Market Talk / Jan. 21 - 27

08:33 am : S&P futures vs fair value: +1.8. Nasdaq futures vs fair value: +4.5. Durable Orders rose 3.1% in December (consensus 3.5%), given a large jump in aircraft orders. Non-defense capital goods orders excluding transportation, which provide a clearer read on underlying business capital investment, also rose a healthy 2.4%. Futures trade has strengthened following the data and now point to a modestly higher start for the cash market. Bonds, though, have weakened, pushing the yield on the 10-yr note (-7/32) to 4.90%.
 
From MarketWatch:

Fed funds market sees small chance of rate hike by March end
By Tomi Kilgore
Last Update: 10:31 AM ET Jan 26, 2007

NEW YORK (MarketWatch) -- The fed funds futures market was pricing in a slight chance of an interest rate hike by the end of the first quarter as a jump in durable goods orders and strong new homes sales lifted bond yields to fresh 5-month highs. April fed funds futures were last down 0.005 points at 94.745, which implies a 2% chance that the Federal Reserve will raise its target for overnight rates to 5.5% from 5.25% by its policy setting meeting in late March. Through its meeting in late June, the fed funds futures market is pricing in a 2% chance of a rate cut. Earlier, the U.S. Commerce Department said December durables goods orders rose 3.1% and that sales of new homes increased 4.8%, the highest level seen since April. The data sent the yield on the 10-year Treasury note to a high of 4.906%, the highest yield seen since mid-August .

http://www.marketwatch.com/news/sto...x?guid={A1A8783A-0EF6-438B-9AAE-CCB959BB3127}
 
But when is bad = bad. A weak GDP report might rekindle the hope/expectation of the Fed easing rates which might spur some serious buying of equities on Tuesday, especially if the USM are down a few days in a row preceding this report.
 
"If we summarize the week, the two important trends that have dominated equity markets are the rise in interest rates due to strong economic data, combined with solid earnings for the previous quarter but deceleration looking forward," said Spencer Clark's Sheldon.

http://markets.usatoday.com
 
Getting hit by the train is tolerable and inevitable from time to time. But getting dragged by it after your hit is completely avoidable and unnecessary.

Don't get fooled into thinking your building character by getting scraped along the tracks. You will feel much more refreshed when you only have to climb half way out of the hole.
 
The Birchtree is not in the hole yet - maybe by the end of the day. Looking forward to my dividend reinvestments at lower prices before this market explodes with delight. Under a scenario of Intermediate 3 of Primary 3 we will see new all-time highs on the RA NYSE breadth MCSUM to confirm. Sometimes prudence is the better part of valor - practice patients. Hurt me bears if you can - shred my pants - make me sorry I'm a BAH kinda guy. We are now challenging the kickoff of 2003. Under Elliott guidelines breadth should now start to really expand - I'm staying in no matter. The SPX will punch its' new all-time high of 1528.22 before June, na make that April.
 
Daily Market Commentary

Comments: Jan 26, 2007

Long: 15% Rydex Dynamic Russell 2000 for Monday. Our Signal shifted from "money market" to "long" very near the close. This did little for the probabilities which were already leaning only slightly higher. T-Index closed at -46 making a slow but steady recovery from a very negative -86 at the beginning of December. This week showed a lot of turmoil in the market place, but little progress up or down. We had very little exposure to those market forces with the exception of Friday and that resulted in a very small gain. It is important to keep overall exposure low unless there is a high probability of success, otherwise you open yourself up to unnecessary risk. The coming week holds the Fed meeting which should be a non-event as I believe everyone thinks they will hold the course. The indexes, I expect, will not move very much prior to the announcement, then relief, combined with the upward pressure of seasonal patterns should move the markets higher. I will post a new long term forecast over the weekend. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.

http://stocmarket.com/commentp.htm


I'm also trading on the long side Monday with stops in my Brokerage accounts. In my opinion we get a tradeable bounce next week. If not the Bears will get some of my money, because I will get stopped out pretty quick.
I hope we get a gap up and it holds. If that happens I'll let it ride!


TSP 70% G / 20% F and 10% I Fund @ Fridays closing share prices. Plenty of opinions on next weeks action. In my opinion we will go higher. However, I will not risk much money on the trade. Waiting for a new buy signal to go long with investment money or a nice little mini-correction. I agree with the comments above.

