Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
ZEEV, GOLD - up to ZEEV:343026, 01/09/05
01/03: (340435) (*COMMENT*)
Zeev, I think you said you think GOLD will correct to 380 to 390. 418 is the likely low to me, although I could pick other starting rally points that would lower the retracement. What do you think? Anyone else?
[Suppressed Chart Link]
(*END*)
You must have misread me, in the "annual forecast" I suggested a cap on Gold in the $480/490 range (#msg-4929099), and earlier in December (12/8, #msg-4769107), I suggested a swoon to around $420 and expressed doubts that short term gold would go under $400.
01/04: (341063) (*COMMENT*)
Zeev, what do you think about gold stocks during the Nassacre? Will the go down in sympathy or will they go up on worries about collapsing dollar? Or will the above two reasons cancel each other? Thanks.
(*END*)
I fear that late in the Nassacre, gold stocks will be thrown out with the rest, but that stage is still far out, right here with gold around $420, what I think should serve as support short term, some select gold might not be a bad bet. I missed entry in NEM today by a nickel I'll try again tomorrow, though $41 is an important support for NEM and I may wait to see if it holds. I do not see a collapse of the dollar so I do not expect an extremely big move for gold (see #msg-4929099).
01/04: (341075) (*COMMENT*)
I can see the miners being sold off, but not Gold itself (GLD). That should pretty much follow the $US, and since a big market drop means much less in tax revenues for the Feds (and thus a bigger budget deficit), and will certainly cause the Fed to cut rates, I can't see the $US rising much, if at all.
(*END*)
Rise and fall (the US Dollar) against what? Many Asian countries are pegged. Against the Euro, I doubt there is much more to go, Europe is in much worse shape economically then we are and strengthening Euro exacerbate this. Thus unless we get depegging in Asia, I doubt the dollar has much more to go, thus gold, even the metal, is probably bound above by another $30 to $40 above the recent high, if the $450 we had was not the high for the next year. The miner, they often follow the market during late stage declines.
01/08: (342879)
(*COMMENT*)
(Part 1)
Near the close, they did give me that NEM after all, do I still want it Monday? (g).
(Part 2)
Zeev, Yes I noticed this a.m. I too got hit.
(*END*)
What are your plans? It breached slightly earlier this week the September lows (when gold swooned just under $400), but I have the $420 area here as potential support for Gold (congestion area from both October and last March/April), and we never closed under that $41.35 level. If $41 is breached, I'll probably take my lumps myself... what says you, or our expert Dan? Good I built a bucker cushion earlier in the week, so failure of $41 will not hurt that much (g).
ZEEV, TECHNICALS - up to ZEEV:340024, 01/02/05
12/28: (338779) (*COMMENT*)
Z: Stock Charts shows an equity only p/c of .36 on the close...this is consistent with eoy readings in 2003. Lowest close in 2004 was .35 on 1/16/04 per Stock Charts.
(*END*)
The CBOE's number, which I have been following for years, is at .48, not yet a "run for the hills" signal, though getting extreme.
12/29: (338855) (*COMMENT*)
(Part 1)
Awww Zeev, what the heck is EPC? You're driving me cookieputz is what. Time to hit the hay or kick the hay.
(Part 2)
Equity (only) put/call ratio. When than number gets under .4 or so, you may want to shorten your exposure to the market. On the run we are in I expect this number to drop under .4, and then we may still have a week or two of rising prices, but the music can then stop any minute. At .48, we are getting close, but "no cigar".
(Part 3)
Any one know where daily EPC's can be found for the last two years ?
(*END*)
Go to:
http://www.cboe.com/data/mktstat.aspx
you'll find the current day's data and a calendar to chose any day's data. You may have to calculate prior years' EPC from data presented in an older format.
12/29: (339113) (*COMMENT*)
Zeev, are you still using the virgin EPC (backing out the QQQQ puts/calls)? If so, is there a different critical level for the virgin EPC or would that also be .40?
(*END*)
No, too much "work".
12/29: (339135) (*COMMENT*)
Wow, he equity/put call is about .8. Does looks like there's some fear and thus maybe not much "down" here??
(*END*)
Be patient, the end of January is still few eeks away...
ZEEV, MARKET/ECONOMY - up to ZEEV:340024, 01/02/05
01/01/05: (339948) (*COMMENT*)
(Part 1)
Zeev, You sound pretty convinced we will get at least some privitization of SS. Did you see where AARP is going to launch a big campaign against any privitization?
(Part 2)
I was under the impression that the President was going to spend his "winning" capital on this issue. I hope it does not happen, since I have the secular bear running for at least another 3, maybe even 6 years.
(Part 3)
Zeev, I think there may be a fairly good "healthy debate" over the privitization issue.
(*END*)
With Republicans controlling both houses and railroading anything they want through?
01/01: (339994) (*COMMENT*)
Assuming privatization of SS becomes a reality I would think it will have a positive effect for the market. The question is when. Maybe not until 2006
(*END*)
It surely is going to boost the liquidity side of the equation in a big way. However, I remember some four five years back, when the Japanese allowed their postal system (the "normal saving plan", for many Japanese) to invest outside of Japanese treasuries (which were and still are, yielding zilch), that was supposed to have a positive impact, but it did not prevent the Nikkei from going from around 20000 in 2000 to a new secular bear market low of 7600 in early 2003... Remember that in 1990, the Nikkei was printing around 40,000. If they had moved their social security (or Postal savings) then into the Nikkei, thay would still be waiting 15 years later at 25% of the top, and probably sold in disgust when that bottom was reached in 2003.
ZEEV, ROAD MAP for 2005 - up to ZEEV:338424, 12/27/04
12/26: (338045) (*COMMENT*)
A little early, but following is my "traditional" annual layout for the market, take it for what it is worth, about two pence. Apologies for the length of this disertation....Mauldin and Roach will be proud of me (g).
The turnips apologize for a bad call of a minor retrench prior to Christmas, though the Naz really has gone essentially nowhere (it is becoming a tradition to apologize for misreading December!).
In the following, they are going to try and layout their thoughts on the market for 2005. There are a number of parameters going into building the "scenario" including the political environment, international markets, were is the economy going and what will be the public perception of where the economy is going, liquidity and market psychology (TA) as well as valuation metrics. In the following, I will muse about these and then "design" what I believe might be a likely scenario for the market in 2005. Others are invited to layout their maps, of course.
Politics
The three major political events early in the year are the state of the union, the election in Palestine and the election in Iraq. Later in the year we will have issues of taxation and particularly debates on the pharmaceutical industry and the privatization of social security. Random terror events will also be in the background, but I believe by now we are getting accustomed to that background noise, so I expect no major problems from that quarter, short of a really bad event such a dirty bomb going off in a major city. (HEPH is a play on current counter measures to handle the consequences of such an event). Additionally, there are still some wild cards in Pakistan and in Russia.
I have no idea how the elections in Iraq will play out, they have less than a month to get the country pacified. If it was up to me, I would spread the election over a week, and concentrate troop each day in the area were the elections are carried out, thus obviating the need to increase force concentration. I don't see any move in that direction, so I guess the election will be of the 60% fair representation type. Not conducive for post election quiescence. As a result, terror premium on crude will probably stay in place despite the very mild winter in the northern hemisphere. My model assumes that crude premium will be slightly reduced, but China demand continue to increase thus keeping crude prices in the $38 to $48 range for most of the year.
Elections in Palestine will probably be a resounding success, and there will be a general feeling of "peace in our times". However, the current local elections indicates that Hammas is getting some very serious support, and that will prevent pacification for some time, probably until the population understands that Israel will not be destroyed and a modus vivandi will have to be found. That is a long time out, and I expect post election terror to increase again, and as a result no immediate peace agreement there. I expect no major impact on markets from whatever happens there.
The State of the Union will set up the stage for tax and social security reform, which I think might have a serious positive, though temporary effect on the market (thus my first top in the 1/19 to 1/25 window).
The problems in Russia (de-democratization and insecurity of foreign investments) and Pakistan (possible murder or coup against Musharef) should not have a major impact on our markets (we have our own problems as Roach has been elaborating on for four years now). I think that Israeli defense outfits will benefit from both situations (MAGS a possible play on that). A major question is if a Government owned oil industry can indeed be vibrant and raise current Russian production levels. I doubt it, one reason I don't think that crude will get much under $40/barrel (increased Russian supply could put pressure on prices).
There are other areas of flare up such as Venezuela that might impact crude pricing, but not outside the band I expect.
Economy
With crude staying above $38 for most of the year, a real tax is imposed on US consumers (not the European and Asian, because of their strong currencies) and slight inflationary pressures might appear. The Feds will probably keep raising rates until it becomes clear that economic growth is stalling. That may not happen till the end of the year. I think that the dollar vs the Euro got most of its punishment (I had a max for the year of $1.40 to one Euro, so far we got close to $1.35). At $1.60 to the Euro, the dollar will be halved from its peak, I doubt we go that far. As for the Yen, the worst I expect is an excursion under 100 yen to the dollar, maybe 90 to 95. Since I still do not expect major inflation to appear this year, that puts a cap on gold in the $480/$490 for 2005. (recent divergence between the miners and the metal should worry gold bugs, IMTO).
Short term though, we must take into account that there is very little additional stimulus that can be applied to the economy, the spigots have been fully opened for too long. I read many people forecasting GDP growth in the 3.5% to 4% range for 2005, but I think that most of the advance will be in the first half. The consumer has done its share and is more or less tapped out. Unless we see major advances in employment (like 250,000 new jobs per month for a good six months or so), I just do not see the consumer increasing spending at a rate of 3 to 4% per year. With rising interest rates, one should assume that the rate of refinancing of housing will decline, and we might even get a slight decline in new housing. If that happens, that could tip the scale into a consumer led recession (two main engines of growth in the last two years have been housing and automotive and both seems to go into "stall mode") starting late in 2005.
Usually, with so much money sloshing in the economy (M3 is about 5.4% higher than a year ago, growth greater than economic growth), one would expect inflation to become a major problem, however, capacity (except in some commodities like oil, copper, aluminum and even steel) is still excessive, keeping price pressure subdued. The growth in money aggregates over the last year, however is not sufficient to create major inflationary pressures.
Liquidity
Right now there are no real liquidity constraints, if at all both the Feds and the government are working very hard to stimulate the economy and even directly, the market (the "dividend" exemption is nothing but a ploy to support equity markets, it has no economic justification as I have harped about for quite some time, this year they will add to that social security privatization, another "harping" point for me <g>). Note that MZM is now well above $6.6 Trillions, but it has stalled there for almost half a year now, and YOY it is just some 3.5% ahead, like the GDP growth, possibly indicating the start of a mild liquidity crunch.
In the market, however, there was a big injection of liquidity from MSFT, which by now should have been absorbed, and the rush of IPO and the excessive insider selling in recent months is, probably, soaking liquidity from the markets on balance, IMTO. Some dollars repatriation by foreigners, just as the dollar bottoms could put additional pressure on liquidity. On balance, I believe liquidity is at best neutral, if not slightly bearish for the equity markets.
Valuation/technical analysis/road map
The basic thesis from early 2000, namely, that we have entered a lengthy period of a secular bear market holding the indices in a wide range still holds. Until we get unusual and uncommon valuations to start the next major secular Bull market, I am staying with this thesis. Namely, give me PE's under 10 or so and then a rebalancing would have occurred. Talking about rebalancing, Roach has made a religion out of it, so I will not repeat this here.
It is quite clear that valuation models on the Naz are going to keep a ceiling on that market over the next 12 months. However, if one looks at the DOW with an earnings estimate of $600 for the current fiscal year, the PE is only 18, in an environment where the 10 years treasuries are yielding 4.18% (Equivalent PE of 24) , however, the long terms rates are climbing and may be above 5% (5.4%?) before the year is out making this measure just fair value. (Remember that secular bear markets create "uncommon values").
As for the technical picture, we are getting very close to some major top like behavior in volatility indices. The EPC 21 days moving average has stayed under .58 for more than a month. Many of the BP are flattening out (BPTRAN at 100%, and for quite some time, it cannot go higher!.). Advisors bullish are above 62%, an area from which a major bear could start. New highs on the NYSE have also reached levels approaching excesses, but not so, so far on the Naz. VIX and VXN keep hitting new lows. While these are all figures that are commensurate with a major peak, these can stay that way for quite some time, and the bears amongst us, should not, IMTO, anticipate a top and go short before a downtrend is actually established.
My roadmap has included, at least since early August of this year, a top in the January-February period above 2275 on the Naz, and for now I am staying with that target. Tentatively, I have the top, or I should say a first top, in the Jan 19 to 25 window. I have also mentioned that I expect a sizeable nassacre early in the year, post that late January early February top. Thus I have a low in the 1700/1750 before July 4th. That is the broad map for the first half. Before I actually get back zipped in my bear suit, however, I would be waiting to see the white in the eyes of the MM's. I do not see that top yet, and we could easily have a double top with the second one marginally higher in some indices, while other market measures (NH, BP etc.) not confirming that second top. Thus for now, the map will have the high at 2275, a dip of about three weeks to 2040/2150 area (depending how high we get late in January), ending, nominally on 2/09. Then I'll decide if a last hurrah to the neighborhood of 2350 plus minus 50 is possible, on the Naz. My next turn date is 3/25, that is supposed to be a minor local bottom, possibly as low as 1820 on the Naz. Note this could be a real nasty move of 500 Naz points in about six weeks. The details of the map have two forks, the first is that late January is the ultimate high, and we go into a grinding but relatively "orderly" decline to 1820 late in March, and the second fork, the one I favor now, is a more volatile market with a sharp retrench from the late January top to and interim bottom in February and another sharp advance attempting to better the January highs in February and then a fast and devastating decline into 3/25. A lot depends on how the VIX and VXN behave on the beginning of the first leg down and whether or not early January yields EPC under .40 or not.
The 3/25 bottom should be followed by a sharp advance, most of it ending before the beginning of May (nominal top is 5/9). Note that it is quite possible the Dow bottoms about a week before the Naz did (as it did in 2001), if that happens, the Naz may not bottom till the window of 4/6 to 4/13). If we indeed reach the low 1800' in late March, the April run could get the Naz to the 2040/2150 window. That should be enough to turn recent "late to the party" bears to turn bullish again, while covering their shorts into massive street and insiders selling. The next leg down should be from 5/9 to 6/22-29, ending in the 1700 to 1725 area on the Naz. From here I expect a labored run (mind you, this low could involve a double bottom stretching to Wednesday post July expiry, or 7/20) to 1940 or so. If 1940 showed no latent bounces in the decline from the January/February top, I will then have to add another 100 Naz points to that summer rally to around 2040, we will know in the "Fullness of time" as Jim so succinctly put it.
I should mention that this map assumes some expectations in some indicators behavior, such as sub .40 EPC before the end of January, failure of a possible February top to generate volume above the January volume at the highs, and few others, so as we get close to these events, I will reexamine this map.
As for the second half of the year, my most probable model has continuation of the bear into a broad double bottom in October and then early December a retest, with a low around 1400 on the Naz (a nasty 500 to 600 Naz points decline). One fork has a low just under 1000 on the Naz in December, but for now, it is just an outside possibility.
As usual, the turnips absolutely reserve the right to be wrong, change their mind and change it often.
12/26: (338079) (*COMMENT*)
Hello Zeev: Thank you for the detailed "road map" for 2005. I know your stance has been for some time that consumers are just about sated and that a consumer led recession may evolve next year.
A factor in the macro picture I have been pondering is capital spending. I'm not optimistic. We have the end of bonus depreciation in 2004 and a tightening of the expensing rules for heavy SUV's. And, given that our economy was never allowed to fully wring out the overcapacity and excesses of the 1990's, isn't it at least possible that at a time when the consumer gives up, business spending does as well? If so, we may be in for a fairly deep double-whammy recession.
Thanks again for your insight and the courage to go on record.
Bob McP
(*END*)
It is a possibility (that cap ex by business will not keep growing), but that will take at least a good six months before it starts its impact. The reasons are quite simple, business is awash with cash, and the current mood is that there is going to be economic growth, to capitalize on such growth investment maybe required. Until there is clear visibility of consumer retrenchment, business may not retrench that fast. Remeber, however that consumer spending is in the 65% to 67% of the end demand, so the balance, business and government got to spend at twice the rate consumer do to compensate for consumer retrenchment.
12/26: (338083) (*COMMENT*)
Zeev, thanks for the hard work you put in coming up with your forecasts. If you would, could you comment on the BTK vs the SOX during the down periods next year. I assume you think the SOX will get nailed, do you also think the BTK will be hit as hard? I am going to get either the SMH short or RYVNX, for 2X down the QQQQ. TIA.
