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Weekly Chartology And Q3 Earnings Preview
Next week 78% of the S&P companies will announce their Q3 results, (even as the the ratio of insider selling to buying hits the 5 digit range.) All cynicism aside, here is David Kostin's advance look at numbers and this week's complete charts that's fit to post. In a nutshell from Goldman: "Consensus expects 3Q earnings to be below 2Q actual results for six of ten sectors despite the US economy expanding during the quarter, albeit at a weak pace. We expect positive EPS surprises in 3Q but a restrained market reaction given the strong September rally and uncertainty surrounding the upcoming election and prospects for a second round of QE."
Chartology (pdf):
Q3 Advance Look (pdf):
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Who needs earnings?
What are earnings...do they have something to do with the economy?
Earnings, aren't they those things that are always "better than expected"?
We don't need no stinkin' earnings!
Enter....Leo...
Chart: RUT
Gartley Bear.
http://99ercharts.blogspot.com/2010/10/rut.html
Enjoy your weekend!
The coming round of earnings, while naturally "better than expected," will be one where the market is in sell-then-news mode. The rationale behind that may be that companies have made most of their money cutting jobs and taken other cost-cutting measures. No real profit.
The SPX will churn near these levels, at best, while the greenback will get a leg up on the data versus the Japanese yen. The world will start to feel more comfortable with the US economy.
With the relative gains in the USD, many Asian players in the stock market who have gotten in with a cheap dollar may now pull their money to the sidelines because with each increasing tick of the USD, US stocks become more expensive for them and their gains will erode accordingly. The longer the rise in USD, the more sustained will be the drop in SPX.
Once the ball gets rolling, the snap-back from these extremes may be severe. Be careful.
:D
Hope you are as right as you are cute, Orly! I'm long SPXU going in Monday. We'll see how that holds up.
Chart: ES and ZB
http://99ercharts.blogspot.com/2010/10/es-zb_08.html
Bottom line: If earnings are strong, market up on "green shoots". If earning are weak, market STILL up on ramp jobs and expectation of QE2. We can't really invest or trade anymore, we can merely place bets on the arbitrary and unknowable future actions of the Fed, nothing more.
There is no "investing" now. There is only repeated rolling of the dice until at some unknown time, the artificially inflated balloon pops. Last one out gets left holding the fecal bag.
Ok we've had 99er showing the 99th chart that it is the top,can't wait for Nic Lenoir's latest "no this time it really is the top" article.
Good economic news -market goes up,bad economic news market goes up(more QE expected),how the hell will charts predict anything in an economy like that?
In all deference to Nic Lenoir, since the market "topped" at this level, it hasn't gone anywhere. It's just spinning its wheels. He also said that there is a higher sell-band on the ES that hasn't been breached yet.
Give the trade time to develop. Patience, everybody.
Technical analysis is nothing more than a tool to help the investor see the forest for the trees (and to clear one's head of the crap offered up by Bulls and Bears alike). I'm a relative newbie at this but continue to play with my ruler and crayons in the hope of making my small contribution to the discussion on markets.
Regarding the "top" that I am calling for, note on my recent charts that I have not moved the point even though price action is currently above those levels. This I consider the "noise" of POMO and other actions taken by the Fed and ECB to save their asses from what may soon be their downfall: they are going to get fucked by the very markets they have been screwing for some time now. When real price discovery occurs (as early as Monday), please come back to have another look at my "top." Thanks.
Edit: Take another look at ES [http://99ercharts.blogspot.com/2010/10/es-zb_08.html]; note that though prices pushed above the blue upper trend line of the downward channel on Friday, it closed within the channel where you can note the "top" from Thursday. It's done, I think, but if you're bullish still--place your bets. Les jeux sont faits.
Trade much or often? Watch the tick on any stock or fund?
Try and sell on the nanosecond high for the day or buy near the recorded low. It's a joke to utilize a candlestick chart for anything other than entertainment after a round of pixie dust and kool-aid.
Reco's made this way are just pump n' dump for any carbon life type traders trying to make a buck.
Candlesticks have been used by Japanese rice traders since the 17th century. They are rather illuminating once you grasp their meaning. Try it...you'll like it.
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:in...
Just take a little out of the middle. No need to hurt yourself.
Hey everyone,
Anytime you are having a conversation with someone and the conversation turns to money or finance, please ask them this question,
"Why does a private bank control the printing of the U.S. Dollar?"
That is all that I would request of you.
I junked ya. Your putting this same exact message, word-for-word, on every thread on the board.
The essence of JUNK.
Ok 99er,we'll see next week,but I'm working so will miss the morning session,I still think the SP500 has 1200 maybe 1220 written all over it.There's another four weeks until Benny Boy announces the terms of the QE2,I don't think the nerves will start to show until a week or two before that date and people get nervous about the amount,the timeframe and the wording.Good luck next week.
Thanks, and to you too. Thanks also for your earlier comments; I appreciate feedback. And it does take both Bulls and Bears to make a market.
Funny how everyone is trying to pick tops.
When many international indexes are breaking out to new 2-year highs.
