P&F Chart School

[James48843]

I just hope it was the right choice. I just took a look at how much was left when I was in doing the interfund transfer, since I haven't looked at it in a month. Afraid to.

It was not pretty.

Cross fingers, and let's see how the next couple days pan out.

 

[KAPLOWD]

James,

Question: currently the chart (http://stockcharts.com/def/servlet/SC.pnf?c=$spx,P) is showing 4 O's ; what would the chart show if the market finishes today at it's high or near it's high ?

David.

PS: Thanks very much for the education.

 

[James48843]

The chart will show the six "O"s formed today by the fall down to the 834 level earlier today. Now we're sitting off of those lows, so it will so the final resting point today within those six "O"s.

So here we sit- slightly above yeserday's close, making it THREE DAYS IN A ROW higher.

That is the first time since last month we've done that.

Now, the question becomes-

Where do we go from here?

I will think and write some more tonight, after I have some time to take a look at some other statistics.

 

[turbo23dog]

James,

I'm waiting... Its 10:53pm and I got a choice to make tomorrow by 11:59am...

 

[James48843]

Well, the data shows two contradictory things.

First, we have the standard S&P 500 P&F Chart. It says, clearly, that we're high on a downward cycle, and should expect a nice drop shortly. Floow that little red line down, and it says we're about to fill in those "O"s shortly. All indications on the standard P&F chart say that we're about to take another dive, at least to the 750-755 range, and it should come over the next two or three trading sessions. That's ONE indicator, that has been fairly reliable over the last few weeks. The RATE at which the swings have occured is now down to a manageable level, and this SHOULD be a clear opportunity. I bailed out today before noon, based on what this indicator was showing me at the time.

Indicator 1- the S&P 500 P&F chart:

View attachment 5137


BUT

(and you knew there was a but in there, didn't you? )

There is ANOTHER P&F chart which is contradicting that one now.

This is a P&F chart of the "Bullishness" of the S&P 500. It takes into account the number of Put and the number of Call options being placed. And THIS chart is saying we have a change today. This is tracking with just a 19% number, meaning that there is a whole lot of headroom overhead. I THINK this one is saying we're going to have a couple of days of positive moves now, because everyone THINKS we're going to move down, so they have been placing bets against moving up- which is exactly when we WILL move up.

View attachment 5138

Remember the dates indicating with letters on this chart. September 1st is represented by the number "9", or about a 52% bull/bear ratio. That's about normal in a smooth market. At "9" we were at about 1280 on the S&P 500.

October 1st is represented by the letter "A". At Point "A" we were at about 1140 on the S&P, and headed down.

November 1st is represented by the letter "B". At "B" we were at 975, and then we poped upward to over 1,000. Then all hell broke lose below.

Yesterday, for the first time since then, we got a solid appearance of "X"s.

You can see the net neutral rating around September 1st, when the number of bulls almost equaled the number of bears. You can see within that area, the Sept 15th drop, and the small rebound, and then further deterioration in October. Now we come to a point were everybody is pessimistic, so the number is very, very, very low. And then today, we get the appearance of four "X"s signifying a change in direction.
​

AAArrrggg.

So there you have it.

One chart says significant drop ahead.

The other chart says bulls on a rampage.

Which is it?

Ya got me.

Gut says it's the first one, and lower ahead.

But technical indicators say it's the second one, and we are about to have a small stamped by the bulls upward.

Side note- I'm a pilot. When you are totally disoriented, you are taught to trust your instruments, not your eyes. Had to use that advice once to get myself out of a very, very bad situational awareness event. Turned out the instruments were right,and my eyes and head were wrong. I trusted the instrument, and survived.

The problem here is the instruments are conflicting today. My head said sell on the pop up. My head said sell cause it's about to drop. And one of my instruments on the panel is saying sell, 'cause we're about to coast down.

But my instruments are also saying look at the second one here. Pop up over the next few days.

But the instruments are conflicting.

Decision Time.

Spin, crash and burn?

OR pop the chute?

Your call.

I made mine yesterday before noon, on the information I had available at the moment.

Ain't this fun?


Just when you think you have this thing figured out, you have to watch out for the bulls. You never know when they are going to turn on you.

​

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[Guest2]

James, I'm waiting... Its 10:53pm and I got a choice to make tomorrow by 11:59am...

(LoL) No pressure or anything ! :nuts: From the looks of James analysis of the
P&F Chart (just below), it would appear that your choice isn't going to be
an easy one due to Technical Conflicts. Good Luck in your decision !

Thanks James For The Information. Love The Bull Pic As Well ! :laugh:

 

[airlift]

James,
Yesterday I benefitted from your analysis and I went 100 C. Very useful information! I won't regret doing this, even if I should watch a continuation of the rally due to IFT restrictions. These tools are not perfect, and Capital Preservation is of great importance too. Thank you and good luck.