Best 2005 wishes to you. Belgie
(*END*)
Don't rush with shorts on the SMH, the current pricing already assumes a very bad 2005, worse than I think it will really be. The BTK on the other hand is putting in a triple top, and unless that triple top is taken out soon, it may get hit hard. The weak link, IMTO, will continue to be the pharmaceuticals, many are facing patent expiration and short term problems, including the fact that consumer spending on health care is already extremely heavy (in the 16 to 17% of toto), not much growth from such high levels to be expected. The traditional safety issue in a bear market will probably move to specialty or niche health care companies, like specialty drugs, smaller size companies, and specialty devices the like of GIVN, LCAV and ISRG.
12/27: (338158) (*COMMENT*)
(Part 1)
Best get the WHOLE story then depend on crawler.
Here is the actual story in full.
http://www.bloomberg.com/apps/news?pid=10000103&sid=aJIYgNLR2zis&refer=us
<<"Dow Theory" Sends Signal for Further U.S. Gains: Taking Stock
Dec. 23 (Bloomberg) -- Two days ago, the Dow Jones Industrial Average reached a three-year high and the Dow transportation average set a record. To Kenneth Tower, the combination suggests the U.S. stock market's 21-month rally will last into next year.
"As part of putting together a forecast or an outlook for the next few months, it's a very encouraging and positive sign," said Tower, chief market strategist at Charles Schwab Corp.'s Cybertrader Inc. in Princeton, New Jersey.
The conclusion reflects a signal sent by "Dow Theory," named for the developer of Dow Jones & Co.'s averages, Charles H. Dow. According to the indicator, U.S. stocks may rise further because the industrials' new high coincided with a similar move in the measure of airlines, railroads, shippers and truckers.
The Dow industrials closed on Dec. 21 at 10,759.43, the highest since June 2001. The transportation average climbed on the same day to 3792.09, exceeding a record set in May 1999. Yesterday, the industrials added 0.5 percent and the transportation-stock gauge slipped less than 0.1 percent.
Stocks started to rally in March 2003 as the economy and corporate profits accelerated and U.S. forces invaded Iraq to oust Saddam Hussein. The Dow industrials have risen 37 percent since then and the transportation average has jumped 66 percent.
The Dow Theory signaled the beginning of a bull market in June 2003, when the averages surpassed their peaks in the fourth quarter of 2002, said Charles Carlson, a fund manager at Horizon Investment Services in Hammond, Indiana. His firm publishes the Dow Theory Forecasts newsletter.
"Favorable Condition"
Having both the benchmarks reach new highs is a sign of strength in the U.S. economy, according to the Theory, because industrial companies produce goods and transportation companies ship them to consumers.
"As long as they are in gear, as they are now, it says everything looks okay," said Richard McCabe, chief market analyst at Merrill Lynch & Co. in New York. "It indicates a favorable market condition." McCabe was the No. 3 technical analyst in Institutional Investor magazine's 2004 survey.
The Dow transportation average, made up of 20 companies, has rallied 26 percent this year. J.B. Hunt Transport Services Inc., the second-biggest U.S. trucker, and Yellow Roadway Corp., the largest, led the advance.
J.B. Hunt's shares have surged 64 percent this year and Yellow Roadway's have risen 54 percent. Both truckers said they increased prices because demand rose faster than their ability to deliver cargo.
Drug Stocks' Slide
The Dow industrials, whose 30 members include financial and retail companies as well as manufacturers, has added 3.5 percent in 2004. McDonald's Corp., the world's largest restaurant chain, has the largest gain. The company's shares have risen 31 percent as a streak of monthly sales increases reached 18 months.
Declines in two drugmakers limited the average's advance. Merck & Co., which pulled the Vioxx pain medication in September after a study showed it increased the risk of heart attacks, has dropped 30 percent. Pfizer Inc., whose Celebrex painkiller was linked to similar risks in another study, has lost 27 percent.
Having the Dow industrials reach a new high this week eliminated a source of concern for followers of the Dow Theory, including Horizon's Carlson.
"When one is doing well and the other one isn't, that type of divergence can dictate there is a problem or dislocation in the economy that will ultimately result in unfavorable stock prices," he said. "The divergence has been resolved."
"It's Reconfirmation"
Economic reports this week suggested growth can be sustained. The Commerce Department increased its estimate of third-quarter U.S. economic expansion to a 4 percent annual rate as consumer spending reached the fastest pace in three years. A gauge of leading economic indicators rose in November for the first time in six months, according to the Conference Board.
This week's moves in the Dow averages bolster optimism triggered by last year's "buy" indication and suggest that stocks can extend their gains, Carlson said.
"New highs in the industrials and the transports happening on the same day sends a stronger signal," he said. "It's not a new bull market; it's reconfirmation."
To contact the reporter on this story: Danielle Sessa in New York at dsessa@bloomberg.net.
To contact the editor responsible for this story: Scarlet Fu in New York at scarfu@bloomberg.net.>>
(Part 2)
Welles, Thanks for the info. I think the following for next year 2005:
Big Negatives:
Rising Dollar in the second half of next year with some what reduction in twin deficit syndrome.
The refinance scam with rising housing prices most likely peaking.
Top that with rising long term rates with 10 year Bonds going to at least 4.5 %.
Short term rates also on the rise with Mr. Greenspan screaming about it from the top of Mount Everest.
A jobless recovery.
Big Positives:
Corporate America flush with cash could translate into capex spending.
A few reputed investment firms including British Petroleum (BP) forecasting oil prices in the mid to high US $ 30 for year 2005.
The above makes it difficult for me to be in the bullish camp after at the most Q1 of 2005.
Inputs are most welcome whether you agree or disagree with me. As Jim says after all we shall know in the fullness of time.
(Part 3)
Zeev, in case you miss it.
http://www.investorshub.com/boards/read_msg.asp?message_id=4929913
(*END*)
Thanks, and I did miss it....
12/27: (338241) (*COMMENT*)
Annual roadmap question
Zeev, thank you for the time you put into your annual roadmap. One thing I didn't notice was any mention of China, where there is sure to be further rumblings about floating the currency, but also where there is still the spectre of the hangover from the mega-growth of recent years. Some believe that hangover will be mild or barely noticeable. But others think we are still on course for a much rougher "morning after".
Jim Rogers has made a "hard landing" call. In this week's Forbes magazine he says he expects the Chinese economy "is due for a hard landing within the next 12 months."
In warning of the hard landing he says: "It will definitely happen, and when it does, I hope I'm brave enough, smart enough, and alert enough to pick up the phone and buy a lot more China."
I don't know what you think of Jim Rogers, but when he uses the words "It definitely will happen ..." I find it very hard to be betting the opposite. And if he is right, and China has a hard landing, then it seems impossible to believe there won't be shock waves reaching our shores (although that would probably result in falling commodities prices, particularly oil).
(*END*)
I have mentioned for some time that China is an accident waiting to happen, I don't think it is that imminent, however. For the time being, they are still a pressure element on various commodities like crude, aluminum and steel.
ZEEV, NEAR TERM - up to ZEEV:337956, 12/24/04
12/20: (336314) (*COMMENT*)
Zeev, Lunch rally, then what?
(*END*)
I still have a window open for some weakness in the next two three days, but not much.
12/20: (336385) (*COMMENT*)
If we don't get that weakness, do the bull horns go back on from your neutral stance now?
(*END*)
Probably not, unless we drop under 2100. Just not worth going full bull for another 100 Naz points.
12/23: (337883) (*COMMENT*)
Using the Larry Williams methods I have studied, I am going to buy S&P in-the-money puts next Monday ... StockCharts does not allow me to show the position of the commercials (net short 38,000 contracts) or sentiment (which is high) but LW's technicals say it is very unlikely that the S&P will rocket north from here ... and that is how I will play it on Monday.
Ken Wilson
[Suppressed Chart Link]
(*END*)
Well, I am still at a mild bullish cash position of about 35%. We'll know in the fullness of time, what is best.
ZEEV, TRADING - up to ZEEV:337956, 12/24/04
12/20: (336186) (*COMMENT*)
Zeev, Do you have a specific vehicle you park your idle funds in while waiting to be deployed?
(*END*)
normal money market funds, I played a little with TLT at the time, but too much of a head ache and a clear trend in rates which must come up, so for now I stopped that parking.
ZEEV, NEAR TERM - up to ZEEV:336139, 12/19/04
12/14: (334238) (*COMMENT*)
Zeev- Is the dip below 2100 scenario dead here? Seems to be on very wobbly legs, no?
(*END*)
Not dead yet, though, on wobbly legs, as you say.
12/14: (334334) (*COMMENT*)
Zeev It has been a very busy day. Are you still neutral ?
(*END*)
Still neutral, cash still at 42%....
12/15: (334975) (*COMMENT*)
Zeev, I thought we were waiting for 1940's?, or was that 2050's
What's the point of all these predictions?
(*END*)
Not waiting for 1940 (that was a maginot line, not a target, the target is still the mid 2000). The point is capital preservation, when my model indicates danger of a strong retrenchment, exposure is reduced, when the model indicates "clear sailing", exposure is increased. Right now cash is at 42%, indicating caution (thus my neutral position, with a slight bullish leaning, since I still expect much higher prices by late January).
12/16: (335564) (*COMMENT*)
do you think that FASB requiring option expensing by June '05 will negatively impact your January rally? after all, we will be getting that much closer to people finding out the emperor(s) isn't wearing any clothes.
(*END*)
The January rally has more to do with liquidity and the current "semi good" economic numbers, the new FASB rules will not take effect till mid year, I believe, and that will not be reported till September/October 2005. Furthermore, only new options cost will need to be reported, so a lot of options might be granted before, and after that date, they will engineer other incentives that are not "called" options, but nevertheless probably are.
12/17: (336000) (*COMMENT*)
Do you expect a pullback either early 05 or before year end? Or just keep pressing higher?
(*END*)
Next week is the last window for a pull back, IMTO, so after early strength Monday, I am still allowing for a minor pull back the rest of the week. After that, my target of at least 2275 early in 05 is intact.
12/18: (336106) (*COMMENT*)
Funny enough, I'm back in the sandals again as well. My buy was a tad higher though, 43.46 was my - obviously not so outrageous - bid. I've had a much lower one originally (41.68) but greed won on me when I was looking at what I think is a very nice way of the COMP to reduce internal pressure.
Seeing you back in DECK certainly gives me a feeling of company <g>
I'm only entering OBs and OAs premarket these days as I'm very busy so shortly before christmas (same procedure every year...) but I've got some fills lately at my prices (OVTI, SLXP, GVHR, CELL, CMN) so I don't feel to bad. OTOH cash has been reduced to below 20% and some of my positions might reach lower levels - I guess I have to become very selective in the next days...
(*END*)
I doubt I will get that low in cash, I have to be very bullish to go to 20% cash, right now I went to sleep with 46% cash it may go down to 35% or so by the middle of next week (particularly if they let me in the bu$$ under 25 and MERQ in the low $43). Also will put a bid for CCMP in the neighborhood of $37 or so. I am not in Monday morning and depending on overnight foreign market will decide if to put in some OB's or wait till the fog clears by mid morning. As for DECK and CMN, are you going to wait for a new high or just take double triple bucker (I already have the double on CMN, but I wanted "more", greed). SLXP is still showing that nasty supply just above $18, a bad market could drop it to $16 or a little lower again, where I definitely would reenter. If I get these four, I'll be pretty close to the 35% target (g).
What is that GVHR, chart is not half bad, but financials are tough to decipher, anything special you like there?
PS the sandals, I had to raise my OB few times as well, I had one at 41.80 on the swoon about 10 days ago, it printed it, but that time they did not take my bid as they did yesterday.
ZEEV, TRADING - up to ZEEV:336139, 12/19/04
12/13: (333457) (*COMMENT*)
Thanks Zeev, I would feel better if I had not covered my short from above 20 at 18.40 last week
(*END*)
Hey, now even I am green on it (g). Don't ever look back, a profit taken is good, even if it is not a max profit.
12/14: (334299) (*COMMENT*)
Hi Zeev: You gonna turn into a 3-5 minute daytrader? Join me and Plugger!
(*END*)
Nope, my religion dictates at least 15 minutes (g).
ZEEV, ROAD MAP - up to ZEEV:336139, 12/19/04
Wecus has a chart of Zeev's ROADMAP on the ZEEV'S ROADMAP CHARTED Board (#board-2299).
The ROADMAP chart is updated through December 17th
ZEEV, TECHNICALS - up to ZEEV:336139, 12/19/04
12/15: (334546) (*COMMENT*)
(Part 1)
Zeev, I've got a signal for a "Change of Direction Point" for December 29th. The market should work it's way slowly higher, into that date.
While most people don't think the market can go down the first week of the New Year, I do, afterall it happened in the year 2000 and I am sure that you remember what happened a few months later.
(Part 2)
No disagreement... except I am not sure yet about the first week, it could drop sharply if the last few days of the year are strongly up as it was in 1999.
(Part 3)
Looking back to 1990, the Market also dropped the first week of 1991, 93, 95, 96, 98, and would have been way down in 2001, except for the surprise rate cut... so I guess it drops about half the time.
(*END*)
There goes the January lore (if first week up, the month is up and if the month is up the year is up) (g).
12/15: (334929) (*COMMENT*)
Equity only put/call at .41. Not low enough, I guess for much of a pullback...or is the market gonna defy and pullback next week prior to Christmas, but after options expiry?
(*END*)
Market could still pull back this and next week...however, a lot of money is jumping on any minimal retrench, so I know not how much of a pull back one should expect.
FOREIGN EXCHANGE (FOREX) - up to FOREX:132, 12/17/04
FOREX #board-2236
12/15: (FOREX: 128) (*COMMENT*)
I have a kindergarten question. It's a kindergarten question because I've studiously avoided learning to think like an accountant (to my detriment, of course). Thus, I'm ill-equipped to think in international terms.
If, on January 2nd: 1) I lived in Belgium, where my native currency was the Euro 2) the Euro/USDollar exchange rate were 1:1 3) I bought 100 shares of JUNK (a U.S. conglomerate with great prospects, trading on NASDAQ) at $20.00/share.
I would pay 2,000 Euros for my JUNK holding
If, on July 2nd:
1) I still lived in Belgium, using Euros
2) The Euro/USDollar exchange rate were .9 Euros to the dollar
3) JUNK had appreciated to $21.00/share
Wouldn't the value of my investment have fallen to 1,890 Euros. Wouldn't my "profit" of 100 dollars actually be a loss of 110 Euros?
If this is true, why would a Belgian invest in a stock in the U. S. market? Is it some kind of play on the idea that, if the U. S. dollar is weak European industry is going to suffer?
I guess, if you are sharp enough to buy U. S. securities when the dollar is weak you have the possibility of a great return, IF the company you invest in does well AND the dollar appreciates. Sounds like one of those circus feats, where someone rides two horses with one foot on each.
Whew. Tough.
(*END*)
it's actually not a question easy to answer. Of course, your calculations are right. The profit of 100 USD would be a loss of 110 Euros.
The bad thing here is, not only is your USD profit affected by the weakening USD, but also your inital investment looses value. That is really painfull when the USD weakens 40%.
The Belgian would only invest in a US stock market, when he expects that his profits on stocks will outweight the loss he suffers from the weaking USD. So if he expects the USD do fall 40%, his stocks need to make at least 67% profits for him/her to break even. That is already bad, but it can get even worse.
Of course when the USD appreciates and the Belgian holds a loss on the stock, he could get out with a profit in Euros.
And now comes the hard part, where it is impossible to give a straight out answer. A changing currency not only changes the value of your investment but also the perception of it!!!
For example, the USD dropped 40% and foreign investors become reluctant to actually put more money into the US stock market or even start to take their money out. Therefore, your stock is going to drop even more. A deadly spiral.
On the other hand, when the USD value isn't dropping too fast/much, a weaker USD might attract more capital into the stock market, since those stocks are cheaper to buy for foreigners.
Which one actually is stronger depends on many factors being all connected to each other. E.g. inflation, earnings, interest rates, etc.
The same goes for other securities. For example bonds or treasuries where the yield is important. Yesterday the FOMC highered the interest rate to 2.25% in the US, in Europe it stands at 2%. I also believe the yields on US bonds are at the moment higher than on EURO bonds. That means US bonds are cheaper than EURO bonds. Now, normally that yield differential would immediately vanish because of arbitrage. Traders would sell EURO bonds and buy US bonds until the yield is more or less the same. Because of this a lot of money would flow into the US and the USD would appreciate. But at the moment it simply doesn't. Why?, because everybody is just so afraid to go for this arbitrage play and loose a lot of money when the USD drops further.
That leads us the next point essential for the survival in the currency market. The big momentum. It is a strong force that overrides fundamentals many times. And because of this you are actually not a sharp person when you buy US securities when the USD is weak. It probably will be even weaker in the future. You are only a sharp person when at least the medium term trend, if not the longer term trend, of the USD is strenghtening. And only then.
I am myself not the sharpest person at the moment, since I keep a small portion of my portfolio in US stocks since years.
And to your last question. A weak dollar doesn't necessarily let the EU industry suffer. Some companies are affected negativly some positively. You also cannot say the export industry is only affected negativly. First they can hedge their contracts, second they can buy cheaper resources on the world market, and third if they have a contract to sell their product over a long time period with a fix price in Euros they have nothing to worry about.
