Seasick Yet?

A positive close might have triggered a buy signal for the Seven Sentinels today, but of course the market had other plans as an initial gap down was reversed by good market data, but it wasn't enough to overcome the continued pessimism in terms of the global fiscal malaise. Towards the end of the trading day selling intensified and the major indexes closed at their worst levels of the day.

On the U.S. data front, the ISM Manufacturing Index for May came in at 59.7, just a tad better than forcasts. Construction spending for April jumped 2.7%, which was much higher than the estimated 0.1% monthly increase.

While the Seven Sentinels moved away from a buy signal today, they do not look bad. This volatility is making it tough for either side to play the market and it seems large moves are becoming the norm. One green close can still trigger a buy signal in spite of today's ugly close.

Here's the charts:



Both signals dropped back down near their 6 day EMAs today, with NAMO flipping back to a sell and NYMO holding its buy.



NAHL and NYHL are also very near their 6 day EMAs. I'd say they are still on a buy for now.



TRIN remained on a sell, but TRINQ actually flipped to a buy.



BPCOMPQ dipped a bit lower today, but remains on a buy.

So we have 5 of 7 signals remaining on a buy, but all of them are close to their trigger points.

It's a tough call right now as to what happens next. I continue to believe we are seeing bottoming action, but it's certainly possible we could drop much lower. That's not my expectation, but we can't go much lower before more sell signals get triggered in other systems.

I have been holding 100% S since last month after whipsawed into a buy signal and not wanting to go to the G fund with more than half the month left to go. As you've seen, reversals can be fast and steep in either direction. We are at the lower end of the channel now, so it's make or break time.

That's it for this evening. Good luck to you on your trades and see you tomorrow.

 

[CrabClaw]

as always, thanks!

markets are tenuous right now

 

[crws]

Well, not to be a downer, but I'm pulling the plug and heading to (-on second thought no G just yet) 100 F while I'm still 50pts ahead and hoping for a tailwind on the way. I should have done an in-n-out last week when the news was looking more positive and I hooked that 278, but oh well.
-Now, for us noobs, this bear market stuff, unless you can short, as I understand it, you are in for a bump and then get the heck back out?
Chess, anyone? Deep Blue vs. (you?)
http://www.dailyfinance.com/article/stocks-turn-sharply-lower-in-late/811170/

Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, said volatility is likely to continue through the summer in part because some everyday investors who put money into the market before its drop in May are giving up. That leaves the pros who use automated trades to try to profit from moves in stocks.
"It just seems like it's computers versus computers," he said. "This volatility is probably here to stay, unfortunately, but that doesn't mean that the market is going to collapse."

 

[CountryBoy]

Not seasick, but I am tired of the same cruise movie. Thanks CH

 

[coolhand]

"It just seems like it's computers versus computers," he said. "This volatility is probably here to stay, unfortunately, but that doesn't mean that the market is going to collapse."

Yep. No question we are at a severe disadvantage in that regard. At this point I'm not looking for a rally to sell into. A rally may trigger a buy signal, which is usually not the time one wants to sell. But if the tea leaves change I may reconsider.

 

[WorkFE]

I'm actually surprised you've hung in this long CH. I know you hate it as I do. Nice flat green day would be a breather.

 

[Frixxxx]

Skittish....the market is skittish and fear is rampant.....This happens from time to time.....

 

[crws]

Well, hell. sittin on the fence. No change for today. 40S 40I 20F. The employment report will be the clincher.
http://www.bls.gov/ces/

 

[crws]

At this point I would be ahead.... -with the bump of 6/02. That makes twice I have been burned on a Friday after a big gain the day before in the last 3 weeks. Both times I was set to pull the trigger early in the am to take the gain and dash, but hung in for the 360.
The lure of a big ramp up is prevelant in a bear market, yes? I thought I read somewhere that some of the biggest day or two rallies in the market came during the fall to the bottom during the 30's, where the losses **far** exceeded any gains realized.
I think I will get under cover on the next power cycle so's to minimize whiplash.

Well, not to be a downer, but I'm pulling the plug and heading to (-on second thought no G just yet) 100 F while I'm still 50pts ahead and hoping for a tailwind on the way. I should have done an in-n-out last week when the news was looking more positive and I hooked that 278, but oh well.
-Now, for us noobs, this bear market stuff, unless you can short, as I understand it, you are in for a bump and then get the heck back out?
Chess, anyone? Deep Blue vs. (you?)
http://www.dailyfinance.com/article/stocks-turn-sharply-lower-in-late/811170/

Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, said volatility is likely to continue through the summer in part because some everyday investors who put money into the market before its drop in May are giving up. That leaves the pros who use automated trades to try to profit from moves in stocks.
"It just seems like it's computers versus computers," he said. "This volatility is probably here to stay, unfortunately, but that doesn't mean that the market is going to collapse."