Uptrend's Account Talk

[Uptrend]

There are those that believe that the FOMC will continue to cut rates on Dec 11 when they meet. Some believe the falling dollar will continue to fall and in fact it is engineered. Drive up the stock market wtih wothless dollars (as a cut will do), make cash and loans readily available, so US consumers keep buying goods and keep the global markets zipping along. Narrow the trade deficit.

Perhaps a market slide for the next week or so and then a factoring in of a rate cut, causing a rebound. Bad news to cause a slide; see "Perched on a Cliff's Edge"

http://www.marketwatch.com/

 

[Uptrend]

Continued for Monday. The $SPX 1375 area looks like a logical place for a real bounce. It fits a long term trend line and has substantial support. What I think we may see happen is a move up to the 1465 area followed by drops to the 1375 area. Whenever this occurs, I will buy in. I have noticed there is a tendancy for the worst of a retracement to occur within 3 weeks or so of when the 20 dma goes below the 50 dma. That happened in early November, so following this theory, we would have another week of heavy downside. The volatility will continue, even if we turn the corner, so if TSP allows, we may want to sell after a few days of uptrend and wait till the next big down day.

I think this rally is fake. We need more consolidation.

 

[Steadygain]

There are those that believe that the FOMC will continue to cut rates on Dec 11 when they meet. Some believe the falling dollar will continue to fall and in fact it is engineered. Drive up the stock market wtih wothless dollars (as a cut will do), make cash and loans readily available, so US consumers keep buying goods and keep the global markets zipping along. Narrow the trade deficit.


Uptrend, this is exactly what I've been telling others for the past few months. I see this as a red flag - a sign of major weakness - that we're trying to cover with "another pleasant mask". This is one of the main reasons I'd like to see a major recession, because when stocks are selling at a much lower price - the dollar in turn will be much stronger. Anyway, I think the quote above is very accurate and wonder if you agree with it.

 

[Uptrend]

Yes I think the chance is 50/50 that we go way down. That is because the sub-prime crisis is not over. We saw how all the big players were denying their losses and then coming clean later. Our TSP fund manager Barclays was a classic example. They denied being affected and then admitted 3 billion in loss a few weeks later. This leads one to suspect that the big banks and hedge funds are hiding more losses on their balance sheet. Loss of net asset valuation because of downward real estate prices will mean these big companies will take another round of really big losses. Put that together with a slowing economy, an oil crisis, and the fourth quarter reports starting the 3rd week of January 08 may be really ugly.

I am hoping we go down the test the 1375 support area and have a nice playable Christmas bounce, and then get out and luck out.

 

[Steadygain]

Thanks my man, I really appreciate your input.

 

[phillyfed]

Yes I think the chance is 50/50 that we go way down. That is because the sub-prime crisis is not over. We saw how all the big players were denying their losses and then coming clean later. Our TSP fund manager Barclays was a classic example. They denied being affected and then admitted 3 billion in loss a few weeks later. This leads one to suspect that the big banks and hedge funds are hiding more losses on their balance sheet. Loss of net asset valuation because of downward real estate prices will mean these big companies will take another round of really big losses. Put that together with a slowing economy, an oil crisis, and the fourth quarter reports starting the 3rd week of January 08 may be really ugly.

I am hoping we go down the test the 1375 support area and have a nice playable Christmas bounce, and then get out and luck out.

Preaching to the choir....Amen

 

[Uptrend]

Today looks like an indecision day, just as I suspected. Open high and then retreat and trade in a narrow range. Also the the first 2 of the last 3 trade days have formed a bearish engulfing pattern followed by a down hammer forming today. Formula for a retreat. Time to stay at cash or go a little F. F is a little high, but the chart indicates it may go higher.

 

[Uptrend]

Well now a bit of a reverse overturning the chart pattern that started forming for today. The market is fickle. I am going to wait it out for at least another day.

 

[Uptrend]

We are at a cross + road. Which way will the market go? Se chart:

View attachment 2706

The top line above the candlesticks shows that we are in a downtrend, and even though we had a good bounce on good volume today, we could not punch through it. The bottom line shows the approximate 5 year upward trend line. The 200 dma is also on the chart for reference (going through the middle). To the bottom right corner on the chart a wedge is forming. Either we will rally above the 5 year trendline along the base, or go down through it. This will probably happen in the next few trading days. If we go up enough the downtrending line would be broken. But we could go down, extending the long downwave.

So, here is the deal. If we rally above the down trendline (around 1440), I will dive in the market, and stay in till we hit the 200 dma. But if we drop below the long term trendline (around 1400), I will stay out. In that case, I will try and play a bounce at 1375. This movement may also indicate we are starting down the road in a bearish market. Sitting on the sidelines.

 

[Steadygain]

Thanks Uptrend, I'm with ya all the way.

 

[Uptrend]

For those in the market today - ring the register! For those on the sidelines like me, don't worry. Markets can't stay up for long on a rumor or an unproven assumption. I expect the market to retrace somewhat within a few trading days. There are not enough good fundamentals and too much subprime mess left to contend with and so I expect the lows will retest. And we shall see whether the 5 year channel holds up.

In the short term however, the Dec 11 FOMC meeting may, cause shorts to be a little more wary. So that might be good for the short term market. Looks like the advancing wave punched through the 20 dma at 1460 on way to the 200 dma. I expect tomorrow to be an indecision day, possibly followed by a larger down day on Friday. May jump in at the next retracement, and get out on or before Dec 11. Too much optimism and bullishness translates into a down. Te put/call ration looks to be rather bearish however, which may keep the advance going.

