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It is Time to Put Up or Shut Up
It is time for the market to put up or shut up!
Many of the indicators that I look at suggest that the markets are at an inflection point. For example, some of our shorter measures of investor sentiment from the Rydex data series have gotten so extreme that they are suggesting there can only be only two outcomes to the current volatile trading range. Either the market will go strongly higher or we should have a waterfall decline. There is nothing insightful to analysis that says we will go higher or lower, but the point is that the resolution to the current volatile trading range should occur soon and the move should be substantial. The direction just isn’t known.
If I were to put numbers or probabilities on to which scenario is most likely, it would probably be 80% resolution to the upside and 20% resolution to the downside. That is what history would tell us, and identifying what the outcome will be is only a guess in my opinion. Furthermore, I don’t think you need to know what the outcome will be to survive in the market. It is more important to understand what is happening and then take action.
Figure 1 is a daily chart of the S&P Depository Receipts (symbol: SPY) going back to the bear market top in October, 2007. The red dots are key pivot points. Look to the right hand edge of the chart and the cluster of 3 pivot points. A close below three pivots is only seen in a bear market. The low pivot here comes in at 112.58. So if we close below this level, we should see continuation of the bear market for equities. The alternative is that this level will hold and prices will move higher.
Figure 1. SPY/ daily
In summary, I see the equity markets at a pivotal juncture. The three pivots will either be the bottom or prices will head significantly lower.
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It is that time, for all things financial. The fantasy doesn'tmatch the reality. The emporer has no clothes, but it's not politically correct to say he's naked in public. That cold breeze blowing up the shorts is currency collapse.
http://georgesblogforum.wordpress.com/2011/06/18/the-charge-of-the-carpe...
Who put this peice of crap together? The market may go up or it may go down. Who knows? but in my opinion it will. No Shit!
Reading these technicals has been pretty easy the past couple months... Pull up a candlestick chart of the DIA the past 2-3 weeks. Every black candlestick off the bounces from lows has seen the market down about 4% the next 2-3 days...
Just by moving my 401k into the long-term bonds those days I am up 15% by being invested in 5 days...
Not a bad annual return %...
This TA stuff isn't "tea leaves" or "guessing" - if you know what you're doing you can greatly get the odds in your favor.
the only red dot i want to see is on the bernanks forehead!
Don't make it so difficult - SPX falls to 1040 - panic - QE3 ramp to 1220 - crash.
The stock market is being manipulated. It is not even legalised gambling anymore, it is a crime scene.
I say it's to the downside. Europe is blowing up and the leadership can't agree on what to do about it. It's already gotten ahead of them and they won't be able to stop it.
There is NO consensus in Germany, let alone in Europe. To think they would pull together and throw all their support behind another is ludicrous.
Each man for themselves unless they're bound by contract to do otherwise. That contract is not existent.
Germany voted yesterday to increase TARP to assist their own banks first and foremost when the shit hits the fan. It was a preemptive measure. The chancellor jeopardized all her political capital over a preemptive measure. We all understand that a politician doesn't go to that extent unless the situation was serious and there was immediate need for the increase coming in the next weeks.
Greece will go down.
Having said that, I'm waiting for the 3pm rally to position my shorts over the weekend.
In the words of Emmanuel Rahm and the sentiment of Alessio Rastani, why would I let this crisis go to waste?
Look at the charts. The red dots are some shit I made up. The market might go up or down from here, not necessarily in that order. But anyhow I recommend you buy stocks, 80% confidence. If you lose all your capital by following my advice, no matter, my newsletter is FREE.
The tea leaves at the bottom of my morning cuppa looked a bit like a dollar sign, so I'm long USD.
Seriously, there was another guy who superimposed fucking triangles to determine "nexus points", or something. What a way to make a living.
Paging Gina Yashere
The conclusion: "The three pivots will either be the bottom or prices will head significantly lower."
Thanks for that insight.
I'll be following all your posts from here on out.
The Grasshopper approached his Sensi and asked......"tell me Sensi, will the market go higher or with it go lower. The Sensi replied with a warm smile, "Yes, of course Grasshopper, but not right away".
