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Bull Pen - Fall 2006
- Thread starter Griffin
- Start date
robo
Well-known member
A small rally and it looks like they are selling into it. You could still be correct.
I'm going to hold my position awhile. I could sell in a hour or wait a few days. I'm going to see how much I can make scalping this baby, or maybe hold it for a few days.
http://finance.yahoo.com/q?s=uso
Comments on today's action:
"This market is getting another leg up but this is not consistent with deteriorating fundamentals," said Metz, referring to a recent spate of weak economic data. "It's a matter of days until we put in a top. This environment is just frothy."
http://www.marketwatch.com/news/story/Story.aspx?guid={5EEF5977-CDDB-4B76-91CB-9679C4392EFB}&siteid=
"This market is getting another leg up but this is not consistent with deteriorating fundamentals," said Metz, referring to a recent spate of weak economic data. "It's a matter of days until we put in a top. This environment is just frothy."
http://www.marketwatch.com/news/story/Story.aspx?guid={5EEF5977-CDDB-4B76-91CB-9679C4392EFB}&siteid=
mayday
Active member
Do'nt ya just love frothy.
mlk_man
Banned
Seems to me the Fed is pumping M3 money into the market to avoid recession since the inflationary numbers have dropped perhaps a bit faster than they hoped. They can't keep that up forever so I expect at least a small 3-5% correction before the end of the year. Might also look for a rate decrease early next year if things continue as they are.
Just an opinion..
Just an opinion..
I think so too, except a little later. A few years ago we went like gangbusters, then tanked the first week in January. I am hoping for the Santa rally but am leery of it making it to New Years.
robo
Well-known member
I received the alert below from a TA. I think frothy is a good word. The CNBC crew have people cashing in savings bonds to buy the Market. Oh Boy!
What say you Birchtree?
A comment from Marty Chenard below. He sometimes posts free articles on Safehaven. I receive his paid service. DOW 36,000 and S&P 1550 by December folks. I'm Bullish.... I thought the article below was pretty cool, enjoy Bulls!
Marty's email:
"Rumors are circulating that Alfred E. Neuman started buying stocks yesterday. (Remember Alfred E. Newman from Mad Magazine?)"
This tongue-in-cheek overview explores Alfred E. Newman's top 5 reasons why he was aggressively buying stocks yesterday.
Regards,
Marty Chenard
http://www.stocktiming.com/Wednesday-DailyMarketUpdate.htm
Man I love this article!!!
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mayday
Active member
What Me Worry? Thanks robo LMAO
robo
Well-known member
Some thoughts from our friend at Sentiment Trader.
Jason pointed out that the Smart Money / Dumb Money Confidence indicators have now reached a notable mark. He stated both of them can now be considered to be negative for the market.
He stated that this is the first such case since January 2004, and January 2002 prior to that. Most of track Sentiment and Jason is one of the best. Mark young is also at the top.
Tom points this out often; The higher the Dumb Money Confidence, the more we should worry about an imminent and sustained decline, and as of today's close it was just barely extreme at 61%. Spaf pointed it out yesterday.
Spaf wrote:
IMHO, The advance today while nice, did not signal a new trend, looking at [$SPX]. If you are "in" please be cautious, and nimble. If "out", now is not the time to be chasing stocks and buying high.
To break the trend we would need to see a break out gap, or see the trend establish itself, and the re-entry point would be the first pull back.
There is euphoria sentiment about the bullish advances. There is also talk about the need for a correction. So while todays action turned the indicators green, these indicators can also turn on a dime at areas nearing overbought conditions [RE: RSI].
Regards
Spaf
http://www.sentimentrader.com/
http://www.wallstreetsentiment.com/
Booyah! Nothing wrong with being bullish my friend. Most newsletter guys I follow are long and have made a bunch of money the last four months. Again, BOOYAH! I get Timers Digest and they track the top newsletter writers in the country. Excellent Newsletter. Most are Bullish!
http://www.timerdigest.com/
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Griffin
Well-known member
I had to get creative with this chart in order to squeeze it on the board, so I chopped out the legends. What your looking at is a 4 year chart for the S&P 500, with RSI and MACD below.
