Market Talk

[Spaf]

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The Kingdom of TSP

Sunday

Market News, Doodles, Tea Leaves, & Yak Date: May 15, 2005


Market News.

-> www.businessweek.com
-> www.reuters.com
-> www.briefing.com/Silver/InBrief/PageOne.htm

Market Talk: Sales down. Market vendors worried about rates and inflation. Sentiment was considered to be unease, and a lot of vendors were jittery about future sales. Kingdom reports could make for a volatile week. Several vendor stands in commodities and materials were closed for business. One vender was overheard to say that his sales had the "zig-zags".


Trends, Doodles, and Tea Leaves.

Trends: The doldrums are here until a catylist can carry the wind, and get the ship moving out of the trading range.

-> www.money.cnn.com/markets/morning_call/

Doodles:

S&P was at 1154.06 dn -5.31
CMF (money flow) was at 0.136, rising.
RSI (strength) was at 44.2, falling.
MACD (trend) was at -2.08, falling, near crossover.
STO (momentum) was at 56.24, falling.

Attachment: S&P (3mo) chart ending May 13th. Added: 50dMA, Trading Range, RSI, MACD and STO.

Tea leaves: Red / yellow: still in trading range.


Yak.

Remarks: Holding 0/100 (50C, 50S). The bulls should make a run. The question is when? So the only yak is: patience.

 

[learning]

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Or are we in a real bear market? This is not always the best of seasons. The market appears to have started to make lower highes and lower lowes. We shall see what happens. It will have to make a move or we could be in the side ways trading range for a while. Not good. Unless it goes up for a while then down. We could play that and perhaps a few have managed to do that. I think Moday will be good. I would have put more in on Friday. Played to much in the woods to do that though. However, the woods have saved me a couple of times from doing a bad trade. Only a few times has it cost me a good trade. Goes to show I do not know whay I am doing. Perhaps it will be another Santa Rally before I go all in again at this rate. The I fund does not look good with another Fed meeting coming up. Looks like the dollar rallies until the Fed meets and then it takes a hit. May pull out of the I fund on Monday for Tuesday.

 

[Birchtree]

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Learning,

We won't officially be in a bear market until the indexes are down 20%. Currently the Dow is down under 7%, and the sp500 is down around 5%. No bear market on the horizon that I can see. I believe we are completing a long 6 year cycle that has been in effect since the Dow high of 11722.98 in Jan 14, 2000. Prior to that the Dow was in a long cycle up trend from somewhere in 1994 untll Jan. 14, 2000. The actual cross over the 10000 mark happened around 3/1999. Shortly after that is when the sideways motion started. I think that cycle is close to ending-but nothing is exact in the markets-that's why we have technicians to help narrow things down.

As a fundamentalist contrarian, I prefer to look at the economic data. Some talking heads are touting slow growth and an end of the economic cycle this time around. They are trying to preempt the Fed strict monetary policy. This is why many hedge funds were selling commodity stocks last week and had me in a bear hug. My sides still hurt-but the hurt is a good hurt. Is that concept difficult to understand?

 

[Birchtree]

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Learning,

I thought I was running out of room. At any rate, even if the economy is in the late stages of the economic cycle, that's when commodity producers tend to well. Remember, unlike Wall Street, sentiment, economic and inflationary cycles don't turn on a dime. Someday this bull market will be over and the economic expansion will end, as they all do. But I'm willing to bet the world didn't change all that much starting 3/05. It's times like these when a steady, measured approach can yield outsize gains. Preparation in purpose is the key in this market for the moment. If it becomes necessary to make more sacrifices this coming week and I'm forced to take some more profits that will enable me to buy more bargains, my plan is ready. I will be glad when my sides stop hurting though-it's not natural to enjoy this much pain.

But the renegade contrarian is getting them cheap. Have to keep that Mike critical eye view on the future in focus. 300 hundred point Dow here we come-one has to always be prepared for the surprise.

 

[robo]

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Learning

Yes , we are in a secular bear market, but the current condition is a cyclical bull market inside the secular bear. The cyclical bull began around March 2003 when the S&P was around 800. I'm with Birchtree, this cyclical bull is not done yet... But rest assured the end is coming and we well be back in the secular bear. These cyclical Bulls usually last around 36 months. We are getting close to the end.You will not find to many buy and hold investers on this board. Many of us have no love affair for going long on stocks.Tom keeps pointing out we are very close to the bottoming process. I agree with him. I have been adding new money on these pull backs under 1160 S&P.The bulls think we have a way to go around 1300 for the S&P, the Bears think the party is over..It's a tough call when your putting up your hard earned money.. but I'm staying long for now..... I will add more money the next few weeks on the pull backs.



