fabijo's account talk

[fabijo]

Good to have you back!

Thanks, weatherweenie! Though I'm kinda back, I'm still minimizing my time looking at the markets. I'm gonna keep an eye on my little channel and may even take a smidgen off the table when it crosses the top a little. It seems a little dip tends to happen around those times. But if the market starts a skyward rally these next couple of days/weeks, I'll let it cross the top a little further before possibly skimming off the top a little. These reaction rallies can spring a little higher than expected pretty fast.

 

[fabijo]

If I'm right with the newer trendlines, we are at a bottom. If the longer term lines are it, then we still have a bit to go to test them. I'm still holding the C Fund since it has been recovering well from these drops.

I don't have my computer where I can draw all the funky lines, but I just looked at the chart again and it looks like we are touching the lower, longer term support line, which has served as the resistance for a few years prior to October, 2006.

 

[Birchtree]

I'm trying to buy myself into happiness, but if I'm wrong I'll be strong. Now please move over, you are blocking my lane. Help me if you can I'm feelin down, sure appreciate your being around. This is exciting if one can absorb the nonsense.

 

[fabijo]

Now please move over, you are blocking my lane. Help me if you can I'm feelin down, sure appreciate your being around. This is exciting if one can absorb the nonsense.

:toung: You keep insisting that I leave, but it just ain't happening.

 

[fabijo]

There you go, Birch. I just got out of the lane for about one day. I figure I'll gamble with the possibility of the I Fund's overpricing yesterday's close. It's risky, given the dollar's levels right now. It almost seems like there is only one direction for the dollar to go from here - up. Of course, I've said that a while ago, but that never panned out. There is still plenty of divergence on the dollar index's chart versus its MACD charts.

Despite that risk, I'm going all into I today anyway. You never know unless you try!

 

[fabijo]

Okay, I just looked at the charts for the S&P 500 and the Wilshire 4500. I saw Griffin posted those charts also and he figured the S Fund looked good. I still see the C Fund as the one gaining major momentum. Look at how the Big caps have become since October (I circled the pivotal moment). There's been a shift in its slope. The small caps, however have kept the same slope, but taking longer to get back to the top of their channel. Actually, the S fund hasn't spent the kind of time at the top of its channels as much as the C Fund spends in its top. I'm not sure small caps will continue to have the strength they've had the past few years.

Here are the two charts for you to see. Even though the C Fund broke below the bottom blue line, I still see that as the new channel to look for tops in this major run that's in progress.

S&P 500:

Wilshire 4500:

Birch, now that I moved out of your lane, I could be getting right back in. I only wanted to play the I fund for a moment.

 

[fabijo]

I'm finished with my day trip out of the U.S. It's back to the C Fund for me.

 

[Birchtree]

Is it OK if I at least draft you on the way up? You won't even know I'm there.

 

[fabijo]

I may not know you are there, but you'll know it if you follow behind me. I'm gassy.

 

[fabijo]

Hey, where'd all the program buys go? Shouldn't they be kicking in about now?

:toung:

 

[fabijo]

I haven't updated my monkey with the price history in a few months. So instead of using the monkey, I just did the math on paper. Prior to the math I considered maybe making an IFT to the I Fund or something, but the math still says the C Fund is the fastest moving. Who needs math, when we can see clearly that the C Fund has been pretty nuts lately?

 

[fabijo]

I know I'm biased, but I really am convinced today is the bottom of the next major leg up. At the moment, I can't upload the charts to my server, so I'll just explain what I'm talking about. I'm looking at the S&P 500.

In May-July 2006, we had a drawn out bottoming, only to be followed by a "neverending" rally through October 2006. We continued to rally with less strength through February 2007. End of Feb through March had another bottoming process that was much quicker than the 2006 bottoming. It was followed by another steep rally that began losing strength in May/June. Now I believe we are in another bottoming that is much quicker to finish.

My take is that we are still in a bull market (mega bull, anyone?) and it is gaining big strength. Now we got all the world banks pumping tons of cash into the credit market. There may be less investing in the supprime markets, but why not use all that cash to invest into other booming sectors?

Look over the charts of the S&P 500 and you'll see that since May 2006, we've had a similar pattern repeat itself, only getting squeezed into tighter timeframes each cycle. Let's see that 1600 mark by the end of September!

 

[Birchtree]

From time to time, as happened with the emerging-market correction in May 2006, and as is happening now, the overall trend of the market will be interrupted and the market filled with momentary panic. But when this happens, markets will quickly stabilize and resume their upward trend. Wave 3 of Primary wave 3 of Cycle wave 3 of the mega trend secular bull run is still intact. I keep thinking about the Chinese sovereign wealth funds to the tune of $200 billion looking to buy U.S. assets.

 

[Griffin]

How's the current MCSUM reading fit into the primary wave theory?

From time to time, as happened with the emerging-market correction in May 2006, and as is happening now, the overall trend of the market will be interrupted and the market filled with momentary panic. But when this happens, markets will quickly stabilize and resume their upward trend. Wave 3 of Primary wave 3 of Cycle wave 3 of the mega trend secular bull run is still intact. I keep thinking about the Chinese sovereign wealth funds to the tune of $200 billion looking to buy U.S. assets.

 

[Birchtree]

The MCSUM is bouncing off a wicked bottom trying to get back to its zero line. It won't be long and we'll be back to new all time highs.

 

[fabijo]

Here's one for ya, Birch:
From http://online.wsj.com/article/SB118678606435894652.html?mod=mkts_main_news_hs_h

S&P 500 Looks On Cheap Side Amid Turmoil
By JONATHAN CLEMENTS
August 11, 2007

Looking to take advantage of all the market turmoil? For ordinary investors with strong nerves, there could be an opportunity here -- in big, blue-chip companies.

The large-cap stocks in the Standard & Poor's 500-stock index aren't dirt cheap. But thanks to their tepid returns since March 2000, and the market pounding of recent weeks, their valuations are pretty attractive.
LIVING LARGE

The S&P 500 companies are collectively at less than 17 times their earnings for the 12 months through June, according to data from Standard & Poor's. The last time the S&P 500 regularly traded below 17 times reported earnings was in 1994 and 1995 -- before the late-1990s stock-market surge....

 

[Birchtree]

And as it happens during bull phases above the zero line, the deeper you go lowrer on the MCSUM, the harder it becomes for breadth plurality to show a highly negative reading. The NYSE breadth MCSUM is currently around -550 which is at similar levels of previous bottoms resulting from corrections. Looking for bottoms above bottoms in the indexes as we come off this bottom. And as long as the A/D lines remain above their 1% trends - the trend is up. (200 EMA).

 

[fabijo]

I find it amusing that the forums are busy all week during the day when we are supposedly working, but get mostly silent at night and practically dead on the weekend.

:laugh:

 

[atcbullet]

Hey, Its tuff working for the Fed.

 

[merlin]

I find it amusing that the forums are busy all week during the day when we are supposedly working, but get mostly silent at night and practically dead on the weekend.

:laugh:

I agree. Where is everyone?