So, I hope I answered your question a little, although I have to admit the topic is actually more complex...
YOUR NEXT ONLINE BROKERAGE - up to 422, 12/18/04
Investors Hub and Silicon Investor are in the final stages of negotiating a joint venture to create a new online brokerage firm focused on the IH and SI communities. The firm will be backed by 20-year veterans of the brokerage business and led on the technology-front by IH/SI.
check out the iBOX on #board-3134
12/13: (NEXT: 330) (*COMMENT*)
I wanted to tell the story of how this project came to be.
About 3 months ago a couple of veteran brokers that have been loyal iHub and SI users for years came to me saying they wanted to get back into the business, but do something unique and online. Wanted to know if I was interested and if I had any ideas. This is what those trips to California were for.
The timing was perfect for a number of reasons.
I keep a book of business ideas, thoughts, etc. When I started IH, one of the parts of the empire was to one day include a brokerage. IH started because I was unhappy with the available services out there. This brokerage will be the same. I think I can do better than what is currently out there and eventually be the best there is. You can't go wrong if you build it with and around the people who are actually going to use it, and built it where the design can be flexible enough to change as you go. We have a site chock full of users that need a brokerage, so why not offer 'em what they want and need?
So, that's how all this got started. They had a brain storm, the experience, knowledge, licenses, and resources to back it....I had the ideas, feel for what people want, the technology background, and a big pool of folks to promote the business to [and get their input].
The firm is in the final stages of approval. I don't want to give the names of those involved yet or the name of the firm until it's all approved by NASD. I have some people out there that are less than adoring of me, so I don't want them screwing around with something important like this.
The question of structure of come up a number of times. The brokerage firm will be completely separate from IH and SI -- different servers, programmers, data center, everything. It's nothing we are running under the IH/SI name or corporate structure. I will be involved directly with the brokerage [details on this later]and there will be a equity relationship between the brokerage firm and IH/SI. Basically, IH/SI have an incentive to see the brokerage do well. Due to this, I'll actually be MORE involved in the growth/Admin/etc of iHub. A good thing.
I'll give more details as we go, as to who's behind this, more on my involvement/role, but for now, I just want to work on laying the foundation for the development of it all -- really, the most important thing.
You guys have came up with some great stuff that I didn't think about and will definitely include...Everybody that wants to, will truly be involved in this thing from start to finish.
MB
ZEEV, OTHER - up to ZEEV:336139, 12/19/04
12/19: (336139) (*COMMENT*)
Earnings Calendar (enhanced)
-----------------
.
.
Symbol Co Date Comment EPS Est
.
------------------------- MONDAY -------------------------------
AMHC American Healthways Mon, Dec 20 After the market 0.21
ANGO AngioDynamics Mon, Dec 20 After the market 0.05
ARRO Arrow Intl Mon, Dec 20 ----- n/a ----- 0.35
CRDS Crossroads Mon, Dec 20 ----- n/a ----- -0.08
IMGC Intermagnetics Gen. Mon, Dec 20 After the market 0.26
JBL Jabil Mon, Dec 20 After the market 0.31
SMSC SMSC Mon, Dec 20 Before the bell 0.12
.
.
------------------------- TUESDAY ------------------------------
APSG Applied Signal Tech Tue, Dec 21 After the market 0.29
ATYT ATI Technologies Tue, Dec 21 ----- n/a ----- 0.26
BSC Bear Stearns Tue, Dec 21 Before the bell 2.14
CBK Christopher Banks Tue, Dec 21 ----- n/a ----- 0.22
COGN Cognos Tue, Dec 21 ----- n/a ----- 0.33
ECHO Elctrnc Clrg House Tue, Dec 21 After the market 0.09
FDS FactSet Research Tue, Dec 21 ----- n/a ----- 0.49
GIS General Mills Tue, Dec 21 ----- n/a ----- 0.87
GTK GTech Holdings Tue, Dec 21 Before the bell 0.34
MANU Manugistics, Inc. Tue, Dec 21 After the market -0.04
PAYX Paychex Tue, Dec 21 After the market 0.23
PRGS Progress Software Tue, Dec 21 Before the bell 0.29
RIMM Research In Motion Tue, Dec 21 After the market 0.55
SLR Solectron Tue, Dec 21 After the market 0.05
SCOX The SCO Group Tue, Dec 21 After the market -0.18
.
.
------------------------ WEDNESDAY -----------------------------
AGE A.G.Edwards Wed, Dec 22 Before the bell 0.56
CAG ConAgra Foods Wed, Dec 22 Before the bell 0.46
GPN Global Payments Inc Wed, Dec 22 After the market 0.53
MU Micron Technology Wed, Dec 22 ----- n/a ----- 0.22
PSRC PalmSource Inc Wed, Dec 22 After the market 0.04
RHAT Red Hat, Inc. Wed, Dec 22 ----- n/a ----- 0.06
TIBX TIBCO Software Wed, Dec 22 After the market 0.08
.
.
------------------------- THURSDAY -----------------------------
[Suppressed Chart Link]
AM American Greetings Thr, Dec 23 ----- n/a ----- 0.70
SUMX Summa Industries Thr, Dec 23 ----- n/a ----- 0.12
.
.
------------------------- FRIDAY -------------------------------
..none..
.
.
----------------------------------------------
Upcoming Stock Splits In The Next Two Weeks...
----------------------------------------------
Symbol Company Name Ratio Payable Executable
CNC Centene Corp 2:1 Dec 17th Dec 20th
AIT Applied Industrial Tech 3:2 Dec 17th Dec 20th
SAVB Savannah Bancorp 5:4 Dec 17th Dec 17th
ADSK Autodesk 2:1 Dec 20th Dec 21st
SKT Tanger Factory Outlet 2:1 Dec 28th Dec 29th
BEBE bebe stores 3:2 Dec 29th Dec 30th
SVBI Severn Bancorp 2:1 Dec 30th Dec 31st
LUK Leucadia Ntl Corp 3:2 Dec 31st Jan 3rd
NADX National Dentex 3:2 Dec 31st Jan 3rd
CLF Cleveland Cliffs 2:1 Dec 31st Jan 3rd
O Realty Income 2:1 Dec 31st Jan 3rd
BRC Brady Corp 2:1 Dec 31st Jan 3rd
NX Quanex Corp 3:2 Dec 31st Jan 3rd
SBIT Summit Bancshares 2:1 Dec 31st Jan 3rd
.
[Suppressed Chart Link]
ZEEV, NEAR TERM - up to ZEEV:333142, 12/12/04
12/07: (331466) (*COMMENT*)
"but don't expect this retrench to go too far, maybe the low to mid 2000."
do you have a time frame for this?
(*END*)
Between the 14th and the 21st, is my "best" guess.
12/08: (331951) (*COMMENT*)
Zeev, where have you been. Haven't seen you doing much trading lately?
(*END*)
Keeping my powder dry for bargains...
12/09: (332163) (*COMMENT*)
Zeev
How likely will we test 2000 on this retrench?
(*END*)
I think that at worst we get to the 2020/50 area.
12/09: (332411) (*COMMENT*)
Zeev- Did that massive 2hr ramp (a bit unusual eh? When was last time we powered up so during 12PM-1PM window on a reverse?) tell you anything about the nature of current market or calls in question the 2020-2050 idea? Was that scared shorts or underlying strong (up) demand IYHO?
(*END*)
I think just an interim counter trend move, nothing unusual. Of course, it cpould also be that the retrench is over. Personally, I doubt it.
12/09: (332547) (*COMMENT*)
revisit 2100 as in a retest of today- ok noted as well as your horn position-g
(*END*)
Sub 2100, quite possibly to the 2050 if not a little lower.
12/11: (332974) (*COMMENT*)
SIRI and XMSR to be added to Nasdaq 100, Short the QQQQ's come December 20th? I think Christmas sign-ups are critical for these guys this year.
(*END*)
I think 12/20 is a little early for a major QQQQ short, maybe late in January?
12/11: (333041) (*COMMENT*)
Zeev, are you saying that if QQQQ goes down that will affect all the stocks in the index? Does it mean that if market goes down the index funds would have to sell all the stocks in that index regardless of the fact that some stocks are worth keeping? So if the nassacre happens, is the downside bigger for the stock included into QQQQ?
Also, what do you think about short term effect on the stocks included into QQQQ? I looked up the charts for last year and it looks like it is usually 'sell the news' right after the rebalancing announcement. But many stocks rose some 10% within a month after the change took effect.
(*END*)
I think the QQQQ reflects the action of the NDX, and not the other way around (namely, a decline in the QQQQ is not a cause for a decline in its components, but a reflection of such declines).
12/12: (333138) (*COMMENT*)
Zeev ... Looks like weekly charts are pointing to an important spot for equities here.
Ken Wilson
[Suppressed Chart Link]
[Suppressed Chart Link]
[Suppressed Chart Link]
(*END*)
We may still have a week, maybe two of indecision and backing and filling here, but I think that after Christmas, these will be taken out and in January I believe my minimum target of 2275 on the Naz will be achieved. I have turned neutral (not yet with horns on, though) since it seems that indeed the liquidity bolus from MSFT counteracted the retrenchment to at least the mid 2000, I expected. It can still happen next week and if we get a good solid EPC above .8 or so, that will probably be sufficient for me to get back into full bull mode, for about a month or so (g). After that, however, I still expect a good size topping following by a nasty nassacre late winter early spring next year. Right now, it seems that buying the dips is the way to go.
ZEEV, ROAD MAP - up to ZEEV:333142, 12/12/04
Wecus has a chart of Zeev's ROADMAP on the ZEEV'S ROADMAP CHARTED Board (#board-2299).
The ROADMAP chart is updated through December 10th
ZEEV, TECHNICALS - up to ZEEV:333142, 12/12/04
12/07: (331394) (*COMMENT*)
Zeev,
Today was a breakdown day for all 3 major indices.
Distribution count (major distribution in []):
NASDAQ: 5 ( [11/19], 11/23, 11/29, 11/30, [12/7]) S&P 500: 6 ( [11/19], 11/23, 11/29, 11/30, 12/2, [12/7]) DJIA: 6 ( [11/19], 11/23, 11/29, 11/30, 12/2, [12/7])
-David
(*END*)
Yes, but don't expect this retrench to go too far, maybe the low to mid 2000.
12/09: (332530) (*COMMENT*)
Watch the EPC, first time in a long time it went above .7, this correction does not have much more to go, switching to neutral and likely will done my bull horns by Friday next week. Accordingly, cash level reduced a little and now at 42%.
12/12: (333141) (*COMMENT*)
Z, do you follow "retail only buy to open" P/C? Essentially it deals with small (less than 10 contracts) buy to open transactions. Reported weakly by OCC. Very few follow it and I don't think it is manipulated (as opposed to odd lot short sales, for example).
Right now it is 0.35. In the last four years it was at this level twice: Dec 2000 and January 2004, in both cases it was the top.
(*END*)
Not following this, I do not have access to historical records like the EPC. Note that these are often "early warning" (my big bear call early in January, was about a week or two premature on that). The top in 2000 did not come till about February, we may have a repeat here, which is in concordance with my current map.
FOREIGN EXCHANGE - up to FOREX:125, 12/12/04
Stackelbergfeurer discusses foreign exchange on #board-2236.
From the FOREX iBox: This board is thought to be mostly for backround information concerning the currency market (fundamentals). All posts are welcome that shed light on currency moves. E.g. political topics or posts about stocks (big mergers, aquisitions etc.) are welcome, if they directly relate to the exchange rate movement. You can also post your trades here, although I would recommend the "CURRENCY CENTRAL" board for that. Please post entry, stop loss and limit prices on your trades.
Another aim of this board is to develop a feeling for longer term currency trends, helping everybody to stir their capital around a global world and avoiding pitfalls of investing in countries with weekening currencies.
12/09: (FOREX: 106) (*COMMENT*)
The reality is that the strength of the U.S. dollar since 1945 rests on it being the international reserve currency. Thus it assumes the role of fiat currency for global oil transactions (ie. `petro-dollar'). The U.S. prints hundreds of billions of these fiat petro-dollars, which are then used by nation states to purchase oil/energy from OPEC producers (except Iraq, to some degree Venezuela, and perhaps Iran in the near future). These petro-dollars are then re-cycled from OPEC back into the U.S. via Treasury Bills or other dollar-denominated assets such as U.S. stocks, real estate, etc. In essence, global oil consumption provides a subsidy to the U.S. economy. #msg-994080
Indeed, and who is paying the subsidy is hardly ever mentioned. Just to consider: What happens with the oil after a country imports it? It evaporates into nothing after it's used. Sure it increases the efficiency and productivity of an economy, but it still is burned away. So what do countries have to do to keep on importing? They have to export goods continously for the exchange of paper called USD. That provides a neverending stream of goods and wealth into the US. Is it good for all the other countries? No, there are only 2 solutions for them. 1. Be more productive and efficient than the average country to export your way out of that misery (e.g. Germany) 2. Sell natural resources like crude, copper etc. (e.g. Canada)
If a country neither has 1 or 2, it has a problem. It will be called third world country or developing country. But it is not poor because it's people are extremely stupid, bad or don't take a shower 3 times a day, but simply because of the system. Some call it the "Modern form of slavery". If the squeeze gets too strong, the IMF or other institutions step in and relief the pain a bit to keep the system from falling down.
The USD in it's form as the "petro-dollar" is maybe the biggest and longest pyramid-scam the world has ever seen. But it will come to an end, at last when there is no crude left to trade or when supply gets too tight or when the world doesn't want to be slave anymore. We might live long enough to see that happen or not.
Until then, good trading. Take a piece from the cake and don't let a few on top have everything.
S
ZEEV, NEAR TERM - up to ZEEV:330397, 12/05/04
12/01: (328785) (*COMMENT*)
So Zeev--- you think more upside tomorrow in the market because of the MSFT infusion of money?
(*END*)
Notr sure how it balances with a market qwhich is overextended.
12/01: (328902) (*COMMENT*)
So where does that put ya? Me, I'm short. :o)
(*END*)
Puts me at 48% cash....tomorrow I hope to dump at least some of my ARO at a nice profit, but on the other hand, if GIVN drops a little more, it will come back into the "fold". So that is about where I m staying for now.
12/01: (328927) (*COMMENT*)
Has the continuing move up changed your top target or time frame? Thanks Zeev.
(*END*)
No, I still expect a retrench to at least the mid 2000, maybe even lower, and then a run of about 200 to 300 Naz points from there with as a top of at least 2275 in the January/February time frame. There is an early August post (look at Kayaker's thread) where I laid out the rationale for the minimal 2275, and still leave the option open for above 2300.
12/01: (328929) (*COMMENT*)
ZEEV I'm at odds with you on cash. Deployed a bunch into funds as I am more bullish than I have been in a couple of years. Lower oil prices will result in adjusted higher projections by analysts and the semi's look ready. Event risk has been greatly diminished and baring any international sinkhole, we look ready to suck significantly more cash out of bonds into stocks.
(*END*)
That is what makes a market, but I still think we should not be surprised to see a top before the end of the week, maybe even early on tomorrow, and then a solid 100 Naz points decline to reliquify the market. I wish, however I knew how much of the MSFT dividend was already deployed (g), that is a nut I am not sure how to handle. The way I do handle it is buy only deep discounts like ARO yesterday and SYNA today (g), and take profits when offered.
12/01: (328940) (*COMMENT*)
Zeev, I've got multiple targets suggesting COMP 2175 and NDX 1630. The SPX also has targets at 1208 and 1226. The former is quite do-able. The latter would need lots of help. MSFT is looking very good here and might even move up to $28. Oracle is turning up, the SOX may hit 454, QCOM may hit 45.50 RUT is close to the 650 3-white soldier target and nearing another one at 657.
The thing is, until the SPX has a big day and at least hits 1208, I'm not ready to throw in the towel and call it a run.
I thought things might be getting toppy here as we neared these targets, but the MSFT wild card is hard to plug in.
We've got the INTC mid-quarter conference tomorrow after the close and jobs stuff on Friday.
Puts are also piling up at QQQ 39, making it likely any drop we get may be mitigated by that situation. I thought we'd drop to 1520 NDX from 1630, but I'm starting to get a bit edgy about that.
As for MSFT, if the dividend is paid on Dec. 2, my guess is most people won't have it show up in their accounts until Dec. 3 if it is paid electronically. The same should go for mutual funds and institutions.
(*END*)
Typically these dividends hit my account at midnight. I don't have any MSFT, but maybe someone who has can tell us. Furthermore, it is "immediate" cash, so people can buy and the cash will be there by settlement date, depending on broker 3 to 5 trading day. Some of that cash might, therefore already have been deployed.
12/02: (329711) (*COMMENT*)
(Part 1)
Time for Zeev to put the bearsuit away.