One by one....India, China, Latin America
Brazil on the brink of a breakout:
That'll be the rapidly declining Dollars looking for somewhere to hide. People aren't really long anything per se, they're all short the Dollar. The Indians, Brazilians and Chinese all know it, and they aren't happy.
You suck, HomoTrader
The charts are only going long if the proceding action dictates bullish flags or continuing ramps off of some supposed (and highly suspect...) US easing. Not to say that that trade is not legitimate but it may be that the charts are breaking down at these levels. I wouldn't bet the farm on the candlestick patterns shown above.
Brasil certainly is in a touch-and-go situation and the other trades are dependent upon what happens in Shanghai, which is dependent upon the purchase of wing-nut, fly-by-night shares. Not sure where this money is coming from (maybe US expatriates using a form of currency leverage to make highly speculative bets?)- except to say that if the trade against the USD from all corners folds, then these emerging-markets trades will probably fold as well.
I agree. "the earnings will be fantastic" and they "really will be fantastic." and with "crushingly low interest rates causing governments at all levels to restate pension obligations" asset sales of the material kind are now "on the docket." fight the power all you want but THIS Wall Street has been a fucking profit machine and that's with even the shit i've thrown at it which has been more than almost anyone i've seen here. Obama and the democrats have no answer other than "give them more" now. they might retain a majority in the Senate but i think they're done at the House level. I also think "crisis in the White House" may very well be an understatement. I take note "no one has reported on the resignation of Obama's National Security Advisor." Indeed "i take note of silence more than anyone" it would seem.
I do think we're near a turn for a retrace, but my original thesis that we'd be in for a more substantial break is flawed. I paid the price, of course, in an underwater options position that I'm not really pleased with - but hell, not trading with the rent or mortgage money. I'll live to see another trade.
It has been an interesting run, but I think a transition is near. But not close enough for my October premiums to be saved. Such is life.
"I'll live to see another trade."
That's the spirit!
;)
I'm inherently stubborn, but I eventually realize when I need to change tack. Appreciate the supportive post.
IT'S ON LIKE DONKEY KONG!
From The Goldman Report: "We expect the S&P to rise to 1200 by the end of the year"
Chart: EUR/JPY
Qualify as a "Top"?
http://99ercharts.blogspot.com/2010/10/eurjpy_10.html
Sure, breaking a long-term upward trending channel like that I'd say it put a top in. Just have to monitor the downward-sloping trendline on top in case it gets breached. Just looking at the charts without any other inputs than the trendlines, that is.
I think that is what I need to do with some of my methods. Just deconstruct and let the price 'tell' me what is going on - instead of having a riot of indicators and retracement ratio lines, etc...
Hope you made something off of that, nice chart.
I can't ever tell which timeframe he is using. It looks like the ten-minute and if it is, it tells you very little.
Try this experiment on a demo account:
Strip your chart of nothing but candlesticks. Add a Bollinger Band with 28 periods and 2 standard deviations. If your charting software doesn't already place a BBMA, set another Bollinger Band with a period of 28 and a standard deviation of zero.
For one week, trade only using this chart set-up and only on the H4 (four-hour...) timeframe.
Maybe you'll be surprised?
:D
I've always liked bollinger bands. Have tried every indicator under the sun, which is why I ended up making my own, but those bands have stayed on my chart all these years. I like the simplicity of the setup you are describing. Thinking about giving it a go on a small forex account. Perhaps AUDJPY or the EURUSD.
Any pair will do and on any timeframe. The following method is how to trade 4X and still have a life:
When the price pierces the extreme of the band, the price will eventually move back to the middle. Since price doesn't like the middle, it will either return to the initial extreme or trade to the opposite extreme, piercing the opposite Bollinger Bands.
The best way to tell if price will continue through to the opposite band is to note the strength and thickness of the candle as it crosses the center line. If the candles that approach the center line are short, doji and indecisive, the price will likely linger in the center for four to six candles before making a move. A thick candle that overlaps the center line thickly is most likely to continue to the opposite extreme within the next two candles.
When trading the H4 chart, I can see that price has violated the second standard deviation and I can put my robot on it, instructing it to trade either long or short, depending on direction. Then, I can go to my quilting class, then to the store and make dinner before I even feel the urge to check my trades. I know from experience that it generally takes twelve to sixteen hours from the initial signal for the overall trend to reverse.
It may sound buffoonishly simple (and it is...) but within a four-hour chart candle, there may be a movement range of 180 pips. That's a lot of movement and you don't even have to sit there and watch it!
I hope this works for you. Give it a try and let me know what you think.
Orly
I can't ever tell which timeframe he is using.
On Think Or Swim, the time frame is found in the upper left corner immediately below the symbol of the financial instrument. My charts are generally based on the one- or four-hour charts although the daily is often used to discern longer-term trends.
In order for both the USDJPY long and the EURJPY short trades to occur simultaneously, there must obviously be some decoupling relative to risk appetite. The USD has been treated for a while like the risk-on portion of the trade pair but that is an unnatural state that will not hold very long, even in a unnatural environment such as we are experiencing now.
Watch for signs of USD strength along with a weakening in the risk assets such as SPX. That could mean the repolarisation of the USD...and that would be explosive.
:D
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