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You and your charts, shouldn't feel so far apart
It's Allan vs. his daily charts, which are trying to tell him to buy stocks. But his heart isn't in it and he's shorting financials in case there are any doubts. And anyway, he's looking at his weekly charts, and not forgetting 2008. ~ Ilene
You and your charts, shouldn’t feel so far apart
Courtesy of AllanTrends
New Daily Signals – All LONGS!
The market has obviously turned up for the Intermediate term, and how strong or how long this rally phase will continue is not part of our Trend Following mantra. ALL OF OUR DAILY MODELS ARE LONG AND THE INVERSE VXX VOLATILITY DAILY MODEL IS SHORT.
We do have two major time frames and now more then ever, I'm letting the Weekly Trade Models influence my trading and recent commentaries. For those of you who have followed me on the wrong side of the trend lines, I apologize, kind of. But before you throw me to the lions, let's look at a few charts and why I am still holding SHORT, at least over this weekend.*
(*Professional trader on an aggressive, some would say deranged, course. Try this at home at your own peril and, any other caveat that you can think of, including sometimes you have to take a shot against all odds.)
I have been comparing this period in the market to the period just before the 2007-2008 crash. Crash? What else do you call a 50% haircut in prices? Perhaps, the Trend Models from that period could shed some light on the credibility of my bearish bias. Below are the major market averages as they played out from the Weekly SHORT signals in late 2007 to early 2008.
DJIA Weekly - 2008
SPX Weekly - 2008
Value Line Weekly - 2008
IWM Weekly - 2008
NASDAQ Weekly - 2008
As you can see, the period from the SHORT signals to the real beginning of the decline ranged from 4 to 11 weeks. Here is the current SPX Weekly Trend Model which is still SHORT:
SPX Weekly Trend Model - Current
I don’t think we can ignore the patterns in these indexes from the 2007 highs that were then followed by their SHORT reversals, then followed by sideways-to-up prices and finally followed by a market crash. Other then in the NASDAQ, there was no immediate follow-through upward.
This summer we had some initial success in the Daily Trend Models after they reversed SHORT, that has now been followed by a robust rally to the recent LONG signals. But now after 11 weeks of sideways-to-up weekly prices, the market could very well be on the precipice of a decline similar is size and scope as the 2008-2009 bear market. I may be a rare analyst/trader/publisher who sees this parallel, but the charts don’t lie and they are suggesting extreme caution in being LONG right now.
Financials - betting on more weakness
The Financial sector is represented by XLF ($12.60, Financial Select Sector SPDR). This is an excellent trending stock as shown on the chart below:
XLF Daily Trend Model
With all of the hoopla about financials finding themselves a bottom, our Daily Trend Model is not yet impressed. In fact, prices touched the trend line Wednesday, then quickly retreated. As per our rules of engagement, it will take a close today above $12.94 for this model to reverse LONG. One of the lower risk trades is to short the XLF as it approaches the line and be prepared to cover and reverse LONG if XLF reverses. The risk is the difference between the current price an the trend line, the reward is unknown, which is my way of thinking a whole lot more then that risk.
For perspective here is a long term view through the eyes of our XLF Weekly Trend Model going back to 2005:
XFF Weekly Trend Model
Now let’s zoom in on XLF for the past 12 months:
XLF Weekly Trend Model 2010-2011
Note how prices ran up toward the trend line last week, hitting $13.00 before settling back down to $12.60. This is the state of our economy, weak and declining with occasional blips up. Who cares? I’d rather make a buck then figure out what is the appropriate level of New World Order debt.
Here are our trade ideas, in order of risk:
XLF – SHORT with a stop at a daily close above $13.00;
FAZ ($51.69, Direxion Daily Financial Bear 3X Shares) = LONG, using the XLF stop;
Options: Buying the XLF March 2012 $13.00 puts at about $1.50. We are looking for gains on these puts as XLF declines its way toward the 2009 lows under $6.00. We'd use the same stop as above, if XLF closes above $13.00, we'd exit the put position, we'd limit the risk on these to about 25%.
*****
Disclosure/Disclaimer
Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed. The past performance of any trading system or methodology is not necessarily indicative of future results.
Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
AllanTrends, LLC and all individuals affiliated with AllanTrends, LLC assume no responsibilities for your trading and investment results.
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I'm pretty sure the masses are all playing the penny slots. The Dow and S&P are the $50 Blackjack tables you never see anyone at outside a couple fools who drop $500 in ten minutes and walk away sobbing. The Nasdaq is the high limit room where a couple asians in black suits and sunglasses drop a grand like it is a dollar until they decide the money is better spent on American hookers.