(Part 2)
Yup, sure, that reminds me of early August when Peteman was waiting for me to "capitulate" (and I was "fully loaded", 8/12 if memory serves) from my call for 2275 by January, we are not much more than 100 Naz points away...., but before it, we must relieve some of the extreme bullishness, IMTO, so the teddy bear and cautious stance stand. Cash will be in the 45% to 55% range (ended the day at 52% when a partial fill of the double SAM position occurred at $22.30, not a great gain on that one, I'll try and use the morning exuberance to get rid of the rest closer to $23, which will be barely even).
(Part 3)
Funny how that Peteman post signaled bottom
I remember it ... looking at AH tonight...now is the time to get the bear suit out and plan...lots of new faces should be an indication too.
(*END*)
We just made a new yearly high on the Naz yesterday, eclipsing the January high, I don't know how far the post breakout including the S&P) will take, but most internals are pointing to an over extended market. I would not short aggressively, however, because I still expect a strong run into the end of the year and January.
ZEEV, TRADING - up to ZEEV:330397, 12/05/04
12/04: (330322) (*COMMENT*)
Zeev - I probably shouldn't have referenced back to the prior trade, because my main emphasis was on methodology and discipline. Perhaps it is "rude" of a piker like me who has not a fraction of your skill as a momentum trader (which is why I rarely engage in that!) even to challenge you when you stray into a no-man's land, or onto value turf where you are obviously talented and knowledgeable too, but maybe don't enjoy quite the same advantage. At any rate, no offense was intended and hopefully a post every now and then challenging discipline and methodology isn't so terrible.
(*END*)
The "discipline" does include deviating from the discipline. The problem right now is that most of the former value stock which were in the core have quadrupled (most of them were ridden up into the current crest) and it is very difficult to find good value attached to good future prospects. Above $20 AAPL became just another tech stock, and other stock seemed, rightly or wrongly better plays.
ZEEV, ROAD MAP - up to ZEEV:330397, 12/05/04
Wecus has a chart of Zeev's ROADMAP on the ZEEV'S ROADMAP CHARTED Board (#board-2299).
The ROADMAP chart is updated through December 3rd
ZEEV, TECHNICALS - up to ZEEV:330397, 12/05/04
12/01: (328533) (*COMMENT*)
Zeev,
The distribution count, although mostly minor, is piling up here (major distribution in []):
NASDAQ: 6 (11/10, 11/16, [11/19], 11/23, 11/29, 11/30) S&P 500: 5 (11/10, [11/19], 11/23, 11/29, 11/30) DJIA: 5 (11/10, [11/19], 11/23, 11/29, 11/30)
Technically, any major distribution day (>1% drop in rising volume) before 12/9 would mark a breakdown day on any of the 3 major indices.
The last time we had 16 distribution days on the books without a breakdown (it typically doesn't go this low until AFTER a breakdown) was 7/28/2003. During that period, we finally got a breakdown (it was false alarm) on 8/5/2003. Then, the false alarm corrected itself with a NASDAQ follow-through on 8/18/2003.
Do we get the same "false alarm" breakdown here, minor swoon, then blast off?...
(*END*)
My problem with that is that this time there is a big bolus of liquidity injected by the MSFT dividend starting tomorrow. Since settlement is few days, and the dividend paid is immediate, it is quite possible we are seeing the effect already. I am still in a cautious mode and have a bunch of ask above the market,
ZEEV, TECHNICALS - up to ZEEV:330397, 12/05/04
12/01: (328533) (*COMMENT*)
Zeev,
The distribution count, although mostly minor, is piling up here (major distribution in []):
NASDAQ: 6 (11/10, 11/16, [11/19], 11/23, 11/29, 11/30) S&P 500: 5 (11/10, [11/19], 11/23, 11/29, 11/30) DJIA: 5 (11/10, [11/19], 11/23, 11/29, 11/30)
Technically, any major distribution day (>1% drop in rising volume) before 12/9 would mark a breakdown day on any of the 3 major indices.
The last time we had 16 distribution days on the books without a breakdown (it typically doesn't go this low until AFTER a breakdown) was 7/28/2003. During that period, we finally got a breakdown (it was false alarm) on 8/5/2003. Then, the false alarm corrected itself with a NASDAQ follow-through on 8/18/2003.
Do we get the same "false alarm" breakdown here, minor swoon, then blast off?...
(*END*)
My problem with that is that this time there is a big bolus of liquidity injected by the MSFT dividend starting tomorrow. Since settlement is few days, and the dividend paid is immediate, it is quite possible we are seeing the effect already. I am still in a cautious mode and have a bunch of ask above the market,
ZEEV, MARKET/ECONOMY - up to ZEEV:330397, 12/05/04
12/04: (330344) (*COMMENT*)
Zeev, indeed not much at all seems cheap these days, and even the ones I've found have some blemishes.
I am preparing to buy some long-term index puts in the next couple months for either Jan 2006 or Jan 2007; which index would you expect to be the best bet to go down?
(*END*)
I think the QQQQ could drop from around $45 to just around $32 in the first leg down, if you are looking to early 2006, you might even see $28, the NDX as an index would seem more "fruitful". I would wait till that top is in, and we could have a double top if employment figures get a second wind early next year.
ZEEV, NEAR TERM - up to ZEEV:327238, 11/28/04
11/23: (325890) (*COMMENT*)
Zeev, the monthly strength period is approaching, also. Some would say from say, Nov. 29th (next Monday) through following Thursday or so (Dec. 2) automatic money from 401k's and the like should be flowing in. If that's true, and we keep rising, would you still see a significant retrench (75 pts or so) following a rise into the first week of Dec.? Thanks.....
(*END*)
Could very well be, we had about 60 Naz points retrench, less than I thought we would have and really did not get much in term of even minor fear in the retrench, so it would be healthy to get something a little deeper, but we may just continue straight up. I have no clear indication if that was "the retrench" or not.
11/24: (326293) (*COMMENT*)
Good afternoon Zeev. Can you clear up a little of my confusion relative to the map?
Are you thinking we will begin a decline in to mid-December, beginning this Monday? I ask this because of the recent concern expressed regarding the MSFT situation. Does this change the turnips road map.
(*END*)
I had the decline till mid December, but the influx of funds from MSFT may stop that around the end of next week early the week after, difficult to say.
11/24: (326456) (*COMMENT*)
Early Dec. tax selling? Is that when you believe tax selling exerts its most force. My experience is limited but when I have watched issues closely with this in mind, seems like the lows are generally tagged in the 20's ( as in Dec. 21/26). Any education appreciated!
(*END*)
Typically, you are right, but with that big chunk of MSFT money sloshing around, it could be done earlier. Typically, tax selling (stocks that are down on the year) exerts influence for about two week starting with the second week in December (ajtj had a post on the statistics typical of December).
11/24: (326537) (*COMMENT*)
(Part 1)
I am thinking about this dividend thing. On the ex-div date, the stock was adjusted by the amount of the dividend to recognize that stockholders have something of value. However, if that money does not go back into the market, then the markets lose, don't they? In order for the market capitalization of the qqq and the SPY and DIA to stay the same, for instance, the dividend has to be funneled into QQQ, SPY, and DIA stocks. It seems to me that any movement of the dividend into anything else other than MSFT is a loss to MSFT and putting the money anywhere else than QQQ stocks is a loss to the QQQ.
This is not an opportunity to invest, it is an opportunity to re-invest. Anyone who chooses to reallocate their money to places other than MSFT and the indices that it is a big portion of is taking money out.
All of the major inices DIA, NDX, COMPQ, SPX are loaded with MSFT. REallocation by spending or moving the money to things other than similar stocks should be a loss to these indices, shouldn't it?
(Part 2)
The DIA divisor was adjusted, so no impact there, on capitalization weighed indices, yes, that 10% cut should have an impact, but I doubt it is even 1% sine with all its market cap, MSFT is not 10% of either the QQQ or the SPY.
(Part 3)
Yeah, I do not think it is a big impact. I am just saying that, if anything, it is net negative as money will flow out from the capitalization of MSFT and some of it will flow into other things. The net effect is small, but I just do not go with the "market awash with $30B" theory. Sell the news. THis is just like when Saddam stuck his crusty head out of the hole.
As afar as I can tell, no one is printing money here.
(*END*)
Steve, the point was made that typically, an average "inflow" of cash into the market is around $10 B per month (when it drops under $5 B or goes negative, we typically get down markets), a sudden injection of , in essence new cash, will act as a liquidity boost to the market, countering other possible seasonal weakening effects such as tax selling, bad economic reports and rise in crude and falling dollar. Will that overcome such possible influences? I don't know, but if the reports from this weekend shopping are glowing, these by themselves could counter a lot of the negatives out there, at least short term. My bet is still taking out 2275 before the middle of February.
11/25: (326608) (*COMMENT*)
I think that around here 2100 plus minus 20 is a good point for such a retreat
zeev, how low do you think we'll go?
(*END*)
On this run, not much, we are pressed for time and history is not a very good guide due to the unique liquidity bolus provided by MSFT' dividend. My wild guess is that we stop in the 2020/2040 area in the next two weeks.
ZEEV, TRADING - up to ZEEV:327238, 11/28/04
11/24: (326328) (*COMMENT*)
(Part 1)
Stayed with that one for a little while, but got out too early.
(Part 2)
Me too...seems to be an frequent situation for all of us, but as long as we're mostly taking gains, it's a livable one...tuna
(*END*)
Absolutely, the game is not maximum profits, but more profits than losses consistently.
11/24: (326571) (*COMMENT*)
Zeev, can you point me to more information on what you referred to as the DCB trading method?
(*END*)
After a big drop, a stock will often do a 50% recovery, or at least an attempt to the bottom of the gap, a DCB play attempts to capitalize on such, keeping in mind, however the structure of historical trading patterns in the stock.
11/24: (326532) (*COMMENT*)
Zeev It was a bad call because you constantly keep trying to find bottoms on these falling knives. You should have waited and let the stock settle. Let the sellers tell you when to buy and not be a hero you've done it with SNDK and a few others and never learn. You need the help not I. If it wasn't for bearmove the only calls on your board would be bad one's and you still bury and hide them all the time. You want the number for help let me know until then keep hiding your plays and losing folks money.....
(*END*)
You really understand very little of the DCB trading method. Sure sometimes, you get caught in a maelstrom, more often than not, you get at least a solid DCB. In the case of CNCT, it is a company on a fast track and getting loaded in the $20/$22 area, IMTO, is a great deal. A lot of people here followed similar tactics with BSTE, JCOM, QLGC, SLXP, LCAV, LSCP, HANS (a great number of times), ZBRA, CRDN, MRVL, CMN, ONXX (missed last week the swoon to $25, my bid it turned just a quarter above) COCO last year (but they cancelled that one...) and the list is long. It works, so I use it, all the above where similar situations, and all resulted in positive returns. Come back in a month or two when I finally throw the towel on that one (I did prematurely on IO, but will be back in it), and yes even SNDK which was extricated a a profit, and I am still waiting to reenter under $22. I tried catching the HXL knife today, but they never revisited the LOD, so it got missed. If you want to learn something, you must understand that a trader uses a variety of tricks in his armamentarium, if you want to point to "failed entries", I assure you that out of every four entry, at least one, is a "failure" at least for a short time. Some "failures" I remember of the top of my head, TARO, ONXX and a part of the COCO family of gambits. A much smaller number than the successes.
ZEEV, ROAD MAP - up to ZEEV:327238, 11/28/04
11/28: (327192) (*COMMENT*)
(Part 1)
Grand Nassacre, now that is attention getting. I'll wait till after ingesting a feast before I get too excited, priorties rule! (g)
(Part 2)
I would say that a 4 to 6 months move from around 2300 to around 1700 or so, or a 20% plus decline classifies, and that might be followed after a sharp rally by another major step down into October 2005 maybe as deep as 1400 on the Naz, that will be almost a 900 Naz point declines in less than a year. Would you classify that as a "grand Nassacre"? Tentatively that is what I have on the plate after we gloriously march to nirvana in January February. I now hear commentators wanting to value stocks like SIRI rationally at 5 times their 2010 "expected" revenues.... deja vu all over again.
(Part 3)
Is this meant to be (or become) a new map?
I have left some money on the table in the last two weeks (darn those sandals! which still refuse to get back into my wanting arms), also the dollar weakness is eating into my profits.
The good side is that I still made some good money as OAs have been reached in CMN, BLTI and POOL, so my cash level is still quite high but I'll try to get back into CMN and POOL. I'll leave BLTI though as I consider myself lucky to have gotten out of a bad earnings report with a nice profit...
Meanwhile got back into CCMP and GVHR at a nice discount, also a second portion of SLXP came in so cash is not as high as last week though I'm still waiting for some steam to get out of this boiling kettle. My indicators are showing negative divergences already so I guess it can't be that far...
(*END*)
These are just initial broad brush outlines, I don't have a map yet. I need to see how deep the next retrench is going to be, if is going to be. My indicators are still pointing to retrench before Xmas, thus my current "cautious" stance for the next two three weeks. Once I have visibility of the nature of the beast here, I will produce a map for the first half of the year. The elements that are tentatively in "place" are a high of at least 2275 in the Mid January/early February time frame. That is followed by a severe three steps down leg going to 1700 (more than 500 Naz points, thus a veritable Nassacre), but I have no idea if that leg ends up in late March early April, or in the early summer period (late June early July).
Wecus has a chart of Zeev's ROADMAP on the ZEEV'S ROADMAP CHARTED Board (#board-2299).
The ROADMAP chart is updated through November 19th
ZEEV, TECHNICALS - up to ZEEV:327238, 11/28/04
11/24: (326568) (*COMMENT*)
VXN hits all-time low (17.87) and VIX is near a 9-year low.
Is the Market absurdly euphoric, or have the volatility measures lost all meaning?
(*END*)
We are slowly approaching nirvana, and after nirvana, we get a "Grand Nassacre", the process of blowing up may take few more weeks, maybe as much as 8 weeks.
ZEEV, MARKET/ECONOMY - up to ZEEV:327238, 11/28/04
11/25: (326625) (*COMMENT*)
Zeev, is this still based on the belief that we won't get the job growth going forward to avoid this "recession"? If we did avg 250,000/month going fwd, would this change your thoughts? Also, any idea why this has been pushed out so far...early this year you had a peak in late summer/Sept, then a drop forecasting an early-mid 05 recession...the market's obviously not forecasting that recession anytime soon, especially given the fact that we seem destined to get 2350-2400 in the next 2-3 months. Are you open to the possibility that we can get a normal correction after 2350, then rise higher into late 05?
(*END*)
I am always open to the possibility that we may not have a major recession late in 2005. Right now, however, the market is behaving eerily like it did in the "no worry", "new economy" late in 1999, including low VIX and VXN numbers (they stayed low, relative to the their average in that period) through the whole blow up. Note that while advisors have not yet reached the 60% plus level bullish, they are getting very close. It all fits with a possible big run here in the next two months which will bring these numbers to "unsustainable" territory, then all you'll need is a trigger to precipitate a sharp decline in February and March of next year. All, of course, just my current opinion, and subject to change as data come in, including employment data. As for the latter, in the "economic picture" high employment numbers serve to compensate for the extended state of the financial state of the consumer. If enough new employees are added to the payrolls, this alleviate the expected retrenchment of the rest of the consumer body.
The economy is in a bad disequilibrium, with the balance of payments exceeding now 6% of GDP for almost a year, consumer having done a lot of refinancing that fuelled (and still fuel) the current expansion, and the US still serving as the only locomotive to world's economy. Reestablishment of economic equilibrium is just a question of time.
11/28: (327238) (*COMMENT*)
With the dollar so weak, how can the market continue up? Do you agree?
(*END*)
No.
ZEEV, NEAR TERM - up to ZEEV:325007, 11/21/04
11/07: (319540) (*COMMENT*)
(Part 1)
DOW(90.8),SPX(93.1),Naz(90.8),NDX(87.5),QQQ(87.7) rsi 5d all very overbought.Means jack according to some.
(Part 2)
I am not sure what you means by "jack", but to me it means a sharp, though rapid retrenchment starting maybe even tomorrow or Tuesday. The futes are down a little but I think that by opening they may very well be back up, giving us a false breakout above the July highs on the Naz (and the March highs on the SPX). However, a retreat here should be bought, since I still think that my target of about 2275 on the Naz (see my August 6 targets for instance #msg-3751323) in January is quite achievable as a blow out top. My plan, reduce exposure a little over the next two days and step aside to see how far (if) a retreat develops.
(Part 3)
I think we're very overbought and in need of a breather.I was pointing out that last week two posters told me overbought means absolutely nothing,zilch,nada(one said "overbought means jack,the other "overbought means shit)".
(*END*)
Now I got you, yes, overbought eventually get corrected, one way to put it is if the 5 day RSI is at 90%, how much higher can it go?
11/08: (319718) (*COMMENT*)
(Part 1)
Zeev, I am ready for the decline, you can let it begin now!<G>
(Part 2)
So am I.... but I think there will be a little more volatility before a trend comes in.
