Well, this ends my winning streak.
Consumer sentiment came in below consensus of 74 but the SPX was already down 19 before the announcement. Within the 1st minute it traded down another 6. Market stayed under pressure all day, with each 30-minute segment seeing new lows until the final half hour. I bought SSO at the 5-minute, 380-unit M/A, again 50 points beneath it, and again right at the 1.25% +10 level 10,120 which I call critical support. Market traded down below critical support, which means that the rally that I expect here will be no more than a 50% retracement. Cash SPX closed on it's 11-day moving average. The market bottomed at 3:30 and the final half hour was the first period of real support. Market rallied after the close. SPY up 20 ticks as I write.
I1 is up through the 21st, but not on a buy signal. I only trade in the direction of I1, and am sorry in the rare occasions when I don't. So, even though I am a longer-term bear I can't short until then. A rising I1 does not mean that declines cannot occur or that the stock market cannot chop mildly lower. A rising I1 only guarantees that a serious decline will not occur over a few days or more timeframe. News-driven markets tend to reverse the following session. Let's see if I1 can beat the 3rd of a 3rd killer wave for a few days. It is hard to count this market's waves short-term. EWI is super-bearish, but that is normal.
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I commend you on your honesty...BAR
ReplyDeleteSteve
ReplyDeleteI only wish I could be half as right as you are about the markets and there moves. If you were never wrong or protested to be that’s when every one should steer clear. Your investment allocations keep the average investor from loosing a lot so they can play the game another day. I1 is still clearly a great guiding light and a very important tool in maneuvering through the ups and downs in the market place and has helped me tremendously in making my investment decisions along with your technical analysis. I may not adhere to it as loyally as you do but I respect it. I have been burned by not adhering to it in the past; it’s that because I am a longer term investor I take a different view when it comes to risk. Thank God for stops.
Thank You
Your friend
Jack C
Thanks Jack. We'll both make money on the coming downswing.
ReplyDeleteSteve
ReplyDeleteDid you here anything about the U.S bond credit rating being dropped from AAA by a China based rating agency called Dagong International? If this is true other agencies could follow or at the least foreign countries could stop buying are debts. Thought this would happen just not yet.
Jack C
Almost all private companies in China are vassals of the state. China has designs to bury US prestige, which would concomittantly increase China's. The west views Dagong as an ideological reflection of Chinese ambitions. I too am repulsed by US credit conditions, and believe that the US is not a AAA risk even now. However, it will be years before the credible rating agencies (oxymoron?) downgrade it.
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