Late afternoon saw Fed minutes that emboldened the bulls. After hours Intel came out with better-than-expected blah, blah. I'm short SP futures.
Big news! The Daily Technical Composite got down to -20 today. That is strong sell territory.
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So the tick points are:
1) SPX got within a point of 1174, the wave (iv) of 1 high
2) The wave count is complete
3) The market couldn't keep it's highs into the close
4) The technical picture has deteriorated to the point that moving averages of internal and price metrics kicked into strong sell.
5) I'm getting comments from idiots. This is my own sentiment indicator.
All in all a very compelling picture. So since Friday close which was the I1 sell signal the DJI is up 14 points. We had our first sell-off into critical resistance today. The next attempt to breach it will have a much more muted response.
I shorted crude futures again at 81.75 with serious resistance at 82. Still shorting based on the 5 down last week.
Bob Prechter came out with the October Theorist. I've been in the trenches since late afternoon Friday so reading the Theorist is like looking up at a B-52 at 30,000 feet. The trenches are not his yob, but it is always a good read. He's still double-short the stock market.
The dollar index has not dropped like a rock on the stock market spurt, a good sign. I'm long 1% DX futures even though the breakout point is close at Dec futures 78.18.
I'll be going to Albuquerque tomorrow. One of the things on my to-do list is to sell off some physical gold and silver.
Have a good trip Steve. As always your posts are a beacon in the darkness for those of us wondering if/when this will ever end.
ReplyDeleteBullih comments abound on the blogs I frequent (normally of a bearish slant).
Good luck to all bears, we all need a bit of that!
"I'm getting comments from idiots." Classic!
ReplyDeleteI love your own personal sentiment indicator - the Idiot Indicator. Your steadiness and confidence are much appreciated.
ReplyDeletesteve..your technical composite got to 20 in mid march as well..market chugged higher for a month,..good luck
ReplyDeletetor the bull
Valid poiht. This composite is not for alerting the end of intermediate moves, but for counter-trend moves within intermediate trend. My intermediate trend is down so this is a valid sell. The 3/2009-4/2010 rally was intermediate in scope. Technically it's too early to tell if this is an intermediate trend. I know the 2007 primary trend and I know that the April-August downtrend was too big to fit within the 2007-2009 intermediate trend, plus I know I have 5 downs at multiple degrees. This composite will only signal end of intermediate trend with a +32 or -32 reading.
ReplyDeleteSteve I have a lot of respect for your perspective on things and admire you nimbleness to cycle in and out of this market waiting for the "turn", while minimizing losses. I see this foreclosure-gate mess as the final straw that will break the camel's back. I don't see how the powers that be can keep this game of lies going with all this added uncertainty due to this one huge issue. Unleashing thousands of empowered lawyers into the mix with an already angry/broke/jobless mob of citizens and I don't see how this could end well for the banks. Smells like a long drawn out process is coming in order to clear this up. Which brings me to my question: I realize the PM market is short term toppy right now but why sell the physical at a time like this? Do you think we are taking a turn for the better sometime soon?
ReplyDeleteSteve, I am barely keeping up with you, but trying nonetheless. Am I to understand that when the daily composite gets to -32 we may have a relief rally? Also, any comment on the Euro 50 day about to cross through the 200 day creating what I believe they call the golden cross? Likewise, the DXY 50 day crossed through the 200 day (a black cross?) a while ago. One could argue that the Euro is only confirming DXY, albeit the Euro comprises a good part of the DXY. If it weren't for everyone hating the dollar I would be concerned. Love to know your thoughts on this. I am intrigued that you are getting so involved with the dollar when I thought you stayed away from the currencies. Is it because it is so compelling here?
ReplyDeleteI wonder what happens when there is a POMO day and stocks don't go up. With respect to selling your gold, I respect the fact that you have held it this long, well done. Richard Russell might have a bid. By the way, the commercials are about as short as they have ever been with the big specs and individual investors taking the other side of the trade. I guess that is a good indicator unless they feel the need to capitulate in which case you don't want to be standing in the way.
ReplyDeleteMonthly DOW is facing 50MA resistance, weekly DOW 200MA resistance, and the weekly RSI is very overbought. We will be getting some form of a correction soon. Selloff maybe... historically we have a bear or weak market around this time of the business (credit/inflation) cycle all the way until 2012. The Feds are trying to prevent this and have a market that virtually trends up all through this decade to attract capital but of course, they will scare it offshore. Hence all the IPOs in Asia instead of USA. If the govt and feds would let the market play out naturally, yes we might have a double dip recession but will recover naturally and will learn a lesson or lessons in the process. (savings, underconsumption, domestic production, strong dollar). The only way through this is to trade based price action (chart) 90 percent, art (cycles, waves, history) 10 percent and 100 percent discipline.
ReplyDeleteI believe Mr. Prechter has said he is too busy running his business to trade. (!?) So if that's true, I don't know how he can be 200 percent short stocks right now.
ReplyDeleteSafe travels tomorrow, Steve.
Another fan of indicator #5 here. Can a comment in appreciation of indicator #5 be evidence of indicator #5 as well? Does that reinforce the indicator or invalidate it?
ReplyDeleteI can't answer with a comment. It's a pretty long response, so I'll post it tonight.
ReplyDeleteHaven't posted in awhile - the market and the day job keeping me busy. I'll never understand the mentality of the trolls who waste their time posting insults/etc, but you are right - it's a notable indicator of bull fear.
ReplyDeleteSo here we are in 1170land, exactly the retrace of a leading diagonal 1170. Prechter's timing is impeccable too - but recently the results have been shortlived. Everything on the precipice, do or die for the EW faithful!
Well... yeah I have some shorts built up from the rally, a nice solid position poised for the decline. But there's plenty of dry powder too.
All the best, let's rock this s***
-shabs
With respect to the Daily Technical Composite I am using -20 reading as the end of an upmove within an intermediate-term downtrend which began 4/26. Primary and Cycle trend are down as well. -32 would register on this composite only before intermediate turns, but I use a weekly composite as my primary tool for intermediate and primary turns, which did signal in April and has returned to 0 now.
ReplyDelete