Market Talk / March 19 - 25

Spaf

Honorary Hall of Fame Member
The Kingdom of TSP
Sunday-Weekly
Early Edition
March 19, 2006

Fortuneteller.gif

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Market Yak.............................Breakout from a up week! [$SPX: resistance at 1297 was broken] Fundamentals are being reported as solid, and inflation seems to be in the can.
Other Yak...............................Lube was up 4% for the week; just inside the worry range. Noting: Supplies were good, but, it's spring break too!

Doodles:
Socks [$SPX] Closed at.............1307.25, up +25.67, for the week.
Volume (CMF) (money flow)........+0.058, decreasing.
Averages (MACD) (trend)...........+6.148, increasing.
Momentum (S-STO) (signal)........92.12, steady.
Strength (RSI) Overbought/sold...[70] 64.55 [30]

Lube (NYM) Closed at................64.30, up +2.46, for the week.
Oil Markers..............................<64= ok, 64-69= worry, >69= panic.
Link .......................................Crude Oil Futures NYMEX

Tea Leaves:
Charts & Stuff..........................Green.
Attachment.............................S&P 500 chart (RSI, PSA-R, 50 & 200dMA, MACD, and S-STO).

Tin Box:
Position..................................50G, 20C, 20S, and 10I
Stops [$SPX]...........................Alert: NA, Trail: 1300

TSP (week ending)......G=11.26..F=10.68..C=14.25..S=17.48..I=19.15
....(1 week past)........G=11.25..F=10.62..C=13.96..S=17.07..I=18.50
....(2 week past)........G=11.24..F=10.65..C=14.02..S=17.36..I=18.56
....(3 week past)........G=11.23..F=10.69..C=14.04..S=17.31..I=18.60
....(4 week past)........G=11.22..F=10.69..C=14.01..S=17.18..I=18.29

Fund Strength: G=01,:: F=06,:: C=25, S=35, and I=40. [Prior week average ratio.]

Link ..........................NYMEX > http://www.wtrg.com/daily/crudeoilprice.html

SP500March172006SCg.gif
 
What year will she track?

Spaf,

This looks like it could very easily be a Nov'05 repeat in the making, but my sense is there is something stronger on the horizon. There is a good floor under this market and I think it has been coiled tighter and tighter for the last two years. And when the energy is finally released it could look like March'03 or even Dec'1995. There appears to be plenty of bearishness around even with multi new all-time highs on multiple indexes - simply a classic case of bull market merchandizing - sorry we're closed for any new customers - we'll reopen in three months. I have more than several takeovers going on in my portfolio - but rather than waiting for final settlement I'm going to take the profits now and reinvest into other positions while they are still reasonably priced. Buy on the way up in a rip-roaring bull market.

Henry by the way is Henry To who is co-owner of Marketthoughts.com and a very knowledgeable fellow and writes a letter for private clients. He is a confident and firm believer in the case of the secular bear market. That's why he is predicting a "blow off " top and is short the market. That's why we are watching him to see how much pain he can absorb before he cries uncle.

Rod,

Amen to that brother. It's time for you to get back in - that way you don't risk neck strain from looking up - because it won't be long all you will see is the smoke stream. Take care

Dennis
 
I feel the same way, except about the I fund. The N^300 should rally soon and Europe will follow. That and the dollar shouldnt be a negative factor as it was last year. So bring it on Junichiro Koizumi, I'll take another 20-30% this year.
 
Nice rally last week! The contrarian indicators were shouting rally, but I was out of the market. My wife's account had some invested in the S&P, but she doesn't really care that my TA's said go to cash... Some of them got squeezed last week and some went long. Some investors on this board are doing excellent this year, compared to some of the Pro's I follow. However, these Pro's have the biggest loses when they short the market and they have been getting hammered all year.

As Birchtree says they are bleeding!!!

Current Status after last week:

1 50% shorting the Dow
1 75% long
1 80% long
1 25% long
3 100% Cash

As you can see most of the shorts are gone. They are still scratching their heads, and drinking lots of Pepto-Bismol this weekend.

The rally was again caused by the thinking the Fed is done, so interest sensitive stocks rallied taking the market higher. Is the Fed really done? I don't know if he is or not, but the market thinks he is and the market is always right. To make money you follow the trend, and last week the trend was up. In my opinion we are due a consolidation after the rally last week.