" It is important to keep overall exposure low unless there is a high probability of success, otherwise you open yourself up to unnecessary risk."
 
Friday, January 26, 2007
Big rally day coming up.
Based on today's intraday action and market internals, monday/tuesday should be rally days. We should then see a correction into the Fed meeting and more upside afterwards. I have the following revised targets(due to lower lows made today) heading into my 2/2 fibo turn date.
Dow 12680
Ndx 1880
Spx 1447
Rut 808

Posted by victor at 4:04 PM 0 comments

Thursday, January 25, 2007
every last one..every last one...every last one...
every last bear...every last bear...every last bear...
I think thats what he said at the end of " The Collector" With Teeth, NIN.
Posted by victor at 4:16 PM 2 comments

Buy signal
The shallow decline so far intraday has generated a buy signal. I just noticed that my 2/1-2/2 fibo turn date falls near the next Fed meeting. If history is any guide then the mkt should hold up in this timeframe and today's buy signal means a possible rally or chopy move to the upside into the above fibo turn dates is likely. Therefore i am now expecting the market to bottom out in the next few hours(possilbe gap down tomorrow) and then go up into feb 2nd.

http://fibo-count.blogspot.com/


An Important point about most of these Blogs.

Most Bloggers are traders and have stops in place in case the Market moves against them. PROPER MONEY MANAGEMENT! We can't put stops in our TSP accounts, but many folks here have successfully learned how two trade TSP accounts. YTD returns of these members prove that. The point is that there is plenty of risk in the Market next week, Technically and fundamentally.

This is not buy the bottom trade! Good luck for those that are going long in this very unpredictable market. I'm keeping my long position small and playing seasonality here. (Which was a loser many times 2006)
 
Last edited:
Robo,
I agree, you can't put a stop in TSP accounts. But, second best you can use a paper stop.
i.e., [$SPX] at Wednesday was up at 1440.13, so 1% = 14, 2% = 28. Paper stops were set at Alert = 1426, and the Trailing stop moved to 1412. The sell off on Thursday triggered the alert but didn't break the trailing stop.
Last week was a dose of volatility.


Most Bloggers are traders and have stops in place in case the Market moves against them. PROPER MONEY MANAGEMENT! We can't put stops in our TSP accounts, but ........
 
Excellent TA work!


January 28th, 2007
Market Update: Check, please!
By Dominick


What a week! I'm going to do less writing than usual and focus more on technical analysis, which is, after all, how we trade. But, looking back over the last update, it’s impressive that the market managed to make it all happen so quickly. The Jan 21st update said:

Friday’s advance on the S&P will probably have early next week taking off to new highs, where we have the potential of creating a reversal pattern. Otherwise, the S&P’s are looking to buy time into either the end of the month, or possibly around February 8. If so, we might trade sideways to down until we approach those dates. I’d rather have a pop to short as I patiently watch to see if my NYSE target mentioned months ago reaches perfection.


So, let’s see, that’s:

“probably have early next week taking off to new highs”: check
“where we have the potential of creating a reversal pattern”: check
“looking to buy time into the end of the month, or February 8th”: ?

Clearly, our “unbiased Elliott wave” works. The secret is that we leave our personal bias out of the charts and follow their lead. To see the difference in action, let’s go to last week’s charts. Monday started by extending the previous week’s correction. Posted as the S&P dropped to its lows, this first chart captured the bottom of the move nicely.



http://www.tradingthecharts.com/phpBB/viewtopic.php?p=29191#29191
 
It Has Been 928 Days Since the S&P 500 Had a One-Day 2% Decline
We recently received a request to look into the length of time it has been since we had a one-day 2% decline on the S&P 500. It has now been 928 days since the S&P 500 had a one-day 2% decline. The last one was on May 19, 2003 when the Index fell 2.49% on the day. This is the longest streak of its kind for as far back as we can download daily prices. Not that we're superstitious, but knock on wood.



http://tickersense.typepad.com/ticker_sense/2007/01/it_has_been_928.html
 
Will be closing this weekly tread to start anew.
Thanks for all the views and posts!
Regards...and be careful!
Spaf
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