Show-me Account Talk

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Show-me said:
Interesting day, strong open with a weak close. Not exactly a making me feel warm and fuzzy inside. The spx did pierce the 1300 but retreated. That is test and I hope it keeps testing it. The tran did not show any strength but it did not collapse in a heap.

So what is the plan?
Click to expand...
I'm holding so far see double bottom testing 5 day.:) Your guess?:D
 
Holy crap! Ride the wave, the trend is your friend! I am going to stay put for a while. I will post some cool charts later.
 
This one looks like one of two things. A coming double top or one hell of a rally. The chart pays big respect to the 50 sma.

spx.png

On the spx weekly major respect from the 20 sma with major support at the 200 sma.

spx weekly.png

The tran daily and weekly is the same show.

tran.png

tran weekly.png


So what is the plan?

I would expect a pull back tomorrow or Friday, if I had unlimited IFT I would be out. Greece and the entire eurozone is Pandora's Box, so I am going to ladder move out. On the spx 1370 is the last top and that is another 4% or so. On the S fund or $emw we could see 9% to the last top. That seems hard to swallow even with all the good new.

This market can turn on you with one pieceeice of news, so I will make it a traders market and nothing more. Do I go all out or use the rule that Tom mentioned and keep 50% in the market as long as we are on a bull run? Going to sleep on it.
 
This will be the good, the bad and the ugly.

First the good part. SPX is looking great, taking off like a rocket ship, but a bit over bought.

spx.png

EMW is looking even better and the gains to last years top could be absolutely phenomenal.

emw.png

The TRAN is a rocket ship but it broke over the upper Bollinger Band.

tran.png

The German DAX is above the 200 sma but need to confirm it.

dax.png
 
The bad.

The UUP is either breaking down or getting to run back up. Strong dollar, weak euro could be a turning point.

uup.png

The $USD has broke the 20 sma and it has respected it heavily. Strong dollar bounce coming?


usd.png

The TBT has tested the 50 sma and that means people have been exiting bonds and the yield has run back up to 2%. That is about were people will start buying back into bonds.

tbt.png

More ugly on the EFA, look at how it broke above the upper BB and then look back at the last time it did the exact same thing.

efa.png
 
The ugly.

So, the dollar has pulled back to support and that is bad for the euro. Bonds have sold off and the 10 year yield is going back to 2% which is were people start buying them back and that is usually bad for equities. The EMW, TRAN and EFA all broke above the upper BB. Not normally a bad thing because stocks can push the upper BB for quite a while before pulling back, but the EFA worries me with the extreme break out. That in conjunction with the dollar pull back is starting to look like a confluence.

A pull back on the SPX to the 20 sma or the 200 sma before or in conjunction with a cross of the 200 by the 50 would be the text book reset.
 
Show-me said:
Possible with all the crap in the EZ and then a strong finish at the end of this month going into Feb.
Click to expand...

Nope, I really think we will end up with a slower drop. Maybe a quick 1-2% to get your attention, but the rest (3-4%) will probably take the rest of the month. February could bring us out, but that will depend on any EU news that we are not already expecting.
 
Things of interest from some non-equities charts.

Things of interest from some non-equities charts.

Silver, major break out above the 50 sma and if europe fixes of pospones their problems. The dollar could weaken. If SLV can confirm, it is due to start running back up. AGQ would be fun to play. No matter what you thing their is money to be made and the trend is your friend.

http://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=0&mn=6&dy=0&id=p09895006750

http://stockcharts.com/h-sc/ui?s=AGQ&p=D&yr=0&mn=6&dy=0&id=p40214985465

Check out the bond short, TBT. As the bond short, as it goes up people exit bonds and the yeild goes up.

http://stockcharts.com/h-sc/ui?s=TBT&p=D&yr=0&mn=6&dy=0&id=p97512398718

The U.S. Dollar................
These two charts bear watching, they are testing their lower trend lines and if they do not hold it can be a game changer for everything.

http://stockcharts.com/h-sc/ui?s=$USD&p=D&yr=0&mn=6&dy=0&id=p80079475890

http://stockcharts.com/h-sc/ui?s=UUP&p=D&yr=0&mn=6&dy=0&id=p45975742113

Check out the VIX, thank you Birch. Pretty simple indicator, I use the weekly to filter it down. When it gets into the 15 range or lower, be worried. The VIX lines up with the market starting to top out. It's not exact but it is a great indicator to keep in the old tool box.

