Short Term Outlook

Spaf

Honorary Hall of Fame Member
The Kingdom of TSP

Tea Leaves, Tarot Cards, and Trend Charts

CHARTS

StockChart.com: S&P 500 Large Cap Index ($SPX)
Link ---> http://tinyurl.com/6a2eu

StockChart.com: SmCap 600 iShr (IJR)

Link ---> http://tinyurl.com/bx4uc

StockChart.com: EAFE iShr (EFA)

Link ---> http://tinyurl.com/exho2

MarketWatch.com: Currencies

Link ---> http://tinyurl.com/cp5d2

StockChart.com: Lehman Aggregate Bond Fund iShr (AGG)

Link ---> http://tinyurl.com/b3b7p

CARDS

StockCharts.com: Market Summary

Link ---> http://tinyurl.com/4d9kq
 
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10-31-05. AM 9:30-9:35 S&P opens with gap 1198 to 1203. Breaks out of trading range resistance of 1200. Appears firm. Pro: Awaiting to see if break out holds. Con: beware of bull traps.
 
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Spaf,

I think you are going to stay plenty busy during your first couple of years in the retirement game - we obviously need your helpful service. The ride up on this next bull leg should be glorious but with many bull traps and head fakes - but with plenty of potential to exercise outperformance gains. I certainly enjoy your perspective.

Dennis
 
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I just posted NNuut that I might be getting a slight change of heart for a short period....this Nov is really a dark dark horse...

We're due for a correction , I wonder if we get the .25% interest rate change or will it be .5%!!!:shock:

May be playing around the S fund for a while....good luck with it all....

:^
 
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Charts and Technical Analysis

(Short Term to Long Term)

Reading the Market

The Dow Theory



[Excerpt] The Dow theory has been around for almost 100 years, yet even in today's volatile and technology-driven markets, the basic components of Dow theory still remain valid. Developed by Charles Dow, refined by William Hamilton and articulated by Robert Rhea, the Dow theory addresses not only technical analysis and price action, but also market philosophy. Many of the ideas and comments put forth by Dow and Hamilton became axioms of Wall Street. While there are those who may think that it is different this time, a read through The Dow Theory will attest that the stock market behaves the same today as it did almost 100 years ago.

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

Rgds, and be careful! :) Spaf


PS: In the recent days the attached chart of the S&P 500, illustrates The Dow Theory principles; identifying the primary market movements, bullish or bearish. We have come off accumulation lows and are now approaching a confirmation of a bullish trend in the market.
 
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Short Term

November 3, 2005

The S&P closed out at 1220. This was 10 points under the prior peak of 1230. The 1st stage of a bullish primary movement has been underway. However the 2nd stage of confirmation; passing 1230 awaits

Rgds, and be careful! :) Spaf
 
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Short Term

November 4, 2005

The S&P closed out at 1220. [Hey, I said that yesterday!]The October jobs report was a disappointment. Buyers had to get some good Pepto to get the bull out of the barn.

We are still 10 points under the prior peak of 1230, and still in the 1st stage of a bullish primary movement.

The daily candlestick for Nov. 4 was a doji dragonfly. A doji occurs when the opening and closing price are the same.The dragonfly is a doji where the opening and closing price occur near the top of the trading range. This is a reversal signal after a down-trend - control has been shifted from sellers back to the buyers.

Rgds, and be careful! :) Spaf


 
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Can't argue with your plots there Spaf....looks like a break out for a short period that could extend for a bit....

I didn't get that strong downer I was looking for here this past week.....we did get that set at 1168....even thought I get some numbers around 1265 or so, I will be surprised if we break the 1245 level on the S&P....I think the end of year will just be down upon us....

Keep a clear head and a quick finger....:oo there are bears amongst us!!!

:dude:
 
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Short Term

November 09, 2005

We haven't reached 1230 on the S&P, close,but not a firm confirmation of a bullish primary movement. 1220 seems to bea consolidation point.

Is it up:} or down:{ ? :?

The economy is resilient, and we are in a seasonal good period.

The P-SAR is bullish, along with the RSI, MACD and ROC. Thursday the market will have news on imports and trade, otherwise the week is sort of neutral. However terrorist actions are taking a toll.

Oil remains ok, at under $60

I use short term in the reference of two weeks.

In the past two weeks the returns for C, S, And I funds have been positive.

IMHO:
Fundamentals (economy), and indicators are trending bullish, at present.

Thats my 2 cents! Rgds and be careful! :) Spaf
 
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I think that thursday will be down and a rally will either come friday and into next week or start the week after. I think you will be surprised to see how far the next rally will take us. Im just looking to buy in low again after selling high. Market has been holding for 5 or 6 days about the same numbers. That scares me, I might not get a chance to buy in low.
 
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Spaf wrote:
Short Term

November 09, 2005

We haven't reached 1230 on the S&P, close,but not a firm confirmation of a bullish primary movement. 1220 seems to bea consolidation point.


Spaf, I think the goal would be 1226....we hit it yesterday and I think 1230 is a far reach.....

Looking for a retrenchment starting real soon....like today or tomorrow....

