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Alcoa missed by a penny and revenue came below expectations
Futures didn't really react to the news but the stock is down about $0.70 after hours.
Alcoa missed by a penny and revenue came below expectations
Futures didn't really react to the news but the stock is down about $0.70 after hours.
Fully agree with you that this is not
But it is not out of the question. Look at the other times when Japanese started rolling back liquidity. NO ONE knows the degree of yen carry trades and those ability upset global money flows.
And earnings season might bring up some hair balls.
Crashes take place from oversold levels, always
The lack of buyers is the fundamental reason for a crash. I'd use options or stock but not futures, in case you are wrong at least you won't suffer more than you initial commitment.
SPX 60 minute chart at the knive's edge
If we can just push a point or two furher down...
Might try to bounce now, NYSE tick 500
but trins are high. Could be fake out before a bigger fall. INDU futures are bounce around +/- 0 and ES -2. Nasdaq has no strength at all.
TICK and TRIN are telling about further downside
Maybe someone knows about Alcoa earnings.... SPX wants to go negative, Sep futures already are.
Is might right?
I find it absolutely amazing how many of the intelligent contributors to this board seem to think that force and military power is the solution to the world's problems. Some of the people that I respect (their commenentary about the markets) have written things that I feel very uncomfortable with.
Can we please cut out all that patriotic crap. This is about trying to make money. Not feeling good about ourselves.
7 years no interest............
Talk about selling future demand. They are advertising they they are desparate to meet revenue numbers at any cost.........
Hi PokerSam,
I'm not sure how important North Korea is. I think it really is just an excuse for what would happened anyway... The real issues and problems are much more fundamantal: both the UK and the US consumers are in debt way over their ability to pay for it. And the governments in both countries have done their utmost to pospone the day of facing the facts. At some point you have to pay for what you borrow.
China is very much starting to compete with the developed world for limited supply for resources. And unlike the most of the Western world, they have the cash to pay for it.
Both the UK and the US have depended on cheap foreign imports to keep the inflation down (and conveniently the "core" measures are viewed as more important than the actual inflation measure which include energy and food prices that each and everyone actually has to pay for every day; just because those costs are volatile does not mean they are less important) and feel good factor to keep the economy going. Once the consumers start acting rationally individually (i.e. they actually spend what they can afford) the fall out is inevitable. We've been on thin air for a long time.
Japan has been huge source of "free" money which urgently needs to be repaid for the two simple reasons: Japanese interest rates are about to embark on a journey up and yen will strengten against Western currencies since there is less pressure for them to competete on currency against the Chinese.
Spx seems to unwilling to give up 1270
If it does things might get interesting. INDU, COMPX and NDX not exactly looking strong. TICK is all over the place, TICKQ more negative, TRIN and TRINQ indicate higher sell than buy volume
SPX daily chart
Anyone taken a look at it? To me it looks like we might be ready to start the next leg down. Looks like break below 1270 could open the flood gates. Also note the daily volume over the last 10 days: up days are either followed or preceded with higher down volume. 1280 and then again 1290 look like having a lot of resistance, so the easy way looks down.
Weekly chart looks like we are at very strong resistance, too...
Historical lows
"now with the S&P trading at a forward PE of 13.7, a near historic low on a forward looking basis, we have the makings of a major low being formed right here right now."
I think historical bottoms at major bear markets are reached actually between 7 and 11 P/E, and most importantly historical instead of forward looking. It would be interesting to see the differences between forward looking and historical P/Es but I've never seen one.
Of course, this does not mean that we cannot move up from here. It could just mean that we are not actually in a bear market or that it's just an interim bull move and the real bottom has not been reached....
Also, dividend yields are not supportive of a major bottom by historical norms.
Crashes happen from the distressed levels
and poor sentiment, not the other way around....
Indeed,
Also, NYSE and Nasdaq TRINS at 0.41 and 0.27 are not excatly inviting for a short. At least wait until they start trending up and TICK turn negative. NYSE tick is 576 and Nasdaq tick 340 which makes me think we might have at least one leg up.
I'll take short term short position with a trailing stoploss on furtures when tick turns negative and looks like it stayes there. But I would not say anything about whether we close below or above current levels and nothing about whether tomorrow will be another up day.