http://stockcharts.com/h-sc/ui?s=$VIX&p=W&yr=3&mn=0&dy=0&id=p55495710648
 
Inflation Bond Sale Fetches Negative Yield for First Time

I know $15 billion is a ton of money, but why pay the U.S. to hold it for you? Do the wealthy think that inflation is going to be so bad that they would pay a premium to own United States inflation protected treasuries? Can't they find a JUMBO CD to put their money into? Or, is this the FED keeping interest rates low? What are they hoping for? 2%, 5%, 10% inflation per year over 10 years? Is it overseas investor banking on inflation and a weak dollar? Should we start seeing the writing on the wall? Some very wealthy folks are banking on some inflation to make money over the next 10 years or that the U.S. at the very least be able to give them back all of their money in 10 years.

http://www.cnbc.com/id/46070802

Inflation Bond Sale Fetches Negative Yield for First Time


These latest 10-year TIPS cleared at a yield of minus 0.046 percent, lower than what traders had expected.
This meant investors essentially paid the U.S. government to own 10-year TIPS at a time when some of them have been hoarding Treasurys, including TIPS, due to fears about Europe's debt crisis spiraling out of control.
Click to expand...

The total accepted bids for the 10-year TIPS issue to the amount offered came in a ratio of nearly 3-1, which is the strongest since an auction last March.
Click to expand...
 
Re: Things of interest from some non-equities charts.

Show-me said:
Things of interest from some non-equities charts.

Silver, major break out above the 50 sma and if europe fixes of pospones their problems. The dollar could weaken. If SLV can confirm, it is due to start running back up. AGQ would be fun to play. No matter what you thing their is money to be made and the trend is your friend.
Check out the VIX, thank you Birch. Pretty simple indicator, I use the weekly to filter it down. When it gets into the 15 range or lower, be worried. The VIX lines up with the market starting to top out. It's not exact but it is a great indicator to keep in the old tool box.

http://stockcharts.com/h-sc/ui?s=$VIX&p=W&yr=3&mn=0&dy=0&id=p55495710648
Click to expand...

Good stuff, ShowMe, especially the earlier graph technical analysis.

Silver is significantly moving. I'm keeping an eye on gold, silver and the VIX too. Many metal bugs think silver should be much closer to the 14 to 1 silver/gold ratio that comes out of the ground. That would put silver at $80 - $120 a troy ounce.

Speaking of ground, it feels like the whole ground, everything financial, is begining to heave upwards. The markets seems to be confirming a larger trend upward, inspite of lower predicted US earnings (~7%), but I'm little suspicous of a quick, soon, shake-out; or, a head-on crash with a Euro truck going in the opposite direction. But, maybe not!
 
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http://www.guardian.co.uk/world/2012/jan/22/greek-debt-talks-stall-imf

Greek debt talks on knife-edge amid growing IMF pressure on bondholders

Hopes dwindle of deal in time for eurozone meeting after German insistence that investors agree to lower interest rates

Late on Sunday it emerged that the talks, now heading into their third week, might continue through to next weekend. "Deadlines may be moved. Ultimately it may all be agreed at the summit," said another official. "This is a very complex, highly delicate agreement that cannot just be settled like that."

The voluntary bond swap originally foresaw €100bn being sliced from Greece's €360bn debt pile, bringing its debt-to-GDP ratio down from 160% to 120% by 2020. If interest rates were cut further, net present-value losses for bondholders could be in excess of 70% – a haircut or write-off that many might refuse to accept voluntarily. Hedge funds in particular are holding out in hope that they will be able to cash in on credit default swaps, which pay out when a bond defaults.
Click to expand...

So the hedge funds want to screw the banks so that they can cash in on the CDS. We have a real problem with the shorts trying to undermine the longs, this is a big problem and nobody is catching on. Remember AIG? We can not have longs and shorts manipulating the system for greed this is a big part of the problem, betting both ways and who ever has the power and influence to tip the scales in their direction using it.
 
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