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Tsunami's Account Talk
- Thread starter Tsunami
- Start date
Tsunami
Well-known member
Expectations for March.....don't want to guess quite yet, it's a tough call, like everyone else I'm waiting for the market to tip it's hand. Like other G funders I'm hoping for at least a small dip to get back in (even something like 1075 would be good enough for me) but am prepared to jump in higher if I have to since I think the market will work it's way higher until early May. I think we'll know by late Tuesday which way it's going. If doesn't start heading down hard by Tuesday, I don't think it will at all and 2/5 was indeed the low. The Elliott wavers are running out of bearish options here. My main goal for this year is to avoid taking a big loss at some point, so I'm trying to be patient and give the bears a chance to be right first, so I keep watching those charts Daneric posts for example. http://danericselliottwaves.blogspot.com/
My overall 2010 outlook remains the same. As I first pointed out on my post #106 on 2/6 on this thread http://www.tsptalk.com/mb/showthread.php?t=7701&page=4 on 2/6 we were very much in sync with the early 2007 pattern, and Tom has been showing lately that we still are. That makes a lot of sense to me fundamentally since, similar to 2007, I think we're leading up to another big drop in response mostly all of the debt issues, plus the basic demographics problem of now being beyond the peak of the baby boomer spending curve. 2010 won't follow 2007 exactly of course, analogs always break down (e.g., if the bears get their big short term drop starting next week the analog is out the window), but I do think it will be basically similar but more squished time wise, with a peak in early May and the final peak in August. Why do I think that?...a combination of all the stuff I read plus just going by Terry Laundry for the specific guesses on the timing of the main peaks, he's been too darn accurate to ignore any more, and he's free. http://www.ttheory.com If I hadn't discovered him about a year ago I'd probably be much more bearish right now, he's keeping me on the right side of things, so far.
Here's that 2007 chart again. Like August 2007, I also think we're going to get a similarly scary deep dip in early summer, probably bottoming in June.
My overall 2010 outlook remains the same. As I first pointed out on my post #106 on 2/6 on this thread http://www.tsptalk.com/mb/showthread.php?t=7701&page=4 on 2/6 we were very much in sync with the early 2007 pattern, and Tom has been showing lately that we still are. That makes a lot of sense to me fundamentally since, similar to 2007, I think we're leading up to another big drop in response mostly all of the debt issues, plus the basic demographics problem of now being beyond the peak of the baby boomer spending curve. 2010 won't follow 2007 exactly of course, analogs always break down (e.g., if the bears get their big short term drop starting next week the analog is out the window), but I do think it will be basically similar but more squished time wise, with a peak in early May and the final peak in August. Why do I think that?...a combination of all the stuff I read plus just going by Terry Laundry for the specific guesses on the timing of the main peaks, he's been too darn accurate to ignore any more, and he's free. http://www.ttheory.com If I hadn't discovered him about a year ago I'd probably be much more bearish right now, he's keeping me on the right side of things, so far.
Here's that 2007 chart again. Like August 2007, I also think we're going to get a similarly scary deep dip in early summer, probably bottoming in June.
JTH
Well-known member
Thanks, I tend to agree with your diagnosis. For me it's a dead even race, but I'm giving the bulls the edge here. The thing that has me the most concerned is the overseas markets and I'm wondering if they will attempt to drag us down with them. If it weren't for the Transports and small caps I'd probably be in the Bear camp.
Tsunami
Well-known member
A possible scenario to fit my expected market path of a peak in early to mid-May, followed by a correction that lasts to around mid-June, then a final rally to an August peak, could be this....
I think debt will be at the center of the coming economic tsunami. Some state governments are in nearly as bad of shape as Greece. California and Illinois are center stage and their budgets are due on 7/1/10. Around mid-May the crisis will become clear and will trigger a sharp but healthy correction from an overbought market, but the states will patch together a temporary patch by late June that allows the markets to stabilize and wobble higher one final time into August. That will be the final distribution to the "greatest fools".
