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Kinda glad I wasn't in to witness the carnage today. Not hurt yet on Bio's. Bought Monday at 17.97 and it closed today at 17.94...down .17% The breakout needs to hold or it's going to get dumped hard.
Chart of Btk still looks promising but won't remain so if we have another downdraft.
Good luck on that trade.
30 year bond looks like 114+. Gap and resistance point.
Btk is above the 50 and 200sma and looks to have broken above it's downtrend. Nice bottom formation and positive divergence with macd.
On Biotechs
Top of this channel? Maybe 2 or 3 weeks.
However long it takes to get to the top of this channel. We've done alot of downside work and washed out alot of the hot money. The only thing I called for was multiple closes above 1500, certainly doable from 1489.
Maybe now it's run the shorts.....
The bearish side has gotten too crowded...plenty of short covering fuel.
The scared money has been pretty well washed out here on the long side. I think it's up we go.
I don't think it's finished. Actually, I think it's the beginning of the April rally and I expect closes above 1500 that runs in the shorts before a summer decline that makes the ytd decline look like kid stuff. Re: too much bearishness for a major decline, the short trade has gotten too crowded LOL.
That said, now there's no doubt one of us is going to be eating our hat <ggg>
Btk
Well, looks like btk is going to fill the upper gap by the close went 100% long bios. Risky and undiversified pure speculation but there are positive implications in the chart.
Thinking about an entry but unfilled gap at today's open and one lower down may scare me off. I seem to be quite risk averse right now. LOL
Trade balance and Treasury budget too. TB could move the market.
That's reasonable but I would like to see less complacency by then.
Begs the question...What level do you consider a safe long?
Rut outperformance may be about finished. A chart worth watching but does not update.
Exit at 1481.11
Took profit on 40/200 short and looking to put on a larger position higher.
And, I don't use stop loses.
Did you ride the bear all the way down from 1500 Spx, 5000 Nasdaq?
Rut/Spx ratio is on it's long standing trendline. Even though risk aversion seems to be increasing, I have to assume it will hold again untill proven otherwise.
Namiar, I noticed one day you put up a chart with an Adx 37 setting on that indicator. I like it and hope you don't mind my using it too. It smooths out the trend picture very well for swing trade bias IMO. Wanted to give you credit for the setting as I may post a chart with it sometime.
Well, I don't understand what the upper TL has to do with the 3 yr Bull but here's a couple of 3 year weeklies that show the bull market not getting any respect. An argument can be made that the linear is still intact but IMO the multiple breaches are just foreshadowing of downside to come.
I see we are now returning to a slowly breaking down exhausted market.
I agree with that assesment. Slow bleed... wear the bulls out kind of market... with enough up days to keep everyone guessing.
I've sure created my share of volatility with the back and forth trading. LOL
Is the lower TL a parallel to the upper? I haven't been brave enough to post one like that but do occasionaly conjecture for my own use.
Yep, I'm not buying another extension to a higher channel. Naz has done that a few times in the last year and all ended in failure.
Yeah I agree after looking at a chart.
It would be an excellent diversification entry that would complement shorts I believe. And in edit, An energy entry long could be a good diversification too.
Some ratio charts so I can save the post and eliminate them from my fav list.
i think we have huge faith in the April Factor.
BULLS & BEARS CONTINUE TO DEBATE! April 8, 2005 . By Sy Harding
http://www.decisionpoint.com/TAC/HARDING.html
It's been a long time since the stock market moved in any recognizable trend.
For all of last year, the Dow rose only 3%, the S&P 500 9%, and the Nasdaq 8%. But even then, until November, the market had been down for the year, and so made those gains for the year only in November and December. A two month move doesn't qualify as much more than a short-term blip, especially given that since December the market even gave back those gains.
In the first three months of this year, the Dow and S&P 500 each lost 2.6%, and the Nasdaq lost 8.1%. The result is that trendwise the market has gone nowhere in either direction over the last 15 months. So the bulls and bears have been debating for a long time without a winner being declared. Will the market's next real move be to the upside or the downside?
That the market continues to trade in such a flat and indecisive manner indicates that neither side is convincing investors to any degree. So far.
I expect that the moderator of the debate, being the market itself, will soon declare a winner. And I suspect that the market's seasonality will have a lot to do with it. The market has a long history of making most of its gains each year in its 'favorable season' between November and April, and suffering most of its declines in the unfavorable season of May to October. The pattern has been so well-known among Wall Street insiders that it resulted in the long-time Wall Street maxim of "Sell in May and Go Away". Studies by respected market historian Yale Hirsch showed an investor could just about match the performance of the S&P 500 over the long-term, while being exposed to market risk only 50% of the time, by simply entering the market on November 1, and exiting to cash on May 1.
