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Three Of The Four JPMorgan "Market Bottom" Indicators Are All Flashing "Oversold" Green
In the past week we discussed how to determine market bottom (or top) conditions either in extensive verbiage, or various pretty charts of the most prominent inflection points in US market history. Whether or not those are relevant to the current centrally-planned regime, where all of a sudden everyone is shocked, SHOCKED, to learn that there is no bond market liquidity (something we kept warning about again and again and again), remains to be seen. Still, some such as JPM, are already rushing to the defense of their clients (i.e., the people to whom JPM's prop desk may have some selling left to do) by providing a handy backtest of which key technical indicators proved useful in the past when determining market bottoms (if not tops - that one JPM will probably never, ever disclose), and what these are saying at this moment.
So for all those who need convincing that the "bottom is now in", and are desperate to BTFD because other, greater fools will also BTFD and so on, here it is, straight from Jamie Dimon's (well, technically Nikolaos Panigirtzoglou's) mouth:
The recent correction is also raising questions about which indicators have been useful in gauging equity market bottoms. The current equity market correction is the 19th (with 5% or more decline in the S&P500 index) since the current equity bull market started in March 2009. One simple way to assess which indicators have been useful in calling the bottom is shown in Table 2. Table 2 shows the minimum reading of four technical indicators within 2 days before or after each equity market bottom. These four indicators are 1) 14-day- RSI or Relative Strength Index which is a price based technical indicator comparing the magnitude of recent price gains and losses to identify overbought or oversold conditions, 2) 14-day VZO or Volume Zone Oscillator which is a volume based technical indicator. VZO separates up volumes from down volumes, it smoothes these volumes by an Exponential Moving Average for a given period, and then divides by the total volume for the same period. Similar to RSI, VZO’s usefulness is in identifying overbought/oversold volume conditions, 3) the S&P500 skew which is an option based price indicator we regularly use in our Option Skew Monitor in Chart A8 in the Appendix and the 4) call/put turnover ratio for US equities as reported by CBOE which is an option based volume indicator.
The green colour denotes a “successful” indicator, i.e. an indicator which happens to be below its lower threshold within 2 days before or after the market bottom. The lower threshold is defined as two standard deviations below the mean since 2009, for all of the four indicators. The message from Table 2 is that RSI and VZO appear to be the most useful indicators followed by the call/put turnover ratio. All these three indicators are currently pointing to oversold conditions. Last time this happened was in August 2011. One of the characteristics of the August 2011 correction was that the equity market was slow to recover.
What are you doing still reading this? You should be out there BTFD with both hands (and certainly the mini bounce into Friday was telegraphed from a mile away)! And after all, JPM has a lot of selling left into this "oversold" market.
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Well,what do you expect, gartman called for a bear market last week...
reel the muppets in for the BTFD.....and crush um like maggots
Hitler finds out Obama's letting EBola into Texas
http://www.youtube.com/watch?v=cQ0zrvgwVRM#t=95
Scotty: "I con't pull 'er out capp'in! I need more POWER!"
So much for the doomsday stuff as asian markets are exploding upwards
pretty bloody cheeky of JPM
fancy triggering the buy signals before any of the big CBs have confirmed Moar
Ah... but the night is still young Mr. Leo... Be patient...
Three promos this week, than all down
+1 Equities are poised for a break out
SPX only has to get above 1943.39 for this 'breakout' to happen. fwiw. 1886.76 friday close.
Predicting a Black Swan event between now and 12/31/2014, possibly by 10/31/2014...this thing is ready to roll over big time
If you're predicting it, then it isn't a Black Swan.
..
It's easy to call the bottom when you control the market
The other things “flashing green” are JPM’s equity algo trade logs, which produce few losing days per quarter -- but I’m sure client’s acting on their research notes have similar success rates.
Headline-reading algos will go ape over this tripe...Good Luck!!!
"What are you doing still reading this? You should be out there BTFD with both hands (and certainly the mini bounce into Friday was telegraphed from a mile away)!"
Listen.
Let me be real clear here. Time to steal another puppy!
http://s22.postimg.org/pdfjyqtgx/puppythief.jpg
What are you doing with all of those puppies?
Making them "listen".
Sharks wondering around desperately looking for fish.
No fish left
Now sharks has eat shark
Well here's some insanity for you.
Rickards went from shilling SDR's to gold confiscation.
Rickards has an agenda.
I challenged him on twitter about SDRs acceptance from the world as world currency.
He retreated his position.
But, again, he has an agenda. Rickards is brilliant.
He may be connected & brilliant, but he's a lousy actor.
When the cadence of one's voice is stacatto, you've got a used car salesman.
He has an agenda. I have yet to fit that puzzle piece.
Twitter challenge is awesome!
perhaps he seeks to be the man they tap on the shoulder to oversee the reinstatement of the gold standard.