As for Illinois, this is insane, there's no way out of this:
"If the state payroll was magically purged of every single employee, the annual salary savings would amount to $4 billion, less than one-third of what is needed right now to dig out of the deficit hole."
http://www.chicagotribune.com/news/local/ct-met-state-budget-mess-20100223,0,7172195.story
In the mean time I plan to stay on this train headed for a collapsed bridge over a canyon a bit longer, I wouldn't be surprised to see the Nasdaq surpass the 2007 highs this year to create a better looking large wave B up from the 2002 low. This sums up nicely where we are right now: http://news.goldseek.com/RickAckerman/1267081260.php
Meanwhile, on the real estate front, commercial real estate problems are escalating steadily as predicted:
http://www.zerohedge.com/article/ja...on-58-total-103-increase-sequantially-and-325-
And in China, prices in some areas are escalating at 20% per month?!
http://www.telegraph.co.uk/finance/china-business/7339669/China-risks-property-bubble-as-prices-rise-20pc-a-month.html
And I didn't think it could get any worse in Detriot, but....
http://www.guardian.co.uk/business/2010/mar/02/detroit-homes-mortgage-foreclosures-80
I think debt will be at the center of the coming economic tsunami. Some state governments are in nearly as bad of shape as Greece. California and Illinois are center stage and their budgets are due on 7/1/10. Around mid-May the crisis will become clear and will trigger a sharp but healthy correction from an overbought market, but the states will patch together a temporary patch by late June that allows the markets to stabilize and wobble higher one final time into August. That will be the final distribution to the "greatest fools".
As for Illinois, this is insane, there's no way out of this:
"If the state payroll was magically purged of every single employee, the annual salary savings would amount to $4 billion, less than one-third of what is needed right now to dig out of the deficit hole."
http://www.chicagotribune.com/news/local/ct-met-state-budget-mess-20100223,0,7172195.story
In the mean time I plan to stay on this train headed for a collapsed bridge over a canyon a bit longer, I wouldn't be surprised to see the Nasdaq surpass the 2007 highs this year to create a better looking large wave B up from the 2002 low. This sums up nicely where we are right now: http://news.goldseek.com/RickAckerman/1267081260.php
Meanwhile, on the real estate front, commercial real estate problems are escalating steadily as predicted:
http://www.zerohedge.com/article/ja...on-58-total-103-increase-sequantially-and-325-
And in China, prices in some areas are escalating at 20% per month?!
http://www.telegraph.co.uk/finance/china-business/7339669/China-risks-property-bubble-as-prices-rise-20pc-a-month.html
And I didn't think it could get any worse in Detriot, but....
http://www.guardian.co.uk/business/2010/mar/02/detroit-homes-mortgage-foreclosures-80
Tsunami
Well-known member
Just to put some Elliott wave labels on my scenario, linked below is my (very ugly, hand-drawn with MS Paint) chart for the Nasdaq-100. I think the drop from 2000 to 2002 was wave A down, then the rally from 2002 to this August will complete wave B up, then wave C down comes from 2010 to at least 2012. The coming May peak will complete wave 3 of c of B. Wave 4 of c of B should bottom in June, then wave 5 of c of B completes the 8 year rally in August (most other index's will not get to new highs and have different wave counts). There will be the dreaded "Hindenburg Omen" in August as the distribution intensifies at the top. I haven't seen anybody with this wave count since the bears are still clinging to hopes of an imminent crash, so if this turns out to be correct I need to get my own website/newsletter. 
Tsunami
Well-known member
Very interesting commentary by Brian Pretti yesterday...
"from 2004 to the equity peak in 2007, the S&P NEVER traded at a level over 5% below its 50 day moving average"...with similar patterns in other post-recession periods.
http://www.financialsense.com/Market/pretti/2010/0305.html
IF this pattern starts to repeat going forward, and since most peaks on his charts are about 5% above the 50dma, with the 50dma now at 1110, I'm not too worried about an important top next week unless it reaches 1165ish. A short-term dip is due (especially with the closing Arms ratio Friday at a very low 0.4), perhaps down to the 50dma, but I don't think we'll get a dip down to 5% below the 50dma until we first touch +5% above it.
One possible scenario, around mid-May the S&P peaks at about 1207ish, and at that point the 50dma will have reached 1150ish, then the market corrects about 10% down to ~6% below the 50dma at 1085ish (read Pretti's commentary as to why it should piece the -5% line, this will be the warning shot like in mid-2007), then it's on to the final peak in August at perhaps 1228ish, the 61.8% retrace point, but I hope even higher in a blowoff top.
Just a wild guess at this point. I wish it was that easy, we could all make 20%+ this year if it was.
Good stuff in the FSN podcasts this week too. I'm a peak oil worrier so am encourage by what Matt Simmons has to say in hour #2 about his wind/potable water/liquid ammonia project in Maine.
http://www.financialsense.com/fsn/main.php
"from 2004 to the equity peak in 2007, the S&P NEVER traded at a level over 5% below its 50 day moving average"...with similar patterns in other post-recession periods.
http://www.financialsense.com/Market/pretti/2010/0305.html
IF this pattern starts to repeat going forward, and since most peaks on his charts are about 5% above the 50dma, with the 50dma now at 1110, I'm not too worried about an important top next week unless it reaches 1165ish. A short-term dip is due (especially with the closing Arms ratio Friday at a very low 0.4), perhaps down to the 50dma, but I don't think we'll get a dip down to 5% below the 50dma until we first touch +5% above it.
