Market Talk / July 27 - August 2

[Spaf]

Market Talk
Sunday Edition
July 27, 2008​

General Commentary:

Did we come too far too fast, or was the resistance just too great? Are we adrift facing too many headwinds or will the bulls get off the sidelines? Did the bulls loose confidence with the financials. Who [what CEO] is telling the truth and who is not? Reminds me of A Bright Shinning Lie* again.

Week before last we had a good run up in the DOW of 396 points, last week we had profit taking of a -106 points. Can the bulls make a higher low or will the bears test the recent lows. Oil has made a decent retreat of -$21.82 from two weeks ago and the hostile forces (hurricanes / wars) have All quited down somewhat.

Well it is up to the bulls, will they step up, or remain in a wait-and-see mode?

A look at the chart(s)
The S&P500 [$SPX] Daily
Large Caps

Charts courtesy of www.StockCharts.com​

The P-SAR is still showning the making of a Bullish trend, but the S-STO is indicating overbought conditions.....

Have a good week!​

But, be careful out there!​

*Neil Sheehan, 1988, Vintage Books.

 

[Spaf]

Market Talk
Daily Edition
July 29, 2008​

General Commentary:

I guess it's time to figure what to do with the double bottom that has been forming. Maybe it's time for all the bulls to step up!

Will the "W" hold or spring a leak? The trigger point to hold for is generally when stocks break above the mid-point peak in between the two troughs (1291). Generally a higher than averge volume would confirm the buy trigger.

There are a lot of factors that could do damage to a buy signal; Energy-oil and financials seem to be the biggest threats to any upward move, and they are volatile.

A look at the chart(s)
The S&P500 [$SPX] Daily
Large Caps

Charts courtesy of www.StockCharts.com​

The P-SAR is still holding a Bullish trend. The S-STO ok, in between overbought and oversold.

Have a good day!​

But, be careful out there!​

 

[Guest2]

Look out for the Head&Shoulders pattern !

 

[Fivetears]

...in the VIX. :suspicious:
http://stockcharts.com/h-sc/ui?s=$VIX&p=D&yr=0&mn=6&dy=0&id=p13263236004

Look out for the Head&Shoulders pattern !

 

[tsptalk]

Yes, interesting. The VIX and S&P are forming an H&S. They can't both break though.

Actually - I guess they can - if the right shoulder in the S&P continues higher.

 

[Spaf]

Yes, interesting. The VIX and S&P are forming an H&S. They can't both break though.

Actually - I guess they can - if the right shoulder in the S&P continues higher.

Head and shoulder: http://www.investopedia.com/terms/h/head-shoulders.asp

A double bottom is used to show where a upward trend starts. The head & shoulder shows a double bottom that didn't pass the resistance zone, the mid-point peak between the two troughs. The stocks trend lower as indicated in the link above.

 

[TerpTrader]

You mean a 'reverse' head-and-shoulders pattern for the VIX ? Those work for bottoms, and it points to the VIX going higher, imo.

 

[hessian]

S&P looks to me more like a "M"/Double Top, pattern is setting up...
http://www.investopedia.com/terms/d/doubletop.asp

VIX more like a Double Bottom/"W" pattern, may be forming...
http://www.investopedia.com/terms/d/doublebottom.asp

Thoughts/opinions?
VR

 

[nnuut]

Double Top = BAD
Double Bottom = GOOD
If you like more volatility!!

 

[hessian]

Roger that Nnuut,
I realize, its too early to say yet as whether the possible "M" and "W" patterns work out, but just wanted to float the possibility (close though), as Monday & Tues could feasibly complete these patterns.

The reason I sugessted these, was that these patterns would reconcile what we're seeing in the S&P with the VIX (if the patterns occur) - since typically the VIX moves opposite the S&P. Also the H&S pattern for both of these didn't reconcile (or really seem all that clear - to me anyway).

For anyone new, wondering if these patterns actually form, what's this mean/what's the next thing to watch for:

• After an "M" pattern, a small "A" pattern is typical - with the 2nd leg of the "A" pointing, down, & keeps on heading down.
• It would be opposite on the "W" pattern, continuing with a small "V" forming - with the 2nd leg of the "V" pointing up & keeps heading up.

In this case, with the VIX, if as it seems a "W-V" pattern emerges, then yes expect volatility, but more important, it can suggest timing to enter longer-term (or at least medium term). Its only one indicator, among many, but recall how closely it is watched (as folks hoped to see VIX ~30_35 to suggest a bottom?).

Some folks may say - hey, we've already been there, done that (close enough at ~28) -maybe right!
Right now, whether these patterns actually turn out is pure specualtion - only suggesting a possibility!!
Likely expectataion would be maybe 5 to 10 days for the full patterns above to complete (so plenty of advance notice).
GL all,

Oh, and Thanks Spaf!

 

[Spaf]

hessian

The double bottom has a trigger point, see previous posts. If the trigger is met it becomes a buy signal.
S&P came close, but was under the trigger and fell back down.
Maybe we go sideways, now???

 

[Spaf]

Thats all for this week, see ya next!​

Spaf​

 

[nnuut]

Roger that Nnuut,
I realize, its too early to say yet as whether the possible "M" and "W" patterns work out, but just wanted to float the possibility (close though), as Monday & Tues could feasibly complete these patterns.

The reason I sugessted these, was that these patterns would reconcile what we're seeing in the S&P with the VIX (if the patterns occur) - since typically the VIX moves opposite the S&P. Also the H&S pattern for both of these didn't reconcile (or really seem all that clear - to me anyway).


For anyone new, wondering if these patterns actually form, what's this mean/what's the next thing to watch for:

• After an "M" pattern, a small "A" pattern is typical - with the 2nd leg of the "A" pointing, down, & keeps on heading down.
• It would be opposite on the "W" pattern, continuing with a small "V" forming - with the 2nd leg of the "V" pointing up & keeps heading up.

In this case, with the VIX, if as it seems a "W-V" pattern emerges, then yes expect volatility, but more important, it can suggest timing to enter longer-term (or at least medium term). Its only one indicator, among many, but recall how closely it is watched (as folks hoped to see VIX ~30_35 to suggest a bottom?).

Some folks may say - hey, we've already been there, done that (close enough at ~28) -maybe right!
Right now, whether these patterns actually turn out is pure specualtion - only suggesting a possibility!!
Likely expectataion would be maybe 5 to 10 days for the full patterns above to complete (so plenty of advance notice).
GL all,

Oh, and Thanks Spaf!

Good analysis Hessian, right on spot. Don't forget about the FED TUESDAY!!