Market Talk

[Spaf]

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The Kingdom of TSP

Sunday-Weekly

Early Edition

Kingdom News, Doodles, Tea Leaves, & Yak Date: Nov. 6, 2005


Kingdom News.

Kingdom Talk:. Bulls expected to remain in pasture.

Bear chasing season underway.

Horseman Rats makes off with more chickens to feed creature from Cartel.

Elsewhere:...... This week, potential market moving news comes out Thursday when the import prices and trade balance figures are released. Import prices are expected to fall, and the trade gap is expected to widen.


Doodles, and Tea Leaves - Weekly, and ending.

Doodles:
S&P 500 (Index)
Closed at................... 1220.14, up +21.73 for the week.
CMF (money flow) at...... +0.024, up +.188 for the week.
RSI (strength) at............ 58.6, up +8.2 for the week; [O.B.=70, O.S.=30].
MACD (trend)...... bullish
S-STO (signal)..... bullish
P-SAR (signal)..... bullish
ROC (change)...... bullish

Light Crude (NYM)
Closed at............ 60.58, dn -0.64 for the week.

Attachment:......... S&P (3mo) chart ending 11/04. Added: 20dMA, P-SAR, RSI, MACD, S-STO, and ROC.

Tea leaves:................... Green


Yak.

Remarks:................... Holding 0/100 (0-0/35-35-30).
Stops (C:S&P):........... Alert: 1208, Trailing: 1196.

Lube Markers:........... <64 = ok, 64-69 = worry, >69 = critical.

Weekly TSP Returns:...1 Wk: G=+.00, F=-.05, C=+.24, S=+.53, I=+.34
2 Wk: G=+.01, F=-.13, C=+.45, S=+.63, I=+.50

 

[Quips]

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From Pete 1's posting of Ben Stein's article:

So, why is the Fed doing what it's doing? Well, I asked two major powers at the Fed just this week. One said, "There's evidence of rapidly rising wages in some fields."

"What fields?" I asked.

"CPAs who really know Sarbanes-Oxley well and finance MBAs," he said.

"And that's it?"

"Well, it's not a lot compared with energy," the man said and shrugged.

The other man said that the Fed was raising rates to slow down inflationary expectations in energy.

"But energy prices are already falling, and the growth in demand is coming from China," I said. "Are you trying to control Chinese demand?"

He smiled and shrugged.

By the way, I don't think it's in the Fed's charter to try to control Chinese demand. I don't get it. Dr. Greenspan. I love you, but I just don't get it.

____________________________________________________________________


Well, that is what it is: the FOMC seems to be trying to control Chinese demand for oil. That's what I alluded at last Friday.

If the price of oil does not drop even moreso, hey, what is to prevent China and Japan and other nations that hold our debt to cash that in for their oil purchases?

Yeah, Greenspan the the FOMC's know it is in the best interests of the country to continue to raise interest rates so there will be less likelihood of that debt being cashed in. If it is used to purchase oil, the world will be awashin dollars.

Not good.

It has little to do with oil's drop from $70 to $60 a barrel; it has to continue to drop to $50 a barrel or lower. If it can't, then we may be beginning to see the effect of borrow and spend econommic policies: lots more risk for less gain ... slowing growth.

At least with pay as you go tax increases the effects are much more immediate and apparent. Or, if it takes drastic spending cuts, that would help too (but then again one man's entitlement is another's example of waste).

But tax cuts in times of skyrocketing deficits has lead to the current FOMC policies.

 

[robo]

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Was last week just short covering or the start of the year end rally? The technicals are lining up and are almost complete..... Things are looking pretty good for the start of a Wave 5!!!!! Back-filling and pauses will be very good going forward......

Some comments from a Tech:

The Program Trading Indicator exceeded 100 and produced a buy signal. However, until it surpasses its recent high the buy signal remains unconvincing. Notice that there was a series of three lower highs following the important high established in May, which preceded the August top. Until there is a new high now, the buy signal is suspect.

As program trading has gained in popularity and became a much larger part of the daily trading on the NYSE (it now represents more than half the total volume), the volume of specialist trading on the exchange has steadily declined. For me this makes specialist information much less valuable as an indicator than it was for many years. However, as specialist trading has decreased, public and member trading has become more significant. Look below at the relationship between public shorting (pink line) and the superimposed trendline of its average volume.

There were 12 occasions in the last four years when the public suddenly became more active short sellers, and each time it happened the market advanced soon afterwards. The public's timing could not have been worse. Only in January 2004 did their short selling precede a market decline, and even then there was a rally first.

Note that they just did it again. Public short selling exploded by 16% in the last 5 weeks, and half of that happened in the last two. It broke out above its average on October 7, the very week that the market reached its low. It appears that this indicator will be useful going forward.

