Sheesh
I, for one, am glad to see this week is over. On the whole, it sucked for bears. Ever since June 14, the bulls have, more or less, been at the steering wheel. We've had some hopeful days now and then, but the sad fact of the matter is that we still get triple-digit push-ups like today on the most feeble of news.
I feel exactly like I did when I wrote this posting in May. Interestingly enough, my feelings of despair at that time precisely match the peak of the market. To the day! So maybe there's a little hope, eh?
There were a few bright points this week, like the nuking of some Insurance stocks. But more and more bulls are getting heartened by recent activity, and you can smell the stink from the media about how rosy everything is. Apparently a slowing economy is great news.
I see the comments section is more active than ever. I don't even want to walk into that bar. God knows what is going on.
The Dow Jones 30 is still - but just barely - in a safe place for bears. I've pointed out five levels. Exceeding each one will make things progressively worse (and if it goes above 5, I'm going to enter the exciting world of retail shoe sales). This is an extremely dangerous juncture.
The note on the chart for the $OEX speaks for itself.
Below is an intraday (minute by minute) chart of the $SPX. It has obediently stayed under the trendline. Now, that's all well and good, but given enough time, the S&P 500 go climb to 10,000 and still be below this line. But at least this slender wall is holding up.
Jeez, I hope next week is better than this one. I enjoyed early June a hell of a lot more than this.
39 comments:
Tim, you pointed to the things I was wanting to mention about the DOW that I saw today! Draw a line from 4 to 3 to 2 and past 1 and you have a slight downward wall that 5 had breached. I will say that if it crosses that line, it may be the final straw before I turn bull and run with at least halfway with the crowd. Live and learn...
Unless there is a serious drop on Monday, I don't see the DOW hitting 10500 that I was looking for. At this point, even 10600 could be in jeapordy.
I should have said breaking lower than 10600 could be in jeapordy.
Pay no attention to me, I'm just kicking myself for not riding this thing on the way up. Everything appears to scream "SELL!" to me. But it appears too many are not listening?
It almost feels like sitting at a blackjack table and the dealer has a six showing. Some dude takes a hit on a seventeen, and busts with a face card. And that sets the dealer up with a low card to beat out everyone else.
It just plain sux...
Tim put it nicely, "Wow what a weeeeek". It's a weak rally that's taking this market higher. When this rally dips, i am going to watch it real close. That's what's going to tell me whether its gathering steam or is a fart. A higher bottom of anything above 10900 and i am getting bullish.
Press the six and eight up four units, and give me all the hard ways please. ....and the stick man screams seven out!! pay the dont's! Just a bad dream! ChronicTown... a.k. a. Hardeight!
Tim, how on earth can you say the bulls have been in control since June 14? Who was at the steering wheel the first half of July? And didn't you just the other day say that neither the bulls nor bears were in control of this market? Rally days have been on lighter volume overall, and leading stocks have been taken out and shot. Nasdaq = bear flag on bear flat on bear flag (daily chart). It's been an erratic environment to be sure, but my shorts have worked out beautifully-- but you have to take profits when they're nice and not get greedy when conditions are so volatile. The major averages closed right at resistance. We may bounce another day or two, but then it should be back down. Not to worry.
Too many people confused, bears bulls you name it. When the market is selling off we have everyone saying its going lower etc etc....Now that there is a rally in place everyone thinks its going higher. Im sure this rally could bring the markets back to 6 year highs but on what reason, too many negatives outweigh the positives. Only positive thing I see in the short term is a pause to the interest rates which again does mean anything. I have read numerous articles stating that after a pause the markets actually do alot worse based on past information. Im sure we will top out soon and head back down. If the dow does past 11700+ I think a run to 12000 is certainly possible. However if 12000 is touched before or around september I would expect a huge drop going into the end of the year. No way can a sustained rally last under so many problems the markets are having.
The medium-term trend is still up. We've been in a bull market since early 2003. The S&P continues to trade above its key monthly and weekly EMAs: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID369857
You have to be very nimble to make money by trading against the trend.
dash
Jesus! Why be a perma-bear/bull it doesn't freakin' pay sh*t!! Play WTF you see! Stop tryin' to guess WTF the fed is going to do next, whether it's a bull or bear market, mid-presidential term, and all that other SH*T. At the end of the day all that matters is whether or not you were able to trade in the direction of the price trend of the equity. If the trend isn't clear park your sh*t in cash...simple as that!
TIM has done a great job! Thanks.
