P&F Chart School

[James48843]

I've started a "account thread" for the P&F chart C, and begun tracking in the autotracker.

today I posted that we're near a high in the X's, and I would normally think it wouild be time to move aside. However, due to the post -christmas rally historical data, I'm going to leave it invested one more day and wait and see what Wednesday brings.

See the account talk thread for the P&F chart for today's reading and copy of the chart.

Merry Christmas to all, and to all a good night.

 

[James48843]

Alright- time to start back to Chart school. We've had enough recess for the time being.

today the P&F chart continues to show a green upside - and an anticipated price objective of around 1490.

View attachment 3205​

 

[James48843]

An update:

Here is the P&F chart for today. Notice that we're at a significant point. the green X"s' are now bumping up against the red line.

What this means: If the market breaks upward, then we have broken the cycle, and we have more upside ahead.

But if it does not, then it will fall again, and we have downside ahead.

I am concerned because the downside, if it continues, will wipe out all of this weeks gains.

And I give a higher probability today of the downside turn that the chance of breaking though to the upside.

So, I will probably be making a move today to the sidelines, unless for some unknown reason the chart is broken to the upside through the red line today. If that happens, then I am moving to an all "in" position.

My guess is 65% chance of a down day today, and 25% chance of a breakthrough to the upside. 10% chance of remaining relatively flat. That's all guess, nothing more.

View attachment 3387

That's my P&F chart call for today.​

 

[Viva_La_Migra]

James,

Which fund would you be going all into, if there is a break to the upside?

 

[James48843]

James,

Which fund would you be going all into, if there is a break to the upside?

Definately "C".

First, the costs to the TSP for moves into and out of C are a fraction of the costs anywhere else.

Second, the chart I am following is only the C, not the S or I. One observer pointed out to me previously that I had made some comment about the C chart as it was approaching a key point a few months ago, when the S chart was already showing the break downside the day before the C chart showed it, so I am now watching a little close on the other chart. However, I am sticking with the C and G right now as my "vehciles" in order to 1. keep a low profile, and 2. Try and hit clean moves and signals. I dont' want to be distracted by seeing the C chart do one thing, and then putting money in S or I . Foregin currency exchange rates are affecting the I right now, and it is not clear to me yet that the dollar's value is going to be regular in it's moves. PLus, they have been screwing with the Fair Value in the I since October.

 

[James48843]

Well, it's the end of the month. I've only made one move this month- Wednesday I bailed out into the G fund for safety, and now I am sitting and looking at whether to buy back in at this lower level. I hit that exit just right, and am feeling pretty good about it.

With the possibility of a two-per-month limit it makes things ten times harder. But it's still doable. The price of oil hit $103 a barrel yesterday, and that will reverberate through the markets for a while.

The P&F indicator says we are still expecting higher ahead- but it's also saying we're expecting lower today. I am fully expecting to go below 1350 in this next cycle, before turning northward once again. It COULD hit below 1340, but 1350 is a lot better bet in the next few days than 1340 is. So if we go below 1350, I plan on buying back in.

That would put me in a position of buying in at two percent below where I sold at. And that is just fine with me. If I can get two percent better than the S&P 500 in one month, that's darn good. If I can get 2% better than the S&P 500 each month for 12 months, then I am in position to outpace it by a good measure. With a limit of just two moves per month, it's going to be hell to find just the right setup to try and make those gains. But that just means it's a challenge to follow the market closely, and find the best entry and exit points.

Here is where we are today. I am sitting in G, having bailed on Wednesday. I am expecting another down day today. Perhaps a significant down day. I don't know. The good news is that the foreign markets are following through on the losses overnight. Japan is now down 2%. And Europe is down a percent as well. Sets us up nice for a down opening today.

View attachment 3402​

If it DOES go down strongly today, and hits below 1350, then I am probably going to jump back into "C" 100%, and be happy with being 2% ahead of where I was on Wednesday. My two moves for the month keep me off the radar screen for the Thrift Board, and I would then be sitting 100% in stocks, waiting for next month's new challenges.