 

[RPM]

Uptrend:

Tomorrow is end of the month dressing, you don't think the market will go up?

 

[Uptrend]

Yeah I am going in right now; 80 I and 20 S. EFA went below the 200 dma a few days ago, but there was no confirmation day so I am mostly in I. Plan to hang out in the funds and sell around on or just before Dec 11 and the FOMC meeting.

 

[Steadygain]

Whew !! Thanks Uptrend, I always feel better when we're on the same path. It's comforting.

 

[Uptrend]

Well, I was a little slow getting in this week and missed the two big up days. The OEX put/calls ratios are still very bearish; with the daily being 0.7 and the 10 day being 1.26. So this tells me the rally has some steam for a little while longer. Also Ben Bernanke remarks left the door open for more rate cuts and more steam.

On the $SPX the next point to get past is the 200 dma at about 1485 and then the 50 dma at about 1505. Once we hit either or both of these points, I think we will see some pullback, and probalby before the FOMC meeting on Dec 11. (I am bothered with that gap on the chart at the 1430 area, but do not think we will get there for awhile).

The last two rate cuts by the Feds in Sept and Oct had a run of about a week of up and tight trading days before the announcement. Both times the largest down day was the anticipation day just before the announcement day. This time that would be Monday Dec 10.

So I plan to sit tight for now, and watch the rebound go to 1505. Because we have been going up or indecision for 3 trading days now, I expect only 1 to 3 more days before a little reverse, but not major. The largest probable reverse would be the anticipation day. When it is so bearish, time to stay in.

 

[Uptrend]

Wake up and smell the coffee!

 

[hessian]

Hey Uptrend,
I've been out, in remote area of PA hills - no news, no internet - until today. Seems I missed alot! - but then again...
Seeking your opinion on that EWT analysis we were kicking around (the one we were looking at, possibly starting early Oct. - and if this might be that final wave (kick up, then down again a little) to complete that 8 piece cycle?? (I'm still in G).:blink:
- Wondering if I should follow, what seems like the crowd, in now (Monday) - or if by the Theory, that its still possible for this cycle to complete - thereby might consider to waiting for.
Just seem to recall we were looking for a possible wave up, then another down (a final zig & zag), to complete that cycle's final wave?

PS I know your ALL IN, so just hoping that you'll do best to provide unbiased reply.
PPS You sure that's coffee in Ben's cup? (meaning maybe be's plastered) - just a thought that as market's seem to be doing so well, what if there's comes no rate cut, this time!
VR

 

[Uptrend]

Yeah, the market was oversold and bounced around 1400; while I was waiting for a little lower. So I missed 2 huge days. In EWT this is an upwave (probably #7) that will be followed by a downwave. I don't know at this point whether we will have a 3 or 5 down. So I am assuming 3 down pattern after a 5 up (ending in Oct) so, I expect the market to turn down around 1490 (200 dma) and head down deeper than 1400. Also notice there is a gap that was formed last Wednesday at the 1430 area. The reason I think we will go down big is because the market fundamentals are lousy. These big hedge funds and banks are all lying and are coveing up big losses that will be revealed near the end of the year and into next year. So I think the market will tank at least to 1375 on the S&P. I am only playing along until the FOMC announcement on Dec 11. Here is a wierd concept - Bad news is good news. By this I mean the jobs report is due out this Friday and if it is much over 60 K new jobs added in October, that will disappoint and the expected rate cut may only be 0.25%. If the number comes in closer to the projection there is anticipation that the cut will be 0.5%. At any rate, I am planning on selling the news on Dec 11. The market already took a run at 1490 and was turned back, so I think it will flounder around for the next few days and may even go down on Dec 10 fear on not cut - this has happened before), but the market will probably end up around 1490 on Dec 11. After that watch for the free-fall.

The OEX put call ratio shows the market is real bearish. When the numbers were similar in April, the market went up, but went down with similar numbers in July. However, the threat of a rate cut will make the shorters a little more wary, so I think the market will trade sideways this week. Here is the data.

 

[hessian]

Hey Uptrend,
I appreciate the way you prsent your thoughts - complex theory, but toned down perhaps, so folks like myself can well understand enough what you're saying in analyses. Also appreciate explaining your strategy (understanding tactics may change, depending on events) -but in explaining plan, both short and longer-term, really helps.

For me, I guess my hope is for some pull-back next week - ordinarily I would then start to DCA in small amounts (just to get some in play) - but with this 2 trades/mo. rule now, I guess DCA concept is dead, or have to go with larger DCA plays (unless policy gets revoked). Now, calling bottoms & tops becomes more critical!!
(Oh well, guess we'll cross that bridge when it actually hits.)

I like your anlyses and opinions, so please keep up your excellent posts!
I'll be tracking them close.
BIG Thanks!!
VR

Oh, BTW, thought occurred to me, on picture below, that Ben's appearance suggests more as the Grinch that stole Christmas (rather than as a Santa). Any thought on this? (Not suggesting any allocation decisions be based on this!)

 

[Uptrend]

ADP jobs report looks great with 189 K jobs added in November. So the gov jobs report should also come in a little better than expected on Firday.

So Christmas rally chances just went up significantly. Dollar index actually jumping a little bit. Oil is stable. Dumb money is real bearish. Smart money is bullish. Charts have hammers forming yesterday. I am going more toward S today as it will really jump if gov jobs report is positive and we also get a rate cut. Hold.