Sure you may go on a ride and win some dough, until they change the deck on you and you're broke in the blink of an eye. The fool is the one who keeps playing thinking this time will be different.
Market crashes are just the roulette wheel hitting 00 so the house can confiscate everyones money. With the table clear people think now is the time to jump back in becuase everyone lost so somehow that tips the odds back in the favor of allowing everyone to win.
I also think it's hilarious that Timmaugh thinks the euro banks need Bazzoka help when BAC C ect are dead
Ilene thinks she is a financial expert and wants the fools to trade. You must be a plant from a trading house (pick anyone)!
really!
With the outflows from funds, the HFT, and the manipulations why would think or promot any investment in the casino!
Would you tell your children to gamble / invest? Is there any true disclosure? market values correct!
Fuck off and die
I am not a financial expert - finances and economics are NOT my fields and what I've picked up has been through reading for my work. Clear enough? Allan trades stocks - and he's also not a financial expert. Furthermore, trading stocks and options is financially dangerous, even for very smart people who do not understand fully well what they are doing, what kind of risks they are taking on.
Ilene thinks she is a financial expert and wants the fools to trade
With the outflows from funds, the HFT, and the manipulations why would think or promot any investment in the casino!
Would you tell your children to gamble / invest? Is there any true disclosure? market values correct!
Fuck off and die
************
Ilene might be right or wrong-but anyone who bases their trades and calls on what "Funds" are doing-like you-has to be a complete idiot-
If you're afraid to trade-fine-go sit on the sidelines and STFU-
Elliot wave 2 bitchez. Doesn't matter if we go to 14,000 on the DOW. The collapse is locked in. You got a few weeks at most until the collapse.
http://danericselliottwaves.blogspot.com/
daneric has been wating a gold collapse since 800's like prechter and dow collapse since last may... so anybody trading daneric's counts since may either has extreme stop loss skills or is just broke
Well, we all have to pick a side of the fence. I've picked mine. And I say this bitch is dead.
yep people sometimes ask if i have tinfoil on my head for reading zh
Every blogger on the planet has drawn parallels to the 2008 crash, which makes it less likely to occur I'm afraid.
*******
Markets seldom crash when everyone is bearish-but when they do crash it's unlikely to happen from overbought levels-it usually happens when they're oversold-
Bloggers did NOT significantly influence the market in 2008 nor will they or their readers do so this time. The markets are BULLISH currently and that's exactly to your above point.
Good points. We will see - Allan will either change his mind when his daily buy signals start turning into weekly buy signals, and I'll post that if/when it happens.
During these patterns it's paid to cover on oversold and go long as the price moves up through the 4 week then sell into overbought (now ish). Next, short the move down though the 4 week. Cover oversold. Rinse and repeat.
Markets are manipulated heavily so this keeps you on the right side of the bullshit. Good luck
Ps. If the spy starts bouncing up off the 10 day and trends up with a falling vix.... The bears over. (2009 mar)
there's been $$ to be made since the key reversal....there will be plenty to make on the downside soon enough.
You wrote:
Are you kidding? Do you not read blogs, or even ZH? Every blogger on the planet has drawn parallels to the 2008 crash, which makes it less likely to occur I'm afraid.
same as everyone who is hoarding gold, only to find out, it was for naught?
But who cares about bloggers? Everyone knows those of us who read those blogs are all crazy conspiracy theorists.
or shills...
or fools...
or, as my doctor friend once described you - "disempowered righteous types who buy gold and water distilation systems and ammo and who are generally of low levels of education and tend to fat"
:-)
pop
http://thepeakoilpoet.blogspot.com/
So your doctor friend is actively plotting to rob and murder his own patients when things get bad? That's odd that his tendencies would gravitate towards murder and larceny when normal people would just save and get the things they desire in times of plenty by honest means. Perhaps you should reconsider the associations you choose to have. I'd hate to see you blugeoned to death by your good pal for a Snickers bar.
Yes, he is. But. Having targets and disowning them are two different matters. The crazies likely outgun him too. :P
Sounds like a good plan. For anyone who wants to get their head blown off.
so there we have target #1
trace his IP address - find gold - but beware he might have gun
pop
300 million guns in the US , Beware he might have a gun? Fill the fuckin house with lead before you enter.
BANG
what about damage to water distialltion system?