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Bull Pen - Fall 2006
- Thread starter Griffin
- Start date
BeaverState
Member
Gotta love those 5-6 percent yields on the bank stocks. Citi, B of A, Washington Mutual, etc. Time to buy - Dividends don't lie.
Birchtree
Well-known member
"Strong growth in the rest of the world in conjunction with the weak dollar has propelled exports of capital goods to all-time highs....trade could add to gross domestic product in the third quarter."
http://www.marketwatch.com Rex Nutting - Exports grow at fastest pace in three years. Economy and Politics
http://www.marketwatch.com Rex Nutting - Exports grow at fastest pace in three years. Economy and Politics
robo
Well-known member
Friday, September 14, 2007
Has The Market Bottomed?
Back in July when the stock market was selling off, I posted the above chart of the S&P and the VIX. What I had noticed is that market bottoms have coincided with VIX readings above 16.
As you can see in the above chart, the vix got as high as 30 which to me was a very bullish reading. High VIX readings indicate fear and when you have fear taking place in a bull market, that is always a great time to buy as long as the trend is still in tact.
Notice in the above chart the 70 week moving average which has supported all declines over the past 3 years. A few weeks ago the S&P tested this average and rallied strongly.
I am long the market but unfortunately I didn't buy at the average. Trying to pick the exact bottom could be painful although buying at the average would have worked out amazingly well. I bought about a week later after I saw some buying come into the market.
I didn't buy the S&P but I did buy the NASDAQ and EEM. These two markets are stronger than the S&P and I always try to position myself in the strongest markets.
If I'm right about the market, I think we'll see the NASDAQ and EEM (along with other world markets) make new highs for the year.
http://kevinsmarketblog.blogspot.com/
Has The Market Bottomed?
Back in July when the stock market was selling off, I posted the above chart of the S&P and the VIX. What I had noticed is that market bottoms have coincided with VIX readings above 16.
As you can see in the above chart, the vix got as high as 30 which to me was a very bullish reading. High VIX readings indicate fear and when you have fear taking place in a bull market, that is always a great time to buy as long as the trend is still in tact.
Notice in the above chart the 70 week moving average which has supported all declines over the past 3 years. A few weeks ago the S&P tested this average and rallied strongly.
I am long the market but unfortunately I didn't buy at the average. Trying to pick the exact bottom could be painful although buying at the average would have worked out amazingly well. I bought about a week later after I saw some buying come into the market.
I didn't buy the S&P but I did buy the NASDAQ and EEM. These two markets are stronger than the S&P and I always try to position myself in the strongest markets.
If I'm right about the market, I think we'll see the NASDAQ and EEM (along with other world markets) make new highs for the year.
http://kevinsmarketblog.blogspot.com/
Birchtree
Well-known member
"Their mission was accomplished: they convinced millions of everyday investors and observers to hit the panic button and run for cover while they, the fear promoters, profited immensely on the very fear they engendered."
http://www.financialsense.com/editorials/droke/2007/0918.html
http://www.financialsense.com/editorials/droke/2007/0918.html
Birchtree
Well-known member
"It would be a positive for stocks if a new high, relative to the close on September 18, 2007 (1519 on the S&P 500), was made after October 19, 2007. This new high would increase the odds we are not in a period which looks like the negative outcome following the first rate cut in 2001."
http://www.safehaven.com/article-8447.htm
http://www.safehaven.com/article-8447.htm
Birchtree
Well-known member
"Our strongest gold and energy shares are at new highs, while most of our natural resource shares are at new highs. This is a time to be buying new positions and holding onto the ones you have. The best is yet to come." These sisters look like the Barbi twins - really.
http://www.safehaven.com/article-8467.htm
http://www.safehaven.com/article-8467.htm
robo
Well-known member
Birchtree,
Carl also gave a new buy signal. Plenty of new buy signals, maybe too many.
The dippers are back in full force.
New Buy Signal
by Carl Swenlin
Ever since the market hit its correction lows in August I have written three articles, each emphasizing that the odds favored a retest of those lows (see Chart Spotlight on our website). As it turns out, we haven't had any decline that I would classify as a retest, and the market has broken out of a triangle formation on high volume. When the breakout happened, it eliminated any reasonable possibility of a retest, in my opinion. Sometimes the low odds take it.
One thing I have been cautioning about is to not get too bearish, because many of our key indicators had remained bullish. Another thing I should mention is that we should never get too invested in a forecast. I have watched as many of my bearish colleagues, after being proven wrong by the market, are still tying to justify their being bearish rather than trying to get aligned with the market. The market will eventually prove them right because, because, because . . . Maybe they will be right sooner than we think, but for now the market looks as if it will be moving higher for a while.
My bullish stance is due to our S&P 500 timing model having switched from neutral to a buy on September 13, three trading days prior to the Fed-induced market breakout. Also, prior to the breakout, about half of the market and sector indexes that we track with our primary timing model were also on buy signals. On the day of the breakout, the other half switched to buy signals.
The chart below shows the two components needed to generate a buy signal -- the Percent Buy Index (PBI) crossed above its 32-EMA, AND the PMO (Price Momentum Oscillator) was above its 10-EMA. Note that the PBI is only at 59%, but it is trending up, which is most important.
Bottom Line: The long-awaited retest did not materialize, and. in my opinion, the market has begun another leg upward that should challenge and exceed all-time highs for the S&P 500 Index.
Regardless of my personal opinion, we rely on the mechanical trend models to determine our market posture. Below is a recent snapshot of our primary trend-following timing model status for the major indexes and sectors we track. Note that we have added the nine Rydex Equal Weight ETF versions of the S&P Spider Sectors. This may seem redundant, but the equal weighted indexes most often do not perform the same as their cap-weighted counterparts, and they provide a way to diversify exposure.
Technical analysis is a windsock, not a crystal ball. Be prepared to adjust your tactics and strategy if conditions change.
http://www.decisionpoint.com/ChartSpotliteFiles/070921_newbuy.html
Birchtree
Well-known member
"A positive Leadership stock ratio means that the "leaders" are out in fron of the pack, and the followers are right behind them. A positive Leadership Ratio means that these stocks are leading the market in a rally."
http://www.safehaven.com/article-8510.htm
http://www.safehaven.com/article-8510.htm
James48843
Well-known member
Lots of bulls busting out on the open.
Could be an interesting day.
Could be an interesting day.
Birchtree
Well-known member
From Jason Geopfert - "Holding the S&P 500 during the last three days of October through the first three days of November has given a positive return every year of existence of the S&P 500 tracking fund, SPY. The 12 out of 12 winning trades returned an average of 3.3%."
Show-me
Well-known member
Show-me
Well-known member
I'm 50G and 50CSI. :nuts:
Birchtree
Well-known member
I'm reminded that worker productivity soared while labor costs declined in the third quarter - suggesting that inflationary pressures from the labor market remain contained. Nonfarm business productivity grew at a 4.9% annual rate from July through September, the fastest pace in four years. Unit labor costs declined at a 0.2% rate. This sure sounds like goldilocks to me. Why all the negativity anyway - are the hedge funds taking profits and rotating in different sectors. They do this several times a year - just another correction. I'm also reminded not to listen to what the Fed says, but rather watch what they do. There is another interest rate cut on the way - perhaps another discount rate cut first before the December 11th meeting. You won't catch me with bear paws in my pants pockets.
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