"The cleansing process continues. The bottom contiunes to form. The process needs to be scary enough to force stocks out of weak hands and into strong hands, and that is exactly what we have been withnessing over the past two months."


..................Bob Brinker.........................

You can listen to Bob Brinker on AM radio every Saturday and Sunday afternoon.



"The bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding go out to met it."

.....Thucydides...........

 

[Birchtree]

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Robo,

The Bears already have me up a tree. You are making me nervous with talk of a secular bear market. I believe we are starting a new back to back secular bull market-so there take that. We are in the last inning of a 6 year transition market that started in early 1999. Prior to that we had a 6 year run up from around 1994-early 2000. Take a look at the latest sp500 graphs for 1996 and 1997 that Tom kindly posted. Wouldn't you rather see a move that is similar in trend and duration. Glad you are getting some good buys on these lows, generally all I do is close my eyes and hold my nose and go for it-always hoping I land on my feet.

 

[Guest]

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Birchtree wrote:

Glad you are getting some good buys on these lows, generally all I do is close my eyes and hold my nose and go for it-always hoping I land on my feet.

Birchtree, I truly hope and pray you are correct but this image came to mind >

 

[rokid]

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For those of you who, like me, don't know what a secular bear market is. The following is a good explanation. The article also outlines some strategies for coping with a secular bear.

http://www.fundadvice.com/FEhtml/PsychHurdles/02bear.html

 

[learning]

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First to all thanks. REALLY ALL OF THE POST WERE GREAT. That last artical posted by Rokid was great. Hope I got your handle correctly. All of it helps me believe that I have started to develop some good ideas. Keeping two seperat books lets me play the market with two valid good ideas. One is future monies are split and I will not move them. Takes some work their as you have to figure out what percentage to move. If you move to much then keep track and put it back in later. The other is move the money when I am or fairly confident. Then the other part is being in the market from November to end of March. (Yea, I took a hit and bailed at the start of the year. Took the first three days of losses and played a little from there to this date.)

I still think the I fund is in for a hit and Iam looking at pulling out until after the Fed speaks. Take a look and you will see that the Dollar goes up until they speak. People want to bet that the Fed will become more aggresive with the intrest rates. Then they stay the course and people dump the dollar. So the I fund makes me a little nervous. Though their market may do well. Any ideas on this also is appreciated. I hate being slow but that is what I am. I over study at times and like things black and white. The market is a gamble and people have to win and others have to lose. So it is not black and white or all would win.:x

 

[Spaf]

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Bulls vs Bears

There are a number of various definitions for Bull and Bear markets. The majority are simply a way of describing good and bad trends.

For investors, it's good to know The Dow Theory. This places the Bulls and Bears in relation to the primary market movements, especially how they (the movements) start, and when they are confirmed.

The Dow Theory fairly well fits TSP investment strategy. However, it doesn't go into stocks being range bound or stuck in a trading range like we have been in since around January.

The Dow Theory link:

http://www.stockcharts.com/education/MarketAnalysis/dowtheory1.html

The Theory is in 3 parts, all worth reading!

I have several of Suze Orman's books. She, IMHO has very good ideas.

Rgds! Spaf

 

[Birchtree]

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Spaf,

I just realized a while back I made a comment comparing the IRS to the Gestapo. Do you think that may have precipitated the e-mails from Germany-I apologize to all in the Deutchland.

We had a Dow Theory confirmation in early March when the Dow was hitting new highs of 10997. Both the Transports and the Utilities also were putting in new highs offering a confirmation concurrently. The guru of the Dow Theory, Richard Russell, refused to commit, but several other followers went 100% bullish. Then stuff begins to happen and we drop 900 points before the print is even dry. I'm still 100% long and making no hedges-take what comes my way. Even if them sharks WW sent along take a few of my toes. A vundabar week coming. Dennis

 

[Guest]

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Birchtree wrote:

The Bears already have me up a tree.

 

[Spaf]

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Birchtree wrote:

Spaf,

I just realized a while back I made a comment Do you think that may have precipitated the e-mails from Germany.

