Weekly MACD showing a gradually sloping downtrend in addition to
a negative divergence developing. This 10 week rally has been
like no other in the last four years of this bull market.
Choppy as all get out, but usually finishing the week
slightly up. This week marked six straight days up, and the
lowest volume week of the year -- with each day getting weaker than
the last. But every week, copper, silver, China and Canada
seem to be left behind.
Next two charts are interesting: I read rumors of QE3..... not
sure how it is justified at this juncture. Especially because
extended twist is still on.
I still think the 1422 top was significant. That marked
the $NDX making a perfect rejection from the 50% retrace of the
2000-2003 bear market, and since then many of those can't miss
stocks have been getting taken to the woodshed (PCLN, CMG, LULU).
For the first time in a LONG time, AAPL isn't off to new
highs before the broad market -- that is unusual
behavior.
These are great charts. Thanks for sharing them :-)
In macrospeak, since 2008, money was withdrawn from the monetary
system, as mortgages went underwater and defaulted, hedge funds,
brokerages, banks, and bond traders went insolvent and were closed,
merged, or sold.
Commodities (excepting precious metals and to some extent oil.
Both serve partially as counterbalances or mechanisms balancing
monetary & fiscal policy.) cratered.
The massive injection of additional funds were a global response
to real deflation.
It appears (and makes perfect sense) that financial assets were
first to respond. They are closest to the lever applied to the
economy by the powers that be, The Wizards.
Now commodities, like food are responding. Have you seen corn
lately?
The last sign to turn is/will be interest rates. When the 30yr
treasury gets slammed back to just last year (120s), that will be a
sign the war of deflation is won.
If these folks have beaten the deflation (yes, a big question),
then the coming inflation may be huge.
One may eventually ask if the cure was not worse than the
disease itself?
kalinm- if the market wants to, it can still work
higher into the year up into the wedge, still plenty of room to go.
The 1450's may be a target over time. However short
term the advance is on lighter volume, Rut continues to lag etc.
A pullback soon would not surprise me at all. If this
ending diagonal pattern plays out the market has plenty of room to
pullback as well and stay within the pattern, and of course still
has plenty of upside room in the pattern. I still 2013 is
when the proverbial shit hits the fan. I've also attached
another daily chart that shows a shorter term wedge, and of course
a weekly chart. The final table shows the statistics of how
the market typically closes the year after a 1st strong quarter
Thanks Matt, there is a good chance this keeps melting up
despite many calls of a top. It is too easy to blow through
some stops at 1415 May 1st high, then the 1422 high all the way to
the 1440 pivot. Europe is on vacation anyway.
Besides the statistical probability that this year ends
positive, why do you think 2013 will be a down year?
Can you really see anything your really want to own?
Sox has been up 6 days in a row which helps and
Transports actually reversed course today. I don't
know how fuel prices are helping, considering they will
go up more especially if they back off on the ethanol mandates in
gas. It looks to me like classic rotation this
week. The Rut still has not broke the
810 ish trendline. I think that this market is more
of a case of lack of sellers then anything. Almost
90 percent of the calls I make on business...
nobody answers.. everyone is on vacation.
Anyway , puts are cheap. Go long the
market and buy protection. Depending on the size of
your account... you can sell some SPX 1455/1465
Sept calls for around 1.65 and buy
some SPY Sept put spreads 140/135 are
about 1.44 Just exit your longs and keep
your puts if the market reverses.
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Dangerous divergences developing
Posted by kalinm on 10th of Aug 2012 at 08:38 pm
Weekly MACD showing a gradually sloping downtrend in addition to a negative divergence developing. This 10 week rally has been like no other in the last four years of this bull market. Choppy as all get out, but usually finishing the week slightly up. This week marked six straight days up, and the lowest volume week of the year -- with each day getting weaker than the last. But every week, copper, silver, China and Canada seem to be left behind.
Next two charts are interesting: I read rumors of QE3..... not sure how it is justified at this juncture. Especially because extended twist is still on.
I still think the 1422 top was significant. That marked the $NDX making a perfect rejection from the 50% retrace of the 2000-2003 bear market, and since then many of those can't miss stocks have been getting taken to the woodshed (PCLN, CMG, LULU). For the first time in a LONG time, AAPL isn't off to new highs before the broad market -- that is unusual behavior.
Perhaps the Wizard is pulling the strings
Posted by cubby on 12th of Aug 2012 at 10:45 am
These are great charts. Thanks for sharing them :-)
In macrospeak, since 2008, money was withdrawn from the monetary system, as mortgages went underwater and defaulted, hedge funds, brokerages, banks, and bond traders went insolvent and were closed, merged, or sold.
Commodities (excepting precious metals and to some extent oil. Both serve partially as counterbalances or mechanisms balancing monetary & fiscal policy.) cratered.
The massive injection of additional funds were a global response to real deflation.
It appears (and makes perfect sense) that financial assets were first to respond. They are closest to the lever applied to the economy by the powers that be, The Wizards.
Now commodities, like food are responding. Have you seen corn lately?
The last sign to turn is/will be interest rates. When the 30yr treasury gets slammed back to just last year (120s), that will be a sign the war of deflation is won.
If these folks have beaten the deflation (yes, a big question), then the coming inflation may be huge.
One may eventually ask if the cure was not worse than the disease itself?
kalinm- if the market wants
Posted by matt on 11th of Aug 2012 at 02:49 am
kalinm- if the market wants to, it can still work higher into the year up into the wedge, still plenty of room to go. The 1450's may be a target over time. However short term the advance is on lighter volume, Rut continues to lag etc. A pullback soon would not surprise me at all. If this ending diagonal pattern plays out the market has plenty of room to pullback as well and stay within the pattern, and of course still has plenty of upside room in the pattern. I still 2013 is when the proverbial shit hits the fan. I've also attached another daily chart that shows a shorter term wedge, and of course a weekly chart. The final table shows the statistics of how the market typically closes the year after a 1st strong quarter
Thanks Matt, there is a
Posted by kalinm on 11th of Aug 2012 at 10:34 pm
Thanks Matt, there is a good chance this keeps melting up despite many calls of a top. It is too easy to blow through some stops at 1415 May 1st high, then the 1422 high all the way to the 1440 pivot. Europe is on vacation anyway.
Besides the statistical probability that this year ends positive, why do you think 2013 will be a down year?
Plus
Posted by zach06 on 10th of Aug 2012 at 08:52 pm
Can you really see anything your really want to own? Sox has been up 6 days in a row which helps and Transports actually reversed course today. I don't know how fuel prices are helping, considering they will go up more especially if they back off on the ethanol mandates in gas. It looks to me like classic rotation this week. The Rut still has not broke the 810 ish trendline. I think that this market is more of a case of lack of sellers then anything. Almost 90 percent of the calls I make on business... nobody answers.. everyone is on vacation. Anyway , puts are cheap. Go long the market and buy protection. Depending on the size of your account... you can sell some SPX 1455/1465 Sept calls for around 1.65 and buy some SPY Sept put spreads 140/135 are about 1.44 Just exit your longs and keep your puts if the market reverses.