Market Talk / October 1st - 7th

[Spaf]

The Kingdom of TSP​

Sunday-Weekly
Early Edition
October 1, 2006 ​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Pro-Yak...................................Socks ricochet off channel top, close to a record high.

Con-Yak...................................Market is overbought and seemingly headed down. Lube is oversold and volatile.

Jester-Yak................................October is known as the jinx month, also the bear killer!

Doodles:
Socks [$SPX] Closed at..............1335.85, up +21.07 for the week!
Volume (CMF) (money flow).........+0.176, declining.
Averages (MACD) (trend)............+8.385/7.278 declining.
............ (MACD) (Hist)..............down at +1.106
Momentum (S-STO) (signal).........66.47, declining.
Strength (RSI) Overbought/sold....[70] 66.47 [30]

Lube (NYM) Closed at..................62.91, up +2.36 for the week.
Oil Markers................................<70= ok, 70-75= worry, >75= panic.

Tea Leaves:
Yakndoodles..............................Turning red.

Tin Box:
Position....................................100% G.
Stops [$SPX].............................Alert (-1%): 1326. Trail (-2%): 1313.

TSP (week ending)......G=11.57..F=11.00..C=14.70..S=17.24..I=20.15
....(1 week past)........G=11.56..F=11.01..C=14.47..S=16.99..I=19.91
....(2 week past)........G=11.55..F=10.90..C=14.52..S=17.19..I=19.83
....(3 week past)........G=11.54..F=10.91..C=14.28..S=16.87..I=19.80
....(4 week past)........G=11.53..F=10.92..C=14.41..S=17.15..I=20.18

Le Chart​

Chart courtesy of www.stockcharts.com
[Channel annotations added]​

 

[robo]

Get ready for another wild month! The Battle continues again tomorrow...

Some comments below from Market Clues:




Sunday, October 01, 2006

Bearish -- and Profitable

The bears in the stock market have been beaten up badly since the July-present rally countered every one of their rationalizations for why the market had to go down. But, last week, they got a ray of hope. In fact, they got several rays of hope that their bearish dreams were about to come true.

Despite the cheerleaders at CNBC urging the market to make a new, all-time high on the Dow Industrials, the market steadfastly refused to do so. In fact, the market may have been thumbing its nose at the feeble attempt. The idea of the Dow making a new all-time high is no more significant than the fact that the blue chips have done nothing over the last six years. That fact somehow escaped the minds of those at General Electric's subsidiary. Perhaps it's a sentimental attachment to the Dow average; after all, GE is the only stock which was originally in the Dow to still survive. That should tell you something, both about the Dow average and the ability of the editors of the Wall Street Journal to pick stocks!

While the broad market easily recovered from the last bear market which ended well over three years ago and then quickly soared to new all-time highs, CNBC has been notably under-enthusiastic about those new high records which we've seen continuously month after month, with little intermissions in between. Where were all the special alerts on the ticker to tell us that the broadest stock market index of all was exceeding its old high? The Value Line Index of 3442 stocks -- each stock given equal weight within the index to reflect the true performance of the market, unlike the distorted price-weighted Dow or capitalization-weighted S&P 500 -- has gained 146% since the low of the last bear market! They would have had to devote most of the ticker to the bullish news day after day! But, that sentiment didn't fit with the idea of a market struggling to recover from the dotcom bomb. As they say, when the facts don't fit, fit the facts. It reminds us of the time when the New York Times ran a story about government officials' corruption in an African nation. Apparently, it's politically incorrect to suggest that black officials might be corrupt, so they changed the African country to a South American country. Fit the facts, indeed!

Despite the fact that we've been in a bear market this year since the April-May top, the Dow and S&P 500 have now moved slightly above their May high-water marks. This is called a bear market rally and it's more insidious than the May top. That's because the first leg down from the May high happened relatively quickly. Very few investors were able to get out without substantial losses -- and the ones who held their positions soon found the market restoring their account values. The rally has reassured the public that it was just one more of those brief selling squalls which has hit the market with some regularity in the last three years. The next leg down is going to be a real wakeup call to that complacency.

Although we've made great profits being bullish the last few months, we took those profits out of the market last week and put them to work in a bearish position for the first time in quite a while. That bearish position made a profit last week, even as the market itself was moving higher! We expect there are much more of those profits coming our way on the bearish side of the ledger in coming weeks. For details, subscribers should follow the Notes link below.

http://marketclues.blogspot.com/

 

[Birchtree]

Sometimes I wish I could be bearish - but right now is not the time. The more bears the better the market will be health wise. I used to tell people I know that adored tech back in 1999-2000 that someone was going to slam the door shut and pull the shute and down you go - exactly what happened. It was terribly difficult being a bear against the crowd. Now I'm a bull gainst the crowd and again it's difficult. But I will hold my ground because the next 1000 points will set well with the portfolio - 12,600 by the end of December.

 

[Birchtree]

A few choice words from Elaine Garzarelli - she says we're in a new phase of a bull market that's ready to break out to the upside at anytime. So what's the smartest way to play the market: 70% in an ETF that mirrors the S&P 500 (SPY), 10% QQQ, 10% R2K index (IWM) and 10% emerging markets (EEM). This will probably be enough to raise the Wizard from his wood pile.

 

[Spaf]

Hi Birch,
If you ate looking for a position, what you were saying looks pretty good!
For short term trading I generally go with IVV. Short term expenses have to be considered: trade cost and buy cost.