One possible scenario, around mid-May the S&P peaks at about 1207ish, and at that point the 50dma will have reached 1150ish, then the market corrects about 10% down to ~6% below the 50dma at 1085ish (read Pretti's commentary as to why it should piece the -5% line, this will be the warning shot like in mid-2007), then it's on to the final peak in August at perhaps 1228ish, the 61.8% retrace point, but I hope even higher in a blowoff top.
Just a wild guess at this point. I wish it was that easy, we could all make 20%+ this year if it was.
Good stuff in the FSN podcasts this week too. I'm a peak oil worrier so am encourage by what Matt Simmons has to say in hour #2 about his wind/potable water/liquid ammonia project in Maine.
http://www.financialsense.com/fsn/main.php
Tsunami
Well-known member
Just went back to see if my latest predictions were still consistent with my very first post on 12/29/09. They are, and boy, how did I nail that first one like that?
:cheesy:
Tsunami
Well-known member
Point:
Sectors and stocks breaking out all over the place now.....
http://www.tickerville.com/index.php/site/comments/its_bull_time/
Counterpoint:
March 8 (Bloomberg) -- Equity mutual funds are burning through cash at the fastest rate in 18 years, leaving them with the smallest reserves since 2007 in a sign that gains for the Standard & Poor’s 500 Index may slow. Cash dropped to 3.6 percent of assets from 5.7 percent in January 2009, leaving managers with $172 billion in the quickest decrease since 1991, Investment Company Institute data show. The last time stock managers held such a small proportion was September 2007, a month before the S&P 500 began a 57 percent drop, according to data compiled by Bloomberg.
Almost like the herd is down to searching for loose change under the cusions to throw at this thing, but I'm committed now since if I bail I can't get back in until April, kinda like self-imposed sticky pants I guess.
Good interview, the financial attack for profit has begun; first Greece, then other weak Euro countries, then the pound, then the U.S. States and the dollar itself. I think they're talking about Warren Buffet in the middle of it: http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/3/8_Jim_Sinclair.html
Sectors and stocks breaking out all over the place now.....
http://www.tickerville.com/index.php/site/comments/its_bull_time/
Counterpoint:
March 8 (Bloomberg) -- Equity mutual funds are burning through cash at the fastest rate in 18 years, leaving them with the smallest reserves since 2007 in a sign that gains for the Standard & Poor’s 500 Index may slow. Cash dropped to 3.6 percent of assets from 5.7 percent in January 2009, leaving managers with $172 billion in the quickest decrease since 1991, Investment Company Institute data show. The last time stock managers held such a small proportion was September 2007, a month before the S&P 500 began a 57 percent drop, according to data compiled by Bloomberg.
Almost like the herd is down to searching for loose change under the cusions to throw at this thing, but I'm committed now since if I bail I can't get back in until April, kinda like self-imposed sticky pants I guess.
Good interview, the financial attack for profit has begun; first Greece, then other weak Euro countries, then the pound, then the U.S. States and the dollar itself. I think they're talking about Warren Buffet in the middle of it: http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/3/8_Jim_Sinclair.html
Tsunami
Well-known member
I found an update on the "Zweig Breadth Thrust Indicator". Before giving buy signals twice last year (March and July), it hadn't triggered since 1985! It just gave another buy signal a couple weeks ago.....
http://seekingalpha.com/instablog/139212-e-nuff-sed/55372-zweig-breadth-thrust
A second thing I wanted to post....way back on July 2, 2007, Tom posted a "Chart of the Day" of historical small-cap versus large-cap (e.g., similar to the S fund versus C fund) monthly returns from 1988 to 2007....I printed out that chart and still keep it handy whenever making a decision on allocations, and I just Googled it and found it here (would be nice to get an update of this): http://www.chartoftheday.com/20070629.htm
For what it's worth, based on historical averages, one could potentially improve returns by focussing on the following funds in these months....and mixing in the I fund when the dollar is likely to stay flat or fall...
Jan - Mar > S fund
April > C fund
May - Jun > S fund
July - Sep > G/F funds (summer doldrums)
Oct > C fund
Nov - Dec > S fund
Looks like we're going to get a weak pullback this week, or just this sideways consolidation. I think the bears will be lucky to see anything below 1125.
http://seekingalpha.com/instablog/139212-e-nuff-sed/55372-zweig-breadth-thrust
A second thing I wanted to post....way back on July 2, 2007, Tom posted a "Chart of the Day" of historical small-cap versus large-cap (e.g., similar to the S fund versus C fund) monthly returns from 1988 to 2007....I printed out that chart and still keep it handy whenever making a decision on allocations, and I just Googled it and found it here (would be nice to get an update of this): http://www.chartoftheday.com/20070629.htm
For what it's worth, based on historical averages, one could potentially improve returns by focussing on the following funds in these months....and mixing in the I fund when the dollar is likely to stay flat or fall...