We had a Dow Theory confirmation in early March when the Dow was hitting new highs of 10997. Both the Transports and the Utilities also were putting in new highs offering a confirmation concurrently. The guru of the Dow Theory, Richard Russell, refused to commit, but several other followers went 100% bullish.

I have several e-mail accounts. The one for this site had 4 multi-mailing attempts by someone in Germany. Don't know what is going on!?!?

On 7 March we had a upside breakout, but it was a classic Bull Trap, reversing back into the trading range.

Enjoyed your comments! Here's hoping we get some advances, and maybe, just maybe, a summer bull. These bears are dang hard to cook. I could use a good old steak about now!

Rgds! Spaf

 

[Spaf]

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greg wrote:

Birchtree wrote:

The Bears already have me up a tree.

Yea! and all of the bear repellent is over in the G-fund! Spaf

 

[Show-me]

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NY Empire State Index Actual -11.1, Extected 15.0 -11.0

This does not seem good. Am I wrong? PPI and CPI numbers are out this week. How does everyone feel the numbers will go?

 

[The_Technician]

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G'morn all,

Friday was a little rough, but I think it sort of sends a message......the bull market that u may have thought was there.... isn't............at least up to Friday.

I took a look at what we might expect this week, I see the long term bottom line making a change .....with the collapsing top line of around 1190's on the S&P....this will narrow our trading range from the 1190's to 1120's and will have to be challenged either up or down.....this is why last week I thought that 1120 would possibly be challenged Friday.....almost made it.....it didn't, but the intention was there....this move Friday should send you a message (whew! ).....giving the market and economic condition....I believe its the 1120 bottom line that will be broken and reestablished at a lower level.....:?

May I say a couple of things...please don't take this wrong....its just an educational hint, from my experience (whose to say how good it is, but I think I have some compared to what I have seen on this board), for those who may need it....I would like to open your eyes a bit....

Based on my own experiences, I have noticed many of you making a basic mistake in investing, I know because I have made the same over the years....this is a time for protection (it is part of smart investing), especially if you're not sure of which direction the market may go.....and many of you still seem to feel invincible.....I suggest you protect your savings now, until you know for sure which way the market intends to go....then get back to it when the market is ok....we will soon enough know the direction and I feel it will eventually progress upwards again (of course), but not right away........money can still be made on the short upswings in the down market......just getting news items and having optimism isn't enough....the market can take all you have if you don't watch out....its like an alligator, waiting for you when you're not looking.....

One other thing I noticed is many of you use data that was derived after the fact......to make decisions for tomorrow and count on it automatically going in the other direction......you have to be careful how you use that data and question every aspect of it.....I'm not saying its always bad, because it can tell you alot, but its not as predictable as you might think....if you don't understand what the data is telling you, then get reading about it......for you might as well just be looking at the daily averages...for they tell you as much......there are alot of things happening and just be sure you're not being led down the trail by a carrot....:shock:...interpreting data takes a while so don't think you're going to learn it overnight....more like years.....

If I told you how much data I look at to make my decisions, you couldn't imaging..:shock:...its not just one or two plots....its an interpretation of multitudes of data and then I consider current market/economic conditions.....its mind boggeling on how much data I look at .........this is not a simple process.....but I think I have been doing a fair job at trying to predict the future.....(its not possible to get it always right and most of the time is just a fairly educated approximation) I don't want to say "guess" because its not....

So watch it, protect your savingsand learn what the data is telling you......I hope this helps many of you.

Lets hope we all fair well this week....and I hope you all bear my above advice.....with the good will it was made....

The Technician :dude:

 

[MR CARLO]

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TECHNITION.:^

Can't agree more.

G80% C10% S5% F5%

 

[The_Technician]

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Thought this might get yourcurrent market thoughts going....

http://money.cnn.com/2005/05/13/markets/sun_lookahead/index.htm

Pay particular attention to the PPI and the CPI....they are going up and that's not good right now....inflationary....

:dude:

 

[The_Technician]

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I couldn't have said it better myself!!!

http://story.news.yahoo.com/s/bw/20050516/bs_bw/nf200505160160db016

keep those eyes open all....o:^

:dude:

 

[learning]

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Greg when you see a bear like that you need to look around and get up a big tree. Moma is in the area and she is not wanting to play. Hear that woofing sound and you have problems. Question is where is mother? LOL Good Pic.