FogSailing's Account Talk

[FogSailing]

Volatile week. Lots of bullishness out there and the technical indicators certainly look to support that theory. Lots of people expecting SPX to hit 2163 or better tomorrow and possibly 2180 before it pulls back. However, I read a "contrarian" view today that I thought was interesting (see chart below). It uses Elliott Wave theory and assumes the market is in an abc correction. It assumes that the SPX market action from June 27th until Sep 14th was a B wave (most sideways action) that completed at 2087 (Brexit) and sets up a declining triangle and that we are now in a declining C wave that will take the market down to 2080 (.50 Fib) or 2050 (triangle bottom).

Personally, my bet is on the bulls (so much momentum out there) including the weekly RSI(14) still above 50 and price still above middle BB. However, the Slow Sto is something to watch tomorrow after close. They are no longer embedded, but will most likely remain there with a 15-20pt up move tomorrow. Even without an embedded reading tomorrow, they can re-embed a week from Friday to officially keep the reading. So, indicators are generally positive.

So, I won't be surprised if the market goes up tomorrow, but I also wouldn't be surprised if the market pulled back (just because the market does what the market wants to do). I wish I knew how to read the tea leaves but I flunked fortune teller 101.... Best to you in your investing.

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FS

 

[nnuut]

"C" and the "S" Fund are both showing an Inside Day DOWN, If that holds it's not a good sign.

 

[FogSailing]

I agree that there is a lot going on nnuut. Oil inventories are high and that should keep pushing oil prices lower. Whoever the big boyz are know how to manipulate the dollar to keep commodity prices higher and that seems to be going on right now as well. As long as the SPX stays above 2116-2119, I think it moves higher next week into the Fed meeting, but if it goes below I think we wake up at 2050. Right now they seem to be keeping SPX in bull territory.If the FED does raise rates (which they won't (my prediction which doesn't mean much) despite a lot of jawboning) the market would likely tank back to the 1880's. That is coming but not till after the election is my guess. So my guess is that market will be manipulated to stay above 2120, that the dollar will stay above 102, that the FED won't raise, and the market heads to 2180 next Thursday and Friday. But...that and $5 will buy you a cup of dollar inflated commodity priced coffee...

Of course, I watch CNBC and read all the subliminal messages needed to develop my brainwashed account....

FS

 

[FogSailing]

We'll see how it goes tomorrow. It didn't surprise me to see SPX sell of today because of nerves about a possible Fed action. I think the big guys are working to scare the little guys out of the market. based on today's action, it would appear the bulls aren't as sure of a NO RATE increase decision by the Fed. My thinking last week was that market will be manipulated to stay above 2120, that the dollar will stay above 102, that the FED won't raise, and the market heads to 2180 Thursday and Friday. So far we are still above 2120, and the dollar is fluctuating around 102. Here are two charts on SPX and technical indicators and the descending triangle we are currently in. If the Fed punts ( I think they will but it's a coin flip), I expect at least 2172 by Friday if not higher with a possible 2200 by the end of the month. If they raise rates I expect a market pullback to somewhere between 1990 and 2040. Best of luck to you in your investing. RSI was around 44 and MACD looks indecisive. Full Sto appears to be moving upward at 35 today. $NYHL is at 78 with the 50 MA appearing to want to cross the 200MA.

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FS

 

[FogSailing]

Well, looks promising through Friday. I still expect profit taking but that may wait till later towards month end, "BUT" EOQ can also be bullish because we're moving into the 4th quarter so 2200 looks to be in range for next week assuming we close above pivot 2177 today and that appears very probable right now. Here's a picture of SPX YTD. The Momentum Indicator looks good and the CB intervention is keeping volume up although there does appear to be more selling into today's rally. The 9 and 20 day Moving Averages look good right now. Oil prices are up a bit and the dollar is down a bit but holding over 100.

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FS

 

[ravensfan]

Well, looks promising through Friday. I still expect profit taking but that may wait till later towards month end, "BUT" EOQ can also be bullish because we're moving into the 4th quarter so 2200 looks to be in range for next week assuming we close above pivot 2177 today and that appears very probable right now. FS

Closed at 2177.18...woohoo!!! 2200 here we come!

