Uptrend's Account Talk

[Steadygain]

The dust cloud is building as the bulls begin to move faster.

Are they heading over the edge of a steep and high cliff? The current data would suggest a sustained sell off will lead to a lower bottom. Missing that BOTTOM is the ultimate loss.

I'm way more convinced that Trading over months at a time is way better than shooting for 2 or 3 day gains. When I go in it's for the long hull. Then when we see anyone fleeing underground we can tease them togehter. :toung::laugh:

 

[Uptrend]

The markets seemed out of control today. But not really. The inverted H&S is setting up for a rally, despite the volitility. Since no one has named it yet, I will name it the Obama Expectations Rally.

Here is a smash of a U tube video. Made me laugh!

http://www.youtube.com/watch?v=28I0JK0byLU&feature=related

 

[Uptrend]

Here is the McClellan Summation Index for the NYSE. Basically it is derived from the number of advancing and decling stocks. Since it is derived using the 19 and 29 EMA, I also have shown those averages on the chart. This is a good measure of the breadth of the market and whether it is under net accumulation (buying -green bars) or net distribution (selling red bars). Here is the chart:

View attachment 5198

McClellan in his book, says that -1000 shows a major bottom is near, and +1600 shows that a major top is near. You can see how weak we are right now, -1100.However, you can see that the RSI is gaining strength heading toward 70 (similar to the summer late August Rally) and the MACD has a positive divergence. Further, you can clearly see that in early October the 19 EMA crossed below the 39 EMA, so this was a "SHOUT AT YA" sell signal. Wish I would have listened!. But now we see the 19 EMA moving up toward the 39 EMA from below and is positioning for a buy signal. Kind of hard to see on the chart, but it is at -1275 at Fridays close. Also, the accumulation has inched above the last accumulation run on November 10. So I think the BIG Investors are nibbling a little on the buying front, or it could be the little guy? At any rate, IMO it is the front side of the Obama Expectations Rally. I see a go till Christmas. then could be year end selling/rebalancing, another push up in January 09 and then a fall-out in March, when the Auto-makers run out of the energy efficient congressional dollars that they will probably receive.

 

[Uptrend]

Besides the summation index tech talk in the previous post, here is another view from the mousehole. If you believe that the financials led the market down (and who doesn't), then you must believe that the financials will help the market go back up. As you see on the XLF chart, the financials bottomed 10 trade days ago, on November 21. The downside was tested, and a strong hammer candlestick was formed. Look at the rally since.

View attachment 5199

At Fridays close the market is pressing on the downtrend line on the chart, or may have slightly penetrated into it. There is still room to run to the 50 dma and the bollinger band at around 14-15. Cound be a little consolidation, before resuming. If the market gets past that point, looks like the early November highs would be the next target. Note that the MACD, and Accum/Dist have positive divergences, but the RSI needs to gain some more strength. So, the BIG Trader needs to start buying at higher levels. The 12-16 area may start to build a right shoulder for a inverted H&S BIG rally sometime next year. So I am thinking for the financials, that the bottom may be in place.

 

[Bullitt]

Yep, been watching the financials for a while Uptrend. If I recall, every expert up until a few months ago was saying 'watch the financials, watch the financials, they are going to lead us out of this hole'. Now we're watching things that nobody has ever heard of let alone understands, ie: TED Spread, LIBOR.

The proof is in the pudding.....

3 Month Market Returns:
XLF -.92%
SPY -8.72%

Something to think about.

 

[Uptrend]

The TED spread measures the difference between the three month US Treasury Bill and the three month Eurodollar Future. Elevated readings in the indicator indicate an increased level of risk aversion in the market, as investors go to short T-bills. Here is the chart:

View attachment 5203

When the spread gets to great, above 1.50, there is a flight to T-bills. I placed a purple line in at 1.5 on the chart, as well as put in the bollinger bands. The MACD shows the TED is rising slightly, but the faster and slower moving averages are imbedded more or less, so the trend is less clear. I really don't know what to make of the current spread, because on one have LIBOR has been lowering rates lately, and there is general fear in the market that are driving folks to T-bills. The spread is supposed to be saying that risk is too high (above 1.5) and fear of another big drop by a majority of investors. On the other hand, if the market maakes a swing up, like on Obama expectations, then folks with maturing T-bills would sell, thus driving the yields up and the TED would be narrowed.

