JTH's Account Talk

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As you might well imagine there was a significant decline in the number of S&P 500 stocks trading above their 50 day moving average ($SPXA50) Here is a year-to-date view of where we are in reference to where we've been. I really don't want to see us drop below the dips from July.
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The MPN has been pretty effective in keeping me from freaking out on this pullback. While a few of my charts got thrown in the trash, this one has kept me amused :D
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Good morning everyone :)

I am neither a bull or bear at the moment, I’m just waiting for the markets to reveal more information. I’m more bearish if we are below the 20 EMA/SMA but as long as we remain above the 50 EMA/SMA I’ll remain on the fence.

Although our 1042.19 swing low was higher than the 1019.95 low, I judge this last swing low to have more weakness when you compare all the swing lows with their Exp moving averages. You can see we’ve already spent 3 days under the 20 EMA and we are testing our forth day. We can also see how we closed under the 50 EMA for the first time since July.

Looking at volume, we’ve spent the last 8 trading days over the volume’s 20 simple moving average. Unfortunately the majority of this volume has been to the downside.

I’m a bit concerned about the ADX trend strength indicator. It’s been putting in a series of lower highs coinciding with the market’s swing highs. When the ADX gets to these levels (20-25) we should be transitioning from a trending market to a trading market. I don’t like trading markets…

On the last wave the slow stochastic put in a near perfect arch. The good news is we have put in a bullish crossover and have broken above the feared 20.
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I did a poor job of watching the small caps this month. That’s a hugh foul on my part considering I’m 100% in the S-Fund. This chart is more bearish than the S&P 500. But I do happen to believe if these markets turnaround next week that the small caps will lead the way.

But let’s look at what’s going on now. You can see we put in a lower low just like the transports did.

We are trading under our 50 EMA WARNING BAD BAD BAD!!! :suspicious:

You can the slight recent rise in the ADX trend stregnth indicator. This can be a good sign if the –DI continues to decline.

As for the Slow stochastic, although we have a bullish crossover, we have spent the last 2 days under the 20.
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if you do a little corellation and forecasting on a spread sheet with the S&P chart you get 1132 as the peak of the next high in about 20 days
 
I won't be harping on Fibonacci as much next month. I believe It's more than proven it's worth as a trading tool.

Once again AGG trades within the Fibonacci trading channel...
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CapeChem said:
if you do a little corellation and forecasting on a spread sheet with the S&P chart you get 1132 as the peak of the next high in about 20 days
Click to expand...

Thanks, I did do some projections last night, but I'm not done with them just yet. But I will say if we get bullish we can see 1198 by the end of November.
 
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Today is the last day for the Magical Purple Necktie. We can see that during this timeframe we stayed within the area of the previous 3 pullbacks. Next month I'll do some projections based on the 3 previous bull legs. But these Assumptions are based on 28 October being a swing low. If that swing low doesn't hold, then the charts go in the trash.
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JTH said:
The long-term system I am using has put the Transports from a buy/hold to a neutral/hold. The others ($SPX, $EMW, NASDAQ) are still on a buy/hold. It's already ugly but it's getting worse.
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My system just put $EMW on a neutral/hold from the previous buy/hold. This is not looking good, if we get 1 or 2 more down days I'm pretty sure I'll be putting both the transports and the S-fund on a sell.
 
Thanx JT for helping me make a lot of money this month. Your charts are like a picture painting a thousand words.:)
 
JTH said:
My system just put $EMW on a neutral/hold from the previous buy/hold. This is not looking good, if we get 1 or 2 more down days I'm pretty sure I'll be putting both the transports and the S-fund on a sell.
Click to expand...

So your system is technically still on a "buy" for equities??
 
akpackfan said:
So your system is technically still on a "buy" for equities??
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Thanks for asking. It's a long term trending system that went into a buy in early April while the last sell signal was given in June 2008. Right now, the transports and small caps are in a holding pattern while the S&P 500 and the Nasdaq are on a declining buy signal. Those buy signals were given a long time ago so I wouldn't say right now is a great time to buy.

When the system goes into a hold, it can mean the market's are either getting ready to trend down, or will trade sideways before they pick a direction.
 
Going to G or F in June of '08 would have saved me a lot of money and getting back in around the beginning of April would have made me a lot of money so sounds good to me.

If you were all in right now would you stay in and wait for a confirmed "sell" from your system or bail now? Thanks for all your work.
 
JTH said:
My system just put $EMW on a neutral/hold from the previous buy/hold. This is not looking good, if we get 1 or 2 more down days I'm pretty sure I'll be putting both the transports and the S-fund on a sell.
Click to expand...

Thank you for keeping us updated. Good work and commentary.
 
Show-me said:
Thank you for keeping us updated. Good work and commentary.
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Agreed! After reading what you and Coolhand have had to say recently, I moved 50/50 G/F yesterday in hopes of catching some upside action in the F, which I usually don't attempt. Might be a good month to try it though.
 
akpackfan said:
Going to G or F in June of '08 would have saved me a lot of money and getting back in around the beginning of April would have made me a lot of money so sounds good to me.

If you were all in right now would you stay in and wait for a confirmed "sell" from your system or bail now? Thanks for all your work.
Click to expand...

I'm sorry, I completely didn't see this post. I've had a huge migrain for a few days and it's kept me down.

While I have to admit I think this market is headed for a long-term decline, at the same time I don't want to front-run my system.

Each Fund has 3 signals and each fund serves as 1 of 3 bigger signals. An additional red signal for the S-Fund (2 out of 3) will put it on a sell. The yellow signals are used as caution lights only and do not trigger a sell or buy. This is where the system stands as of EOB Monday. Today will probably add more yellow signals.
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Nordic said:
Agreed! After reading what you and Coolhand have had to say recently, I moved 50/50 G/F yesterday in hopes of catching some upside action in the F, which I usually don't attempt. Might be a good month to try it though.
Click to expand...

Only the long-term riders seem catch a good bid on the F-train. But it sure beats losing 5+% :)
 
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