:dude:
 
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Short Term

November 10, 2005

Comments:

The S&P closed out at 1230.96 with an advance of +10.31.

The previous peak of 1228.81 on 9/30/05 was surpassed, confirming the 2nd leg of the primary bull market.

According to The Dow Theory:
When the previous peak is surpassed, the beginning of the second leg and a primary bull will be confirmed.
Primary Bull Market - Stage 2 - Big Move
The second stage of a primary bull market is usually the longest, and sees the largest advance in prices. It is a period marked by improving business conditions and increased valuations in stocks. Earnings begin to rise again and confidence starts to mend. This is considered the easiest stage to make money as participation is broad and the trend followers begin to participate.

Will the 2nd stage hold?
The question is easy, the answer is hard! The reality of the situation is that nobody knows where and when the primary trend will end.

That was a very general answer, why?
Even though the theory is not meant for short-term trading, it can still add value for traders. No matter what your time frame, it always helps to be able to identify the primary trend.

The critical issues:
The market will support the primary bullish movement, provided the fundamentals stay in place. Items that can cripple a movement are business conditions which relate to the 4 Horsemen of rates, inflation, energy and earnings. There are also outside factors that can influence the movement such as terrorism, storms, and etc.

Short Term game plan (IMHO):
For the short term it will pay to be vigilant. The play is to protect gains. Have a exit strategy in place.

Rgds, and be careful! :) Spaf
 
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good sign...$dwcp overcoming s$p 500going in to end of day, small caps/naz lead upas well asdown...slow today with no bonds, monday = real take-off?
 
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The Kingdom of TSP

The Dark Cloud

(what goes up has to come down)

While the market is going up, it is time to prepare for the following bearish primary movement, which is sure to come. It may be in weeks, months or years. In 2005 the movement change has been within month(s).

According to The Dow Theory:
The Primary Bear Market - Stage 1 - Is Distribution.
Just as accumulation is the hallmark of the first stage of a primary bull market, distribution marks the beginning of a bear market. As the "smart money" begins to realize that business conditions are not quite as good as once thought, they start to sell stocks. The public is still involved in the market at this stage and become willing buyers. There is little in the headlines to indicate a bear market is at hand and general business conditions remain good. However, stocks begin to lose a bit of their luster and the decline begins to take hold.
While the market declines, there is little belief that a bear market has started and most forecasters remain bullish. After a moderate decline, there is a reaction rally (secondary move) that retraces a portion of the decline (classic: the period after 09/12/05).

In reviewing the S$P 500 and the last four peaks: June, August, September, and October.

See StockChart.com: S&P500 Large Cap Index ($SPX)
Link ----> http://tinyurl.com/6a2eu

A "dark cloud" or a variation could be identified in each of the four prior peaks, which is a candlestick reversal signal after an uptrend, warning of "rainy days" ahead. The dark cloud was not text book, but it could be identified within 1 to several days when the uptrend hit resistance and prices started to move sideways.

The long white candlestick indicated that buyers were in control, which is bullish.
The long dark candle stick indicates that sellers were in control which is bearish

Noted that sometimes the dark candle formation may be one or two days, but a higher high is not re-established.

There are two other indicators that would coincide with a dark cloud: the MACD trend and the signal on the slow-stochasitics.
 
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Short Term

November 16, 2005

Reuters
UPDATE 2-U.S. stocks pause as Dow tries to pop above 10,700

Wed Nov 16, 2005 06:32 PM ET


Link to Article ----> http://tinyurl.com/7a6u4


Rgds, and be careful! :) Spaf
 
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Today will be a good day.

The core CPI was up a modest 2.1% over the last 12 months

The bond market believes inflation is contained.

The Nikkei is +241

The DAX is +46

The FTSE is +39

There has been a lack of conviction in this pull back - onward and upoward.
 
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Birchtree wrote:
Today will be a good day.
Good call Dennis!

Bullsacheering.gif


Let's hope Grandma keeps her umbrella open against rainy days!
 
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Alright - now that I have courage - I'll go for another up day. GE seems to be the leader for the future and Nikkei is up another +211. I wouldn't be surprised if the S&P closes above the resistance level of 1245. Whew!!
 
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The stock market's gains this past week came as yields on short term and long term Treasury bonds converged - a tren called a flattening of the yield curve that suggests the Fed's campaign to raise short term rates could stall the economy.

An inversion of the yield curve would be s serious occurrence - despite what AG has stated publicly. The Fed has tightened eight times in the past three decades, and the Treasury yield curve has inverted five times. Each time the curve inverted, the economy slipped into a recession a year later. In late trading Friday, the gap between yields on 2 year and 10 year Treasurys stood at about one-tenth of a percentage point, down from about three -tenths in September.

Lead times vary between the inversion of the yield curve and a subsewuent profits recession. The shortest lead time was six months (June 1989) and the longest was 24 months (June 1973) and (December 1978). The average was 14 months. Equally important, S&P 500 earnings growth rates varied from cycle to cycle. The strongest profits growth when the curve inverted was 22% (August 2000) and the weakest was 8% (January 1969). Definitely something to remain apprised of.
 
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