Market Talk / September 24th - 30th

[Spaf]

The Kingdom of TSP​

The Catfish Channel​

Sunday-Weekly
Early Edition​

September 24, 2006 ​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Pro-Yak...................................What happened to the soft landing? Lube is at a 10 month low!....:nuts:

Con-Yak...................................Talk of a hard landing scared folks!....

Jester-Yak................................We were just overbought! A wave up should be near!

Doodles:
Socks [$SPX] Closed at..............1314.78, dn -3.25 for the week!
Volume (CMF) (money flow).........+0.138, declining.
Averages (MACD) (trend)............+5.427/6.092 declining.
............ (MACD) (Hist)..............down at -0.665
Momentum (S-STO) (signal).........75.53, declining.
Strength (RSI) Overbought/sold....[70] 57.60 [30]

Lube (NYM) Closed at..................60.55, dn -2.78 for the week. A drop of 5%
Oil Markers................................<70= ok, 70-75= worry, >75= panic.

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

Tin Box:
Position....................................100% G.
Stops [$SPX].............................Alert (-1%): 1312. Trail (-2%): 1299.

TSP (week ending)......G=11.56..F=11.01..C=14.47..S=16.99..I=19.91
....(1 week past)........G=11.55..F=10.90..C=14.52..S=17.19..I=19.83
....(2 week past)........G=11.54..F=10.91..C=14.28..S=16.87..I=19.80
....(3 week past)........G=11.53..F=10.92..C=14.41..S=17.15..I=20.18
....(4 week past)........G=11.52..F=10.87..C=14.23..S=16.71..I=19.84


Note: F-Fund: last week's winner!

Le Chart​

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

 

[robo]

Stocks: The Bear Brigade Calls Another Top

Although the market failed to rally Friday, market sentiment proved that the rally is likely to resume shortly. Bears were coming out of the woodwork to declare that stocks had made a top. Like Chicken Little, these ever-wrong criers of doom and gloom can be counted on to run for cover at the slightest hint of bad news. And that's actually a good thing for it means that the stock market has further gains ahead of it.

You see, the stock market can continue to climb due to these worriers. They have already sold their stocks and will be forced to become buyers when those stocks move higher. This will give the market the buying power to make higher highs in the near future.

We would definitely start to worry if these ever-wrong traders were actually buying dips, however. So far, that's not the case and we are confident that the market will continue to make new highs in the near future. Unfortunately, we are much closer to the end of this long rally than to the beginning, but that's no reason to give up on the rally prematurely.

Remember, tops are long, drawn-out affairs because it takes an overwhelming amount of bad news to stop the underlying uptrend, but bottoms are very quickly made as the last seller has sold and there is no one left to sell. The opposite holds at tops: the last buyer has bought and there is no one left to buy. Right now, it's clear that we will need to see the current ample crop of sellers become buyers before there is any chance that a top is in.

 

[Spaf]

Nimbleness at a position
(For lack of a better word.)​

RE: Stockcharts.com as posted above (Post #1.)
RE: http://www.incrediblecharts.com/technical/slow_stochastic.htm

Current market conditions, as we stay in the channel for $SPX (C-fund).

The downside pause should break when the slow stochastic gets in the range of 30-40 in the current channel market.

We were overbought above 80. And we had a broad top where stocks ran for a while near the top of the channel. This generally says that the bulls are in charge.

When we get a pause, it last for several days, and the bottom is very short lived. Indicating that the bears are weak.

As energy prices become more respectable this advancing channel could get stronger and become a predominate trend. This means one could buy in at a dip (low) and ride the channel for as long as it lasts.

IMHO!

Regards
Spaf

 

[Pilgrim]

NEW YORK (MarketWatch) -- The odds of an interest rate cut by the end of the year increased Monday, in the wake of data showing that August median sales prices of existing homes fell from year-earlier levels for the first time in 11 years. December fed funds futures were up 0.03 at 94.80, which implies a 33% chance that the Federal Reserve will lower its target for overnight rates to 5% from 5.25%, vs. a 13% chance of a cut late Friday. The fed funds futures market starting pricing in chances of a rate cut for the first time on Thursday.