The Commitments of Traders reports for the Dow, NASDAQ 100 and S&P full and mini-contracts show that the decline in long positions continued as the market rallied last week. Again, this is typical behavior, and exactly the reverse of what we are seeing in the gold market as it declines.
Total of Dow, NASDAQ and S&P Full and Mini Contracts -- Commitments of Traders
through Friday, November

In all three charts below, commercial hedgers consistently reduced their long positions as the markets rallied last week.S&P 500 and Mini Contracts, Weighted Commitments of Traders
Through Friday, November

ASDAQ 100 and Mini Contracts, Weighted Commitments of Traders
Through Friday, November 4th

ow and Mini Contracts, Weighted Commitments of Traders
Through Friday, November 4th

 

[Skip]

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Market holding at the top of the trading range...
Looks good for next week...

Robo I like the chart with the public shorting the market... Seems like most have their timing backwards

When they start going long PLEASE TELL US...:^

Skip

 

[mlk_man]

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Quips wrote:

From Pete 1's posting of Ben Stein's article:

Hmm,, could of sworn I posted that.

 

[robo]

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Most of the short term technicals are indicating a pull-back!!!! How much is the question? Will the 1200 level hold? It should, but the big boys might try to shake out the weak bulls one more time... Could be a good buying op for those that want to increasestock in their portfolio's..... For those waiting on the sidelines, the trendshould become clearer in the next few weeks....

Comments from a tech:

SPX: Long-Term Trend - There were some indications in the past two weeks that after a period of consolidation, the long term bull market trend might be resuming.

SPX: Intermediate Trend - The intermediate trend was down in a fairly mild corrective process for about 3 months, but the past two weeks have given a signal that a new up-trend may be underway.

SPX: Short-Term Trend - After bottoming at 1168, the short-term trend underwent a brief period of indecision from which it emerged into a well defined up-trend. However, there are signs that a correction could begin by the middle of next week.

SUMMARY:

There is technical evidence that the October correction is over and that a new intermediate term up-trend has begun which could result in new bull market highs by the end of the year. In fact, the leaders are already there! But a lack of uniformity is apparent, and much will depend on how all the indices behave in the coming short-term retrenchment..

 

[The_Technician]

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Eur/$ took a dive.....1.17:1......does not bode well for the I fund.....speaking of which, the I fund shouldn't be doing well in this period of the market......

Looking for the local markets doing well due to changes in energy and such....could be that we may get an interest rate direction change in the next 6 months....this combined with the energy sector easing off would bode well for the markets.....

Still in protective mode though....but we could be getting something in the works that works well for the market...

:dude:

 

[ATCJeff]

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Did anyone post the October returns? If someone did, could someone repost? I missed the returns.



Jeff

 

[mlk_man]

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ATCJeff wrote:

Did anyone post the October returns? If someone did, could someone repost? I missed the returns.



Jeff

http://www.tsptalk.com/mb/view_topic.php?id=2382&forum_id=21&jump_to=33597#p33597

 

[Spaf]

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The Kingdom of TSP

Daily Edition

Market News, Doodles, Tea Leaves & Yak Date: Nov. 07, Closing


Market News.

Kingdom Talk:. Lower lube lifts market!

Elsewhere:...... Good weather aids seasonal bear chasing!


Doodles and Tea Leaves - Daily.

Doodles:
S&P 500 (Index)
Closed at..................1222.81, up +2.67
CMF (money flow) at.....+0.08, up
RSI (strength) at...........59.7, up
MACD (trend)....bullish
S-STO (signal)...------
P-SAR (signal)...bullish
ROC (change)...bullish

Light Crude (NYM)
Closed at..............59.47, dn -1.11

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


Yak.

Remarks:.......Holding 100% stox
S&P Stops:.....Alert: 1211, Trail: 1199.

Oil Markers:...<64= ok, 64-69= worry, >69= panic.

 

[robo]

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The technicals are changing and shouting buy, does that mean we are running out of Bulls? Come on big money join the party.....Some are worried about a pullback this week and are still cautious.... We could start climbing the wall of worry!!!!! A pullback would be healthy to get some new money into the rally....

Closing Comment

I don't know if we can survive another day of this type of action. Buying has dried up, but so has selling.

1224 becomes the pivot point. If we can move above it with strong A/D numbers, we can extend the rally into the low to mid 1230's. If we move above on mediocre A/D (less than 800-900) we're finishing off wave 5 to about 1228. And then, if we fail to go above 1224, and break below 1215. We've started the reversal.

I'll try to figure out which it will be first thing tomorrow morning and let you know.

Some comments from a cautious Tech: A “buy” signal is in place, but needs to be treated with caution. Nothing is certain, until the price confirms.