Jan - Mar > S fund
April > C fund
May - Jun > S fund
July - Sep > G/F funds (summer doldrums)
Oct > C fund
Nov - Dec > S fund
Looks like we're going to get a weak pullback this week, or just this sideways consolidation. I think the bears will be lucky to see anything below 1125.
Trying to keep my posting average at one per day....oops, this is my 69th post and today is the 68th day of the year, now I can't post again until Thursday!
Thanks Tsunami, Keep bringing it. You bring good stuff!
Tsunami
Well-known member
A short-term guess.....
A) Per that "Mr. Topstep" 3/8 update posted in Poolman's post #2842, the CME floor traders are expecting a pullback this Thursday/Friday, then another run higher into options expiration on 3/19.
B) Terry Laundry's latest update shows his top channel nudging up to the 1150 double-top area, today's it should be at 1148 today, rising about a point a day. http://www.ttheoryfoundation.org/t-theory-calculations.html (note that he's now zeroed in on 5/20ish as the next significant peak)
C) To me the Elliott wave count since the low last Wednesday afternoon is a very clear 5 waves up, completing today, or at tomorrows open, probably in the 1147-50 area.
That would be a perfect setup for about a two-day drop back down to the 1135 area, or worst case the upper 1120's. That's all the bears are gonna get. So Thursday would be my best guess on a good entry day for this week, since by late Friday it could already be running up in anticipation of the usual Monday jump.
Elliott wave lesson, from the 3/3 low, wave 1 up completed with the Thursday morning high, wave 2 down just a little later Thursday morning, wave 3 up (and you can also count 5 waves up within the wave 3, with the gap up Friday morning being the center of wave 3 of wave 3) finished Monday morning, wave 4 down finished at today's open, now we're in 5 up to the short-term top.... or of course that could be wrong and like all the other Elliott wave counters I'll just say "oops".
A) Per that "Mr. Topstep" 3/8 update posted in Poolman's post #2842, the CME floor traders are expecting a pullback this Thursday/Friday, then another run higher into options expiration on 3/19.
B) Terry Laundry's latest update shows his top channel nudging up to the 1150 double-top area, today's it should be at 1148 today, rising about a point a day. http://www.ttheoryfoundation.org/t-theory-calculations.html (note that he's now zeroed in on 5/20ish as the next significant peak)
C) To me the Elliott wave count since the low last Wednesday afternoon is a very clear 5 waves up, completing today, or at tomorrows open, probably in the 1147-50 area.
That would be a perfect setup for about a two-day drop back down to the 1135 area, or worst case the upper 1120's. That's all the bears are gonna get. So Thursday would be my best guess on a good entry day for this week, since by late Friday it could already be running up in anticipation of the usual Monday jump.
Elliott wave lesson, from the 3/3 low, wave 1 up completed with the Thursday morning high, wave 2 down just a little later Thursday morning, wave 3 up (and you can also count 5 waves up within the wave 3, with the gap up Friday morning being the center of wave 3 of wave 3) finished Monday morning, wave 4 down finished at today's open, now we're in 5 up to the short-term top.... or of course that could be wrong and like all the other Elliott wave counters I'll just say "oops".
Tsunami, This chart fits right into what you are talking about. Here is the link I got it from.
So the question is do we use an IFT to protect and lock in some profit or ride it out until Tuesday or Wednesday next week? We also have to remember that next week is Options X week.
Tsunami
Well-known member
I try not to time any moves that look like they'll be less than a week, it's just too hard to be right even half the time. I already tried to get cute once in January and once in February and didn't gain much by it. If a correction down does happen starting tomorrow, then today would have been the one and only good day to get out. I may just ride this all the way to that projected 5/20 peak at this point. I'm hoping for 1200, but it's possible this could start to really "melt up", in Terry Laundry's Sunday update audio http://www.ttheory.com/ , at the very end he made a comment that it seems to be entering a "buying panic" mode. After this first test of 1150, then a retreat, once it blasts through it on the next try I bet there's going to be some good short-covering fireworks as all the Daneric's and McHugh's and Hochberg's of the world retreat.
I just noticed that Yahoo chart keeps updating, wierd. I guess it's linked to the live chart, so it won't show the waves I was counting after today.
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