Decision Time

Make that 2 for 2 to begin the month of December as stocks gapped at the open once again and never looked back.

Of note on the economic front, initial jobless claims came in at 436,000, up from the previous week and a bit more than forecast. But what really seemed to spark the bulls was the October pending home sales numbers, which jumped by 10.4%.

The Dollar ran into more selling pressure as it shed another 0.7%.

And so the market makes another statement, putting what appears to be an exclamation point on yesterday's action, which suggests the trend has just changed again. And perhaps it has, but with one caveat as far as the Seven Sentinels are concerned. Let's take a look:



NAMO and NYMO have both pushed back up into positive territory and remain on buys.



NAHL and NYHL also remain on buys.



TRIN and TRINQ remain on buys and still suggest an overbought condition. But we saw this kind of action early in September as it bounced around for several trading sessions in this area.



BINGO, BPCOMPQ flips to a buy.

So all 7 signals are flashing buys, which means the system flips to buy as long as NYMO has hit a new 28 day trading high. That's the caveat. Take a look:



While NYMO may be in positive territory it needs to go above 36.63 to hit a new 28 day trading high. Otherwise the risk of whipsaw is elevated. And that's a real risk in such a volatile market. In September it took the Sentinels extra time to "confirm" a buy signal the same way, and while it cost me some gains the market did continue upward for quite some time after anyway, so it's all relative.

As for myself, I plan to wait this market out a bit more as I am admittedly conservative in my approach. Remember to keep an eye on our sentiment survey as it continues to hit the ball out of the park. Next week's results should be out soon.

 

[Birchtree]

I'm satisfied that it is above its' zero line and is most likely on the way to 100.

 

[WorkFE]

TAX bill news will have +/- impact on the market over the next few days.

 

[EmoDx]

1. I saw a video and read on Yahoo finance that the word from the White House is that they are open for extending the Bush tax laws across the board.
2. The ECB is willing to purchase bonds at some level to support economies in trouble.
3. It is the end of the year and this month is generally bullish.
4. The are under performing funds looking to catch up.
5. Easy Fed money.

I am all in %85 S and %15 C and will let it ride through volatility as we may not see all 7 line up in time to capitalize on the upside pressure.

That being said I look to be out before the first of the year as I think a lot of smart money recognize the run up for what it is and will sell off the riskier equities.

I am hoping this run up will vacate funds from the AGG and finish the correction the F fund is in. I would prefer the F over the G but the volatility over the last quarter of the year is similar to being in equities.

I wish everyone a safe holiday season and keep the Mylanta and Tums close at hand.

- Emo

 

[airlift]

CH,
Uptrend got a Buy signal today. What we don't know is whether his system is using the same market parameters as the 7 Sentinels or not. Also, I recall Intrepid getting a sell sinal, in similar fashion as your short-term system sell signal. C;early, these are mixed results, but I still have 40G and might risk further deployment depending on the analysis we get from now on. If there is no unmanageable global crisis,and if economic numbers should continue to show relative improvement, I would hope that seasonality would keep the wind to our backs for some more upside.

I read somewhere that the consumer is not idle. The consumer is supposed to represent around 70%cent of the GDP. I believe someone stated that this past Black Friday and Cyber Monday resulted in good retail sales. Unscientifically, we could extrapolate this information to expect a fairly good Christmas and Santa Claus rally. Also we can speculate that any correction could be shallow. Opinions, please!

 

[Boghie]

We are in political season again...

Folks may simply be dumping their gains for cash in the hand - at a 15% capital gains tax.

Wait a month and you may end up paying 28%

The market will have a short term boom for that reason, but it will explode for the long haul if we keep the current code and make it permanent.

 

[airlift]

Thanks Boghie.

 

[coolhand]

I hear ya. There's so much going on that I don't try to cover it all. I refer to them as "cross-currents". Just when we were about to fall off another cliff, the market comes roaring back. When will the smart money bail? When we least expect it.

1. I saw a video and read on Yahoo finance that the word from the White House is that they are open for extending the Bush tax laws across the board.
2. The ECB is willing to purchase bonds at some level to support economies in trouble.
3. It is the end of the year and this month is generally bullish.
4. The are under performing funds looking to catch up.
5. Easy Fed money.

I am all in %85 S and %15 C and will let it ride through volatility as we may not see all 7 line up in time to capitalize on the upside pressure.

That being said I look to be out before the first of the year as I think a lot of smart money recognize the run up for what it is and will sell off the riskier equities.

I am hoping this run up will vacate funds from the AGG and finish the correction the F fund is in. I would prefer the F over the G but the volatility over the last quarter of the year is similar to being in equities.

I wish everyone a safe holiday season and keep the Mylanta and Tums close at hand.

- Emo

 

[coolhand]

The smart money has had some fast, extreme shifts in sentiment recently, which makes it pretty tough for me to commit to any given market scenario. Sentiment is bullish overall and we're in a seasonally positive timeframe, although this particular week is known for being weak. The Sentinels are not far from flipping to a buy, but as long as sentiment remains bullish I'll be in caution mode. That doesn't necessarily mean I'll stay in cash if I get that buy signal, but I doubt I'll move to a 100% stock position. This is the week before OPEX, so it could be on the wild side. We'll see how it plays out.

CH,
Uptrend got a Buy signal today. What we don't know is whether his system is using the same market parameters as the 7 Sentinels or not. Also, I recall Intrepid getting a sell sinal, in similar fashion as your short-term system sell signal. C;early, these are mixed results, but I still have 40G and might risk further deployment depending on the analysis we get from now on. If there is no unmanageable global crisis,and if economic numbers should continue to show relative improvement, I would hope that seasonality would keep the wind to our backs for some more upside.

I read somewhere that the consumer is not idle. The consumer is supposed to represent around 70%cent of the GDP. I believe someone stated that this past Black Friday and Cyber Monday resulted in good retail sales. Unscientifically, we could extrapolate this information to expect a fairly good Christmas and Santa Claus rally. Also we can speculate that any correction could be shallow. Opinions, please!