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Oops! New high...
My "Dumb Money" indicator is the dips in my own trading account balance.
Yep, seems the bears went into hiding again after a couple of feeble attempts to sell it off. They did a lot better in the overnight session. Dow still in the red and Naz A-D is -200, which is normally indicative of propping in the NDX, which has tacked on ~ 3 pts to the Fri HOD, so far.
Bernanke lied, no doubt to secure his reappointment...
http://forum.prisonplanet.com/index.php?topic=124020.0
http://www.jackstevison.com/weblog/2009/08/22/weekly-market-update-august-22-2009/
This is definitely cause for concern from a valuation perspective, but typically, price leads earnings, and therefore, the price/forward earnings ratio is perhaps what the market is anticipating, and that earnings will begin to show the effects of the recession being over. However, with consumer spending in the tank and likely to remain so for many more months, I still think it is way ahead of itself.
The late medium Jeanne Dixon was renowned for many of her predictions that came to pass, but over her lifetime, she made so many that just based on the law of averages, she was bound to get a few right. Also, many were so vague and/or such a foregone conclusion, e.g. "there will be continued strife in the Middle East", that almost anything that happened could reasonably fit the prediction. Of course, no one ever remembers all the wrong predictions. Perhaps Lansing fits this category. It is even said of some indicators, e.g. the Hindenburg Omen, that they have accurately predicted 7 of the last 3 market crashes. Betting on false positives can be just as destructive to your account balance.
With SP500 P/E at historic levels, I predict that it will all end badly for those buying at these superinflated levels. They can chortle and pat themselves on the back all they want, but the the big bad bear is right around the corner, and it won't take many disappointing 3Q earnings to bring him out with a vengeance.
Poker should feel very honored that they have taken note of his work...
She said that on her last appearance on Squawk Box sometime last week. The rationale is that with so many foreclosure sales, overall prices will continue to be depressed until the inventory is worked off. If you are looking to buy, why pay the full asking price on a resale if you can get a decent foreclosure for 60 cents on the dollar?
Don't know about Prophet.net, but you can get it on Stockcharts.com...
http://stockcharts.com/help/doku.php?id=chart_school:technical_indicators:price_oscillators_pp
Alternately, you can construct your own in an Excel spreadsheet by using the TA-Lib addin, i.e. f(x)=TA_PPO(price array, fast period, slow period, MA type)
IMHO, the reason TA and other more esoteric methods of market prognotication are floundering is that since early July the Fed has pumped over $3T into the market through GS, JPM, and other big investment banking fims, and the retail trader, seeing the effect and hearing the daily propaganda of the Obama lackeys and the CNBC hacks, has drunk the Kool-Aid and now believes it is safe to get back in the water.
Additionally, has anyone noted the historically low value of the dollar in the FOREX lately? Also, you might note how the price of commodities *and* stocks have had an inverse relationship, which is a clear indication of the "dollar/inflation" trade. This should come as no surprise as any Keynesian will tell you that the only way we will be able to pay off our burgeoning national debt is with inflated dollars.
Accordingly, a dip of any consequence is merely seen as an opportunity to move more money back into the market at a better price. However, note that per the link on a previous post, insiders of many different companies are *not* buying, I think because they know 3Q will be horrible and would prefer the retail traders be the bagholders rather than themselves. This sort of "managed market" cannot go on forever, since the statistical market forces (OB/OS) will eventually reassert themselves. It is like a spring which is compressed to the limit, and when the external force is removed, responds violently in the other direction.
Meredith Whitney says housing prices still have another 25% to decline and the impending defaults in commercial real estate loans and adjusting jumbo and "Alt-A" mortgages will make the subprime mess pale by comparison. Finally, with *official" unemployment at ~ 10% (it is actually much higher due to many who have taken part time work, benefits have run out, or have just stopped looking), the outlook for a return to pre-crash levels of consumer spending, which is 70% of the economy, is simply not credible. When people have lost their jobs or are fearful they might, they stop spending on everything they can except for cola and beer.
So, for those still happily buying the daily tops, enjoy the run while it lasts, but don't pat yourself on the back too much for your market acumen and it would be advisable to keep your stops tight. The far greater risk in the market at this current P/E valuation and extreme overbought condition is in being Long vs Short. When it happens (and will most assuredly happen), the decline will be far swifter than was the grind up.
Two - It is a Price Percentage Oscillator, a commonly used ST bullish/bearish indicator. A 3/8 or 3/9 seems about optimal...
NDX new high of 1707.75, may or may not be HOD.
NQs trading at a new high. Apparently, not yet, although the insiders seem to have gotten the word...
http://pragcap.com/the-negative-trend-in-insider-selling-worsens
NDX HOD 1703.66, so apparently not yet. Bulls are still buying the dips into the close. No fear...