 

[Birchtree]

I'm still gratified that no one except Spaf (25%) likes the C fund. I hope it takes deep into next year before attention is refocused to the large cap area. This tiny microcosm lets me know that I'm on the right track for value. Everyone must already know that the C fund is the epitomy of dull and boring - just a classic fake out. I'll gladly continue to DCA what you don't desire. Please keep looking the other way.

Dennis - permabull#1

 

[Spaf]

Reply,
For me, I can chart the ups and downs of the C-fund a lot more accurate than the S and I funds. Small caps seem to be more volatile and the I has the double edge sord. The gains may be less but the risk is a lot less. Being retired, my strategy is a bit different! Capital preservation is a priority.

 

[Birchtree]

Spaf,

Being retired gives you an immense advantage - your time belongs to you. As an investor you can take all the time to study and be prepared for any market moves. And you have cash at your finger tips - it takes money to make money. Capital preservation - Gee let it fly. This idea of less risk because you are retired is so 1950 - you are going to live another 30 years. Don't give the young guns any advantages, they don't have your resources. How high - who knows, how long - who knows, just the ride of a lifetime on the way. Have no fear - your wife will help. That's my backup.

Dennis

 

[Spaf]

Dennis,

My TSP account is all set. I'm staying low-med risk with it. However, my ST account is for trading. In and out with a few key strokes, all the stocks, all the ETF's. I can duplicate TSP with [IVV][IJR][EFA] and [AGG] and not have the lag time in or out. And I get a small return for holding cash. With you guys and gals I don't need expensive trading platforms, and financial advisors, not with ya'll around................

Regards
Spaf

 

[Spaf]

Daily Yak

The Kingdom of TSP​

Catfish Channel​

Daily Edition
September 25, 2006 Closing​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Pro-Yak....................................Socks advance, but Lube pushes back.

Con-Yak...................................Lube closed above 61.

Jester-Yak................................Tug-of-war. Energy vs Economy!

Doodles:
Socks [$SPX] Closed at..............1326.37, up +11.59.
Volume (CMF) (money flow).........+0.178, rising.
Averages (MACD) (trend)............+5.906/6.055.
............ (MACD) (Hist)..............up at -0.149.
Momentum (S-STO) (signal).........75.92, falling.
Strength (RSI) Overbought/sold....[70] 64.08 [30]

Lube (NYM) Closed at..................61.45, up +0.90
Oil Markers................................<70= ok, 70-75= worry, >75= panic.

Tea Leaves:
Yakndoodles..............................Yellow.

Tin Box:
Position....................................75% G/ 25% C.
Stops [$SPX].............................Alert: 1313. Trail: 1300.

 

[Birchtree]

Robo,

Glad to see Henry went 100% long at 11,505. Hope he stays there all the way to 12,600 or greater. And Don says we are setting up with all the players assuming their designated starting points for the next BIG RACE for the cyclical bull market's finish line which should be several years from now. Certainly makes this bull want to Snort. Snort. Thanks for your time.

 

[robo]

GO GO Birchtree! S&P 1400


Stocks: Shorts Cover Losing Bets, Sending Market Higher

Sentiment toward the stock market is now at levels last reached four years ago, at the beginning of the last bull market. Bernie Shaeffer reported Monday that the NYSE options unit reported that investors had reached current levels of bearishness only one time before, right at the bull market bottom in late 2002 (not coincidentally, the last 4-year cycle low in stocks).

Our measures of sentiment are showing similar, but not so extreme, levels of bearishness toward stocks. On Monday, OEX and QQQ option speculators poured almost twice as much money into put options as calls even as the market soared. This contrary indicator is basically saying the rally which started in June has legs.

Although there is definitely a thinning out of the list of advancing stocks, the blue chip stock indices are leading the advance. Over the last four years, the broad market has led the way higher, confirming the strength of the bull market. Now, that leadership is changing, being passed to the blue chips. The last time the market transitioned from a broad market led advance to one led by the blue chips was in 1994. The S&P 500 Index then gained 243% over the next four years.

