This afternoon, John Murphy stated that it was his opinion that
the stock market has bottomed.
Breakpoint's viewpoint has emphasized that this has only been a
bear market rally and that the market will turn much lower than
previous lows.
Obviously these are 180 degrees of diametrically opposing
viewpoints. One is right and one is wrong!
I respect the technical analysis of both Murphy and Breakpoint
and having a hard time trying to figure out how we get such a
divergence in opinions.
Does this mean that technical analysis is not a science but only
a sentiment based on a indicators that can have opposing
interpretations. If this is so, then who should the average
unsophisticated Joe believe?
Posted by dodgerdog on 27th of Jun 2009 at 01:10 pm
David - while we are looking for anther move lower (at
least a near test of the lows which would be a triangle - all other
scenarios would call for lower lows), you shouldn't lose any sleep
over it anyway. We will not (under any circumstances)
position short if the technicals do NOT support.
So in the end it's nothing to worry about since we don't trade
(even swing trade) off long term predictions. Instead, we
play the trend and stick with the trend until it changes.
DOW AND S&P 500 BOUNCE OFF MAY LOW -- A SHORT-TERM TOP,
HOWEVER, COULD LEAD TO A 38%-50% CORRECTION OF THE SPRING RALLY --
200-DAY AVERAGES PROVIDE SUPPORT BUT ARE STILL DROPPING
but is simply down to interpretation and different
analysis/tools being used. This happens often, and one will be a
hero, the other zero...until the next time...
I wish I knew for sure if it was over or not. I certainly
respect both viewpoints. There is one thing that I do feel
strongly about. Until we get good confirmed crosses of the
13/34 weekly MA's, I'm staying cautious. It really doesn't
matter who is right or wrong at this moment because until we hold
that MA cross we are still in a bear market. That's my
marker. There will be plenty of time to be a bull after that
happens and holds. That doesn't mean that you can't play the
shorter term trends that arise until it happens, however.
There are a few things that bother me on each side. I
don't trust the strong v shaped stock recovery we've had to date.
I also don't like the fact that the market has stalled just
about where we thought it would. I will trust the market
recovery a lot more if we were to go back down and retest the lows.
The strength of the V just doesn't seem to match what is
really going on. While the single bottom could have been
reached it's uncommon not to at least retest it before it's finally
over. Since I'm not a Murphy subscriber I wonder if he
allowed for a retest of the lows. I'll bet he didn't rule it
out.
So is TA simply who's looking at the indicators? Somewhat,
I suppose, especially when we get to these confusing sort of make
or break points. (note that even during these periods we are so
much farther ahead than everybody else that it really doesn't
matter if we are unclear of direction). But it is also so
much more than that. With training you can look at most
charts and make a pretty good guess on the stock's future
direction. The forecast gets cloudier with an increase in
time, and truly some charts just don't give you anything to hang
your hat on. But for most everybody here, TA is the only game
in town.
These transition periods where anything can happen are
absolutely the most difficult to deal with. There can be so
much support and resistance around that head fakes become
frequent. The best thing to do during these periods is play
short term trades with Matt and Steve or just simply stay safe in
cash and wait for the trend to show itself. It can get
frustrating as the transition drags into months, but I've heard it
said that the market spends more time sideways than up or down.
I've come to believe that.
Opposing views.
Posted by davidd on 26th of Jun 2009 at 07:43 pm
This afternoon, John Murphy stated that it was his opinion that the stock market has bottomed.
Breakpoint's viewpoint has emphasized that this has only been a bear market rally and that the market will turn much lower than previous lows.
Obviously these are 180 degrees of diametrically opposing viewpoints. One is right and one is wrong!
I respect the technical analysis of both Murphy and Breakpoint and having a hard time trying to figure out how we get such a divergence in opinions.
Does this mean that technical analysis is not a science but only a sentiment based on a indicators that can have opposing interpretations. If this is so, then who should the average unsophisticated Joe believe?
I am confused!!!!
David - while we are
Posted by dodgerdog on 27th of Jun 2009 at 01:10 pm
David - while we are looking for anther move lower (at least a near test of the lows which would be a triangle - all other scenarios would call for lower lows), you shouldn't lose any sleep over it anyway. We will not (under any circumstances) position short if the technicals do NOT support.
So in the end it's nothing to worry about since we don't trade (even swing trade) off long term predictions. Instead, we play the trend and stick with the trend until it changes.
DOW AND S&P 500 BOUNCE
Posted by brophy on 29th of Jun 2009 at 09:14 am
DOW AND S&P 500 BOUNCE OFF MAY LOW -- A SHORT-TERM TOP, HOWEVER, COULD LEAD TO A 38%-50% CORRECTION OF THE SPRING RALLY -- 200-DAY AVERAGES PROVIDE SUPPORT BUT ARE STILL DROPPING
This was Murphy's headline today
No it is a science
Posted by ravun on 27th of Jun 2009 at 12:24 pm
but is simply down to interpretation and different analysis/tools being used. This happens often, and one will be a hero, the other zero...until the next time...
Davidd
Posted by jcomptonod on 27th of Jun 2009 at 07:43 am
Davidd,
I wish I knew for sure if it was over or not. I certainly respect both viewpoints. There is one thing that I do feel strongly about. Until we get good confirmed crosses of the 13/34 weekly MA's, I'm staying cautious. It really doesn't matter who is right or wrong at this moment because until we hold that MA cross we are still in a bear market. That's my marker. There will be plenty of time to be a bull after that happens and holds. That doesn't mean that you can't play the shorter term trends that arise until it happens, however.
There are a few things that bother me on each side. I don't trust the strong v shaped stock recovery we've had to date. I also don't like the fact that the market has stalled just about where we thought it would. I will trust the market recovery a lot more if we were to go back down and retest the lows. The strength of the V just doesn't seem to match what is really going on. While the single bottom could have been reached it's uncommon not to at least retest it before it's finally over. Since I'm not a Murphy subscriber I wonder if he allowed for a retest of the lows. I'll bet he didn't rule it out.
So is TA simply who's looking at the indicators? Somewhat, I suppose, especially when we get to these confusing sort of make or break points. (note that even during these periods we are so much farther ahead than everybody else that it really doesn't matter if we are unclear of direction). But it is also so much more than that. With training you can look at most charts and make a pretty good guess on the stock's future direction. The forecast gets cloudier with an increase in time, and truly some charts just don't give you anything to hang your hat on. But for most everybody here, TA is the only game in town.
These transition periods where anything can happen are absolutely the most difficult to deal with. There can be so much support and resistance around that head fakes become frequent. The best thing to do during these periods is play short term trades with Matt and Steve or just simply stay safe in cash and wait for the trend to show itself. It can get frustrating as the transition drags into months, but I've heard it said that the market spends more time sideways than up or down. I've come to believe that.
john
$spx monthly the buy case
Posted by jlag on 26th of Jun 2009 at 09:19 pm
$spx monthly the buy case is a close over the 10EMA. Currently the signal would be close>945.14. Two more trading days in the month. The chart has been sucessfully backtested, but because it is a monthly signal a significant drawdown could occur.