(Part 3)
Zeev, I hope this retrench does not turn out like the July one! I kept my faith in the turnips and am now able to unload some into this rise!
(*END*)
Hey I kept my face in those turnips as well, and since the low in August (1750, called a week before, on the dot), I have been doing quite nicely, thank you. Right now, I have no indications that the retrench will be more severe than a test of 1940, probably higher.
11/10: (320629) (*COMMENT*)
Zeev remains neutral. Is he getting ready to buy ? Or is he waiting for more down side ?
(*END*)
Much more downside.
11/11: (321038) (*COMMENT*)
Zeev, They just can't seem to penetrate 2050! (YET) Probably if I closed out some of my remaining positions we would go past it almost immediately!
(*END*)
Yup, we are fighting with the July highs here, but they may take these out, but I doubt we stay above that level long, I still have a retrench coming and just got out of the first serving of APSG here at $34.34 for the bucker.
11/11: (321054) (*COMMENT*)
Zeev, still looking for about 1940 or rather anything under 2000? Thanks.....
(*END*)
I said about 85 naz points from the top and 1940 as a solid barrier.
11/11: (321073) (*COMMENT*)
Closed out remaing longs, more upside almost guaranteed! <fobl>
(*END*)
I am right now at 48% cash, reflecting my opinion that a sizeable retrench should occur soon.
11/11: (321299) (*COMMENT*)
(Part 1)
What happened after 500pm DELL was at 37, I go out for dinner and closed AH over 38
(Part 2)
Lunacy
(*END*)
Lunacy is right, I probably will have a sell signal sometime tomorrow (namely more than 100 Naz points drop), not a bear market yet (still have a run to 2275 or so by late January) but a solid retrenchment to the 1940/1960, which from the day's high tomorrow will be more than 100 Naz points. It seems as if the cycle date I had of 11/12 was a high rather than a low. It happens with cycles. My next turn point is too broad (I have from the 23 to the 29th as a turn which includes Thanksgiving, seasonally, the day before Thanksgiving is a good buying point) so that may not be too useful. I will probably end tomorrow with around 50% cash or maybe even higher from a going to sleep level of 42%. Those still in Hans, note that the RSI is getting above 70%, an area from which HANS often take a sharp turn down. HAUP seems to be ready to break out as well, $5 is the buy signal there.
11/11: (321311) (*COMMENT*)
100 NAS points...dream on...dip buyers every where...minor pullbacks of 20 or so points...that is all...
(*END*)
I always hear the same comments at tops that are much more significant then what we are at right now. That worries me as far as the possibility of a post retrench moonshot I expected. We'll see how the internals are going to behave in the next two weeks.
11/12: (321852) (*COMMENT*)
Zeev, sounds like you are less sure of a retrench in here to 2000 level or lower. Are you less sure now than you have been recently? Thanks in advance.
(*END*)
How many times I can say I am "neutral", that means do not expect major downside move, but be careful and keep some ammo dry. I am not saying "full speed ahead damn the torpedo", and surely not "run to the hills".
11/14: (321981) (*COMMENT*)
C: re: " J, looks like Z has changed his mind."
Not sure about that. Maybe he is waiting for some more pieces to fall into place. I would like to see some things develop too. But it may not happen. We will see.
re: "We are overbought big time."
On a weekly and daily basis on price alone, we are as overbought now as at the January top. I have not had weekly readings such as the one registered on Friday since January 16, 2004. That, of course, was an intermediate term top.
Re: "Reminds me spring/early summer 03."
On a weekly basis since March, 2003 and prior to January 2004, I have only once had price indicators this overbought once and that was on September 18, 2003. And that lead to a 104 NDX point drop that bottomed at the end of September, 2003.
(*END*)
I still think that shorting here is to try and catch a top, and typically, in manias, the first retrench is bought heavily. I am sticking by my scenario of a relatively mild retrench, I don't know wherefrom, followed by a run into January/February before a grand Nassacre develop late in the winter lasting at least into April/May. Note that Max pain on the QQQ is probably around $36/7, and we are close to $$39, fuel for delta hedging late next week... and thus a spiky (up) expiry next Friday.
11/14: (321997) (*COMMENT*)
Z: Re: "I still think that shorting here is to try and catch a top."
But the greater risk is holding long here and gaming the top and failing to recognize it and thus end up holding the bag.
Re: "in manias"
I don't see that here so far.
Re: " I am sticking by my scenario of a relatively mild retrench, I don't know wherefrom."
With all due respect, I don't see much left of your orignal scenario to stick by at this juncture.
(*END*)
I am not sure what you are referring to, I had a possible intermediate top here in early november around 2025, on 11/3 we got there and I turned more cautious, so now we are another 60 points higher. I am no disturbed by this inaccuracy, i was fully loaded early in August near 1750, run this 275 Naz points with the load, taking profits on the way and changing few horses, that is the way to make money. Get loaded near bottom and unload as your perceived top is reached, but do not unload more than necessary unless you see big signs of a real top. Just keep flexible, and you can do very well.
11/14: (322034) (*COMMENT*)
the indexes are starting to remind me of the Tom Cruise movie as they are going vertical. sure would be nice to get some selling this week for some relief on the shorts i am carrying
(*END*)
What do you make of max pain on the QQQ, we are quite far, often just adding to the fire as the houses rush to cover their "buts"?
11/14: (322096) (*COMMENT*)
too true. the year has been pretty good to me so ill be fine either way, but a few days of weakness would be a much nicer alternative. my understanding of your short was it was just a partial hedge against the core longs you held, so overall you should have done just fine in that window. in my case its not a hedge, but a full short position without any longs to even it out.
(*END*)
Yes, it was a very small hedge, minimal damage, and the short before that fully covered the last folly, in one day too. Looks as if the futes indicates another ramp earl on tomorrow, there is really nothing between here at the January high on the naz to serve as major resistance, except if internals started to get whacky, these are not there yet. I also thought I would get a down to earth sell signal Thursday, but it never happened, so I went to sleep with a moderate cash position of 40%, earlier in the week I was almost at 50% and was planning further increase, but decided t let few more positions mature. CMN might even print a new high this week, which will take that one off.
11/15: (322373) (*COMMENT*)
Do you think we could see 1985 this week?
(*END*)
No. But I am formally calling back my bear suit from the cleaner here at 2089 on the Naz, expecting at least a 100 Naz points soon down. have few asks in place to get cash to the 50% area or so. For instance, I hope SNDK manages to make a run to $23 since my ask is just under that.
11/15: (322436) (*COMMENT*)
Zeev, if you're expecting only a move of 100 points down or so, then I assume that this is only a temporary donning of the bear suit for just a few weeks, right?
Then I assume you'll put on a Santa Claus suit in time for the "Santa Rally." <g>
(*END*)
Two maybe three weeks, if that long.
11/15: (322613) (*COMMENT*)
Zeev, if you're expecting only a move of 100 points down or so, then I assume that this is only a temporary donning of the bear suit for just a few weeks, right?
Then I assume you'll put on a Santa Claus suit in time for the "Santa Rally." <g>
(*END*)
Upon reviewing additional closing data, there is a possible fork extending the swoon all the way to just before Christmas. Low probability for now, the probability will increase if we take 2100 here before expiry and continue with sub .45 EPC. We will know in the fullness of time as Jim says. Short term, I will concentrate on "deep discounts" if offered, and possibly few day trades, if I have the time.
11/16: (323160) (*COMMENT*)
Z: Re: " I think they have a chance of bringing the QQQ to the $37 area before expiry, obviating the need for delta hedging."
The last time the QQQ closed about $37 the composite was at 1978. So, you need a 100 point or so drop in three days in the composite. How do you figure that is going to happen?
(*END*)
They don't need to get it to $37 to extricate themselves, furthermore, the QQQ outperformed the Naz (even today mind you) and in a fast decline it could decline more than the Naz, getting to the 2020 os will be sufficient to bail "them out", though, with HPQ results, that seems more doubtful short term. I did not expect HPQ results to be that "good". I don't have the time to check what, if any, are the skeletons in the closet.
11/17: (323342) (*COMMENT*)
SMH Quotes 11/17/04 This morning. Looks like a gap & crap.
(*END*)
Looks like a run and delta hedging will be in force. My last bear signal, was once more a "fake", and yielded barely 20 Naz points. Going back to a neutral stance here, until I see how the January highs on the az are handled, we may go to my 2275 target straight line? If they give me few bargains, I might even decrease cash to the 45% to 50% range. So far no hits, though.
11/17: (323461) (*COMMENT*)
Z: Re: "My last bear signal, was once more a "fake", and yielded barely 20 Naz points."
Why so definitive? You gave it a day. Maybe the whipsaw machine is on high.
(*END*)
Could very well be that is why I did not go all the way to bull and am still in neutral with exposure at the 50% or so.
11/17: (323583) (*COMMENT*)
Zeev, I thought you had a turn date (along w/JimQ) next week (Nov. 23rd). You still keying off that in some form or fashion?
(*END*)
Right now, I am confused and that turn date might actually be a high, not a low.
11/17: (323783) (*COMMENT*)
Where's Zeev and his bear suit? Edit:...nevermind...saw he took it of. <g>
(*END*)
Just opened the zipper to "neutral" no raging bull yet, I would like a revisit of just the 1990/2010 area at least for the End of Year and January run to the targets above 2275. That would be a nice final 300 points run (we already had 350 run from the August low, so a mild retrench to alleviate some of the overbought would be quite healthy.) I may have to wait till Friday's Delta to rezip that suit (g). Sure looks as if the houses have a bunch of naked calls on their hand, and getting back under $38 might not be easy tomorrow and Friday. I got few OB's today, so cash was reduced a little to 50% (it was 60% just on Monday).
11/18: (323881) (*COMMENT*)
Zeev...by what time do you envision the visit to 1990/2010 to take place? thnx
(*END*)
Depends how long it takes us to top here, assuming we top Friday, then about two three weeks later.
11/18: (324335) (*COMMENT*)
Zeev at this point with OE about over and next week being a holiday week I'd expect a positive bias into next friday all things held equal.
(*END*)
We have two seasonal factors that are contradicting, assuming tomorrow is indeed an up day due to delta hedging, then Monday and Tuesday after an up expiry day have a great probability of being down. That leaves Wed and Friday. Friday after Thanksgiving is traditionally up, because "professionals" that usually "reign" in the market are out. Could it be, such professionals are now those providing fuel (via short covering) to the rally, and their absence Friday will let a down trend continue? As Jim says, we will know in the fullness of time, but there are only so many days the EPC can brush with .5 (after an excursion to .4) without starting a solid down trend. Mind you, in the last 10 trading days, only once has the EPC been above .6 (and not by much, on 11/12), thus my guess is that tomorrow, if we get a squeeze up, the bear suit is probably being rezipped for a little while, counter the traditional seasonal strength.
11/19: (324562) (*COMMENT*)
(Part 1)
Read my post before market this morning and you will see what is going on:
http://www.investorshub.com/boards/read_msg.asp?message_id=4610218 (I copied this message below for your convenience)
Delta hedging is over.
Market: There have been five occassions this year where the Nasdaq 100 closed higher by 0.5% or more while the breadth of the broader Nasdaq market closed at -200 or lower. A higher close with this kind of breadth suggests buyer exhaustion:
The dates of interest are are 9/14/04, 7/22/04, 7/7/04 and 4/23/04. Yesterday we had another one of those days. In three out of the four cases, the day this occurred marked a top to the exact day. The 4/23 example had a 2 point higher high the following day. In all cases, this lead to a corrective period. In all cases, the NDX was down the following day by an average of 22.50 NDX points. None of the prior dates occurred during opex.
There was one exception was March 23 2004 when the index just rallied higher. The distinction there is that we were coming off the lows and the kind of extremes I have been talking about did not exist. In fact. I had buy signals that day on the NDX.
(Part 2)
I don't disagree, the problem is that today is expiry and normal games don't always work. If we indeed have no delta hedging, and it seems that way now, then, statistically, Monday after a down expiry is higher, getting the the topping action according to Jim's schedule on Wednesday, I won't hold my breath for that since here around 2100, I think we have to let the market regroup for a solid 100 Naz points or so anyhow.
(Part 3)
Z: Okay, you had delta hedging yesterday in the NDX. That is why it was up so much relative to everything else. Maybe Jim revisits his schedule and finds a low on Wednesday. That fits with seasonal patterns.
(Part 4)
Problem with that is that if we are sharply down today, there is a good chance Monday will partially reverse that, maybe only early on and then continue down.
(Part 5)
Z: I don't understand what you see as the "problem" with that possibility so I must be missing something.
(*END*)
For Wednesday to be a local low, it would help to have at least three four down days, today, Monday and Tuesday, but often, if expiry is down, the Monday is up. I think it is a higher than 65% correlation.
11/19: (324775) (*COMMENT*)
Yes. If it works out that way. But I'll just take it a day at a time.
I guess you are staying neutral ? That's what makes markets.
And your cash is ?
(*END*)
I stated last night that I am rezipping the suit today. We may get to that 200 level faster than I thought. Unfortunately, my asks were too greedy, so I did not manage to raise as much cash as wanted, it is at 46% right here. I might eve be forced back to Neutral if Monday is up and recaptures 2100. Very tricky markets here near a local top.
11/19: (324798) (*COMMENT*)
http://stockcharts.com/def/servlet/SC.web?c=$COMPQ,uu[d,a]dhclyyay[d20040110,20041119][pi!f][vc60][i....
2153.8 on the $COMP is the 12 month high. Turning back here on strong volume would look ugly
151 Dow points from the 2004 high
http://stockcharts.com/def/servlet/SC.web?c=$DJIA,uu[d,a]dhclyyay[d20040110,20041119][pi!f][vc60][iU....
$SPX $TRAN $RUT & $UTIL all broke out very impressively, first out of the downtrend channels then through the 52-week price highs.
Financials and Semis weighing down the bull market breakout?
(*END*)
Old highs always take two or three attempts before they are "taken out", the QQQ and the NDX and well as the SPX already took out the January high, the later, with some gusto too. Actually, the old January/ March high in the SPX (around 1150) should serve as support on the current retrench.
11/19: (324822) (*COMMENT*)
(Part 1)
Zeev is bearish Today 11/19/04
(Part 2)
Don't make too much out of it, it is not the start of a bear market, is a tiny teddy bear, maybe to 2000 maybe another 50 Naz points under that, from here to late January, I still think that the bulls will have the upper and, not withstanding today's ugly action.
(Part 3)
Zeev am I reading your comment acurately? You expect us to go down till mid to late January? I thought you expected a high maybe 200 more points by then.
(*END*)
No, you are not reading this right. #msg-3751323 from early August is till effective (at least 2275 before we really top).
11/19: (324825) (*COMMENT*)
Zeev, I'm wondering why you see the current retrench holding at SPX 1150 (only about 20 points lower), but you see a swoon on the Comp of another 75 points or so...at least.
Am I reading you wrong?? Thanks...
(*END*)
Only because the nature of the beast is that former resistance often becomes support, it is quite possible that the more recent highs of April and June (in the 1130/40 area) would be a better support for the SPX. The Naz may not do the "whole" trip to 2000, 2020/25 and maybe as high as 2050 were minor overhead resistances and could serve as support.
11/20: (324865) (*COMMENT*)
Zeev, the operative phrase may be "at least" (2275). This election year turned out differently than many expected (too many expected a "feel good" rally 3 months before the election?). Mainstream press articles about how the first 2 years of a presidential cycle are market down years are starting to pop up...Dollar is at a major low, etc.
What's the turnips probability that the bull will extend beyond the 2300 area?
(*END*)
Reread that August 6 post (and earlier in the year), I would not be surprised to see an overshoot to 2390, particularly if the current swoon down does not brings the Naz under 1980.
11/20: (324879) (*COMMENT*)
Isn't it premature to talk about what kind of upside there might be once the next decline is completed?
Zeev, in your post # 324335 you say: ".... but there are only so many days the EPC can brush with .5 (after an excursion to .4) without starting a solid down trend. Mind you, in the last 10 trading days, only once has the EPC been above .6 (and not by much, on 11/12), thus my guess is that tomorrow, if we get a squeeze up, the bear suit is probably being rezipped for a little while, counter the traditional seasonal strength."
Then in post # 324825 you see the downside here rather contained: "... Only because the nature of the beast is that former resistance often becomes support, it is quite possible that the more recent highs of April and June (in the 1130/40 area) would be a better support for the SPX. The Naz may not do the "whole" trip to 2000, 2020/25 and maybe as high as 2050 were minor overhead resistances and could serve as support."
I mean, we could be at 2050 by Monday if the day is weak, you really think that could already be all down we get?
With such a string of EPC extremes, if not the beginning of a downtrend is at hand, isn't there a more extended correction more likely than a rather shallow one?
