Market Talk / January 13th - 19th

[Spaf]

Market Talk
Sunday Edition
January 13, 2008​

General Commentary:

The market is getting very defensive; we have the subprime debacle, the housing meltdown, the rising cost of energy, a rise in unemoloyment, and a drop in retail sales, Gee!

Last week the S&P lost 10.61 points. Pricing is now near the lower Bollinger band, below the 13 and 50 day moving averages.


Economics / Fundamentals:

Economic indicators are running about 3 (Ok) - 4 (not Ok) (See CNNMoney link). Crude was dn $2.01 last week, closing at $92.90.

Economic News - CNNMoney

NYMEX crude - wtrg


Technical Analysis:

A look at the chart(s)
[$SPX]
Large Caps

Charts courtesy of www.StockCharts.com​

Me and TSP

My allocations can be found in the Auto Tracker, about 40% cash, 10% bonds, and 50% stocks.


TSP Share Prices:
Week Ending........G=12.29..F=12.08..C=15.81..S=18.34..I=23.67
End of 2007.........G=12.28..F=11.93..C=16.56..S=19.79..I=24.76

Have a good week!​

And, be careful out there!​

 

[optionman]

Are we there yet? no, Are we there yet? No, Are we there yet?

Bear trap or market bottom? SPX closed up today but remains in a consolidation in the 1390-1420 area. A close above 1420 would give short term bullish implications while a close below 1400 would continue to be bearish. Chart patterns are leaning more to the bullish side than bearish but I wouldn’t get to bullish until we break out and close above 1420 and then I would want to see it hold for a few days. We will break out of this consolidation one way or the other very soon, possibly today.

I am 100% F fund as of the close 28 Dec 07 at 11.90.

My TSP position will soon be posted in the auto-tracker system for all to view.

Good luck and happy trading

optionman

 

[optionman]

optionman IFT to 100% G

I stated on my challenge post that I would post any IFTs I make the day I make them and then post again with the entry after the market close. Since I posted a little earlier here I am posting my IFT here and on my challenge post.

Good luck and happy trading.

optionman

 

[Bullitt]

"With the odds of recession rising, he (Laidi) believes there is a 70% chance that the Fed acts this week."

Economists at Bianco counter with, “We doubt an inter-meeting rate reduction would have much more than a VERY short-term market impact and might actually be viewed as a sign of panic.”

http://blogs.wsj.com/marketbeat/2008/01/14/the-fed-cutting-folly/

 

[optionman]

Optionman what the?

For those of you saying optionman what the hell were you thinking? The market tanks, you’re in bonds which look good and you move to the G fund, what kind of move is that? OK, OK enough.

First, my propriety trading system signal remains on a buy for bonds, but that signal is weakening. Since the market was tanking there was a strong probability that investors would seek the safety of bonds causing them to rise. So, I have a weakening signal with a strong possibility of an up day making it an ideal time to sell into strength rather than wait a little longer and sell into weakness.

My trading system remains on a buy signal for bonds but it is weakening and a sell signal for the major indices, SPX, NAZ and DOW and all TSP stock funds. This signal could reverse as early as the close today, 16 Jan.

Now for a little market analysis. SPX broke out of its short term consolidation I mentioned yesterday to the downside closing below the 1390 level. But is it really bad? Maybe, maybe not. There is no doubt a lot of technical damage to overcome, but we are getting some bullish contrary signals. For example I mentioned a few days ago in my post the NHNLs were at an extreme, during the same time we were seeing some extremely bearish advance/declines and up/down volume which can also be viewed as a contrary bullish signal. We have the AAII bearish percentage above 55% which more times than not portends a bullish reversal and add to that the fear gauge or VIX, although not at an extreme it is still high. Speaking of which did anyone notice that with the market down so much the VIX barely budged? that in itself may be suggesting that this is or will lead to the capitulation we’ve been waiting for.

Decennial Cyclical:years ending in 7 in the decennial cycle are the second most bearish year in the cycle, second only to years ending in 0 and usually bottom out near the end of the year or early in the following year. Years ending in 8 are generally very bullish, second only to years ending in 5.


2008 TSP History/Position:

100% F Fund from 28 Dec 07, entry 11.90 thru 15 Jan 08 exit 12.12
100% G Fund from 15 Jan 08, entry 12.30

I’ve graduated from being a newbie to being a rookie and now qualify for autotracker. My TSP challenge remains so view autotracker often for results.

May your TSP positions generate great profits!!

optionman

 

[JOVARN]

Went to the Stuart FL boat show over the weekend and the crowd was thin and sails were flat. I spoke with a friend of mine who worked the show and he said there were no buyers and all were talking about the high price of fuel. Nothing new there but some gauge the economy on small boat sales. Following rate cuts, how long will the positive effects last? I been out since 1/2/08 and would love to get back in Buttt.

 

[Oldcoin]

Hey Jovarn, same kind of news out west. A friend of mine owns a Temp Agency and he said he is the first to notice a recession and the first one to pick up business when it’s over. He said he’d let me know when this one was over

 

[Silverbird]

Can government turn the economy around?

In an election year, 'stimulus' proposals are popular — but will they work?


http://www.msnbc.msn.com/id/22670736/

 

[Bullitt]

Another bloodbath.

It's only going to get worse. We haven't seen panic yet. Short sellers are afraid to take it below the August lows in fear of Bernanke squashing them. Short covering is the only thing that put capitulation off for another day.

 

[Rod]

Short sellers are afraid to take it below the August lows in fear of Bernanke squashing them.

Correct me if I'm wrong, but IAW my spreadsheet we've been below August lows across the board since yesterday.

 

[Bullitt]

You're right Rod. I was thinking of the 1371 level which was the lowest point it hit in August before the comeback rally. Strictly buying on technicals today, but met with a rash of final hour selling. Either levels we use, future says run.

 

[optionman]

SPX 20 Day EMA

Anyone notice just how far below the 20 day EMA the SPX closed? Pull up a daily chart and check it out, then look at what happened when it was that far below the EMA the last few times. Just something to keep in mind.

I mentioned in my account talk thread that if the market opens up strong I will move to 100% S fund.

Follow the money!

optionman