Given that nearly every other gold advocate despises the insiders of the system that has maligned preshy metalz, its an open niche
Richards is 100% chosenite
Agora is the a newsletter puppy mill. Rickards must need money very badly because he's a very smart guy with some great insight but this is pure newsletter shilling for Agora.
I think Rickards ate too many oysters while playing his DoD & D.
Ricktards= See Eye Eh limited hangout. Grooming himself for a seat at the NWO.
"We ( the US) have 8300 tonnes of gold"
J Ricktards
"We have Moar."
--Xi, Vlad.
Yeah well theer's no link to any Rickards video or article. So Arabian money says he said it. Until a good link is provided it's bullshit.
I just sold off equities to buy some land.
Then I am going to move there, make a small garden and catch fish nearby in a mountain stream.
Bit-chez.
Meanwhile, I keep the bolt-hole in Uruguay.
LISTEN!
banger! you have lost your mind...
you just might fit in here...
:)
bla bla buy buy a fools dream market but I would say the market will not crash till just before the 2016 election. it will be time for a party change like 2007 when the Dems took over and we are at 20 trillion in debt and the Dow at 20,000 and the a&up at 2,000 look good everyone. now we can go back to buying PM
Clinton did the same thing. The ZioCon RINOs and Zio Con Dems are all the same. Any Constitutional conservatives are destroyed or races stolen.
Buy, what can go wrong?
Up to 1906ish and back to 1790.
Well now, does not the market remain "oversold" the majority of time during a bear market?
BTFD..huh?...I'd feel more confident going "all in" on OTC pink sheets.....
Go for the green. BTFD bitchez.
Smart money is buying stocks and trading profits for gold or land. Dumb money is on the sidelines and/or buying gold with their paychecks. Dumbest money is buying bonds or bitcoins.
Good old Market timing redux.
Unless you know exactly WHEN buying stocks is no longer the "smart money" move.
Can any of you guys who trade options explain how you go about calculatng the Put/Call ratio??
I've been keeping an eye on a few equities and using Yahoo/Google finance and downloading the Option Chains and dividing the Puts by the Calls using Volume and using it as a contrarian indicator...so.......
PCR < .6 = Bearish
PCR > 1.0 = BULLISH
some say use the dollar amount on each side and others say use a moving average and combine volume and price...I know somebody here is an options pro so why dont you help a fellow Zero HEdger out?
~DipshitMiddleClassWhiteKid
here you go, knock yourself out!
http://www.theoptionsguide.com/put-call-ratio.aspx
personally i think trading the gamma of put ratio backspreads on the e-minis is about as useful to smaller investors as this ratio..
It's stupid because many times the put or calls are just a hedge of the opposite position rather than someone placing big bets on a market move. Don't bother with options... like 99% expire worthless. By the time you buy them the volatility has been priced in. The only time to buy options is maybe some puts when the VIX is very low and you sense a top.
ive heard this as well but unless you have 50K or so, it makes no sense to trade cash equities since you cant go short and they have all these gay ass rules.
Options let you get creative and give you the ability to sculpt trades..granted you know what you're doing.
people tell me the same shit about forex and ive been profitable so, liek anything else...if you bet all your chips you're gonna get fucked but with disicpline and risk management you can do alright.
~dipshitmiddleclasswhitekid
Put call ratio is totally useless bullshit.
You have no way of knowing why people are buying or selling those options unless you are the one doing it. They could be hedging positions in the underlying one way or another or making a speculative bet or trading off some inside information or doing a volatility arb with some other thing or synthetic long or short stock or a basis arb or whatever else.
don't worry...the US debt clock is starting to shpw thefiscal deficit is reducing for this year about 1,000 bucks every 3 seconds, as is treasury interest paid.
ya i know the deficit is still going to be over 480 billion this year, and treasury debt is increasing to beyond 105% of gdp now but every little helps hey?
http://www.usdebtclock.org/
usdebtclock.org also shows US debt held by foriegn countries increasing appreciably, like thats happening. Belgium perhaps. Sometimes I wonder how accurate their data is. A lot of fudge factor involved I suggest.
I guess they were flashing green in 2007 and 2008 a lot.
BTFD stands for Buy The Final Dip, amirite?
The algo's read this article http://www.usatoday.com/story/news/nation/2014/10/19/ebola-quarantine-en... that's all. Humans will buy the dips (helps if oil is bid) on the vacuum pumps. Apart from that, liquidity dry market is still risky buying dips, say Ebola shows up again, or the Swedes fire on Vlads mini nuke sub.
Are you sure its not 'USS Maine'?
You had me until you started talking like Obola about Russia.
And who are the muppets - always 3 steps behind - buying from?
The uptrend broke in August folks. Only question now is how far and how fast. You should have been takaing profits last summer. Daily RSI will look oversold from here on out.
Look, Tyler, some of us dinosaurs do not use twitter. A little consideration would be nice, but you do what you think is best.
As an aside to Bangedalot in someplaceIndia, you can't listen to a typed message.