NDX new high of 1701.00.
New top on the NDX of 1700.33.
Okay, it's a deal. I will just be bemused to myself with your prescient calls. BTW, have we hit the top of this bear market rally yet? My suspicion is that there is a strong correlation between the market and the Fed fiat printing actions since early July. Nothing else could pausibly explain this mindless bull run.
I respectfully disagree, and am surprised you didn't just follow your usual modus operandi of deleting that with which you disagree. My point, and it is *entirely* valid to all who have a brain and are capable of critical thinking, is that any call will be right *eventually*, especially if you have the luxury of revising it on the fly, but it is getting the timimg reasonably correct that is troublesome.
How many SPX points ago was your initial call for the top and the beginning of (iii)?
Ah, but the beauty of EW is that because of the retrospective aspect, it is seldom wrong, although the timing may be off enough to wreck your trading account balance. Some here just don't seem to get that...
With consumer spending at ~ 70% of the economy and the fact that the consumer is *not* spending, I think piss-poor 3Q earnings are a foregone conclusion. There is only so much you can pad the results from cost cutting and firing workers, and that was already done in the 2Q.
Well said, Two. *All* analysis (quantitative or mumbo jumbo) presupposes an honest market, and absent that, we might as well be choking our chickens.
This will probably get deleted, but maybe you can read it beforehand...
http://www.traderplanet.com/questions/view/14962-are_the_markets_being_propped_up
Yes, I noticed that, so I guess we are now due for a "new" count. Tight trail tagged on post-announcement spike of the Treasuries auction, but reentered on the stallout. Now we just need to be patient and wait for this pig roll over. NDX RSI 5 back in nosebleed territory (> 80).
SPX HOD 1039.04 vs 1040 (pretty close). Do you think that will satisfy the EW gods???
If anyone can find the plug, how about pulling it?
In this context, it is not hard to understand why there have been no meaningful pullbacks in the markets since the propping started. However, I don't think they will be able to prop 3Q earnings, and with P/Es at such historic levels as has already been noted here, it will likely end badly for the blind bulls, as it always does.
This is the net result of the $1.5T+ in Fed fiat money that was pumped into the markets by the likes of Goldman Sachs beginning in early July which is a very effective way to get the herd moving in the direction you want them to go (the NDX has moved up ~ 270 pts). They are hoping that enough have drunk the Kool-Aid that by the time the Fed has to turn off the spigot, sufficient dumb money will be coming into the market to keep it afloat, and if this week is any indication, it seems to be working. Of course, 3Q earnings, unless they are cooked again, may be the wake-up call that the emperor really has no clothes, and don't forget the "other shoe" of commercial real estate that is yet to drop. Meredith Whitney, who I would not bet against, says housing prices have another 25% to fall.
If you hold your Short positions long enough, the market will *eventually* go down. However, whether it will go down enough to make your position green is another question, since that sort of depends on how much it has gone up since you entered. Hence, it is not enough simply to say that the market will go up or down, you also have to have some idea of *when* (i.e. within a day or so). Like Kenny Rogers said "every hand's a winner and every hand's a loser", and so when you get in is critical to survival.
No, I was just asking if anyone else thought the setup looked especially good, and that was 30 NDX pts ago. I just keep wondering what is holding it up (other than the obvious answer "more buying") and what/when the trigger will be for the collapse. Apparently, neither of us has a clue...
So, when exactly does this monster tsunami "(iii)" kick in???
Well, to be fair, I go both ways...
Ever the conspiracy theorist, some believe that these "miracle" inventions will never see the light of day due to the vested interests of those whose livelihoods depend on the status quo, i.e. Big Oil, General Electric, etc.
Have you heard anything on whether an IPO is planned?
Interesting...
Here is a link that describes it a little more.
http://www.technologyreview.com/business/18086/page1/
BBs are getting very tight. Cliff dive, anyone???
I predict that when this protracted move up ends, the market will then move lower. Not sure what wave that is, but I am sure there is one.
Poker - Don't mention it. I understand completely that is what you meant. However, seems the market doesn't care what either of us thinks. Probably waiting for another "green shoot" report to give the die-hard bulls another chance to bid it up before the next leg down.
Actually, I don't think what has happened so far this morning would qualify as a pump or a dump, certainly not like yesterday, where it was ~ 30 NQ pts from the open to HOD, and 59 NQ pts from HOD to LOD.
I was referring to the post open action. What happened overnight and in the pre-market was water under the bridge (~ 5 NDX pts down), and was already taken into account. Otherwise, noting what actually happened would be an easy call, not unlike revision and extension.