View attachment 1182
For about a month, I have been rambling on about the channel from the first half of the year dominating the market as we move forward (between the red lines). While that channel seems steep compared to the overall channel from the past 3 years (between the blue lines). It is within the trend of the past four years (between the orange lines).
Yesterday, the S&P broke above the red channel. When you look at the history of when the MACD has reached 20 and the RSI hit 80, you see a steady decline in those numbers, but a moderate choppy increase in the price over the next couple of months. That is usually followed by a significant pullback and that pullback is proportional to the time the market continued to gain.
My point is - we could still have another few weeks gains which could even take us through the infamous Santa Clause rally. If that happens, I will be out at the start of the new year.
I'm looking for a good opportunity to go long. The Monday after options expiration weeks (this coming Monday) has often provided such an opportunity.
View attachment 1182
For about a month, I have been rambling on about the channel from the first half of the year dominating the market as we move forward (between the red lines). While that channel seems steep compared to the overall channel from the past 3 years (between the blue lines). It is within the trend of the past four years (between the orange lines).
Yesterday, the S&P broke above the red channel. When you look at the history of when the MACD has reached 20 and the RSI hit 80, you see a steady decline in those numbers, but a moderate choppy increase in the price over the next couple of months. That is usually followed by a significant pullback and that pullback is proportional to the time the market continued to gain.
My point is - we could still have another few weeks gains which could even take us through the infamous Santa Clause rally. If that happens, I will be out at the start of the new year.
I'm looking for a good opportunity to go long. The Monday after options expiration weeks (this coming Monday) has often provided such an opportunity.
fedgolfer
Well-known member
... great points. I agree about us thinking we're way topped out when looking a the 2yr trend... but zooming out to the bigger picture, we're not at all... and its not just a coincidence we're resuming the larger 4 yr trend since the 2 yr trend coincides with the Fed's rate hike. The upper trend line of the 4 yr trend will definitely be filled... exactly when and how is anyone's guess though.
One added point i'd like to make is that those that were gun shy about trading the cup & handle (although the handle was so short-lived the formation looked more like a rounding bottom) in the S&P and the subsequent breakout should try not to make the same mistake again because the s-fund is a few days into it's cup and handle breakout.
One added point i'd like to make is that those that were gun shy about trading the cup & handle (although the handle was so short-lived the formation looked more like a rounding bottom) in the S&P and the subsequent breakout should try not to make the same mistake again because the s-fund is a few days into it's cup and handle breakout.
Griffin
Well-known member
Yeap, but this gives us a hypothesis to work with - if it stays on top, I would expect the upward trend to continue, in which case a hold strategy would be the best way to go. If it drops back into the red channel, then a timing strategy might be more appropriate.
Griffin
Well-known member
If you read this and said to yourself...hey &(*$#, stay on top of what?
I'll pre-empt that from being said out loud
1395 for the S&P, if resistance hold's it down - I say it's headed to 1370 for a 1.9% loss.
That would drag down the DWCP.....I guesstimate to 605 for a 1.9% loss unless it drops much faster then the S&P taking it to 595 for about a 3.5% loss
This is the point where I buy the dip.
Although I would rather see 1395 (preferably 1400) hold as support - then the sky is the limit.
fedgolfer
Well-known member
If you read this and said to yourself...hey &(*$#, stay on top of what?
I'll pre-empt that from being said out loud
1395 for the S&P, if resistance hold's it down - I say it's headed to 1370 for a 1.9% loss.
That would drag down the DWCP.....I guesstimate to 605 for a 1.9% loss unless it drops much faster then the S&P taking it to 595 for about a 3.5% loss
This is the point where I buy the dip.
Although I would rather see 1395 (preferably 1400) hold as support - then the sky is the limit.
I'm charting this on the cfund prices... another support level could be the upper line of the 2yr trend...I have it staying on top of anything >$15.15. Thats a .30 difference from yesterday's closing C fund price ($15.45) at a 1.94% loss.
Some pundits are saying what we are seeing IS the Santa Claus rally. I am not smart enough to figure all of this out, but I find it a little hard to imagine we will see a Santa Claus rally in addition to these new highs. If this is, in fact, the SC rally, should we be seeing a pullback fairly soon?
Inquiring minds want to know. (Europe and Asis are down at present - 10:50am EDT)
Inquiring minds want to know. (Europe and Asis are down at present - 10:50am EDT)
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