That was, of course, a once-in-a-lifetime bull market. And, it was a Bubble which burst, eventually. But, it does show the power of a new bull market to create enormous wealth. The typical bull market arising from a four-year cycle low historically has seen an advance of 50%.

 

[The_Technician]

Think this will be a tell tale sign coming up this week, even thought this plot it from a few months ago its says we should be dropping profits for another year at least.....

 

[Birchtree]

Techy,

I recently had a pm where somone compared me to you - I guess it could be construed as a compliment. Hope you don't mind, brother. Anyway, you may be surprised regarding the profits picture on the horizon. SPX companies have been buying stock back for several years - and it will start to produce the continuance of elevated earnings. We'll see. My money says green light.

Dennis - permabull #1

 

[The_Technician]

Guess being compared to is an honor if its honorable....

I'd say I fluctuate with the market, but you get your feet stuck mostly....

C :nuts: (That was a funny)

 

[Birchtree]

And the pin action looks good today - the more you have in the more you win. If you are on the G fund lilly pad it's time to pop off and get invested. Chase the darn thing if you have to, but get on board. Don't be afraid of a small whipsaw - just DCA yourself back to redemption.

Dennis - permabull #1

 

[Birchtree]

Take the SPX up to 1340 and I'll be fulminating around my bull nostrils. It may be time to purchase a larger fuselage to keep the momentum on track.

 

[nnuut]

Can't make money in real estate, where to put it?

Wall St. gains from housing slump Many worry about how the housing slowdown is hitting the economy, but investors pulling out of real estate are pumping money into stocks.
By Chris Isidore, CNNMoney.com senior writer
September 26 2006: 4:43 PM EDT

NEW YORK (CNNMoney.com) -- While economists, investors and even Federal Reserve policymakers express concern about that the slumping real estate market will hurt the economy, U.S. stocks may well be getting an unexpected lift from problems in the sector.
That's because a wide range of real estate experts agree that much of the current weakness in sales and home prices is due to investors pulling out of the sector. And some stock market experts say that the money being pulled out of homes is finding its way into stocks.
http://money.cnn.com/2006/09/26/markets/housing_stocks/index.htm?cnn=yes

 

[Spaf]

Daily Yak

The Kingdom of TSP​

Catfish Channel​

Daily Edition
September 26, 2006 Closing​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Pro-Yak....................................Socks advance again. $SPX at 5 1/2 year high.

Con-Yak...................................Lube volatile, rising and falling.

Jester-Yak................................Consumers have confidence!

Doodles:
Socks [$SPX] Closed at..............1336.34, up +9.97.
Volume (CMF) (money flow).........+0.213, rising.
Averages (MACD) (trend)............+7.199/6.284, good divergence.
............ (MACD) (Hist)..............up at +0.915.
Momentum (S-STO) (signal).........85.04, rising.
Strength (RSI) Overbought/sold....[70] 68.53 [30]

Lube (NYM) Closed at..................61.01, dn -0.44
Oil Markers................................<70= ok, 70-75= worry, >75= panic.

Tea Leaves:
Yakndoodles..............................Green.

Tin Box:
Position....................................75% G/ 25% C.
Stops [$SPX].............................Alert: 1323. Trail: 1310.

 

[Birchtree]

Tomorrow may be an opportunity to see real panic on the upside. I'll go for 150 Dow points to start the shorts bleeding some serious blood. The liquidity is available to set some painful bear traps. I'm still waiting for the epicenter of a primary wave 3 up - not to mention Primary Dow Theory confirmation when the DJTA catches up. Id the Presidential pattern holds as it has in the past 2007 will be an exciting year for investors. In year three of the cycle the market returns have averaged 9.5%. I'm bullish and my money is where my mouth resides. Is Nikkei providing a clue for tomorrow. Can anyone be stupid enough to visualize a DJIA of 39,000 similar to the Nikkei in 1980? I'll take it - should be good for a couple million dollars over time. Double Snort.

 

[Show-me]

Looks like Durable Goods changed the momentum for futures and OSM. Market expected +0.4% but came in -0.5%.