Friday, May 25, 2007

Chart-Free Memorial Day

From time to time, there's just nothing new to say, and I don't want to waste your time with the same old charts.

Turn off your computer and enjoy the long weekend. We all could use a graph-free break! See you all again on Tuesday.....


z-stock said...

I have it on good authority, (VR Trader), that the the market will panic when the US demands that China strenthens it YAUN. This will come in the form of US tarriffs. Now here’s what I understand. Anything that threatens to raise interest rates, collapses the market. Tarriff’s raise prices, in turn, create inflation. Threat of inflation plays into Big Ben’s hand (FOMC), to go out and sink the US market. So, as chatter from Chinese tarriff’s get louder, watch for the market to panic sell.
Sell-off should stop at 13,160 and then watch for DIA, to rise to 13,800.


The latest Commitments of Traders report, released this afternoon with positions effective as of this past Tuesday, showed that large commercial hedgers (aka the "smart money") made a surprising turn.

After increasing their hedges against a further rally for the past two weeks, this week they made an about-face to the tune of over $8 billion and are sitting on their 2nd-largest net long position in the past seven years. This is highly unusual behavior, and while it certainly does not preclude short-term corrections by any means, it is a continued positive for the intermediate-term.

Guess we just BUY and Hold....I am 70% long 30% cash After being near 200% long at bod


dbohntr said...

I keep coming back as you teased with that temporary post.
Okay, chart free, never!
BSC is looking weak. Have a good one.

downosedive said...

After last Thursdays sell off, are you sure the Commitments of Traders are still as long as suggested? Last week was very volitile on the DJA futures, in fact wacky. I cant see that if such strong long positions existed, why AFTER last Tuesdays report did the market take a turn for the worse. Surely it should have stabilised rather than behaved as it actually did? Your thoughts please? By the way can you continue to keep us undated on the weekly (?) Commitments of Traders reports? Im afraid I cant understand the figures at all !! If the longs are so strong then all the talk by others here of a fall back to say 13200 short term isnt going to happen then? If it were likely then surely the major players would not take such strong up positions at this point - they would wait for the fall and then steam in?????


It is a longer term indicator and holds some weight but is not by any means the cut and dry some say it is have that as benefit if you are a Bull is a positive but there are dozens of negatives just as strong i.e. all put call ratios and Mutual fund cash is just as important and there are several COT reports to look over ..the latest being pretty bullish LONG TERM ..but short term there are a lot of indicators just as Bearish keeping us from establishing new long positions other than stable growth stocks that will handle short term corrections pluus we can get short very quickly to HEDGE our positions.

Investors Intelligence surveys are as important in some circles as COT and they are bearish readings now.


Fund said...

In the long term the market moves in only one direction. UP. Inflation and a global surge in wealth creation is about to exponentially increase the price of assets.

I do expect a small multiyear correction next year. However we're at the cusp of a multi-decade stock market rally.

Astute traders and investors are going to make fortunes on the backs of the permabears. Human civilization is at the cusp of the beginning of its most glorious period. The psychological defect that afflicts permabears is going to cost them.

nonsumdignus said...

Speaking of short- and long-term indicators, what do you all make of the site, which supposedly takes things like the COT reports into account?

I noticed that their long-term indicators spiked higher upon Friday's COT report.


z-stock said...

I found two more shorts that make sense in any market direction...ALOG and CREE.( both have crashing EPS trends),80/20...details at the site

downosedive said...

Thanks for the response. Yes, your comments make sense. It would be just too easy to read or hear about the COT (although i cant understand it!) if that was the sole basis of the futures market. Sure the long trens is always up, we all know that. bears choose to bet on the down legs for various reasons, I know I do. The trouble with this particular bull run especially recently is that apart from last weeks drop of 85 points on the DJA, there hasnt been any meaningful little dips. That means a hell of a lot of hot air paper profits have built up a head of steam. Just how much longer before people decide to take at least some profits on the back of some negative news at some stage soon?


I do think there is a bigger correction in our future but it doesn't have to happen this week ..staying Long in Bull markets is the only way to really make money and getting super aggressive when conditions warrant ..can be a huge advantage ...right now risk has risen and there has to be another short term set back but at this point in the market 1-3% is a present as so many people and countries view the US as the only good value left at 18 x earnings ...and they are PEAK earnings at that without a rate cut this market is in trouble as earnings will slow for 2 quarters and the risk has risen due to overseas mania and sentiment creeping up ...the correction that was last week will trick some short term traders and they will get it handed to them and have to exit with losses but the longer term and even intermediate term should have nice gains with a target of 1650 SPX in Jan 08 .

Tom 24/7

Gary said...

As Tom said the COT isn't a timing device. It is however a very good tool for determing what the big money in the market is doing. I personally am not willing to fight the big money...ever. Sure we can have 1-5% corrections with the COT long but we could also have a parabolic advance and if you are out or short at the time you could get left behind or worse lose lots of money. The details of the COT report are to large to try and post here. I would need to attach spreadsheets and explanations which I can't do. If you are really interested in learning about the COT report you can go to and request to be put on the subscriber list.