If you are full-time trader, this blog also has something that might interst you.
http://bluelightnewsletter.blogspot.com/
John, you're right on target about the markets being "fully priced" right now. And you're right, it does NOT MEAN that the markets will fall. I've been saying this for a while.
I'm still waiting for that "last" rate hike before committing fully to the bond market. I get the sense that they will spike upwards once the Fed raises the rates again and does not confirm a pause. Let's face it, the bond yields are around 5.00% and the Fed rate is 5.25% already. When the Fed goes to 5.50% and does not indicate a pause, the bond market will tank, giving a great buying opportunity going into end of 2006.
Of course, to be "prudent," it might be wise to start scaling into bonds right now, considering that it's still uncertain what the Fed will do in the coming weeks.
I like your thinking.
-Tony
You got whacked buddy. One must be nimble in this market and not remain locked into one frame of mind. If the indexes can top the July high, they'll be in an uptrend. Simple as that. This will be very interesting indeed.
Trying to figure a way to "post" graphs I am following. Similar to Tim K's. I am a little shorter term than most. We are in my opinion close to a top:
DOW
http://stockcharts.com/h-sc/ui
(my internal charts show that Thursday penetrated the down trend and Friday confirmed the break in the downtrend. Would read this as a change in ST direction to neutral or "channeling" - why?)
SPX
won't put the site (they default - anyone that knows of a public site where you can save your drawings, let me know)
Similar to the DOW, broke through on lower volume but broke the trend line (short term). Good channel pattern now.
NDX
Fought like heck to come up, still in a downtrend. While others still may be hopeful, I think technology needs some "new" news and leadership. This index (and the stocks in it) needs some help or it will continue to trend lower.
Anyway, I commented on biotech (heathcare related) and finacials as the leaders and was criticized. Short term there appears to be strength, but would be careful thinking that the market buying is weak and ready for lower interest.
Best of luck in all your trading. Really appreciate Tim's forum!!!! Keep up the charting and idea's TIM!!!!
Here's a simple point: we are closer to the top than the bottom right now.
Now, if you can figure out how to turn that little piece of knowledge into solid money, I'm all ears.
Wow interesting sentiment going on here. Lots of bulls, interesting.... What happens when growth slows= estimates get cut and multiples contract. What you are seeing right now is the beginning of a slowdown..... The top for this market was reached on May 10th. We are going to be fully overbought by the fed meeting.... Interestingly enough, I havnt taken any whacks on the short side- patience has paid off- can bulls say that since may??? SBUX
, WFMI are interesting earnings to watch... i've got puts on those and added at the end of Friday to the QQQQ and DIA puts.....we are getting ready for the next leg down.
We haven't even had a 7%CORRECTIon on the Dow yet.... brutal. 20% is a normal correction and 30 is a bear market.... wait for the fun to begin and play smart.....as soon as earnings are done. I will just be playing the indexes.
Good luck!
"We haven't even had a 7%CORRECTIon on the Dow yet.... brutal. 20% is a normal correction and 30 is a bear market"
I might be mistaken, but to my knowledge, 10% is a normal correction and 20% is a bear market. 30% is a drubbing :)
Regardless of what you call it, the markets are topping. We are definitely closer to the top (within 800 points or so on the Dow) than the bottom (room for at least 2,000 or more to the downside).
I've done so much reading about the markets and the economy in the past 6 months that I'm bleary-eyed. I think every single article (from anyone meaningful, that is) is calling for a downturn in the markets within the next 2 months, followed by the typical end-of-year relief rally, followed by a full bear market in Q1 of 2007.
Does anyone here read Volkmar Hable's commentary? I find that he's got a pretty good grasp on things and he's calling for a decline starting in mid-August.
-Tony
when is it a good time to buy TLT????
I think this says it all:
"Investor's Business Daily
Failed Breakouts By Leading Stocks Signal Weakness In Stock Market"
http://biz.yahoo.com/ibd/060728/corner.html
I don't know who's doing the buying, but the rallies all seem to be in the morning and the air is let out by the afternoon (suckers in the morning and institutions in the afternoon).
anon Tony, pls enlighten us on Volkmar Hable.
_ Frank
I'm reluctant to post an external link here, but someone asked about Volkmar Hable's commentary. His direct link is here:
http://www.hable.ca/downloads/Commentary.pdf
If you read www.safehaven.com, you'll see his weekly commentary posted there.
And for any serious bears out there, if you're not reading safehaven.com, you're really missing out on some good information.