 

[Uptrend]

Even though I would like to play-on, I have moved 100% to G. Why? The entry point for the big gain in this rally was Dec 2. Today the market is pushing against the downtrend line and trying to get over. It may well run higher up to the spx 50 dma or the bollinger band at the 940 area, but is also major resistance. The risk increases every day in a bear market rally, for a reversal. Today is rally day 5. Even though the IFT limitation prevents me from trading on, at least I will have a posivite December, if the market holds up. This upwave is irrational, but irrational markets may proceed longer than one might think. I am opting out for the safe trade.

 

[Uptrend]

The rally today is low volume, and is chopping around and staying real close to the downtrend line. And the XLF for financials is declining. The buyer information I watch, suggests that the small investor is buying, but the Big program trader is not. These factors lead me to believe that the uptrend is in trouble.

Based on previous bear markets, a retest of the lows may take anywhere from 6 weeks to 5 months. For a successfull retest the market should come to within 2% or closer to the first low. On the spx, we have not met that condition for the 739 low.

Conclusions: Another big low is on the horizon, based on lack of market strength, weak financials, time between lows that is now increasing (and meeting average conditions for a second low based on history)making a big drop more probable. However, it is not clear how long the market chops or roller coasts before the capitulation low, forming the broad W pattern. Estimate? Between now and March 09.

 

[Uptrend]

A disturbing trend is beginning to affect wildlife in the U.S.


Animals that were formerly self-sufficient are now showing signs of belonging to the Democratic Party... as they have apparently learned to just sit and wait for the government to step in and provide for their care and sustenance.

This photo is of a Democrat black bear in Montana, nicknamed 'Bearack'.


View attachment 5263

 

[Guest2]

Being a distant relative, Squalebear reluctantly admits that Bearack hailed
from the southern most part of Italy and always tanned darker then bears
that thrived in the Naples area of the country. So you see, he's not really
Black, he's just really, really tan. :nuts:

 

[KevinD]

:laugh: :laugh: :laugh:

 

[Uptrend]

I suspect there is massive manipulation going on in oil. Just like when it soared to $147/barrel, now the shorts are taking it down.to unrealistic low levels, that is not in-line with supply and demand. As I understand it, the world is still using oil near 5% of all-time highs. So, I believe there will be a short covering rally coming. See chart:

View attachment 5269

Most likely target is around $65/barrel. So I am long coal stocks, that will bounce up up as soon as oil recovers. They are btu, pcx and aci. And solar stocks that will get a bid. They are fslr and eslr Play the foolishness.

 

[FogSailing]

Thanks UpTrend for your thoughts. I almost hate to read any of this stuff anymore. Such corruption in everything that seems to be going on in Wall Street. I heard a wise man recently say that in all his years he had never seen Wall Street so spiritually bankrupt. He said that until that turns around, we will all continue to suffer. Let's hope for more integrity. My only question is where and how do we find those people? I don't know about all of you, but I have certainly have lost trust with those who broke faith with all of us. I hope karma is a reality. On a positive note, my best wishes to you all for a Happy Holiday.

FS

 

[Uptrend]

Still a Bear market until proven otherwise.

Note the trading channel on the spx weekly, and the fact that we are still in it. Bollinger bands are on the outsides, and the 20 and 50 sma are above. I note that the 20 sma is crossing the 50 sma to the upside on the daily, but a similar crossover is nowhere in sight on the weekly.


View attachment 5383

My IFT: Holding in G for a signal.

Recent winning individual trades (>10%)on the following stocks: AUY, DRYS, ESLR, PCX and FNM. Watching ASH, USO, DXO, AUY, PCX, ACI, BTU and JSDA

 

[Uptrend]

Watching the retracement today, as expected for the overbought market. Because the spx market is below 912 that now acts as resistance and 857 as support. Market cooling off to nuetral to slightly oversold. 16 day cycle low lines up with Monday, January 12. Because there is little support below (till 857) I am wiating in G, expecting some more downside Monday. So, that may be the buy in day because I am expecting a brief rally surrounding the inauguration.

Will the market move up around the inauguration?

"Results on average suggest abnormal strength three to four days before inauguration day and weakness from two days before through inauguration day. Volatility on average tends to be high the day before inauguration and low on inauguration day. As usual for daily data, noise generally dominates signal. Sample size is small."

http://www.cxoadvisory.com/blog/internal/blog1-09-09/

The inauguration is Saturday January 17. So, that puts potential market strength on next Tuesday and Wednesday January 13 and 14.