(*END*)
I don't really know. Typically, the string of EPC we got was not extremely negative (If memory serves, prior to my major bear call in January we even hit under $.4 and had a string of under .5), external parameters could come into play such as crude resuming a down trend, the dollar mounting a counter trend rally etc. which could abort, short term, a decline. Mind you, Jim's Momentum indicators are still pointing to a high Wednesday and from there a relatively strong decline, and I do not disagree with that. Which ever is the case, many of the internals have not reached such extremes that a major bear stance should be taken (thus my "teddy bear" stance), I believe for such extremes to develop, we will need to take on the Naz the January highs, and then some, so I would not be surprised to see that move to at least 2275 in late January, in between, whether we stop at 2050 or at 1940/80, I have no idea. If Jim's model is right, then probably we first stop the current decline here monday without going under 2050, print a new high or get close to the 2130/50 area (a fast 3 days 80 to 100 Naz rush, by the way, I think that Jim's model can be off by a day or two, so it may include a spike into post Thanksgiving, but you'll have to ask him) and then engage into a decline till around Christmas to the 1940/1980 area. If Monday starts down and then reverse, then I would think that the latter scenario, including Jim's high on Wednesday could indeed be the one we follow.
ZEEV, TRADING - up to ZEEV:325007, 11/21/04
11/11: (321125) (*COMMENT*)
A lot of froth out there.
(*END*)
Yup, got to be careful and take profits when offered, even if you leave some on the table.
11/13: (321925) (*COMMENT*)
Zeev - Being a swing trader that does not short stocks (Except the QQQ), how do you remain profitable in a sustained down trend?
(*END*)
High cash levels, diversification, few core issues and down channel swing trading. In rare occasions I have been as low as high as 90% cash, with only few core issues remaining. If you look at the bad 2000/2002 market, good core issues still advanced quite nicely. Even in a bear market, there are violent 30% plus counter trend moves up, which, if you are cash rich, you can exploit (late May 2000, late December 2000, early April 2001, late September 2001, early July 2002, and so on, all period where I shifted rapidly (and sometimes, a little prematurely) from heavy cash to "fully loaded", and quite profitably. I am being criticised right now for being between 40% to 50% cash since we hit 2025 on the Naz, a solid 55 Naz points below, but I would not have been able to launch 12% on BSTE, ZBRA, SAM and NTMD Friday (of which only NTMD and SAM stayed on), if I would have been fully invested...
11/16: (323158) (*COMMENT*)
Zeev, do you , or anyone here find it helpful to place sell orders on longs after starting the position? I find with volatility it would behoove me to put orders out there , in my case usually for a cover. ie today KLAC came in good before bouncing, when I wasn't watching. Sure would be nice to collect at least partials that way.
I use stops some of the time, and place orders out there to initiate a position, but rarely an order to close a position.
I think I just convinced myself
(*END*)
I do it quite often (did that today with the third ZBRA serving, all I wanted from it was the bucker). I used to do it a lot when I had the time to day trade, then almost half the day trade buys were followed immediately by entering sell orders near the top of the box, unless I expected market blowout behavior.
ZEEV, ROAD MAP - up to ZEEV:325007, 11/21/04
Wecus has a chart of Zeev's ROADMAP on the ZEEV'S ROADMAP CHARTED Board (#board-2299).
The ROADMAP chart is updated through November 19th
ZEEV, TECHNICALS - up to ZEEV:325007, 11/21/04
11/11: (321122) (*COMMENT*)
Zeev, I know, But never understimate the power of my market trading inabilities<g>
(*END*)
Yup, it is packing now and the July high are behind. Yet, the EPC is well above .5, so any retrench should be relatively mild... if we get one (g). Because of the inability to now ahead of time if the map will be followed or not, I always keep few things on the table, and often put OB's under the market to get few things to ride on.
11/12: (321846) (*COMMENT*)
zeev, might this be a coalescing of your december and january rallies into one rally here?
(*END*)
It could be, the new highs keep expanding, but we are getting close to levels that are "unsustainable" (like 500 new highs on the NYSE), so it is still possible we get a retrench, i was expecting to get a "bona fide" sell signal today, but no cigar. So I am slightly defensive with 40% cash, which I need in case they give bargains like ZBRA again....
11/14: (322049) (*COMMENT*)
my opinion on max pain is that it follows the index rather than being a predictor of future action as most believe. about the only time i look at it is times like this, where there is a significant difference between the underlying and max pain. im playing for a retrace of last weeks action to close the gap some.
i do not have a good understanding of delta hedging and would appreciate it if you or someone else could post a link to a description or if you could give me a quick overview. from what i do understand, this is a prime setup for that to occur. sure hope it doesnt as i have a big net short position
(*END*)
Steve, I don't know any place where it is described, I have tried few times to explain "my take" on it (I am not big on options nor a great believer in Max pain either). In short, when Max pain is well under the market, as it is now, it means the houses are stuck with a lot of naked calls that are "in the money", and if the do not manage to narrow the gap early in the week, near expiry they are forced to rush into the market buying the underlying security (that is the "delta hedging") causing additional upward pressure on prices (often undone rapidly in the two to three days after expiry). The inverse is the case when max pain is well above the market, a lot of naked puts are outstanding and the houses sell short the underlying equities to cover their naked puts putting further downward pressure on the market. Can you "bank on it", I don't know, but you are gutsy being heavily short here trying to guess how far this thing goes, while it is in "breakout" (QQQ above the July highs, SPY a three years high, I believe) mode. Probably a little "nail biting" time (g).
11/15: (322359) (*COMMENT*)
Equity Put/Call ratio is hovering around 0.31. Don't you think Market is making a local top around 1560?
(*END*)
Yup I think so, waiting a little longer for a sell signal, but already engaged in profit taking here. I still do not expect 1940 to be taken, but even if we get to "just" 1985, that will be a 100 Naz points swoon...
11/15: (322408) (*COMMENT*)
i'm impressed with the market strength...maybe we won't get a retrench?
(*END*)
Always possible, but here near 2000 on the Naz, new high are not printing new recovery numbers and the EPC is really worrisome.
11/15: (322566) (*COMMENT*)
Zeev, market on perma pump, when does it end, Q4 warnings?
(*END*)
When puts buying dries up. You noticed a million plus calls contracts today? Volume on the Naz, however, once more dropped under 2 B. I thin we are pretty close to short term yop and have zipped the bear suit accordingly, raised cash to the 60% level as well, it would have been higher if TBL would have printed a new high (g).
11/19: (324362) (*COMMENT*)
EPC 11/08 0.49, 11/09 0.53, 11/10 0.53, 11/11 0.56, 11/12 0.64, 11/15 0.40, 11/16 0.59, 11/17 0.51, 11/18 0.50
Is this a record for 2004, 2 weeks of EPC hugging 0.5 ?
(*END*)
No, we had a similar situation in early January.
11/19: (324639) (*COMMENT*)
Looking back about 6 years, and using the QQQ's, if expiry is up, Monday is down 41% of the time. If expiry is down, Monday is up 36% of the time.
Overall, Monday moves the same way as expiry Friday 61% of the time.
(*END*)
Thanks, you must have a nice program doing this search. I'll bear it in mind. So Jim might not be right and we actually get a low on Wednesday...
11/21: (324979) (*COMMENT*)
Junk bond spreads which have served as a very accurate stock market indicator this year are extremely narrow and narrowed further on Friday. No way will get a sharp or sustained stock drop until junk spreads start to widen IMHO.
(*END*)
Junk spreads are maximal at bottoms, minimal at tops of markets, if the spread is already quite narrow, in the next six months, particularly, if we start and get slowing economic growth (leading to possible negative growth) such spread will expand, and equity drop. We should be watching the monthly employment figures, if they keep strong as last month, things should be fine, if they start and retrench under the 200,000 level for few months, it may foreshadow problems in equities later on, IMTO.
ZEEV, MARKET/ECONOMY - up to ZEEV:325007, 11/21/04
11/13: (321917) (*COMMENT*)
Zeev-- Your road map lines up with 1936-1937 incredibly well. note this post I just made to AJ on his thread.
http://www.investorshub.com/boards/read_msg.asp?message_id=4560487
What do you think?
(*END*)
Except that this time, I think that the 2005/6 lows might be lower than the 2002 lows.... unlike the post 1937 lows.
11/13: (321928) (*COMMENT*)
Zeev, this would be a serious decline from these levels. What fundamental reasons do you think will bring the market down to new lows?
Falling dollar? Inflation? Rising interest rates? Inability to reign in budget deficits? Tougher earnings comparissons in 2005? Profit squeeze related to inflation in commodities? Tax cuts may not become permanent ?
(*END*)
A consumer led recession, and the "need" of secular bear market to create "uncommon" value by getting a generation of new bulls (hedge funds?) to throw in the towel.
11/14: (321980) (*COMMENT*)
(Part 1)
Yes and just imagine what that will do to the deficit. What do you think the Chinese Centrla Bank will have to say about all that?
Think they will carrry on buying our bonds? So what if you go 100% cash what good is it if Europe is in turmoil and your bank is shut? Europe is a tinder box.
And how about another does of unemployment? Huh? How about the good voters of Iowa ? Think they are going to happy about their votes of early November when even more of them are chucked out of work?
By all means predict disaster but at least follow it it through other than some charts.
(Part 2)
If you think that outcome of the elections has anything to do with the future denouement of economic events here and with our trading partners, I have a bridge in Brooklyn for sale. (g). see my old April 2000 long term map, independent of who is in charge of the white house.
(Part 3)
ZH - itts not the outcome but what he will say when another few millions lose their jobs. That wan't supposed to be the outcome for those that came out to support him neither was losing their savings.
So if you think that governements are unable to improve thier economies I'll sell you the bridge that I just bought offf you<gg>.
As for the Chinese and the Europeans we really do not need another dose of unemployed Germans etc.
(*END*)
Limtex, by now, you should be familiar with my April 2000 post suggesting a lengthy secular bear interrupted by few cyclical bulls. If not, go to kayaker's thread he has that post for "posterity".
11/16: (322647) (*COMMENT*)
"Limtex, by now, you should be familiar with my April 2000 post suggesting a lengthy secular bear interrupted by few cyclical bulls. If not, go to kayaker's thread he has that post for "posterity"."
ZH - What then does that mean in simple terms. A market that continues to decline over a period of years? For ever, how long? Employment and growth or do you cindsider those to move independently to the market?
(*END*)
Trading in a broad range for a decade or more until earnings catch up with valuations and a new economical equilibrium is established. The economy grew quite a lot from 1966 to 1982, despite four or so recessions in the period, yet the market went nowhere.
ZEEV, NEAR TERM - up to ZEEV:322062, 11/14/04
11/08: (319718) (*COMMENT*)
(Part 1)
Zeev, I am ready for the decline, you can let it begin now!<G>
(Part 2)
So am I.... but I think there will be a little more volatility before a trend comes in.
(Part 3)
Zeev, I hope this retrench does not turn out like the July one! I kept my faith in the turnips and am now able to unload some into this rise!
(*END*)
Hey I kept my face in those turnips as well, and since the low in August (1750, called a week before, on the dot), I have been doing quite nicely, thank you. Right now, I have no indications that the retrench will be more severe than a test of 1940, probably higher.
11/10: (320629) (*COMMENT*)
Zeev remains neutral. Is he getting ready to buy ? Or is he waiting for more down side ?
(*END*)
Much more downside.
11/11: (321038) (*COMMENT*)
Zeev, They just can't seem to penetrate 2050! (YET) Probably if I closed out some of my remaining positions we would go past it almost immediately!
(*END*)
Yup, we are fighting with the July highs here, but they may take these out, but I doubt we stay above that level long, I still have a retrench coming and just got out of the first serving of APSG here at $34.34 for the bucker.
11/11: (321054) (*COMMENT*)
Zeev, still looking for about 1940 or rather anything under 2000? Thanks.....
(*END*)
I said about 85 naz points from the top and 1940 as a solid barrier.
11/11: (321073) (*COMMENT*)
Closed out remaing longs, more upside almost guaranteed!
<fobl>
(*END*)
I am right now at 48% cash, reflecting my opinion that a sizeable retrench should occur soon.
11/11: (321122) (*COMMENT*)
Zeev, I know, But never understimate the power of my market trading inabilities<g>
(*END*)
Yup, it is packing now and the July high are behind. Yet, the EPC is well above .5, so any retrench should be relatively mild... if we get one (g). Because of the inability to now ahead of time if the map will be followed or not, I always keep few things on the table, and often put OB's under the market to get few things to ride on.
11/11: (321125) (*COMMENT*)
A lot of froth out there.
(*END*)
Yup, got to be careful and take profits when offered, even if you leave some on the table.
11/11: (321299) (*COMMENT*)
(Part 1)
What happened after 500pm DELL was at 37, I go out for dinner and closed AH over 38
(Part 2)
Lunacy
(*END*)
Lunacy is right, I probably will have a sell signal sometime tomorrow (namely more than 100 Naz points drop), not a bear market yet (still have a run to 2275 or so by late January) but a solid retrenchment to the 1940/1960, which from the day's high tomorrow will be more than 100 Naz points. It seems as if the cycle date I had of 11/12 was a high rather than a low. It happens with cycles. My next turn point is too broad (I have from the 23 to the 29th as a turn which includes Thanksgiving, seasonally, the day before Thanksgiving is a good buying point) so that may not be too useful. I will probably end tomorrow with around 50% cash or maybe even higher from a going to sleep level of 42%. Those still in Hans, note that the RSI is getting above 70%, an area from which HANS often take a sharp turn down. HAUP seems to be ready to break out as well, $5 is the buy signal there.
11/11: (321311) (*COMMENT*)
100 NAS points...dream on...dip buyers every where...minor pullbacks of 20 or so points...that is all...
(*END*)
I always hear the same comments at tops that are much more significant then what we are at right now. That worries me as far as the possibility of a post retrench moonshot I expected. We'll see how the internals are going to behave in the next two weeks.
11/12: (321846) (*COMMENT*)
zeev, might this be a coalescing of your december and january rallies into one rally here?
(*END*)
It could be, the new highs keep expanding, but we are getting close to levels that are "unsustainable" (like 500 new highs on the NYSE), so it is still possible we get a retrench, i was expecting to get a "bona fide" sell signal today, but no cigar. So I am slightly defensive with 40% cash, which I need in case they give bargains like ZBRA again....
11/12: (321852) (*COMMENT*)
Zeev, sounds like you are less sure of a retrench in here to 2000 level or lower. Are you less sure now than you have been recently? Thanks in advance.
(*END*)
How many times I can say I am "neutral", that means do not expect major downside move, but be careful and keep some ammo dry. I am not saying "full speed ahead damn the torpedo", and surely not "run to the hills".
11/14: (321981) (*COMMENT*)
C: re: " J, looks like Z has changed his mind."
Not sure about that. Maybe he is waiting for some more pieces to fall into place. I would like to see some things develop too. But it may not happen. We will see.
re: "We are overbought big time."
On a weekly and daily basis on price alone, we are as overbought now as at the January top. I have not had weekly readings such as the one registered on Friday since January 16, 2004. That, of course, was an intermediate term top.
Re: "Reminds me spring/early summer 03."
On a weekly basis since March, 2003 and prior to January 2004, I have only once had price indicators this overbought once and that was on September 18, 2003. And that lead to a 104 NDX point drop that bottomed at the end of September, 2003.
(*END*)
I still think that shorting here is to try and catch a top, and typically, in manias, the first retrench is bought heavily. I am sticking by my scenario of a relatively mild retrench, I don't know wherefrom, followed by a run into January/February before a grand Nassacre develop late in the winter lasting at least into April/May. Note that Max pain on the QQQ is probably around $36/7, and we are close to $$39, fuel for delta hedging late next week... and thus a spiky (up) expiry next Friday.
11/14: (321997) (*COMMENT*)
Z: Re: "I still think that shorting here is to try and catch a top."
But the greater risk is holding long here and gaming the top and failing to recognize it and thus end up holding the bag.
Re: "in manias"
I don't see that here so far.
Re: " I am sticking by my scenario of a relatively mild retrench, I don't know wherefrom."
With all due respect, I don't see much left of your orignal scenario to stick by at this juncture.
(*END*)
I am not sure what you are referring to, I had a possible intermediate top here in early november around 2025, on 11/3 we got there and I turned more cautious, so now we are another 60 points higher. I am no disturbed by this inaccuracy, i was fully loaded early in August near 1750, run this 275 Naz points with the load, taking profits on the way and changing few horses, that is the way to make money. Get loaded near bottom and unload as your perceived top is reached, but do not unload more than necessary unless you see big signs of a real top. Just keep flexible, and you can do very well.
11/14: (322034) (*COMMENT*)
the indexes are starting to remind me of the Tom Cruise movie as they are going vertical. sure would be nice to get some selling this week for some relief on the shorts i am carrying
(*END*)
What do you make of max pain on the QQQ, we are quite far, often just adding to the fire as the houses rush to cover their "buts"?