The coming week is a reversal week. For a long time I’ve been expecting a downswing towards 11/14 +/- and I think it starts on Tuesday 11/8 +/-. How low it will go is something that we’ll have to wait and see. Based on last week’s buy signal on the SPX/VIX system, the projected low could be a higher low (above the October’s low). But the market is not out of the woods just yet.

The following chart is the weekly chart of the SPX with some key weekly time pivots. As the chart shows, the week that just ended was a pivotal week. So it’s very possible we’ll see a reversal to the downside coming within a couple of days.

 

[robo]

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[align=left]

[align=left]More of CNBC
L I V EV O T E
RESULTS


Total Votes: 738

Will there be a year-end stock-market rally?

Yes 71%
[/align]


[align=left]No29%

[/align]

[/align]

 

[robo]

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Comments from Traders -Talk:

With the seasonal low in place, buyers would welcome some 'bad news' to create a renewed buying opportunity. A chance for such a retracement may come this week as the market appeared a bit tired late last week, beginning of the month 401K funds have likely been put to work and we're approaching 'Weird Wally Wednesday' this coming week. If we're correct in our analysis that the October 13 lows were benchmark lows, we will see the market work its way higher (probably considerably higher) between now and next summer. To that extent, long term investors should be fully invested or be looking to add on any weakness that unfolds this month or next, especially if accompanied by a 'bad news' story. Indeed, the market has held up remarkably well (too well if you believe in the PPT).

On a trading basis, we are adverse to buying at current levels but recognize holding some core long index positions only makes sense should our 'timing' of a possible pullback fail to materialize. There were 'rumors' on Friday that a pre-emptive strike against Iran by either the U.S. or Israel was in the offing (long overdue in our opinion). Our feeling that such a strike would ultimately be very bullish - relieving the world of self-proclaimed enemy, but intially the market would nosedive. Meanwhile, as we previous discussed the 'adage' that calls for years ending in '5' to be positive has a very good chance of being vindicated in a continuation of the current 'year-end' rally. To that end, any dips are clearly buying opportunities.

We keep giving away details of our Annual Forecast Model which we previously mentioned calls for some low (secondary or otherwise) in the November/December timeframe. Originally, we though early November (around November 9), but alternate counts stretch all the way into mid-December. For that reason we need to monitor the short-term indicators for both negative divergence as well as any Negative Volume Reversals ™ that may be formed. As stated, there are some negatives raising their heads here, but far from broad-based - still enough to be slightly cautious.

Long bonds continue to show weakness and we remain short the TLT (ETF for long-term interest rates). The Dollar remains resilient which only makes sense as interest rates inch their way higher. Gold and gold shares remain weak short-term and we're awaiting either broad-based Positive Volume Reversals ™ to signal a buy or theoretical cycle lows due around Thanksgiving to come and go.

 

[The_Technician]

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robo wrote:

Comments from Traders -Talk:

We keep giving away details of our Annual Forecast Model which we previously mentioned calls for some low (secondary or otherwise) in the November/December timeframe. Originally, we though early November (around November 9), but alternate counts stretch all the way into mid-December. For that reason we need to monitor the short-term indicators for both negative divergence as well as any Negative Volume Reversals ™ that may be formed. As stated, there are some negatives raising their heads here, but far from broad-based - still enough to be slightly cautious.

Someone agreed with me on the low of Nov..like I said the other day, its a dark horse and unpredictable it has been.......but, given the change of the market wind with energy costs subsiding, that low will not materialize, unless another factor shows its ugly head.....Iran Maybe???

Well, I'm in and made up some ground today....but I believe we will see the market challenge the 1245 area in the S&P....if it bypasses it, I expect it will run right on by and then take a few days rest....then move it on up to the 1260 ranges....of course I'll be smiling all the way....

:dude:

 

[tsptalk]

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robo wrote:

[align=left]

[align=left]More of CNBC
L I V EV O T E
RESULTS

Total Votes: 738
Will there be a year-end stock-market rally?

Yes 71%
[/align]
[align=left]No29%[/align]

[/align]

Interesting. Our survey also showed 71% bullish this week.

 

[tennisguy]

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How did we get RevShark to post on our website. He seems to know what’s going on in stocks. I really enjoy reading both Tom and Rev comments every morning. It’s unbelievable this web site is free. Without all of you guys I think I would just be in the G fund.
Tennisguy

 

[bkrownd]

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The sky is falling! Is it time to buy yet? :dah:

 

[The_Technician]

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Looks like a good day to pull back to G for a short period....

:dude:

 

[Quips]

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Oil prices are starting a slow decent into the 50's.

That is good news.

The bad news is that there is a forty-five cent difference in the cost of a gallon of gasoline in Pennsylvania in comparison to Florida,

 

[robo]

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Lowest station in El Paso $2.15 a gallon at Sams Club....