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Emmett, the symbol is $CPCE for equity and $CPC for total P/C. Equity is better as it doesn't include most hedgers, the bulk of which are typically institutions using index options...so it gives a bit more clearer picture of general investor/trader sentiment.
agree...and the equity P/C is reflecting that.
Fear or complacency? if you rely on the VIX, above 40 is still pretty high from a historical perspective. But if you look at the a 10 or 21 day moving average of the Equity P/C, it's making new lows. they are currently trading at .61 and .67 respectively. When the 10 day MA hits around .55, it would be one indicator warning of a decent retrace...if we continue up in this parabolic manner, that probably won't take too long (maybe only a couple of weeks or even less, considering with every day, the highest number in the series is being dropped off)
True..and that is not good...but maybe they can fit a lot more lambs in the slaughtering house.
We may be able to read the dealer/cards a bit if try hard enough; Key i think will be to continue to focus on internals to guage when smart money has turned and heading in the right direction. Yesterday breadth was negative, but volume tepid...doesn't seem like institutions are in a hurry to get out just yet.
i think exiting a trade early and having no grets can help. Money on the table isn't really yours unless it's in your pocket.
This is one of the things i think Nick and others do well...in normal markets, take 2% or so profit regardless.
i think to be able to take small profits when you have them and be content requires discipline...and with that type of discipline, it becomes easier to sit on your hands when you are unsure about your signals.
i definitely wouldn't say i am as disciplined as some of these guys...work as been helping me to stay away :)
I hear a Nintendo WI and Guitar Hero might be good also to distract one from not only the market, but everything else. lol
Emmett, to answer this question more in-depth...
Why i continue to lean towards the bull side is primarily because of the intermediate term signals. Here are some..
* I noted several weeks back that the weekly chart of the S&P showed some good potential divergence in oversold territory and that we needed one additional up week for it to confirm the positive divergence..that triggered (for two indicators i watch most for divergence, MACD histogram (which is my favoriate) and RSI)
* We had a series of higher highs on the new 52 week low reading.
* We had the Investor's intelligence survey showing all time lows.
* We had a noticeable spike in NYSE program trading (representing institutional participation)
The above things do not occur often...and when they do occur, i tend to think they have intermediate term implications. In otherwords, it's not likely that MACD positive divergence on a weekly chart implies a st term bounce, but rather one that should last for weeks, possibly months. Given that they only recently occur, i think they are still on the board as being bullish.
Last week given the short term oversold conditions, i took profits as i thought a short term pull back was needed to relieve those conditions. It wasn't much of a relief before the market went on to make higher highs.
Oversold/Overbought can be interpreted in two ways i think..
the first warns me to control greed and step aside or hedge in the very short term. The other has more LONGER term implications and this is what i watch for now...if this market continues to make higher high in overbought conditions, it likely will continue to favor buyers on dips..as i think such occurrences underscores strong bulls are behind the move. I believe i have a study that supports this...i will have to check for it (given the time).
Those are just some tehcnical reasons why i think shorting is a bit more risky right now.
I think eric's target of 875 is doable, probably much higher. We shall see...i'll change that opinion quickly if the technicals break down.
i think if i weigh all that we see in the past couple of weeks, i think dips should be bought rather than shorted heavily...will give some reasons later
agree, maybe even tomorrow...but i think it's worth entertaining the possibility that we are on a run-away train here, it might occasionally slow down a bit to let a few more victims, i mean passengers, jump on before eventuallying derailing.
well, i'm glad it came AFTER options expiration...with S&P coming near 825 today, i would surely have been called on those calls if expiration were this week.
...a reminder of just how powerful bear mkt rallies can be.
feels like panic buying...
impressive move, anyone for +500?
i am content to remain on the sidelines...too much noise and interference to get a decent read. But common sense/gut tells me that i'd likely have been selling into it too.
i notice the 10ma of the Total put/call ratio is hititng a 1 year low. problem there is the equity p/c is not quite there. looks like index option players may have been on the right side of this one and are accounting for quite a bit of the total p/c reading.
i don't think many investors/traders think too much about such things on days like this...and i think sometimes to make a trade work, you have to dumb yourself down and pretend to cheer from the back of the line....rah rah rah! lol
Eveything is rallying because it's perceived as 'good market/economy' news...plain and simple as that i think.
price alone can be deceiving...
that said, i tend to think near bottoms, the S&P helps more in identifying a bottom and the nasdaq helps identify false moves. more speculators are found in the nasdaq market...they are late at bottoms and pile on at tops; plenty of lambs so to speak.
that looks like it would be an excellent short..sure to be a place where the bear makes their stand with backs against the wall.
Whether we continue up from here or not depends on how the market digests the FEDs recent move.
As you know, and to richard's point a bit, a technical bounce turns into more if the market perceives a change in future fundamentals. Will this market see positive changes in fundamentals based on the FED's plan? right now i can't see that being the case and so i am thinking that after options expiration, we could head lower...just speculation on my part of course.
Nick, that to me seems the case...it seems to me they are trying hard to gain enough campaign points for future elections. How great would it be to say "in the first 100 days, we did xyx..."?
The problem with this is that the push to get all these things out removes debate and the ability to properly vet issues. Some of these things we are doing deserve good debate..i realize the masses are have been conditioned to want instant statisfaction, and that anyone that makes and arguement with that in mind will likely win the people...but i hate to say it, but we shouldn't make policies for the greater good based on what the masses want...policies should be debated, vetted and should take time.