11/14: (322049) (*COMMENT*)
my opinion on max pain is that it follows the index rather than being a predictor of future action as most believe. about the only time i look at it is times like this, where there is a significant difference between the underlying and max pain. im playing for a retrace of last weeks action to close the gap some.
i do not have a good understanding of delta hedging and would appreciate it if you or someone else could post a link to a description or if you could give me a quick overview. from what i do understand, this is a prime setup for that to occur. sure hope it doesnt as i have a big net short position
(*END*)
Steve, I don't know any place where it is described, I have tried few times to explain "my take" on it (I am not big on options nor a great believer in Max pain either). In short, when Max pain is well under the market, as it is now, it means the houses are stuck with a lot of naked calls that are "in the money", and if the do not manage to narrow the gap early in the week, near expiry they are forced to rush into the market buying the underlying security (that is the "delta hedging") causing additional upward pressure on prices (often undone rapidly in the two to three days after expiry). The inverse is the case when max pain is well above the market, a lot of naked puts are outstanding and the houses sell short the underlying equities to cover their naked puts putting further downward pressure on the market. Can you "bank on it", I don't know, but you are gutsy being heavily short here trying to guess how far this thing goes, while it is in "breakout" (QQQ above the July highs, SPY a three years high, I believe) mode. Probably a little "nail biting" time (g).
Added by editing after posting:
11/14: (322085) (*COMMENT*)
The window I use for Max Pain started last Thursday. In a situation where delta hedging occurs, I've noticed in the past the MM's will often move price equal to or slightly more away from Max Pain going into expiration as the distance it was on that Thursday.
For example, let's say Max Pain was roughly 36.50 on Thursday on the QQQ and price began at 37.79 from Wednesday's close. That's 1.29 points above Pain. Ideally, the QQQ should move to a minimum 39.28 (or NDX 1579) to cover the Max Pain spread. Often times it moves above the minimum as the MM's give themselves a profit cushion. The alternative would be to reach the minimum a day or two prior to expiration and then drop into expiration.
Looking at the situation, I think we could see a white candle this week with a bit of a shadow below and above on the COMP/NDX/QQQ, and then a 58 NDX point drop from the top the following week. We'll see.
During bullish moves, it seems we often have fast dumps in November, but recoveries around Thanksgiving.
*END*
I think you may be right, I have a "next" turn date around thanksgiving (Jim also), thus we may top on expiry and the normal post expiry swoon (when expiry is up) turn into a beginning of a short term decline allowing for the typical post Thanks giving EOY run.
ZEEV, TRADING - up to ZEEV:322062, 11/14/04
11/13: (321925) (*COMMENT*)
Zeev - Being a swing trader that does not short stocks(Except the QQQ), how do you remain profitable in a sustained down trend?
(*END*)
High cash levels, diversification, few core issues and down channel swing trading. In rare occasions I have been as low as high as 90% cash, with only few core issues remaining. If you look at the bad 2000/2002 market, good core issues still advanced quite nicely. Even in a bear market, there are violent 30% plus counter trend moves up, which, if you are cash rich, you can exploit (late May 2000, late December 2000, early April 2001, late September 2001, early July 2002, and so on, all period where I shifted rapidly (and sometimes, a little prematurely) from heavy cash to "fully loaded", and quite profitably. I am being criticised right now for being between 40% to 50% cash since we hit 2025 on the Naz, a solid 55 Naz points below, but I would not have been able to launch 12% on BSTE, ZBRA, SAM and NTMD Friday (of which only NTMD and SAM stayed on), if I would have been fully invested...
ZEEV, ROAD MAP - up to ZEEV:322062, 11/14/04
Wecus has a chart of Zeev's ROADMAP on the ZEEV'S ROADMAP CHARTED Board (#board-2299).
Wecus has changed ROADMAP chart to a new format.
(It has been updated, but the date of the update is not available flg)
ZEEV, TECHNICALS - up to ZEEV:322062, 11/14/04
11/07: (319540) (*COMMENT*)
(Part 1)
DOW(90.8), SPX(93.1), Naz(90.8), NDX(87.5), QQQ(87.7) rsi 5d all very overbought. Means jack according to some.
(Part 2)
I am not sure what you means by "jack", but to me it means a sharp, though rapid retrenchment starting maybe even tomorrow or Tuesday. The futes are down a little but I think that by opening they may very well be back up, giving us a false breakout above the July highs on the Naz (and the March highs on the SPX). However, a retreat here should be bought, since I still think that my target of about 2275 on the Naz (see my August 6 targets for instance #msg-3751323) in January is quite achievable as a blow out top. My plan, reduce exposure a little over the next two days and step aside to see how far (if) a retreat develops.
(Part 3)
I think we're very overbought and in need of a breather.I was pointing out that last week two posters told me overbought means absolutely nothing,zilch,nada(one said "overbought means jack,the other "overbought means shit)".
(*END*)
Now I got you, yes, overbought eventually get corrected, one way to put it is if the 5 day RSI is at 90%, how much higher can it go?
11/14: (322049) (*COMMENT*)
my opinion on max pain is that it follows the index rather than being a predictor of future action as most believe. about the only time i look at it is times like this, where there is a significant difference between the underlying and max pain. im playing for a retrace of last weeks action to close the gap some.
i do not have a good understanding of delta hedging and would appreciate it if you or someone else could post a link to a description or if you could give me a quick overview. from what i do understand, this is a prime setup for that to occur. sure hope it doesnt as i have a big net short position
(*END*)
Steve, I don't know any place where it is described, I have tried few times to explain "my take" on it (I am not big on options nor a great believer in Max pain either). In short, when Max pain is well under the market, as it is now, it means the houses are stuck with a lot of naked calls that are "in the money", and if the do not manage to narrow the gap early in the week, near expiry they are forced to rush into the market buying the underlying security (that is the "delta hedging") causing additional upward pressure on prices (often undone rapidly in the two to three days after expiry). The inverse is the case when max pain is well above the market, a lot of naked puts are outstanding and the houses sell short the underlying equities to cover their naked puts putting further downward pressure on the market. Can you "bank on it", I don't know, but you are gutsy being heavily short here trying to guess how far this thing goes, while it is in "breakout" (QQQ above the July highs, SPY a three years high, I believe) mode. Probably a little "nail biting" time (g).
Added by editing after posting:
11/14: (322085) (*COMMENT*)
The window I use for Max Pain started last Thursday. In a situation where delta hedging occurs, I've noticed in the past the MM's will often move price equal to or slightly more away from Max Pain going into expiration as the distance it was on that Thursday.
For example, let's say Max Pain was roughly 36.50 on Thursday on the QQQ and price began at 37.79 from Wednesday's close. That's 1.29 points above Pain. Ideally, the QQQ should move to a minimum 39.28 (or NDX 1579) to cover the Max Pain spread. Often times it moves above the minimum as the MM's give themselves a profit cushion. The alternative would be to reach the minimum a day or two prior to expiration and then drop into expiration.
Looking at the situation, I think we could see a white candle this week with a bit of a shadow below and above on the COMP/NDX/QQQ, and then a 58 NDX point drop from the top the following week. We'll see.
During bullish moves, it seems we often have fast dumps in November, but recoveries around Thanksgiving.
*END*
I think you may be right, I have a "next" turn date around thanksgiving (Jim also), thus we may top on expiry and the normal post expiry swoon (when expiry is up) turn into a beginning of a short term decline allowing for the typical post Thanks giving EOY run.
ZEEV, MARKET/ECONOMY - up to ZEEV:322062, 11/14/04
11/13: (321917) (*COMMENT*)
Zeev-- Your road map lines up with 1936-1937 incredibly well. note this post I just made to AJ on his thread.
http://www.investorshub.com/boards/read_msg.asp?message_id=4560487
What do you think?
(*END*)
Except that this time, I think that the 2005/6 lows might be lower than the 2002 lows.... unlike the post 1937 lows.
11/13: (321928) (*COMMENT*)
Zeev, this would be a serious decline from these levels. What fundamental reasons do you think will bring the market down to new lows ?
Falling dollar ? Inflation ? Rising interest rates ? Inability to reign in budget deficits ? Tougher earnings comparissons in 2005 ? Profit squeeze related to inflation in commodities ? Tax cuts may not become permanent ?
(*END*)
A consumer led recession, and the "need" of secular bear market to create "uncommon" value by getting a generation of new bulls (hedge funds?) to throw in the towel.
11/14: (321980) (*COMMENT*)
(Part 1)
Yes and just imagine what that will do to the deficit. What do you think the Chinese Centrla Bank will have to say about all that?
Think they will carrry on buying our bonds? So what if you go 100% cash what good is it if Europe is in turmoil and your bank is shut? Europe is a tinder box.
And how about another does of unemployment? Huh? How about the good voters of Iowa ? Think they are going to happy about their votes of early November when even more of them are chucked out of work?
By all means predict disaster but at least follow it it through other than some charts.
(Part 2)
If you think that outcome of the elections has anything to do with the future denouement of economic events here and with our trading partners, I have a bridge in Brooklyn for sale. (g). see my old April 2000 long term map, independent of who is in charge of the white house.
(Part 3)
ZH - itts not the outcome but what he will say when another few millions lose their jobs. That wan't supposed to be the outcome for those that came out to support him neither was losing their savings.
So if you think that governements are unable to improve thier economies I'll sell you the bridge that I just bought offf you<gg>.
As for the Chinese and the Europeans we really do not need another dose of unemployed Germans etc.
(*END*)
Limtex, by now, you should be familiar with my April 2000 post suggesting a lengthy secular bear interrupted by few cyclical bulls. If not, go to kayaker's thread he has that post for "posterity".
ZEEV, NEAR TERM - up to ZEEV:319499, 11/07/04
10/27: (315355) (*COMMENT*)
Do you think we hit some resistance here at 1965 and then resume the march to 2000? If we can take October high of 1971 we should be in good shape but we're definitely hitting some resistance here.
(*END*)
I think we will take the 1965, and possibly even close within 5 (+/-)of 1971. We may not make the 2000/2025 I had by election day, but I think we should get pretty close.
10/27: (315637) (*COMMENT*)
Goes that mean you are calling a top Today if it reaches 1965 ?
(*END*)
Nope, just reducing exposure since we have covered more than 50% of the target move I had from 1900 to about 2000. Take profits when offered.
10/27: (315380) (*COMMENT*)
Zeev, how much of a retrench do you see from the 2000 range before another assault? Do we test 1900 again, or not? Thanks.....
(*END*)
Depends how far we go up, if we reach 2025, the retrench could go to around 1940 or so.
10/27: (315490) (*COMMENT*)
"Did you cash in some healthy profits on LSCP?"
No, Zeev, did you? It looks like the weekly chart shows more left in this move ... although I doubt it will be this week ... <G>
Ken
(*END*)
I took out 40% of my position, still have three serving left, got to take profits when offered. Cash gone above 25% and will rise more here.
10/27: (315505) (*COMMENT*)
Zeev, Any forseen deviations for the roadmap for the remainder of the year?(assuming no actual terror incidents)
The reason I ask is at a projection of 2,275 by Jan. 1 from here is a whopping 15% jump.
With the turnips projected short term relapse coming up, I assume this would be "the" time to load up (1945 +/-)
(*END*)
ANSWER #1 - Actually a more refined dating has the peak between January 20 and February 2nd. In between I have a local low on November 12 (Jim has a turn date November 24th I believe, so we are about two week apart. The truth is that it will depend a lot on the election, if it is not contested seriously and by Nov 3rd we know who is the next president, there should not be too much problems with the normal cycles. A contested election may wreck the whole picture.
ANSWER #2 - Not by January 1, that is the peak I expect between January 1 and February 20th or so.
10/29: (316060) (*COMMENT*)
Disciple, I am getting the feeling that this market is going to continue up (on balance) into late November or early December. Zeev has a "local low" due November 12th but the rally off of that low ought to be explosive and there are an awful lot of nervous folks around and a lot of people shorting stocks and as they cover, that could provide extra fuel to the up move.
Some of the cycle work, that I do, indicates the trend is up into early December.
Several posters have mentioned a possible early Tax Loss selling season, so perhaps the "Theory of Contrary Opinion" will prevail and we will get a more traditional Tax Loss selling season into the days after Christmas.
We Will Know In The Fullness Of Time
Jim
(*END*)
Jim, I think it all may depend on the elections, if it ends up with the courts, then we may have a November of discontent. If a decisive victory, then that local low of Nov 12 should be contained around 1940 (and still assume us going above 2000 before that...).
11/01: (316730) (*COMMENT*)
Zeev, I see really dramatic shift in the sentiment during the last few days. Are there any bears left? EPC is down to 0.55-0.6. Big spike is Rydex Nova/Ursa.
I am betting on short-term decline (2 days).
(*END*)
Same bet here, but not yet, maybe peaking tomorrow? I do have a local low in mid November.
11/02: (317326) (*COMMENT*)
So, is today's 2000 the local top before mid-November?
(*END*)
I don't know, if the election is decisive one way or another, we may even reach that 2025 outer boundary tomorrow, but I think we peak no later than tomorrow at 2:22....
11/02: (317390) (*COMMENT*)
Zeev Should we be expecting either a "neutral" of "sell" any time soon ? You recent posts seem to indicate that. IMHO.
But I'll wait for your "word"(g)
(*END*)
I already stated earlier today I expect a minor top no later than tomorrow at 2:22.... not worth taking off the horns, however, since I doubt it will be more than 85 Naz points peak to bottom.
11/02: (317641) (*COMMENT*)
I am not scared-MM'S shaking the Trees!
(*END*)
I think it is more than that, we have reached the 2000 level and a small retrench is due, just dumped a number of positions here...
11/03: (317970) (*COMMENT*)
Disagree with you on Jcom . One good piece of news and "Bang" it could be up 5 bucks . Worth holding here since I have a small cushion in it, and profits from others in the last few days.Are you completely out of Bste now ?
(*END*)
Completely out of BSTE, remember, my map has today as the local top, so I raised cash, dutifully. For the map keeper, that is a transition to "Neutral". We got the 125 Naz points I sought, and expect a retrench to around 1940 or so.
11/03: (318288) (*COMMENT*)
Zeev, Great Call on your rally from 10/20 until today and to think I had the market going down, in November. Just goes to show you what I know.
You are the master!
Jim
(*END*)
You have had some pretty prescient calls in the past, and I have had some monstruous screw up. You win some you lose some, and as for November, it is only the 3rd, and I still have a retrench here till about the 12th... I think we started it already.
11/03: (318354) (*COMMENT*)
Zeev Are you trying to have your cake and eat it too ?
(1)You keep you horns on. (2)But say down until 11/12/04
(3)I can see why some people get confused(g)
(*END*)
Not at all, very short term down to about 1940 (thus moving back to Neutral after target in the 2000/25 was reached), medium term bullish with a target major top between 1/20 and 2/5 next year at around 2275 (read prior messages for detail), thus horns are still on.
11/04: (318858) (*COMMENT*)
Zeev, if we somehow get thru 2025 tomorrow w/gusto, does the 1940 short-term get put on the shelf (as wrong), or just adjusted up (to wherever the move stops?) tia
(*END*)
Not really, I still have a swoon down into the 12th, it may be wrong, but that is what I have on the map and the main support is still 1940, so it may be a 100 points swoon if we break to the 2050 or so area. My cash position is at 32% and may increase if the frolick continues. Got caught with three OB's today (NSTK, TEVA and SAM), thus the relatively low cash.
11/05: (318985) (*COMMENT*)
(Part 1)
Well Zeev, they got within 2 of the 1925... One more day should do it....<g>
(Part 2)
you must have meant 2025. Strangely enough, the EPC is not dropping much as it would near a local peak, I would have expected under .6, but we got these numbers a week ago, so I am not too concerned with my "increased conservatism". I think that tomorrow I will do additional selling, particularly if we gap up.
(Part 3)
Thanks, Yes, I did meand 2025.... Too many numbers in my head.
I am starting to see lots of Bullishness from Gurus and "Advisors" saying we may go up into year end... Not excessive yet IMO
(Part 4)
We got to clip their wings before such a rally takes hold, thus my thinking of another swoon down before that....
(Part 5)
Zeev, The official decline is postponed until Monday at the earliest so I can be here to enjoy it! <VBG> Have a good trading day!
(Orders submitted just in case!)
(*END*)
You actually could see a late day let up today, it could be your standard G&C today, I am getting ready to unload few positions in the first hour if "fair prices" are offered. (g).
11/05: (318988) (*COMMENT*)
I think that 10400 will serve as an important barrier on the Dow for now.
ZEEV, TRADING - up to ZEEV:319499, 11/07/04
10/26: (314726) (*COMMENT*)
Absolutely. I don't know what could cause that kind of downside to a QCOM, but there it is.
(*END*)
Happens, the MM's got to refill their inventory and cover their shorts...just took off third LCAV here at $27 flat for the double bucker.
11/06: (319385) (*COMMENT*)
(Part 1)
Zeev, ARO went through the $30 resistance. Are you in it? If so would you hold or sell the high?
(Part 2)
zero, ARO approaching a new high,you may want to use the occasion to cash in here at $33.50.
(Part 3)
Zeev, thanks for pointing this out, unfortunately I was away for a few days and missed the opportunity. I do appreciate it.