My own research built on Yale's work by adding a technical charting indicator, which either triggers a sell signal before the calendar date, allowing an earlier exit, or remains on a buy signal when the calendar date arrives and thus keeps an investor in past the calendar date when the market is liable to continue rising. That simple change created a seasonal strategy that has almost tripled the performance of S&P 500 over the last seven years, with similar results when computer back-tested over the previous 50 years.
According to its rules that strategy became bullish and has been 100% invested since last October 16. But that same seasonal approach is now saying the market could be close to its next unfavorable seasonal period, in which it suffers most of its declines.
And this time the unfavorable season will take place within a longer-term negative pattern, which involves the Four-Year Presidential Cycle. For many years, upon winning a Presidential election, each administration has tended to allow whatever corrections are needed in the economy and stock market to take place in the first two years of its new term, and then pulls out all the stops in the form of economic stimulus, in the second and third years, to make sure the economy and stock market are recovered in time for the next election.
The good news is that since 1918, from the market low thus created in the second year of each Administration, the stock market has produced big rallies to its high in the following year, rallies in which even the conservative Dow averaged a gain of 50%.
The bad news is that this is the first year of the next Four-Year Presidential Cycle, which makes the odds very high that the market will see a significant and important low in the 2nd year of the cycle, which will be next year.
Put those two conditions together, the unfavorable May to October seasonality, taking place in the first year of the Four-Year Presidential Cycle, and the bulls need a lot going for them to overcome the history. But do they have a lot going for them?
Unlike during the 1990s bull market, inflation is now rising, some say at an alarming rate. And interest rates are now rising, with seven rate hikes by the Fed since last June, and the Fed's promise of more to come. The stock market does not like either rising inflation or rising interest rates, because they take spending money out of consumers' hands, and consumer spending accounts for 65% of the nation's Gross Domestic Product.
Meanwhile, in the background are the macro concerns of record consumer debt, record U.S. budget, trade, and current account deficits, even a potential housing bubble.
Bulls can argue all they want that the economy continues to hold up (so far), or that the housing sector has shown no signs of slowing (yet). But the stock market looks ahead to what it expects conditions to be six months to a year ahead, and I don't see anything in current economic or political conditions that will allow the market to disregard its own consistent seasonality, the Four-Year Presidential Cycle, and the time-tested criteria that indicate serious economic imbalances that need to be corrected.
There's a decent chance of higher prices, 10 day chart has higher lows/higher highs. I think there's a close above 1500 again soon {NDX}. Watch the DT lines for reversals.
Asset Allocation: Reduce Equity Exposure
Our Global Investment Strategy service’s asset allocation model has significantly reduced global equity weights.
The monthly allocation (unconstrained) for April has cut equity weights to 66% from 91% last month. This month’s reduction is across the board: weights were reduced in both Europe and Japan. The model maintains a zero weight in U.S. equities. Capital has been re-allocated to bonds, the bulk of which is in the U.S. market, following the backup in yields in the past two months. More indicators are positive than negative on the U.S. dollar. We recommend hedging non-U.S. dollar investments.
http://www.bankcreditanalyst.com/public/story.asp?pre=PRE-20050408.GIF
Winners And Losers From High Oil Prices
08:44:00, April 07, 2005 http://www.bcaresearch.com/public/story.asp?pre=PRE-20050407.GIF
Japanese stocks are the most vulnerable to high oil prices based on market structure, while Canadian equities are the biggest beneficiary.
The impact of rising oil prices on equity markets is a function of the oil intensity of economic activity and the composition of stock market capitalization. Japan has the largest weight in equity sectors that are consumers of oil, and the smallest weight in oil & gas stocks. In short, the Japanese market is the biggest direct loser from rising oil prices. Conversely, oil & gas stocks make up more than 20% of Canadian market cap, about double the share of oil consuming sectors. Among the markets included in the Table, only the U.K. is a net winner besides Canada. At the global level, rising oil prices are equity bearish given the substantially higher weight in oil consumers than oil producers.
Beware an April rally!
April tends to be a month of seasonal strength. I do not recommend playing this short term rally from the long side but using this strength to reduce positions and to initiate some short sales.
Dr. Marc Faber... see Market comments section
http://www.gloomboomdoom.com/gbdreport/indexgbdreport.htm
Higher mortgage rates to bite.......
http://money.cnn.com/2005/04/07/news/economy/debt_consumers/index.htm
You got it EK. Welles made mention of it not mattering if crude inventories increase w/o the refining capacity to turn it into something useful.
My fear arises from the possibility they run-in the shorts prior to the big tank. Actually, false break shakeouts are common before big runs.
Seen the volatility indexes?
Taking out the tails and using open/closing prices shows the rally was repelled by the Jan. downtrend line. Further, the rally is taking the form of a bearish rising wedge which is due to run out of room soon as the apex collides with the DT line. I make decision time Wed/Thurs. I'll likely increase shorts next week.
http://www.chartpatterns.com/wedges.htm