 

[FogSailing]

Looks like some profit taking today. Yesterday the planets were too aligned...those moments are sweet and rare...As long as we stay above 2163 today I think we move higher over the next period. Here's an interesting tidbit I picked up this morning.

View attachment 39496

FS

 

[FogSailing]

Oil needs to stay above 44.38 or I expect further downside to SPX 2131. Hope this thing turns around and SPX holds at 2163 or higher. Currently CL is 44.58 but prices appear in decline. I guess those excess inventory levels are finally starting to impact. I still think we have further upside but it looks like there is some profit taking and consolidation going on...

FS

 

[FogSailing]

OK. We're headed into the last week of September. Trump and Hillary debate on Monday, new housing starts on Monday, and the Fed starts jabber-talking again on Monday. I'm reading a lot of nervousness in traders about an impact to the market because the debates trigger market downside.

My guess is that this market will stay its current course and limit it's downside to 15-20 points and then creep it's way forward again. I've read the three peaks and a dome stuff but these scary patterns have shown up a number of times this year and haven't resulted in the expected downturn/s so I'm aware of them but considering more data to try to make my decisions. Since 2194, the market has given and taken away in equal measure but the CBs seem to be keeping things level so more sideways action has been the norm. My guess is that the market will shed some additional weight and dip to around SPX 2160 before resuming the rally. Oil and the Yen need to stabilize more. Of course there's always the unknown event. South Korea's warning to North Korea last week could blow up into an international incident without warning... for example; and with the algos controlling so much of the trading, you don't how far they will go. I'd hate to be trashed by an algorithm. Support is at 2131 and 2116. If it were to pull back to less than 2116, I'd say the trend has changed.

I'm out until October and I'll reassess then. I'll be following the trend until it shows me it's going to change. With the long term MACD looking to go bullish, there appears to be more upside on the horizon...the question is when.

FS

 

[FogSailing]

Just want to thank Burro, Bquat, John Ross, JTH, Clester, FMW, DBA, Cactus, Tsunami, of course (Tom), and others who share their insights and thinking into the market for the rest of us. Burro, your comments on the ark this week are just great. I pulled a graphic of the market and it displays the market schizophrenia we are currently gripped in. Things are coming to a head in the SPX triangle and it could go either way; although the VIX and RSI, as of Friday, indicate that the bias could be positive. That said, I would not be surprised to be a big down day on Monday. But Yellen's comments last week and the resulting pullback in bonds would also indicate that more money heads into equities. We're moving back into earnings season and that will impact things as well. Best of luck in your October investing.



FS

 

[FogSailing]

I was tempted to jump in today. SPX looks to be pulling back a bit. As long as it stays above 2145, I think MACD resets to look positive and tomorrow is an up day. Expect some news baloney to push the market up. The graphic below from one of blogs I read appears to indicate we are in an inverted head and shoulders pattern which could extend to 2180. Anything above 2163 and the bulls will be charging. That said, I'm still holding because I think the better opportunity comes at the end of the month. My guess is that the market will pull back to the 2100 area soon and that is when we get our best bang for the IFT... buck so I'm holding. Best of luck to all of you in your investing.



FS

 

[ravensfan]

I like your plan FS. I'm currently invested 50% and still have both IFT's for October. With that said, I could see myself heading to safety at 2180 and then wait for the pullback to the 2100 area to jump back in.

Just hope I don't hit an iceberg on my way back to port...LOL:nuts:

 

[Tsunami]

Don't worry, global warming is melting away all of the icebergs.

Boy, the day traders had some fun today, but otherwise the market was clearly waiting for the jobs report tomorrow to make the next move. I think there should be a fairly quick jump of 2-3% over the next week or less, but sure can't tell which way it will be.

 

[ravensfan]

Looks like we're in for a little more pain before we hit 2180...Guess I picked a bad day to give up drinking...;swear

 

[FogSailing]

I agree. The jobs news is worse than predicted and the ride in the unemployment rate is sending the market shivers. This is why I am coming to mistrust patterns. We've had 3 peaks and a dome which may now be starting to materialize, but took it's sweet time; and the inverted head and shoulders pattern which is also apparently taking it's sweet time to materialize....Next week will be interesting to see if the bulls will be buying the dip; or are we now on our way to 2120, 2100, or even 2075 pivots before this turns around. The market has been correcting slowly (lower highs and lower lows) if you look at the last two months so a bounce is on the way, the question is when. The bulls have been having it their way since last February so maybe this is a lull in the action and we'll see some bear activity.