(*END*)
If you go away like that, simply put out an outrageous ask and hope it catches. You could have gotten back here at a nice double bucker discount...
ZEEV, ROAD MAP - up to ZEEV:319499, 11/07/04
Wecus has a chart of Zeev's ROADMAP on the ZEEV'S ROADMAP CHARTED Board (#board-2299).
Wecus updated his ROADMAP chart through November 5th, 2004
ZEEV, TECHNICALS - up to ZEEV:319499, 11/07/04
10/29: (316062) (*COMMENT*)
JIm, I have nowhere near your ability with "cycles" but what I do watch is P & F sector trends. These have a tendency to show their direction slower than most indicators, but when they do demonstrate a direction, it is usually a strong indication.
P & F sector trends have changed to upward momentum over the past couple of weeks.
(*END*)
Yup, if you look at the BPNDX, you'll see it is now above the July's high....
11/04: (318453) (*COMMENT*)
Post election, what key indicators should we be looking at?
(*END*)
Internal technicals such as expansion of new highs, A/d volume expansion and EPC, on the fundies side, new jobs, if we stay anemic at under 250,000 a month, my model for a recession starting in the second half still holds.
11/04: (318862) (*COMMENT*)
All SIA/SEMI/price charts are updated with SIA/SEMI September and price October data
http://home.comcast.net/~gottfriedm/index.html
gottfried
(*END*)
Thanks, Gottfried.
ZEEV, DOW GAMBIT - up to ZEEV:319499, 11/07/04
10/25: (314492) (*COMMENT*)
Zeev - Any thoughts on a dow play?
MRK, PFE, SBC, JPM, MO perhaps-
Cy
(*END*)
Not these, if I were to play a Dow gambit it would involve IBM, AXP, UTX, EK and a bounce on AIG.
ZEEV, MARKET/ECONOMY - up to ZEEV:319499, 11/07/04
10/25: (313985) (*COMMENT*)
While I given many a crash call
Here are my holdings now.
5% short SnP. Don't plan to add. Ready to cover once the Oct/02, March/03 lows are revisted.
10% gold bullion.
50% 5 year gov't T Notes, 20% of which turns over each year.
The rest? Sold all my commerical real estate in the last 3 months (low cap gains this year), went to cash. Its sitting in a US government money fund.
Two homes, one of which is up for sale now.
Good luck to all.
(*END*)
Why US gov. funds, would you not do better in either UK or even Canadian funds? Rates are at least double and these currencies are still climbing against the US currency. If we have inflation, Canada being mostly a "natural resources" economy, should do much better than the US dollar.
10/25: (314033) (*COMMENT*)
What is your opinion about the interest tates in the next 1-5 years? I have to make a decision and I value your opinion.
(*END*)
If you need to put money away for 5 years, I would suggest you stick with inflation protected treasuries...
10/28: (315780) (*COMMENT*)
Zeev. Right or wrong, I have gone to 100% cash until after the election except for 2005 and 2006 GOLD CALLS -- and I sold all my LSCP this AM.
It has been an excellent week for my family, and I do not think the market has built in the likely Kerry victory I think is coming, and want very very much.
So I will study some technical analysis and catch up with some reading for the next six days ... and hope and pray for our country.
Ken Wilson
(*END*)
Why should a Kerry victory have a major negative impact on the market? I think that uncertainty of the outcome is more damaging than the certainty one way or the other.
11/06: (319384) (*COMMENT*)
Zeev and others,
Do we have a Real Estate bubble about to burst or is that just another irrational fear?
I have heard from various sources that Real Estate is a bubble and due for a sharp drop. Reasons: National Debt, Consumer Debt, rising interest rates plus Adjustable Rate Mortgages, unemployment, etc. Add to that the hanky panky at FNM and FRE. Is there a derivatives problem that could easily rock the US economy?
On the one hand, it sounds similar to the Y2K hype of coming disaster, but on the other hand, the arguments seem valid. Both FRE and FNM have dropped sharply recently. Is that just the first salvo in a major dive? Consumers are over-extended and likely to be hurt when interest rates rise, especially if the employment picture doesn't improve. I am surprised at how many people are choosing ARMs instead of locking in these low rates with a 30yr fixed.
I am surprised I didn't see a discussion of FNM in September when it dropped almost 15%. Now that the election is behind us and we know who will be in the White House for the next four years, I would appreciate hearing thoughts on the economy related to real estate prices over the next few years.
TIA - Ken
(*END*)
In some regions probably overextension, but unless we get a recession concentrated in these area, bursting is not the only resolution, gradual readjustment is probably more the potential case.
ZEEV, LONG TERM SECURITY - up to ZEEV:319499, 11/07/04
11/06: (319387) (*COMMENT*)
The STREET is salivating with the hope of SS money coming their way. SS money placed is stocks is, to me, madness. A better solution? Put the money in high yielding, [T-bonds?] with government or private or a combination insurance protection. The money has to be there when due. I'm just tossing out thoughts.
(*END*)
There is really no problem in putting some of the money od SS in the market, provided that no one is "allowed" to try and do timing, namely change from one class (bonds or stocks) to another class, since 90% will do it wrong (we know that is a fact since "smart people" as well as the public always get extremely bearish at bottoms and extremely bullish at tops). If it was set up that every month (it would be best if the investment would be distributed over the whole month as are disbursements of SS payments), the set aside money buys a given amount of SPY or DIA or even QQQ and that is not changed till retirement, that could provide over the long run good results, even better than inflation protected treasuries. What I don't understand is why can't the SS trust manager do that for everyone, why add another 1% cost to those funds through "managers". That is simply a "gift" to wall street, which has not yet proved it is honest enough to be left with that management task.
The real solution would be to take all the inflow of monies, split in four, 1/4 in TIPS, 1/4, in DIA, 1/4 in SPY and 1/4 in QQQ.
If we let individuals manage entries and exits from one class to another, we end up with 90% of our population not having sufficient SS funds by the time they retire. I think that enough people have lost their 401K and IRA accounts in the last 15 years to prove that management of money smartly, not only takes a lot of time, but is also a question of training most people do not have and will probably never have.
11/06: (319396) (*COMMENT*)
I agree with you about an automatic system of investment for SS funds that is not "managed," but there is no reason to confine such investments to the US markets. For best returns the funds should be invested in a broad worldwide stock index.
(*END*)
The problems with foreign markets, they are not as well regulated as US markets and because of rapid growth in some emerging markets, the chances of a severe meltdown is critical. I think that US SS money should be invested here, it helps finance growth here and avoid many pitfalls of international markets. Some ETF are quite solid, almost self culling (like the DIA, SPY and QQQ where failing companies are culled and new companies added). These funds should not be invested for maximum returns (which also entail maximum risk), but for higher returns than TIPS, the best long term returns with minimal risk.
11/06: (319399) (*COMMENT*)
Hi Zeev: You offer a thoughful response, yet I must disagree. No serious money, no critical-for-some-money [my thinking only]should go into equities, any equities, ever.
(*END*)
I woul accept a system that invest only in TIPS. But corporate America is yielding internal rates of returns, on the average that are twice what long term bonds do, so a mixture of the three ETF and TIPS would be a ood long term chpoice, provided no timing exercise are allowed. Even if the market goes nowhere like in the 1966/82 period and the current 2000 to ?, monthly investments of same amounts would eventually yield more than treasuries.
11/06: (319417) (*COMMENT*)
Do you really think that TIPS provide a positive real rate of return, or do you just suggest them as being better than cash?
(*END*)
Better than cash and over the long term, better than long term treasuries. Of course, the index can be fooled with, but one needs to "live with that". To compensate I suggest including in the pots ETF's representing American economic might, which should provide (if not ill timing of entries and exits is allowed) a return greater than treasuries or tips.
11/06: (319418) (*COMMENT*)
<< The real solution would be to take all the inflow of monies, split in four, 1/4 in TIPS, 1/4, in DIA, 1/4 in SPY and 1/4 in QQQ. >>
Zeev,
Based on this comment, you seem to be long-term bullish the markets. After 1929, it took decades for the market to make new highs. Do you have any estimate as to when the Nasdaq will exceed its 2000 bubble top of 5,000+?
Also, thanks for your response to my question regarding the Real Estate bubble. Am I correct to assume that you are not concerned about FNM and FRE, the accounting irregularities, their derivative positions, and the possible effects on the over-all economy?
Some hype that I have seen (ad for "Strategic Investment" newsletter) says that this will be worse than the 1930's Depression.
http://www.agora-inc.com/reports/DRI/housing910/
The extremity of their claims and their certainty of their occurance do tend to bring their credibility into question.
Thanks - Ken
(*END*)
But you see, if you leak the money in monthly, it does not really matter how long it takes for the Naz to reach 5000 again, a lot of your buying would be under 2000 which will double if and when the naz comes back to 5000. Whether to include the QQQ or not is an interesting question, I would prefer the DIA and SPY, or just the SPY, but that is a separate issue. The QQQ would add some "zing" (it is almost double its bottom in 2002, but still 1/3 of its 120 top in 2000....
11/06: (319420) (*COMMENT*)
"The real solution would be to take all the inflow of monies, split in four, 1/4 in TIPS, 1/4, in DIA, 1/4 in SPY and 1/4 in QQQ."
But who decides what companies go into DIA, SPY and QQQ? Does that automatically give the people who choose the composition of the indices a power that they shouldn't have? And give those companies an automatic and potentially huge investment bonus?
(*END*)
Actually, the SPY and QQQ are determined every so often almost "automatically" by taking the 500 and 100 largest market caps companies, companies that falter and fall out of the group are culled. Your question might be valid relative to the DIA.
11/06: (319426) (*COMMENT*)
Zeev, I've got two IRA accounts, one a contributory IRA and one was a rollover IRA from a previous employer. I have found that all a person has to to is find one core stock and stick with it for decades.
In my contributory IRA I found KMP, which is up 229% in the eleven years that I've owned it and more importantly raised it's dividend 338%, in that time.
In my rollover IRA I found FITB, which has split eight times, in twenty-four years and is up 4,581% from my split adjusted cost and has raised the dividend 700%, in that time.
I take the funds derived from those dividends to trade other stocks within those IRA's, but I allways hold onto those core holdings, come hell or high water.
(*END*)
Jim, you belong to the 10% of the population that get rich on account of the other 90% (so do I, but c'est la vie...). In 2000 I suggested some 10 or so core issues to the thread on SI, you'll see that most of them did very well (few were excoriated in time from the group, like TYCO, and more recently AGM and COO). They did quite well despite the bear market and people that decided to go into these issues then would have. COO from $12 to $70, IGT from $5 to $35 (after being taken off around $40 for reentry in the near future around $25), AGM yielded only a double before it was demoted (from $15 to $30, though it did get to $45 in between). POOL from under $5 to above $30, PII from $15 to $65, TBL from under $30 to close to $70, and MO from $25 to $50 (where it was demoted). I think that a diversified core portofolio is better than selecting a single bet. But how do persuade 90% of the population to chose the right combination? I don't know ahead of time which will succeed which will not (SKX was one example that started well, and then faltered and was stopped out till the reentry near $6, but it is no longer showing performance consistency, so it can no longer be considered for the core).
ZEEV, NEAR TERM - up to ZEEV:316616, 10/31/04
10/27: (315355) (*COMMENT*)
Do you think we hit some resistance here at 1965 and then resume the march to 2000? If we can take October high of 1971 we should be in good shape but we're definitely hitting some resistance here.
(*END*)
I think we will take the 1965, and possibly even close within 5 (+/-)of 1971. We may not make the 2000/2025 I had by election day, but I think we should get pretty close.
10/27: (315637) (*COMMENT*)
Goes that mean you are calling a top Today if it reaches 1965?
(*END*)
Nope, just reducing exposure since we have covered more than 50% of the target move I had from 1900 to about 2000. Take profits when offered.
10/27: (315380) (*COMMENT*)
Zeev, how much of a retrench do you see from the 2000 range before another assault? Do we test 1900 again, or not? Thanks.....
(*END*)
Depends how far we go up, if we reach 2025, the retrench could go to around 1940 or so.
10/27: (315467) (*COMMENT*)
Zeev, Any forseen deviations for the roadmap for the remainder of the year?(assuming no actual terror incidents)
The reason I ask is at a projection of 2,275 by Jan. 1 from here is a whopping 15% jump.
With the turnips projected short term relapse coming up, I assume this would be "the" time to load up (1945 +/-)
(*END*)
Not by January 1, that is the peak I expect between January 1 and February 20th or so.
10/27: (315490) (*COMMENT*)
"Did you cash in some healthy profits on LSCP?"
No, Zeev, did you? It looks like the weekly chart shows more left in this move ... although I doubt it will be this week ... <G>
Ken
(*END*)
I took out 40% of my position, still have three serving left, got to take profits when offered. Cash gone above 25% and will rise more here.
10/27: (315505) (*COMMENT*)
Zeev, Any forseen deviations for the roadmap for the remainder of the year?(assuming no actual terror incidents)
The reason I ask is at a projection of 2,275 by Jan. 1 from here is a whopping 15% jump.
With the turnips projected short term relapse coming up, I assume this would be "the" time to load up (1945 +/-)
(*END*)
Actually a more refined dating has the peak between January 20 and February 2nd. In between I have a local low on November 12 (Jim has a turn date November 24th I believe, so we are about two week apart. The truth is that it will depend a lot on the election, if it is not contested seriously and by Nov 3rd we know who is the next president, there should not be too much problems with the normal cycles. A contested election may wreck the whole picture.
10/29: (316060) (*COMMENT*)
Disciple, I am getting the feeling that this market is going to continue up (on balance) into late November or early December. Zeev has a "local low" due November 12th but the rally off of that low ought to be explosive and there are an awful lot of nervous folks around and a lot of people shorting stocks and as they cover, that could provide extra fuel to the up move.
Some of the cycle work, that I do, indicates the trend is up into early December.
Several posters have mentioned a possible early Tax Loss selling season, so perhaps the "Theory of Contrary Opinion" will prevail and we will get a more traditional Tax Loss selling season into the days after Christmas.
We Will Know In The Fullness Of Time
Jim
(*END*)
Jim, I think it all may depend on the elections, if it ends up with the courts, then we may have a November of discontent. If a decisive victory, then that local low of Nov 12 should be contained around 1940 (and still assume us going above 2000 before that...).
ZEEV, TRADING - up to ZEEV:316616, 10/31/04
10/25: (313985) (*COMMENT*)
While I given many a crash call
Here are my holdings now.
5% short SnP. Don't plan to add. Ready to cover once the Oct/02, March/03 lows are revisted.
10% gold bullion.
50% 5 year gov't T Notes, 20% of which turns over each year.
The rest? Sold all my commerical real estate in the last 3 months (low cap gains this year), went to cash. Its sitting in a US government money fund.
Two homes, one of which is up for sale now.
Good luck to all.
(*END*)
Why US gov. funds, would you not do better in either UK or even Canadian funds? Rates are at least double and these currencies are still climbing against the US currency. If we have inflation, Canada being mostly a "natural resources" economy, should do much better than the US dollar.
10/26: (314726) (*COMMENT*)
Absolutely. I don't know what could cause that kind of downside to a QCOM, but there it is.
(*END*)
Happens, the MM's got to refill their inventory and cover their shorts...just took off third LCAV here at $27 flat for the double bucker.
ZEEV, ROAD MAP - up to ZEEV:316616, 10/31/04
Wecus has a chart of Zeev's ROADMAP on the ZEEV'S ROADMAP CHARTED Board (#board-2299).
Wecus updated his ROADMAP chart through October 29th, 2004
ZEEV, TECHNICALS - up to ZEEV:316616, 10/31/04
10/29: (316062) (*COMMENT*)
JIm, I have nowhere near your ability with "cycles" but what I do watch is P & F sector trends. These have a tendency to show their direction slower than most indicators, but when they do demonstrate a direction, it is usually a strong indication.
P & F sector trends have changed to upward momentum over the past couple of weeks.
(*END*)
Yup, if you look at the BPNDX, you'll see it is now above the July's high....
ZEEV, MARKET/ECONOMY - up to ZEEV:316616, 10/31/04
10/25: (314033) (*COMMENT*)
What is your opinion about the interest tates in the next 1-5 years? I have to make a decision and I value your opinion.
(*END*)
If you need to put money away for 5 years, I would suggest you stick with inflation protected treasuries...
10/28: (315780) (*COMMENT*)
Zeev. Right or wrong, I have gone to 100% cash until after the election except for 2005 and 2006 GOLD CALLS -- and I sold all my LSCP this AM.
It has been an excellent week for my family, and I do not think the market has built in the likely Kerry victory I think is coming, and want very very much.
So I will study some technical analysis and catch up with some reading for the next six days ... and hope and pray for our country.
Ken Wilson
(*END*)
Why should a Kerry victory have a major negative impact on the market? I think that uncertainty of the outcome is more damaging than the certainty one way or the other.
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |