The Market could be topping

[Birchtree]

In the markets it's always darkest before the new dawn. Only believe half of what you hear and that goes for reading too. From a contrary viewpoint the more negative tendencies just make me more bullish. Snort.

 

[vectorman]

Free info from a paid site. SPX vs VIX

http://stocktiming.com/Thursday-DailyMarketUpdate.htm

 

[vectorman]

The media is saying worse job number in 4 years. Wow. Now we'll see if we get to 'depression' on the Emotion Cycle Chart.

View attachment 2070

 

[vectorman]

The VIX broke out above 25. Something is keeping the market from falling significantly. M3 money? The SPX is holding near the 200 day ma. Very strange? Looking at the VIX the market should be falling more than what's showing. The VIX gapped up and the NASDAQ gapped down, so there may be a play next week, for those who don't mine the risk. With the VIX above 25 and in an uptrend, market timers will get their day. Also in light of the just released job number, it will be interesting to see how the SPX vs Housing Index chart plays out.

View attachment 2071

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=NASDAQ

 

[vectorman]

I mentioned above about a gap down in the NASDAQ chart that will get filled sometime in the future. If you look at the EFA chart below next post , it had previous gaps that have been filled recently. There is a issue of a 'gap up' on the NASDAQ chart from Aug 16-17 that has yet to be filled. Nobody knows when, but evently it will get filled.

View attachment 2074

 

[vectorman]

EFA Chart shown with filled gaps.

View attachment 2077

http://stockcharts.com/school/doku.php?id=chart_school:trading_strategies:gap_trading_strategi

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:gaps_and_gap_analysis

 

[vectorman]

Recession? Dollar still falling. 10 yr T broke through support. Great buying opportunity for stocks ahead, but is it next week? Bottom fishing is not for the weak hearted and those who want to sleep peacefully at night. Once the can of bad news is opened, more seems to follow. The trend is your friend, but be careful of trend reversals. We still may be watching a head and shoulders pattern, with a triple top, and a SPX right shoulder that failed to break above 1500.

View attachment 2079

http://stockcharts.com/school/doku...._analysis:chart_patterns:head_and_shoulders_t

 

[vectorman]

10 yr T chart


View attachment 2080

 

[vectorman]

What Tom usually puts out this statement on Job Number Day:

· Three days after a large surprise in the jobs report of 50,000 jobs, up or down, the S&P 500 was higher only 5 out of 18 times. Its average return was minus 0.5%. Markets don’t like surprises because they create uncertainty.


· Ten days after a negative surprise of 50K jobs or more, the S&P was higher 55% of the time. Ten days after a positive surprise of 50K or more, it was lower 58% of the time.


· Ninety days after a large negative surprise, the S&P showed an average return of +5.1%. Ninety days after a large positive surprise, its average return was 1.7%.


· The correlation between surprises in the jobs number and 90-day returns in the S&P 500 has been -.32. This means that the more positive the surprise, the more negative the performance in the S&P and vice-versa. Given the sample size, this is significant.

And, perhaps most important of all…


· If the market did cartwheels for the jobs report and closed higher by 0.5% or more, there was only a 33% chance that is was still higher 30 days later. If it fell out of bed and declined by 0.5% or more, there was a 93% chance of it being higher after 30 days.

 

[Fivetears]

For these numbers to play through V-man, we'd be looking at a 50% SPX correction coming our way. If there were any truth to this chart, we'd have already seen it.
http://www.tsptalk.com/mb/attachment.php?attachmentid=2071
Any thoughts??

The VIX broke out above 25. Something is keeping the market from falling significantly. M3 money? The SPX is holding near the 200 day ma. Very strange? Looking at the VIX the market should be falling more than what's showing. The VIX gapped up and the NASDAQ gapped down, so there may be a play next week, for those who don't mine the risk. With the VIX above 25 and in an uptrend, market timers will get their day. Also in light of the just released job number, it will be interesting to see how the SPX vs Housing Index chart plays out.

View attachment 2071

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=NASDAQ

 

[Bullitt]

Once again, the market proves that it is always right and that technical analysis is just a guide. The reverse head and shoulders failed us. 3rd and long and the bears knew what play we were going to run all along. Failed moves up bring fast moves down. Too bad we couldn't hold the line at 1460, for now it's only going to be another possible overhead resistance.

 

[Birchtree]

All we need is a few announcements from the strategic buying corporations - they are full of cash and they know value when they smell it. They can use their own company stock as a cash substitute to target other company's stock. Sounds like a doable plan.

 

[Show-me]

I'm 100% in but this chart still haunts me at night.

 

[tsptalk]

That chart is unsettling but that drop won't happen overnight. Volatility is up and Ebb shows us that the ups and downs can be played.

 

[fabijo]

I'm 100% in but this chart still haunts me at night.

:laugh: I'm not haunted by that any more.

Here's what we were shown (correlation 80%):

I put the numbers of that index into Excel, only spanning more years. Here's what it showed (correlation 63%):

Posted here in March (maybe I should update the file to see the new correlation):
http://www.tsptalk.com/mb/showthread.php?t=4147

 

[vectorman]

For a while, I discussed the SPX forming a head and shoulders pattern. After the inverse head and shoulders blowout thanks to the Fed, the idea of SPX completing a head and shoulders pattern may seem silly, but the only major difference in market conditions since talking about the right shoulder forming is the Fed rate cut. Most of the economic problems still exist. Had the Fed disappointed the market, we would be probably be talking about a neckline break. Whether the market could truly be manipulated for any length of time can be debated. But in the end the market will follow its own course. If this cup and handle thing comes to completion then the bears better just pack it up because the bulls will be off and running. But if the SPX isn't able to get the job done, then lets just say the position of the right shoulder was manipulated because of the Fed rate cut and the market may just head lower to retest Aug lows. Concerning the Elliott Wave Thoery, I think we're at the top of a-b and may start b-c (but a breakout of a cup and handle pattern will kill that bear). I can't believe it, I think I'm sounding more like The Technician. I still think you can't fight the Fed, but I just wanted to go on record with this theory as silly as it sounds.

http://stockcharts.com/school/doku...._analysis:chart_patterns:head_and_shoulders_t
http://www.acrotec.com/ewt.htm

View attachment 2179

 

[vectorman]

SP500 8-24-07 with 50 day ma

View attachment 2002


http://stockcharts.com/school/doku...._analysis:chart_patterns:head_and_shoulders_t

Yikes - that would be a 1200 target on the downside if it plays out.

View attachment 4270

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=SP500

 

[fabijo]

Looks like Tom called it last year. I guess at any point in time somebody is calling the correct outcome way in advance. I just wish it was always the same somebody.

 

[Show-me]

vectorman called it and Tom did the math.

 

[Show-me]

That is really freaky that it NAILED 1200 right on the dot.