 

[airlift]

Typo Errors:
I went 100G. And "benefited"

 

[KAPLOWD]

James,

Do you also use the "Institutioanl Index - Amex ($XII)" P&F chart ? Since Institutional trading makes up 50% of the trading volume, it seems reasonable to assume that this chart can give you some additional guidance ? Was just wondering if you also might use some other P&F charts?

Thanks, David.

 

[James48843]

James,

Do you also use the "Institutioanl Index - Amex ($XII)" P&F chart ? Since Institutional trading makes up 50% of the trading volume, it seems reasonable to assume that this chart can give you some additional guidance ? Was just wondering if you also might use some other P&F charts?

Thanks, David.

No. I don't watch that one. I take a look at it at a later time, see what it says, if I see anything helpful, I'll factor it in. Watching enough different ones right now that I got to keep them simple and seperate.


Note: I am seeing some other indicators this morning that reinforce the running of the bulls scenario, and soon.
I may have blown it. Even though the news is horrible this morning, and the market is down over a percent right now- I'm seeing other background indicators setting up for a probable strong bull run.



More later.

 

[turbo23dog]

James,

You knew I was "patiently" waiting in my comment above, right??????? I appreciate your insights and always keep an eye out for them.

I heard elsewhre on this MB that Obama has a press conference today. His appearances over the last few weeks have consistently meant good things for the market each day. At this point with all the mixed signals, I'm still leaning toward a move back to G today, meaning that I'm hoping to catch whatever today brings and position my self for moves off the lilly pad next month.

 

[James48843]

Technical change this morning on the P&F Chart-

Now showing positive, with a new Price Objective of 990.

View attachment 5155

This now reinforces the Bullish Index I talked about on Wednesday. Then, it was a mixed message. Today it is no longer mixed. They are now both solid Bullish.

View attachment 5156​

Both indicators showing higher soon.

So I'm strongly considering moving back in today. Let's see what is does between now and noonish. I am expecting slightly lower today, but then a good solid run upwards next week.
​

 

[airlift]

James,
I am a bit confused. I was under the impression that you had gone to G fund around November 25. Having been in stocks, and then to G, doesn't that preclude you from going back to stocks today? Thanks in advance.

 

[ATCJeff]

This helps me with my decision to stay in. I was having doubts this morning. Thanks for the post.

 

[James48843]

James,
I am a bit confused. I was under the impression that you had gone to G fund around November 25. Having been in stocks, and then to G, doesn't that preclude you from going back to stocks today? Thanks in advance.

No. I had not moved at all this month prior to the move to G on Nov 25th. If I go back to stocks today, that will be the second move of the month for me.


Not 100% sure yet, but most likely will move to stocks today. Still gathering data points.

 

[turbo23dog]

I hesitantly moved out of CSI for COB Wednesday and am out of moves for Nov.

I had a feeling I should have held position but moved most to G and F, leaving 10% in C. At least I have a toe hold till Monday...

 

[James48843]

OK- MOST charts continue to be consistent. I'm moving my own today. Back into stocks.

I will say this- the C fund's chart and the S Fund's chart differ today. C is saying pretty dog gone postive, yet the S fund chart is looking poorly. The S fund chart says next week will be lower.

And the bull/bear ratio is weaking too. The puts are now climbing up.


I'm going for the risk- and moving into stocks. But I don't know what next week is going to bring. I will be prepared early next week (new month! ) just in case things turn sour.

Good luck all.

 

[James48843]

In the last two minutes of trading today (markets close early today- 1 pm) the price objective was revised upward. Now showing a P&F price objective of 1020.

Here is the chart:

View attachment 5157

I have no idea what Monday will bring. Light trading today, some conflicting signals out there indicate perhaps a weaker trend ahead. We've now had five trading days in a row with higher numbers, something we've not seen in a long time. We're bound to get some relief next week, but I hope it ends up following the chart to higher territory ahead.

Good luck, and have a good weekend.


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[James48843]

Chart reverses again on Monday's devastation. Now showing a bearish price objective of 740. I can't post the chart from where I am right now, but it looks pretty nasty. Looks like we have some room to move upward from here, maybe to the 890 range, but then back down after that again. I give up= swings are huge.

There are a couple of OTHER signal though that we may be nearing the bottom of this thing. VIX, for example, reversed it's chart and is now at 62, and falling, with a price objective of 20. That indicates the market should settle down from these huge swings. BUt then again, these are extremely unusual levels, so I don't know if that really means what it technically should mean. I'll just have to wait and see what happens.

 

[Guest2]

View attachment 5183