Just waiting to take my bite of the bread when offered It might be at the table but too hit to touch still.
I don't expect. It was my mistake hitting submit by accident. I've now edited the post to say what it was supposed to.
CaribbeanJim - The "VIX mirror chart"
You posted:
http://stockcharts.com/h-sc/ui?s=$VIX&p=W&st=1989-01-01&id=p79439938994&a=79008856&a....
This does not look like a mirror chart to me. And why pick 2000 as the center line anyway? Immediately right of the centerline there are spikes that are not replicated on the left side.
What theory says that VIX would behave in a mirror like fashion? Also, note that there are several unnumbered spikes comparable in size to numbered ones. In other words, this is fitting a pattern to a data set that does not really have it.
"July historically has not been a bad month to be long, as I recall....something like 5th or 6th best"
Hmmm... How many months are there?
NYSE margin debt cannot be commodities
The margin debt figures are available from NYSE itself, January 1992 to April 2006:
http://www.nyse.com/marketinfo/datalib/1022221393023.html#margdebt
True, but
NYSE tick was above 1000 for extended periods. Btw. USD index is getting close to the resistance. The gold is probably becoming a safe buy.
BKX
(I've been silent as although I've read a bit of the posts on the board, but I've been busy with work and trading has been wonderful Special hi to PokerSam...
I'm slightly concerned.... I just sold some September 110 BKX puts at 5.20 (bought at 1.70 ages ago), just too rich, and I'd expect a bounce soon.
But I had some loser June 105 puts. The bid offer was 0.20 to 0.40 and I got a fill pretty much right away at 0.30. The price is now 0.35-0.60. Are the financials going to crash or was I just lucky to have someone who wanted to close their short position?
I also went long October gold futures. The fall in gold is unwinding some of the speculative bubble, but it is inflation hedge. Hope not to be run over....
No doubt that we have a lot of downside ahead of us
But it might not happen directly now. There's been a lot of those articles around how this has been healthy for the markets and up we continue. The funniest talk is about how real long term investors always come ahead etc.
We are either due a bounce or we will crash early next week. I agree that soon we will start having supply from the long term investors who even if not selling out all together will reduce their positions. The question is whether the supply can be accomodated or the markets get overwhelmed.
I see we moved up shortly after I closed my longs. I closed because the expected option expiry bounce (that was big part of my reason for trying long) didn't really materialise and the tick was weak. Trin on the other hand has been more supportive of a bounce.
Oh well, not every trade goes right.
Closed my long stupidly taken
at lows of Wednesday and added yesterday. We migh bounce but why risk it. Better lose a bit than a lot. I'm way ahead on my futures shorts and puts, and now basically flat and relaxed instead of nervous.
I just hope I can find re-entry (short) before the big fall. I was unable to re-enter gold long or USD short earlier. Now, gold might start looking interesting in a day or two.
The "reason" for selling gold makes no sense: higher interest rates do not kill the investment reason for it. Higher interest rates will hurt the economic activity and decrease the demand for things like copper, zinc and other metals which are actually used in industry.
This was just a round of profit taking.
Gleno,
I agree that we have further down to go, but I would expect some kind of bounce on option expiry, but then again maybe that is the reason why we won't get one...
Looks bad here. FTSE went up 20 points, then collapsed to down 50 points.
Then recoved to be down about 30 points. FTSE has a lot of miners and oil, so it can suffer even if tech would recover a bit if miners keep correcting.
Gleno,
Sounds like you Guru could be a contrarian indicator. Does he indicate what time frame (s)he expects the moves? I do expect much lower prices but I would not choose this moment to add to shorts unless you nurse you position from second to second.
I might live to regret this, but I am actually long as of 10 minutes to the close. I sold tons of puts at profit between 50 and 250%. I am all out of June and July puts and even sold some August and September ones because they were so deep in the money.
I don't expect a long bounce but we are coming to expiry that should normally bounce and Thursday is as good a turn date as they come. I just hope I will not be sorry for my decision.
There's a saying that 500 point move in FTSE-100 in three days wlll result to a reasonable (20 to 50% of the previous move) counter trend move and I've benefited from it before. The thing to remember is that it is a counter trend move. We are 100 points short of that. So I front ran it but not as badly as the perma bulls.
I hate the fact that I sold my FTSE puts yesterday (they were May and I was getting afraid of the risk having them killed in a bounce) in the morning when today they were each 1000 pounds more valuable.
I was out of short futures US positions Tuesday. I can't find entry on shorting USD or going long gold. I'm afraid of a explosive countertrend move.
Tomorrow's US economic statistics don't really look big market movers in principle: jobless claims is unlikely to be a big surprice. Natural gas. Leading indicators and Phil Fed survey actually could cause a rally with a weaker than expected reading which makes no sense. Money supply? I think it will be one of those days where any excuse will serve to take this one way or another.
The strength of USD against Euro and GDP kind of gives strength to my feeling that we will get a bounce, break in the trend. Gold was down, then up and closed down. We are also approaching the lenghth of string of down days which should be interrupted by up day or few.
Unless we crash. I would like to see a bounce from tomorrow until mid-day Friday and then down.
I'm planning to start selling calls on bounces on stocks that have no new pending (results) and that are fundamentally overvalued like GOOG. I do think that the downtrend is now set in stone pretty well. Those who don't remember it, better visit December 1999 to 2003 in charts.
We've been in a bull market last three years or so
You need to look at at least until 2000 to draw concusions about whether an indicator can go lower or not. I remember RSI being clued to slow values for a long time. I think in a bear market, before you can trust RSI long signal, you need to see it to move out of oversold area, not just slow down in getting furheer down or move a little bit up.
Not long enough period
Twelve months is not reliable indication that things will work this time as they have done within that period.
Looking at the daily charts
NDX
I think there is no real support until 1600-1610. Then it is around 1550. Forget RSI5 but look at RSI14 which says there's plenty of downside left before daily on that gets seriously oversold. CCI20 is making extreme readings but if you look at the all the way to 2000 you see that market can keep falling and CCI can bounce in the negative. Anyone looking for extreme readings to indicate go long, better go back and read. You should not consider going long based on CCI until it crosses above -100 and even that is actually a signal to possibly reduce shorts...
Stochastics are falling nicely but not turning up yet and they have room to fall.
I think bounce hunters are going by 60-min and shorter term charts, but remember if the trend has changed (which I believe) oversold conditions can persist for a long time.
COMPX
Just look at MACD. It's creaming that the trend is down and strengthening. 2240 is a bit a bother, but in fact it could propel us down further. If that get past 2220, then 2160 to 2180 area is the first real support area.
SPX
It looks that we could at some point come to back test the 1300 level. The daily chart is not over sold by indicators except that the index is at the lower Bollinger band. All this could mean that they dramatically open down. Note that 20-day SMA is just turning down i.e. the Bollinger bands are turning down. Doesn't early October 2005 look very similar to what we see now. That would give us another 30 points down on SPX before a reasonable bounce. Even on indicators, the situation looks similar to that. Of course, the fall was then followed by rally, but seasonality was for it. Now seasonality is against a rally.
INDU
Ooh, does this index have more room to fall! Most manipulated to upside so it will come hard down. It's not even oversold yet!!!!
DJ TRAN
Not oversold either. Lots of room to fall. Btw. someone was saying they wish they could sell this. You can. There are options (although illiquid) on it.
BKX
Hasn't even really started falling. You can harldy have a bottom when some of the segments of the markets have not even taken the first hit.
RTH
Turning down and just look at how much room there is to fall.
I'm afraid, but finally, the word that will become common in the 2 to 6 months is stagflation. You can pump so much liquidity until you have to pay for it.
Note that USD supposed strength was its higher rates vs. Euro, Yen, GBP. And this week when it become clear that the feds will proably keep raising the rates, USD kept falling!
Pokersam,
I'm all out of May puts in anything that I had them. I reduced some June puts just a tiny bit, but I agree with you. I think Monday is another big down. Closed June FTSE-100 future short, but will keep September one. The nice thing about futures is that the amount they are in profit (minus margin) is available to spend even if you don't close the position....
Also, everyone is expecting that option expiry limits the scope of the fall, but that is not always case. In fact, in my experience if significant supports are broken just prior, the fall speeds up.
