Zeev's Ideas

[Koikaze]

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.