-Tony
BEARISH engulfing pattern on ESRX -- picked-up on friday on the rally about that robust GDP #!
Great site, some great guys but perhaps needing a little foreighn perspective to correct your isolationism. The markets are rising and will probably continue to do so beacause the world is awash with money. With oil at $70 plus the sheiks have to park their cash somewhere and, historically, quality equities have provided the best return. These guys are no small investors, they are pumping billions per day. Allied to this many American CEO's are so unimaginative that all they can think to do with their own cash piles is to buy back shares. If you bears are going to end up frustrated, blame liquidity.
scottishinvestor --- you are one enlightened dude!! Must be that Scotch!! Hey, do you remember the 1970's?? Yeah, you know, the one with oil shortages and HUGE spikes in oil prices. Hmmm, how come we didn't get a rising stock market then?? Those oil sheiks must have spent the petro-dollars on women. Now that they are older, not even viagara does the trick, so they must buy stocks?? Anyways, your argument is very weak. CEO's buying back shares can only last so long. Do you not think that under-investment by US CEO's will not catch up with stock prices? Enjoy the ride, as it's almost over.
yup new shorts this week look good
Deed I do remember the 70's. No rally because of high inflation and oil money reinvested in what was then a very underdeveloped mid east. American co's should do very well over next few years. India and China have 40% of the world's population and are developing very rapidly. The demand for the successful American lifestyle will generate huge demand for U.S. goods. Look at any long term chart (from 1900 say) and history speaks with one voice. Hiccups along the way, such as 1929, but bears only appear from the woods for short spells.
scottishinvestor said:
"The demand for the successful American lifestyle will generate huge demand for U.S. goods."
Surely, you must be joking.
Just because the Indians and Chinese want to grow and prosper (which MAY be related to the "American lifestyle"), it does NOT mean that they will be buying USA-made goods. In fact, it probably means exactly the opposite.
China is our biggest source of goods. In fact, I find it difficult to locate any NON-Chinese made goods in my local stores. If the Chinese want the American lifestyle, then they will simply "buy Chinese".
USA makes very few goods now, and that number is declining on a daily basis. The trade deficit is increasing annually for a reason, and it's NOT because China and India are INCREASING their imports of USA-made goods.
"If the Chinese want the American lifestyle, then they will simply "buy Chinese".
LOL thats good stuff!
"America makes very few good now"
Levis, Nike sneakers, I-Pods, Coke, Macdonalds, Lear jets etc.
Lear jets???
Hahaha. Dude, you must be here only for comic relief.
I don't know about Nike, but the Wilson tennis shoes that I have on my feet right now are Made in China.
My Dockers pants that I'm wearing are made in Bangladesh.
The phone that I have on my desk is Made in the Philippines.
The Logitech mouse that I'm using right now on my computer is Made in China.
My Dell computer has a sticker on the back of the case that says Made in China.
The Dell 19-inch LCD display for my computer is Made in China.
Need I continue??
Or maybe you are implying that these products are not part of the "American lifestyle" and that the Chinese and Indians will start buying Lear jets by the dozen to flood the USA with money.
Wow, "Scottishinvestor", you really are a trip.
super blog dude.
Nike manufactures a large part of their apparel in china & other asian countries.
I'm sure the sugar and coloring for coke is made in china.
Yeah! But the profits appear on Wall Street.
Wonder if you look on the back of half the "Wall Street" companies, you'll see "Made in China"?
Take a trip to Shanghai and you'll know what the hype is all about.
Anon at 1:32pm:
Are you in Shanghai or in the US?
You will then understand what EddieFl was saying?
Where is the market going? I guess it depends on who you want to listen to, the analysts or history. Check this out:
http://www.comstockfunds.com/index.cfm?act=Newsletter.cfm&CFID=6567261&CFTOKEN=73006534&category=Market%20Commentary&newsletterid=1254&menugroup=Home
Looks like Tim is still licking his wounds. Market action, however, still shows signs of a bear rally about to fail at key resistance levels. With the possible exception of energy, the stocks running up are speculative momo types, not, for the most part, leaders. Furthermore, anyone watching intraday futures today saw each move higher greeted with sharp selling into strength. I think the stage is being set for another wave of selling sooner rather than later. JMHO.
So when reality bites, it will bite a big ol' hunk o' beef, eh?
This end of month thing got me confused. I'll definately have to make a note of it to remember. Does it happen most/all/some months?
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