As an independent, i am one of those that really try hard not to move with herds; i can find things on both sides of the isle that i support and disagree with, and i would be willing to give this administration a chance. However, they have disappointed me with almost everything pertaining to the economy.
How's your Mandarin or Cantonese? throw in some Hindi to be safe...though likely there is only a C in BRICs right now.
it really is shocking to see where we have come to in such a short time...we now change laws and policies in knee-jerk like fashion...at will.
most stocks that reverse split, end up trading back to pre-split levels rather quickly.
So looking at the S&P, this did turn out to be a powerful V-shape rebound. Now the question is when does it end..
Initially i keyed on 775 and 825 as resistance (i exited on the first).
But i do see resistance right here around ~800. This resistance comes from the 50MA, which has given the S&P some trouble recently..
http://stockcharts.com/h-sc/ui?s=$SPX&p=DAILY&b=5&g=0&id=p40975160094
i think you have to be careful if this is you rational though...fundamentals are last to change.
I'm wondering what the attack on the dollar will do foreign investors in treasury and whether they will stay there, move to equities or move out of US all together...
yes..but for short term traders, you know how the masses perceive value
not enough here to make me want to move from cash...
I think in the ST, it needs to retrace a bit and has many reasons to do so. momo on the bulls side however..and as we know, bulls can get irrational quicker than bears.
there's an arguement that could be made that they are probably safer than most think. I can not see the government allowing them to go under and losing all those billions of tax payer money that has poured into them. With regards to nationalization fears, they also seem cognizant of the fact that wiping out shareholders would send a terrible message to the market.
When was the last time someone made 100%+ on financials in just over a week? if the had bought C in face of 'doom and gloom', they could have.
it's possible if we get a retrace here, then bounce back to test 775, we will paint an inverse head and shoulders. if the neckline breaks on that retest...i think bulls are going to rush in...and i think if that happens, that would be the rally to short (as opposed to now where i would rather stay on the sideline).
Today, Volume down significantly, new lows up despite what looks like a strong up day on the surface, VIX about 10% off from 10MA, and 5 day RSI in overbought...safe in the ST to be in cash it seems.
i have an intersting study i started laste week that i hope to post this weekend...actually it is a study similar to one posted back in oct that showed that clusters of large 1 day movements in stock market has different meanings to short/intermediate term traders vs long term traders. (been a away and busy last week..making difficult to follow markets).
The Gloom, Boom & Doom Report? you wouldn't be the editor, would you? lol..
i'm actually thinking a bit of the opposite...we flatline or sell into april, bounce , and finally flush the remaining bulls afterwards
The only positive i see is sentiment, but with every bounce, the general reaction from the talking heads is that the bottom is in...i think when we get a bounce that no one believes in is when we will know the ultimate bottom is in.
I see that S&P barely closed above 775 which is good from an S/R stand point. We also painted what looks like a bullish engulfing candle...the problem with that is that 'bullish engulfing' is bullish at bottoms, not while making higher highs.
With S&P just about hitting that first resistance at 775 before turning, i decided to step aside. Looks like unless we trade higher today, the candle pattern generated will paint a sell for traders that pay attention to those things.
out for now...
Very nice eric...i like these charts. Some quick observations...
During 1999 to 2004, the ECRI bottom lagged significant market bottom. This was the question i had in mind when i said i'd like to plot this vs the market movement (which i never had time to do, but GLAD you did..since it is your research).
Next..DIVERGENCE: Observe the market top noted in the second chart. Notice that while this was happening, ECRI began to turn down significantly. In this case, clearly the ECRI was not lagging, but warning well ahead.
Question...how far back can we get ECRI data?
John Stewart vs Cramer/CNBC pt 2 (or is it 3):
Love them or hate them...this was brutal for Jim/CNBC:
http://blog.indecisionforever.com/2009/03/13/jon-stewart-and-jim-cramer-the-extended-daily-show-interview/
I saw this headline this morning and the first thought that came to my mind was that they saw through that 3.2% growth claim.
Interesting...so in one post you use Schwartzman to conveniently argue Richard's point, but after corrected by Eric, you lump Schwartzman with Richard and give us a lecture on the difference between debt, wealth and the perception there of?
Time out for you! go to your corner and think about what you have done! lol...
lol!...
agree...i'm of the belief this will be trap.
those resistance are significantly higher than current price..i imagine if we do get there, we will see a bit of euphoria and possibly another set of climatic buying days.
I would do well if it hits those resistance, but i will do better if it does not go much beyond that, as my psuedo hedge(which basically means it was an attempt to open a trade at no cost) is around SPY 83 (80 strike + premium it was sold for).
There are also some very short term sell's about to trigger if we go much higher...for instance, the VIX is about 10% lower than it's 10MA. Additionally if it closes below it's lower BB(20,2), that would be a good bet on a down day to follow; its not there yet.
If this is a V-Shape rebound in progress, notable upside resistance appear to be S&P 775 followed by 825
I see your point...
Well, i guess the idea behind getting rid of mark to market is so you can take your asset valued by the market as having none, and claim it actually does at some point down the road...lol.
i laugh, but it does make some sense...no doubt when there is a whirlwind of selling going on, over-devaluation can occur. I see no problem with companies making a case for their assets and leaving it up to the buyer to decide...
How would the market react if Madoff started to drop names of high profile individuals and worse, companies?
Thanks...makes sense.