I really wish I had had the courage to go short USD, but the fall has been so relentless that I just can't find a place to get in. Gold I'll wait for about $20 correction and then I'll go in.
I was wrong about the reason for selling, though. I thought it would be the profit expectations but the official line is inflation expectations. But indirectly that is bad for corporate profits. Btw. there was another article publishing the fact that American consumer is starting to feel the pain of credit card and mortgage interest payments.
It's quite possible that we break below 40.20
Tick, tickq, trin and trinq are still indicating weakness. Futures had a couple of tentative attempts to move up but those were sold off.
Good luck to you, but I am not yet convinced. If we get another big leg down, then I will take a small position, I guess.
But don't underestimate the possibility of another down day on Monday. If today was not Friday, I would take a small position in calls, but since it is Friday, I am not that willing.
Anyone thinking of going long today?
I'm going to reduce my June put positions and I am very tempted to buy a small number of at money May calls for selling them after the bounce on Monday, but what if there is no bounce on Monday? I think I will stick on just reducing the puts and when the bounce comes, just add June to August puts.
I think it is dangerous to assume that there is a bounce on Monday. We will have some kind of bounce at very soon but Monday could easily be another day down, as people have the weekend the digests the events of the last two days.
It is also option expiry so that should have some "stabalising" effect. The dollar drop is scary.
Sweet
Imagine how much it helps the downdraft on the next leg down
Trin and trinq still support further down, ticks might indicate an attempt to bounce. Dunno
OOOPS...
NDX below 200-day SMA, COMPX way below its 50-day and fast approaching 200-day SMA, SPX below 50-day SMA, INDU is the only index far above its MAs
OOOPS...
NDX below 200-day SMA, COMPX way below its 50-day and fast approaching 200-day SMA, SPX below 50-day SMA, INDU is the only index far above its MAs
Take a look at October and November 2001 levels and what happened to NDX afterwards
Small bounce yes, uptrend unlikely. We might get a bigger bounce when the fear increases. They need bounce then to get back the buyers to sell to.
Hi Pokersam,
You wimp I sold all May puts in profit, tripled my money on QQQQ May 42s. I have a small number of May 41 QQQQ puts that are stil showing tiny loss. I'm keeping them in hopes this is for real. Closed NQ futures short.
But I've got tons of puts in various things in June, July, August and September. I start buying further out and go closer in time when my confidence of the move increases.
I'm sure we get some kind of bounce, but there will be more and more longs that will start thinking of getting off the further down we go.
I want to see SPX below 1300 with a good volume to feel safe from rallies caused by whatever explain what Bernacle really ment.
A lot of talk about dip buying and buying for a bounce. I think whoever puts their toes into the water better be nimble and fast. It was heavy selling all day.
PokerSam, you getting a bit ahead of yourself.
There's a lot more to fall before any of the circuit breakers will be hit:
http://www.nyse.com/press/circuit_breakers.html
DJIA must fall by 1100 points to cause a trading halt.
Program trading gets limited to the direction opposite of the move if NYSE index moves by at least 160 points. It is down about 90 at the moment.
I guess consumer confidence/sentiment is going to turn even more negative
Markets down, oil up, interest rates up. Expectation index last week came weaker than expected already. I wonder how Bush's approval rating will fair.
TICKS are nicely negative and TRINS above 1.
There must be bounce somewhere I guess, but I would bet it meaning much. The real downdraft starts when the old buy the bounces start falling. Today was a start of it: many expected a post fed liquidity driven bounce: look the rates went up but markets are taking it well... Not this time.
Ticks have been solidly negative
and Nasdaq TRIN 1.57, NYSE TRIN made it to 1.07 or something. Now 0.97. The question is if we get 3% down day, is that the bottom or the top
Nasdaq damage seems to me unsaveable.
Strange use of terminilogy
" This would be "negative divergence" (i.e. no divergence aka agreement). One would not take the trade if "positive divergence" is the case (i.e. divergence aka disagreement)."
Negative divergence doesn not mean that there is no divergence. It means that there is negative divergence between the price and the indicator e.g. the price made a new high but the indicator did not.
Positive divergence is when the price makes a new low but the indicator does not.