FS

 

[JamesE]

Dunno FS, I think "they" are going to prop this thing up until elections at a minimum just to cement the win for the liar. I do see turbulence afterwards until the acceptance of the rate hike. ...

 

[FogSailing]

So, for the first time in many years the GOP control the political agenda of our country. The have the White House, the Senate, and the House and even a majority of State Governors. It’s time to see all the growth they always promise. A very good opportunity for redemption from the mess they left last time. I’m routing for them to get it right this time.

But the reason for my post is this: I would like to get some input about any benchmark\s you think would a good measure of the economy (i.e. we're better off now than we were in 2016) for 2 years down the line. It could be GDP, DJI price, housing market, unemployment, tax rates, wars, debt reduction, etc from November 2016.

In BURRO fashion, I think it would be fun to establish some "expected parameters of success" and then set up something similar to what Tom does for the Jobs Report, and see who are the best 5 prognosticators of the nations condition TWO YEARS from now; just before the next mid-term elections. We could even all provide a little TSP Silver to the pot and pay out to the top 5 for example.

Just an idea. let me know if any of you would be interested.

FS

 

[Tsunami]

Politicians love to make lots of promises. My first thought was if the total nonfarm payrolls were higher 2 years from now, but I see that stat has been steadily rising for years:
Graph: Total nonfarm payroll employment (seasonally adjusted)
There's always talk about more and more people dropping out of the workforce (and every time my wife are out and about on a weekday one of our topics of conversation is always "why aren't all these people at work!"), so maybe a better stat to watch for success is the labor force participation rate:
Bureau of Labor Statistics Data
If they succeed in lowering corporate taxes, and get that recent blip up to keep going up to 64% or higher, that would be a success.

My guess is the markets will continue to do well clear into the spring of 2018, then we'll finally get the much-needed recession to cleans things and cool the markets. So 2 years from now the indexes could be right about where they are now.

Off topic, boy has the seasonality of small caps kicked off with a bang. I moved from C to S a week earlier than I'd planned when I saw that happening Wednesday. This chart shows the surge in the ratio of the S to C fund indexes...I suspect this will continue, but at a slower pace:
$DWCPF:$SPX - SharpCharts Workbench - StockCharts.com

 

[FogSailing]

Congrats on catching those S Fund gains. I went to G just before the election. Was quite surprised to see the Dow Futures go from 800 down to new highs....who woulda thought...

Thanks for the feedback TS. Those are good measures to add to the list.

I'll give this a chance to get around. If there is enough interest I'll create a template on up to 5 indicators...Too many and it becomes burdensome..

FS

 

[FogSailing]

Still working on the 2018 Performance Predictions. Will post something soon to see if folks want to play...

This morning I read some interesting comments from an analyst and wanted to share: "..and yet it seems the markets have priced to perfection a massive infrastructure program for the industrials and a practical clean unchallenged repealing of dodd frank for the banks…..nothing will run as smooth as utopia…as of 2 weeks ago there were many inherent risks in a DJT win and now at this juncture risks are not even being factored ,,,,This is the classic absurdity of markets these days ..extremes….years of moves in a few days or weeks….also keep in mind it was the low interest rate fed driven environment that may have held up the markets from any major corrections these past couple years ..take that off the table and suddenly we are bullish due to fiscal spending? while the dollar rallies?? and rates rise? again this seems very suspicious to me...

Just a few thoughts that I'm considering before tip toeing back into the market: The dollar has surged but for how long will stay there? Tech stocks are already hurting from the strong dollars rise and international corporations would be appear to be ones that feel the pain. But if the dollar stays high, the market will need to adjust by doing what? I wouldn't be surprised by a sell off soon. I'm reading analysts talking about Trump Team is going to tear up the Iran agreement. What does that do to oil (and when)? Likewise, tearing up trade agreements with EU, Canada, Mexico, etc is going to warrant increased tariffs on American goods or other types of economic reprisals at some point. Also heard a rumor of a 1 trillion infrastructure package in the works...interesting times..

FS