October is a pretty good month for watching the Slow-STO and the MACD for a buy in oppurtunity, thus getting into the best six months a little earlier.
Regards
Spaf

 

[Birchtree]

Jeepers Creepers - everyone is so sacared and it's not even Halloween yet. Or perhaps I'm the greater fool here. That lilly pad sure is getting crowded. Am I wrong staying 100% or will I end up making another uncomfortable sacrifice. Yes you have to be in to win - and the deeper in you go the more potential for the score. September was good and now October will be excellent - from a contrary approach. As soon as Bernanke mentions the word unwind - it will all break to the upside. Snort.

 

[James48843]

I just think there is some incredible strength in this market. Perhaps it's the price of oil falling that is propelling the continuation of this rally. Its almost like the Energizer bunny.

 

[Birchtree]

Well if you feel that positive you must not fear the sucker's rally. But you are hedged as a 50% diddler in the F Fund. Now if you sit there with a big bag of miracle grow maybe you can get a few cents. The train is leaving the station and only the few and brave care to ride. Choo-Choo.

 

[Show-me]

OK, what just blew up and tanked the run?

 

[Griffin]

OK, what just blew up and tanked the run?

The talking heads are scrambling for a reason that makes "economic news sense"....they'll eventually find some trivial piece of garbage to hang their hats on....but the reality: the Dow choked on today's "new surge" and the reality of last quarter window dressing and overstayed channel tops just kicked in. If your thinking the market is going to bounce back today.....look at what the smart money did on Friday.....38 minutes to go until they start again.

 

[ebbnflow]

OK, what just blew up and tanked the run?

It was "Da Boyz" trying to tell us that they're still in charge.

Yahoo's Market Update

2:30 pm : Market bounces off its worst levels as investors begin to question the recent overreaction to what appears to have been linked to a large program trade. It is worth noting that, in light of the Jewish holiday Yom Kippur, below average volume has exacerbated the market's recent pullback, as limited participation has a tendency for such large sell orders to cascade throughout the market. With regard to today's light-volume session, the NYSE has yet to see 1.0 bln shares exchange hands. DJ30 +0.88 NASDAQ -16.96 SP500 -3.64 NASDAQ Dec/Adv/Vol 1919/1024/1.25 bln NYSE Dec/Adv/Vol 1660/1527/902 mln

 

[ATCJeff]

OK, what just blew up and tanked the run?

Large program trade

Jeff

 

[Griffin]

It is worth noting that, in light of the Jewish holiday Yom Kippur, below average volume has exacerbated the market's recent pullback, as limited participation has a tendency for such large sell orders to cascade throughout the market.

The talking heads are scrambling for a reason that makes "economic news sense"....they'll eventually find some trivial piece of garbage to hang their hats on.

 

[Griffin]

This is directed at the folks at Market Overview not Ebb for those who might interpret this differently. Just wanted to be clear.

 

[Show-me]

http://ichart.finance.yahoo.com/b?s=^GSPC

And this is why there should be no noon cut off.

 

[Spaf]

Daily Yak

The Kingdom of TSP

Daily Edition
October 2, 2006 Closing​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Pro-Yak....................................Lube down on good supplies.

Con-Yak...................................Socks pull back on worries over earnings.

Jester-Yak.................................Pull backs have been rather light!

Doodles:
Socks [$SPX] Closed at..............1331.32, dn -4.53.
Volume (CMF) (money flow).........+0.154, declining.
Averages (MACD) (trend)............+7.563/7.335, converging.
............ (MACD) (Hist)..............declining at +0.228.
Momentum (S-STO) (signal).........85.43, falling.
Strength (RSI) Overbought/sold....[70] 62.16 [30]

Lube (NYM) Closed at..................61.03, dn -1.88
Oil Markers................................<70= ok, 70-75= worry, >75= panic.

Tea Leaves:
Yakndoodles..............................Red.

Tin Box:
Position....................................100% G.
Stops [$SPX].............................Alert: 1326. Trail: 1313.

 

[Birchtree]

Spaf,

Thankyou for cleaning up (I'd like to rename you Harvey Keitel) my diatribe against the insurgent jihadists. They do dine on scat. But did you have to remove or edit the fact that Iran as a country are populated by liars. Come on these creeps are the enemy. I know you're just doing your job - there are no hard feelings on my part. But you'll have to stay up late some nights because I'll never be done with the likes of Al-Qaeda and their terror.

Sorry to be so defiant - but you know the type.

 

[robo]

Getting alerts to go short today in TECH, QQQQ's and Russell 2000... Last time I did the Bulls Gored me good. Some TA's have also went to cash and others are staying the course. Contrarian indicator or the start of a pull-back... Might go short tomorrow at the open, TSP is still in the G Fund!
Big caps holding up well so far, but Tech and small caps will lead any sell-off, use caution if you own them... The risk is higher for these Indexes...



Good luck for those staying long! Could be a Bear trap, we will know soon...

 

[robo]

After reading some more reports I'm passing on the short for now! The Bulls are still in control......

 

[Spaf]

Birch,
You didn't say "populated", you said "they" which would imply every one in that class.
How you word things using absolutes and nauty words detracts from the context.
I don't like the enemy, and I'm quite sure that a lot of civilians feel the same way.
Please, watch your blood pressure!.......Take care!....... .........Spaf

Spaf,

Thankyou for cleaning up (I'd like to rename you Harvey Keitel) my diatribe against the insurgent jihadists. They do dine on scat. But did you have to remove or edit the fact that Iran as a country are populated by liars. Come on these creeps are the enemy. I know you're just doing your job - there are no hard feelings on my part. But you'll have to stay up late some nights because I'll never be done with the likes of Al-Qaeda and their terror.

Sorry to be so defiant - but you know the type.