regulators deem substandard, doubtful or a loss, rose to $447 billion from $163 billion, or 174 percent, from a year ago. That rise exceeded the expectations of FBR...to read more..
http://www.bloomberg.com/apps/news?pid=20601110&sid=a6FqFo8zRL5M
SEPTEMBER 25, 2009
Gore-Backed Car Firm Gets Large U.S. Loan
WASHINGTON -- A tiny car company backed by former Vice President Al Gore has just gotten a $529 million U.S. government loan
http://online.wsj.com/article/SB125383160812639013.html?mod=WSJ_hpp_MIDD...
Another confirmation that the world we live in is not one where merit earns money, but connections "earn" money. This makes me sick. I will attempt to never buy/use any goods/services that have utilized the federal trough.
Amazon investors have priced in 20% earnings growth for the next 5 years. Even if they achieve this momunmental growth, the business would be twice the size and hence growth maybe say 10%. On a PEG of 1 and 10 times earnings would give $42 a share in 2014! 15 times $63. Let's all pay $90 eh??? One of the most idiotic valuations on Wall Street. Not to mention a horrendous risk reward ratio.
Gee, I thought pricing in 20% growth for the
next five years is the new standard on
everything.
They are not just an online store tho, they use the infrastructure to provide storage/cloud services as well. Check out amazon S3. I am not saying their valuation is fair, but if the junkers are at 20, they could well be worth 60 in this market considering they are established and rapidly growing in a market with massive potential that does not cannibalize their original customer base cause it is something completely different.
and in other shocking news....
Goldman Sachs May Benefit From Regulation, Citi Analyst Says
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0wzGHyHBD3k
104.6 gonna get taken out by eod
103.5 to follow
1035 is last week's low, if the goes the game is up for the bulls.
LUNA up 159% on no news and 20x normal volume....LOL
This might explain it - http://www.roanoke.com/business/wb/220194
We really need to hedge our mind
www.hedgeyourmind.blogspot.com
It's my comical entertainment for the day... while I drive to work... I like to see how they are going to spin 'straw' into 'gold' each day... I missed their spin this morning on the Durable Goods Report... but I bet they managed to make 'gold' out of it also.
Goldman and Bank of Amerika run the markets along with Geithner, and beagle boy Ben. There is no free markets, only welfare capitalism and socialism for capitalism.
good articles; good articles 4 slow news day ..http://www..
hat tip: financial news & opinion updated daily
Elliott wave counts are subjective, but the count above does not adhere to the various guidelines of Prechter's EWP... in fact, if properly applied, a 5 wave impulsive count is complete (or will be as we move to test support), and would allow for a proposed wave 2 retracement (up) going into the close in accordance with the rest of Mr. Lenoir's thesis.
Whether it's an ABC or we completed an impulse lower cannot be determined yet, since we are sitting on a relatively big support line, I suggested that the bear trap is and abc correction and then a new upleg. However I made it very clear I am very bearish, I am just trying to remain cautious, maybe it is abc, maybe it an impulse, maybe it is 1/2/1/2 and we accelerate even harder to the downside. Only the future will tell us. For MACD I use 12/26/9 by the way.
Whether it's an ABC or we completed an impulse lower cannot be determined yet, since we are sitting on a relatively big support line, I suggested that the bear trap is and abc correction and then a new upleg. However I made it very clear I am very bearish, I am just trying to remain cautious, maybe it is abc, maybe it an impulse, maybe it is 1/2/1/2 and we accelerate even harder to the downside. Only the future will tell us. For MACD I use 12/26/9 by the way.
Other technical observations show the MACD has turned momentum but we are not in negative territory just yet, quite a way from it. Certainly expect the market to attempt a run higher into the close to turns things around and not close the week in trouble.
Alvarez: "If 1207 were enacted today we believe that the public would lose confidence in the independence and judgement of the Federal Reserve"
pearls before swine
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=djia&ti...