Yes, this is a challenge. We'll see where it goes.

Happy investing everyone- and remember, I am NOT an investment counselor, what I do is what I do, not what YOU should do.

And my final word of the day:

Except, of course, in Nebraska.

Cross my fingers, and hope we get a nice tank today.​

 

[BlueMax]

James,

It looks like you got your 'below 1350 pop'. Are you still going in?

 

[James48843]

OK- I just updated my account chat thread.​

Yes Max, I think so.​

More than 80% chance I am moving BACK INTO "C" today as a result of the nice pullback. I am going to wait 45 more minutes to see where things are, but unless the bottom drops out between now and then, I am planning to go in. Watch for my IFT on the autotracker in about 40 minutes.​

Here is this morning's chart from ten minutes ago and 1342. We're now at 1341.​

View attachment 3404​

I consider 1341 to be a great place to take a LEAP.​

After all, it's "LEAP DAY" today.​

LEAP DAY FACTS:​

Since the start of the Dow in 1896, there have only been 19 Leap Years with February 29 falling on a weekday including today. The last occurrence was eight years ago in 2000. Leap Day has been a down day more than up; only the Nasdaq has had more up Leap Days than down.​

February 29 and the Markets

Dow

Current: DJIA 12363.19

-218.99 (-1.74%)

• 18 past occurrences
• 61% of the time down, 39% up
• Avg gain of .13%
• Best Feb 29 was in 1988 - the Dow soared 2.4%
• Since the last Leap Year in 2000, the Dow is up almost 16%

S&P

Current: SPX 1343.44

-24.24 (-1.77%)

• 14 past occurrences
• 57% of the time down, 43% up
• Avg gain of .2%
• Best Feb 29 was in 1988 - the S&P soared 2.0%
• Since the last Leap Year in 2000, the S&P is down almost 4%

 

[James48843]

Quick note-

IN my account thread, I said yesterday that I was getting out because I was afriad of a breakdown on the down side.

It has occured- new P&F price target to the downside is 1250. I'ts offical- there is a double bottom breakdown occuring today.

Here is the chart:

View attachment 3431

Notice the downside target level. 1250.

The bear continues.

 

[James48843]

Now we continue with the downside.

It looks to me like this wave down will take us around 1280 to 1270 level.

Here is the chart- and I've put in purple the trend line underneath:

View attachment 3459​

I'm sitting safely in "F", hoping to catch a little up F action today. But I think we've got at least another day, if not two, on the downside, before the momentum changes. Japan was down over 3% overnight, all of Europe down over 1% each. There really isn't anything postive in the outlook, and we continue with this hungry bear market.

Da Bears rule.​

 

[Silverbird]

Sorry, I have a couple questions.

I have a general idea on how to use P&F charts for stocks, but I can't make heads or tails out of the AGG P&F charts for bonds as they never seem to move. Any advice on how to do a little forecasting on F?

Also, F would appear to be the play when stocks are doing a dive, but that hasn't always followed recently - is that because of the backlash on municipal bonds and no one's buying anything, or

 

[James48843]

I have a general idea on how to use P&F charts for stocks, but I can't make heads or tails out of the AGG P&F charts for bonds as they never seem to move. Any advice on how to do a little forecasting on F?

The F chart doesn't move enough to do a day-to-day type of action like you can in stocks. Yes, P&F charting works in the F, but it is a much longer time period, so it is harder to see the moves. Here is the F's chart:

View attachment 3461​

You can see the "double top breakout" back on September 4th, a signal to move into F, and if you did, you would be a little better off than if you had stayed out. But a move from 99 to 101 over six months isn't really a lot, now is it? F does have benefits over longer terms- higher average returns than "G", but again, there are other factors weighing in on the F right now that makes it so you have to be careful.