The first part of the week we could see a test 1300, but the money is still rolling in right now so we could also head higher. The concern is Technology. Will it catch up, or will the market go down. If techs catch up it will pull the market higher. We could easily go to 1350's or higher. The big concern is the institutional boyz.

Basically, it's the NASDAQ/Russell divergence: "The NASDAQ has become mainstream and is one of the divergence tools they use to "pull the plug" on a market rise. When the Russell's divergence gets to far apart on the NDX, they start selling or pairing down our market exposure" The technicals are indicating that we have such a divergence once again. The kind of divergence that described as a prelude to their institutional selling. That is why many TA's are still in cash are are waiting for this sell-off that just has not happened.

The smart/dumb money changed some after last weeks rally. Smart Money = 38% Dumb Money = 50%. I think the dumb money is making more gains this year than the smart money. The smart money might just be to smart for their own good. I'm really talking about computers and trading software, It's mostly black box trading these days.

I might add some longs next week if we get some consolidation Monday or Tuesday. After all, the TA's I'm paying are now mostly long.. HMMMM...
Contrarian indicator again? Maybe I should go short? NOT!!!

I'm going to play the QQQ's in my new Traditional IRA brokerage account with American Century. I'm not touching my Roths, they are tax free money. I think I can make the biggest gains in the QQQ's due to market swings. Or maybe the biggest loses!! I will considered some shorts when I go away in May. One of the TA's I pay invests in the QQQ's. He is currently down -13.5 % this year due to short covering loses, but was up over 40% last year.

I'm using my taxable accounts because I'm not as concerned about loses. Let's just say I'm having fun spending my kid's inheritance. We put this money away years ago for my son's college fund. But due to our current income level we have been paying cash for his college and left the money invested. So, spin the wheel; I'ts the QQQ's or bust. I really feel I can make money or I wouldn't do it.

I will be taking the advice of the guy at the link below in my new accout in trading the QQQ's. Check his web site out. Most of you have probably read one of his articles at SafeHaven. Another guy I follow commented on his web site recently he wished the TSP had the QQQ's to trade. He thinks Tech will shine again soon and he made over 20% on his TSP recommendations last year. He is worth listening to. http://www.marketlistener.com/index.php?page=Results

Birchtree,

What's your take on tech? Will it soon join the party? Also, Henry will send us a update this weekend. He needs to watch out for your Bullet Train my friend!!!!
 
Last edited:
I missed the tech boom intentionally

Over the years I've been accumulating rust belt America and the various stocks that are associated with that theme. Steel, manufacturing, farm equipment, fertilizers, specialty chemicals, even super markets, oil service and drillers, basically all dull stuff. I own taiwan semiconductor, applied industrial technology, railroads, drugs, reits, motorola, and a few other techs. The technology sector may be required to accept more pain before it is fully flushed from most portfolios - I prefer auto parts over technology. But if they continue to lag I'll be more interested - I'm just a long term contrarian now as second nature.

If we get a good week I'm coming in both barrels blazing - there is so much I want to own - I need to buy more general electric, midas, steak and shake, bunge, brush wellman, tenneco automotive, advance auto parts, comstock resources, commercial metals, and even weismarkets. But I have to sacrifice something else to accomplish these purchases - I got 3 years to buy as much as I can. It all takes money. Take care
 
Thought is not action but

Man I am so bullish on America - we'll see what lead in Bernanke provides Monday evening if any. Regardless, the time has finally come. Liftoff!!!
 
Re: What year will she track?

Birchtree said:
Rod,

It's time for you to get back in - that way you don't risk neck strain from looking up - because it won't be long all you will see is the smoke stream. Take care

Dennis

Oh, I'll be back in alright... after the selloff.

God Bless:)
 
Henry is talking 75% again

Birchtree,

He is at it again! He is breaking the rules and talking about going to 75% again. Are you going to send the Bullet Train after him my friend!!!!

The Starship Birchtree is ready for lift-off.... I really want to put some Power Money to work, but not at these prices....
 
Have been watching for a while, and you guys have really helped me with your insight to the markets. I have been riding the I fund train, but don't know if it is going to rest for while or keep going. Long term I feel the I fund is the place to be. I have tried to time the I fund but feel this is risky. If it moves higher it's hard to catch up. In Feb. i sold the I fund @18.68 and bought it back @ 18.60 currently 100% I fund
 
Looks like the place to be for tomorrow at least. Australia, China, and Japan all solidly up tonight.