Bill
Are stocks "cheap" or "overvalued"? It depends on who you're asking. The sellers are telling us that stocks are cheap, the potential buyers are looking for bargains.
Who are the buyers? The stock market has always been and will always be a game of hot potatoe. Don't fall in love with a stock, take profit. Increase your networth. That sentiment is as ancient as markets exist.
There is no further quantitative easing, no balance sheet expansion. Not here and not in Europe, China or Japan.
Financial institutions, brokerages, market makers, investors and so on all need to have a paycheque. Where is their next paycheque coming from when the markets are flat?
Finally, the game of hot potatoe will quickly become a game of chicken.
Everyone please form their own conclusions.
Did I mention that there are no further liquidity injections? Fundamentals will start to matter again. Price discovery is coming.
General consensus on S&P 2012 earnings is around 90 - 100. (Ive seen 80 on the lowside and 110 on the top) That puts us at around 11.4 to 12.7 on a forward PE... Neither cheap nor overvalued really...
I would say there is a better chance to miss to the downside than beats on the top...
This is a regular old bear, the kind nobody's seen since the 1970s. In this kind of bear we don't bottom out until PEs are in single digits, and I mean 5 or 6, not 9.9.
Add in the mountain of un-repayable debt everywhere in the world, the demographic inflection point (old people don't buy as many stocks), and the fact that people are completely disgusted with the rigged casino this market has become...and you don't have a recipe for big upside.
Chinese water torture trending downward with a few 4-5% rallies until March of 2012...then maybe a bottom at 850 or so. Then you back back up the truck again.
The bottom isn't falling out today at least. SP 1141 ish had strong resistence this morning despite overnight carnage in the ES and the action in Europe.
Tell me why? DAX was down up to 3% and when US opened it turned around. Are we still dealing with end of quarter gimmicks?
Sans government intervention, what's holding it up there?
"Sans government intervention, what's holding it up there?"
The promise of future government intervention.
0% credit to bankers. That is all you have to know. You can't force them to sell. They can make every margin call. If the market is down, they want it down. If it is up, they want it up.
I have come to a startling conclusion about massive inflation. If the money is concentrated, you get speculative chaos in all directions, up and down. If it is spread evenly in the public, you get uniform price rises.
The only escape is moving to physical gold and taking delivery. You cannot possibly measure the value of anything else due to price fluctions in supply and demand caused by concentrated speculative forces. Gold can be measured vs the money supply at all times because it is baseline money.
Agreed - most short term charts seem to show lower however... recent lower highs and lower lows. Rejection of the 50 dma 3 times now over the past month. Would be curious to see the chart above with that trendline as well.
I agree, and I think the only thing holding stocks up here is the generous yield vis-a-vis 10 Treasurys. Either stocks are the only game in town, or they are the last thing you want to be stuck in- there's no middle ground.
Yup, tired of corrupt markets. And if they are not corrupt, tired of all the ups and downs. Just gonna sit and wait this all out.
The blue column makes it so I can't even see the important stuff on the right.
If the markets head higher from here my hat is off to the PPT as domestic equities will have flown in the face of every other world equity, bond yield, CDS, and commodity market message that is lower.
I'll give you the sentiment is washed out. That's the only thing that concerns me now.
Tip: If you click on PRINTER_FRIENDLY version you can see the full chart.
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Hold down the Ctrl key and hit the minus key until you can see the chart, then, to return to normal, hold Ctrl and hit plus the same number of times.
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Stick a crowbar in your wallet and upgrade to a system that can handle a widescreen monitor.
I stated: looking historically
Historically in October, it's an 80% chance of an upside move? Is that what you mean? I think historically in October with this level of volatility, there is an 80% chance to the downside. Also there is always a small chance of a sideways move, no?
I think we get both.
First up, then down.
Hey, dude ... nice cluster of pivots there on your forehead! You'll either be smiling or frowning next week. Not sure which.
80% resolution to the upside and 20% resolution to the downside...thanks anyways, but I'll pass on the FREE!!!! newsletter for now
With all the bailouts the 80% makes sense. I think this time we increase the 20%