The last time I moved to "safety", I went "G" rather than "F", and watched the F bounce up nicely while I was not in it. This time I went to "F" rather than "G" , and wouldn't you figure, the F is getting smacked.​

Also, F would appear to be the play when stocks are doing a dive, but that hasn't always followed recently - is that because of the backlash on municipal bonds and no one's buying anything, or

"F" is screwed up right now because of the issues with the bond markets in general. You've probably been reading about the municipal bonds having problems attracting buyers- the secondary markets won't re-insure, and good government bond issuers are not able to get buyers as a result, unless they really jack up the yields of the bonds, and that's playing havoc with the bond market.

Until the whole sub-prime fiasco is rung out, I'm not sure where bonds are going to go. We might have some good opportunities, and then again, maybe not.

Sorry I can't help more- but my F fund crystal ball is really fogged over at the moment.

 

[Silverbird]

Thanks, James. I did the ride the F at the wrong time too. Well, G may be the only sure thing right now...as in surely not going to keep up with inflation so I'll keep some in F too. I can see why investors are trying to ride gold and oil, but I think those are the next ones to go as the valuations seem like foam and not beer.

 

[James48843]

Solid downside, as expected.

But the volume has not kicked in to bounce back. Look for buyers to step in over the next hour, and possibly try to capture something here.

It's looking more and more like a 1280 kind of day- if the buyers start coming in in the final hour, we'll finish better- perhaps 1290 to 1300. But if the buyers don't appear, the number is toast.

Here is the chart so far today:

View attachment 3464

Notice that we' ve now built five "O"s into the downside on this wave down. By exceeding the normal four "O"s and by the continuning weakness, I'm thinking now we'll hit the 1270 mark before we feel any resistance at all. We are down five as of now. We'll probably make a little of that back before the close. But overall the trend is still lower.

And getting ten "O"s on the downside is a real possibilty here. That would make the P&F Chart target of 1230 a real possibility before we hit a resistance point if the 1270 doesn't hold.

And shows once again that the P&F chart targets seem to work pretty well.

 

[James48843]

We're starting to see a little more volume start to move in, but it's premature to say that the people on the sidelines are ready to move in.

We're still on the downward move: Now 1280 level has been crossed, and then back over again. Still not enough to say that we're ready for an oversold condition, but I think we're a lot closer today than we were on Friday.

Here is the chart for today noonish:

View attachment 3492​

I'm sitting on the sidelines, and will continue to be there for at least another day while we watch and see what happens later today. Will buyers come in, and drive it back up? Or will weakness hold, and the effort to form a base fizzle out?

That is the question.​

 

[Silverbird]

Crazy buying seems to occur every time we start to touch 1275, at least that's how things appear to me. How long can it last?

 

[James48843]

looks like everything at 1275 blew out. Now were at 1273, and most of that resistance appears to be gone.

Next- down through the 1270 mark.

If we blow threw that tomorrow- the next support level is back down around 1240 to 1230.

P&F chart price objective is showing 1230.

View attachment 3500​

And we could reach that in a couple days.​

 

[James48843]

I'm afraid I am falling for a sucker's rally. the only reason the market is up today is fed's action to make things liquid, nothing else.

The P&F chart does NOT show a break to the upside- we're still below the 1300 level necessary to break out and change the direction of the wave.

Here is the chart-

View attachment 3505​

I am considering cancelling my pending IFT- I think I jumped the gun. ANd I've only got minutes to make a final decision.

Sorry - I thought it was going to be different.​

 

[James48843]

I cancelled my IFT.

Staying 100% "F", following the P&F chart.

The chart rules over emotion today.

 

[Silverbird]

Look at the SP 500 12:00 noon line of spikes in trades. Here we go again with big investors trying to hold the line. But it's not sustaining, the line is spikey but the overall trend still appears to be down. However that's just my opinion, YMMV (your mileage may vary).