 

[XL-entLady]

Watching the retracement today, as expected for the overbought market. Because the spx market is below 912 that now acts as resistance and 857 as support. Market cooling off to nuetral to slightly oversold. 16 day cycle low lines up with Monday, January 12. Because there is little support below (till 857) I am wiating in G, expecting some more downside Monday. So, that may be the buy in day because I am expecting a brief rally surrounding the inauguration.

Will the market move up around the inauguration?

"Results on average suggest abnormal strength three to four days before inauguration day and weakness from two days before through inauguration day. Volatility on average tends to be high the day before inauguration and low on inauguration day. As usual for daily data, noise generally dominates signal. Sample size is small."

http://www.cxoadvisory.com/blog/internal/blog1-09-09/

The inauguration is Saturday January 17. So, that puts potential market strength on next Tuesday and Wednesday January 13 and 14.

Thanks for the information, Uptrend. I like the cxoadvisory site and have found their information to be reliable in the past, so this is a timely and appreciated update!

Lady

 

[Uptrend]

Here is my blog on the market this week (since I am not a moderator and cannot leave blogs). Will the market go up or down? Lets look at the spx chart:

View attachment 5409

You can see that we are locked in a 741 - 1007 trading range since November 08. So far the market has retraced 77% from the low and then fell back to 60% on Friday on support with 20 and 50 sma support double coverage. That lines up with a 61% FIB retracement. But markets meander. Will the market retrace 100% to 1007 resistance before heading down again? That is one theory. Lets look at another spx chart:

View attachment 5410

This is a clear pennant pattern and it seems to indicate a breakdown because the market is below the lower line, and would breakdown, especially if support of the moving averages break. But markets usually fake-out one way and then go in the opposite direction. Will that happen? Perhaps. A safe play would be to IFT in to a ride to 1007 if the market goes above the lower line at about spx 912. Lets look at one more spx chart:

View attachment 5411

Since early December 08 the market has been within a rising channel. If the pennant breaks to the upside (as I expect) then the market has clear sailing to about 940 spx (pennant resistance line in previous chart) and then the top of this mini-trading channel at the resistance spx 950 area. 1007 would be the lid. I still think we will have the Obama rally under way tomorrow. The market could break below support tomorrow in the AM, but must finish above spx 890 and preferably above about 900. 912 wouold be even better for confirmation. If you are a low risk taker, IFT in when you see spx 912 taken out. RSI has moveed back to neutral.

The weight of evidence tells me that we are going up. Markets almost always fake-out and then go opposite. I am planning to IFT in tomorrow. But not to I. That is because the dollar is on support and rising. So I will split between C and S. Trade on.

 

[Uptrend]

The market is not going the way I expected. Futures show there is a high probability spx will break 20 and 50 sma support, and furthermore that the market will close below the 912 pennant line. So the fake-out to the downside is not confirmed. This is a bearish sign, and therefore I am holding in G.

 

[Uptrend]

The rally so far today appears to be fake. This is some chart support in the spx 860 area, but not important moving average support. There are various divergences within sectors. This means to me that the big traders are selling into it. Thery were in accumulation for the last month, but appear to have turned. At this point the risk/reward is too great for me to play. Holding G.

 

[Uptrend]

I am still interested in the financials, as IMO they are a key to market direction. Here are the XLF SPDR and KBE ETF charts:

View attachment 5431

View attachment 5432

You can see the trading channel the market is currently confined within. The market is sliding along and partly to totally outside the lower bollinger band the last 2 trading days. Contrast this with 5 trading days touching the bollinger band on the last downtrend in November. I am not saying the financials will turn in 3 days, but merely point out that it is unusual to stay there for any length of time, since by defination the bollinger band is 2 standard deviations from the 20 day sma. Also todays (Tuesday) market activity is upon the boundary of the trading channel, with a doji candlestick which means indecision. In other words forces of buying and selling are nearly equal. Thursday JP Morgan/Chase reports and that might be a market mover? At any rate I am watching for a sign that the financials are turning, and at that point if the spx has not totally fallen apart, I will be a buyer into the market. Could be as early as tomorrow. Holding G