Dave
<><
 
After the breakout to the upside last week, it appears to be a new dealer, and a new game! :) :D :nuts: :notrust:
 
Spaf said:
After the breakout to the upside last week, it appears to be a new dealer, and a new game!

Yeah....But have you ever noticed in Vegas that they change dealers right about the time you start winning? ;)

Here's to hoping the current dealer has some stamina. :)
 
I believe if we close on the positive today that will make 7 consecutive up days. I remember one February when we did 13 days consecutive to the upside, so there is precedent here for further nonstop gains before any small back and fill transpires. It's only the rest of this week to wait - would like to see a new all-time high for the Dow above 11,722.28.
 
May have to play momentum at this point, as I now know what a deer feels like who is caught in the headlights of a fast moving car. A few months ago I posted a comment that the I fund would be setting new highs and if you wait to climb aboard the ship, until a better buying opportunity presents itself you may lefet at the dock. I said that the previous days high will be the I funds new low.
I should have practiced what I preached.
Live and learn.
 
If you have a Ticket Enjoy the Ride!

Birchtree said:
I believe if we close on the positive today that will make 7 consecutive up days. I remember one February when we did 13 days consecutive to the upside, so there is precedent here for further nonstop gains before any small back and fill transpires. It's only the rest of this week to wait - would like to see a new all-time high for the Dow above 11,722.28.

Birchtree,

Isn't it a good thing to get a little consolidation my friend. GO GO Birchtree...


As Tom pointed out in his comments the train is a roll'in, but is it up hill. Are you getting on this train? As Birchtree points out the price of a ticket is going up every day. However, if you already bought your ticket," Enjoy the Ride."

Some comments about 6 days in a row and maybe even 7 after today from a TA:

The likelihood that there will be a pullback by the S&P 500 this week is heightened not only by the fact that the index has advanced six days in a row, for the first time since November, but also because it has been held back by its May 22, 2001 high at 1309.38, just two points above Friday's close. I welcome a pullback for the opportunity it will present us to get our trades accomplished at lower prices.

The Tech above in his full article is Bullish.

Is the price of a ticket to get on the train expensive or is it a bargain? If your in the Market Excellent, don't try and pick tops; but I'm not chasing this rally! I hope we hit 1350 for those that are long!!!
 
Some comments from a concerned TA:

Don't get tempted ... if preservation of cash means anything to you, remain in cash. This is a topping market, and yes ... we may see more upside on short covering or M3 liquidity, but the upside has risk levels associated with it that we haven't seen in a long time.


This is not my opinion it is his. I'm posting this to point out the risk/reward to many TA's is increasing as we continue to make new highs. Again, if your in the market, "Enjoy the Ride." Don't try and pick TOPS!!!!

We can always use some caution and warnings when we are getting close to making new highs.
 
Daily Yak

The Kingdom of TSP
Daily Edition
March. 20 2006 Closing

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Market Yak.............................Stocks in temporary holding pattern. Don't know why! Maybe awaiting sentiment from speech by chairman of Fed Reserve? Maybe they just need to catch their breath? Or maybe waiting for the NASDEQ to catch up?
Other Yak...............................Lube down 4% on good supplies and lower demand.

Doodles:
Socks [$SPX] Closed at.............1305.08, dn -2.17
Volume (CMF) (money flow)........+0.026, decreasing.
Averages (MACD) (trend)...........+6.705, increasing.
Momentum (S-STO) (signal)........89.14, slightly decreasing.
Strength (RSI) Overbought/sold...[70] 62.69 [30]

Lube (NYM) Closed at................61.96, dn -2.24
Oil Markers..............................<64= ok, 64-69= worry, >69= panic.

Tea Leaves:
Charts & Stuff..........................Green.

Tin Box:
Position...................................75% Stocks
Stops [$SPX]...........................Alert: NA, Trail: 1300
 
Re: Daily Yak

Correct me if I'm wrong, but I noticed looking at the charts for yesterday, that the DOW and SP500 both had an outside day looking at the bar graph. Could we be in for a temporary trend change soon?
 
Re: Daily Yak

vectorman said:
Correct me if I'm wrong, but I noticed looking at the charts for yesterday, that the DOW and SP500 both had an outside day looking at the bar graph. Could we be in for a temporary trend change soon?

1. We were stuck in a trading range.
2. We had a break out to the upside.
3. The upside seemed to hold.
4. Now there should be a consolidation, where resistance becomes support.
5. We advance.

Then of course I could be all wrong {too}!.....:D......Spaf
 
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