Thread: Market Talk

So to clarify for us rank amateurs. Are you looking to buy in at strength or weakness on the market on Monday. My amateur opinion is there will be a slight pull back because the rally was fueled by the tobacco settlement reversal. This will get digested, along with the poor jobs report, over the weekend and some will engage in profit taking.

Can somebody please clarify what does the chart means. I see them posted here everyday and I have to idea how to analyze them... A step by step instruction will be greatly appreciated...

Pyriel

Show-me wrote:

So to clarify for us rank amateurs. Are you looking to buy in at strength or weakness on the market on Monday. My amateur opinion is there will be a slight pull back.

I'm just following the trends on the charts. Money is positive. Trends are up via the MA. I don't follow daily fluctuations unless they are part of a trend, exception being the last week in December. There may well be a pullback on Monday. My analysis says UpUp. But be careful cause the market is sensitive. That's why I will look very closely at the Monday AM opening.

My transfer was a change of 10% added to stocks and 10% out of I to C & S. More of a tweak and caution with the I fund.

Rgds Spaf

For technical information about trading see:

http://www.incrediblecharts.com/site_map.htm

For the best chart in MHO. Go to:

http://stockcharts.com/

When you get there, go to the free charts tab, then go to gallery view, then to Create a gallery view. Type in $SPX and hit GO. Wala!!!

Rgds Spaf

Go NIKKEI go! :}1.11% at midday and still on the rise :}1.21%. Hope it continues to hold and go's into our Monday market.

Thanks again Spaf for chart info.

One other thing we need to remember!
This market is very sensitive! Very sensitive!
MT has said buy the strength and sell the weakness!
With TSP it takes a day (before 12:00 noon ET) to transfer funds.
So (as history) when we see the the market go sideways (for a couple of days) after higher highs, that is probably a good indicator to bail.
If the market doesn't make the the December high, it will turn bearish and we will have to play the cycles.
We are now bullish, but the primary movement (bull or bear) hasen't been confirmed (via The DOW Theory). But it is bullish with trends and the advances in Feburary.

We are in a state of cautious/green. With a sensitive market, thats all I can see!

Rgds, and be careful! Spaf

Spaf wrote:

One other thing we need to remember!
This market is very sensitive! Very sensitive!
MT has said buy the strength and sell the weakness!
With TSP it takes a day (before 12:00 noon ET) to transfer funds.
So (as history) when we see the the market go sideways (for a couple of days) after higher highs, that is probably a good indicator to bail.
If the market doesn't make the the December high, it will turn bearish and we will have to play the cycles.
We are now bullish, but the primary movement (bull or bear) hasen't been confirmed (via The DOW Theory). But it is bullish with trends and the advances in Feburary.

We are in a state of cautious/green. With a sensitive market, thats all I can see!

Rgds, and be careful! Spaf

I agree. I have been studying the Share Price on the TSP website and when you see two or three days sideways movement look out. I am only excited because I left 20% in the I Fund. If it performs well Monday AM I will run for safety in the F or G. Seems like USD is trying to rally. Euro and Pound are not to strong so far but I just looked and they are trying to test Fridays close. Yen is up .17% so far.

[align=left]Tom,[/align]

[align=left]I went back to study your market comments for Fri.and this part I can't get out of my head. [/align]

[align=left]And, perhaps most important of all…[/align]

• 
  
  [align=left]If the market did cartwheels for the jobs report and closed higher by 0.5% or more, there was only a 33% chance that is was still higher 30 days later. If it fell out of bed and declined by 0.5% or more, there was a 93% chance of it being higher after 30 days. [/align]

If thisis to be true Feb. could be the terrible month that follows a terrible Jan. A 67% chance of a lower market is not good odds to me. How much weight do you think this carries? This seems to follow the general tone that some are having. Good luck everyone.

Lewis Capital Weekly Thoughts
by Lance J. Lewis
February 6, 2005


I’m not a big believer in technicians, but Joseph Granville has been around a long time and is probably one of the best ever. If he sees the potential for trouble this year, it’s worth noting. So, once again, I’m going to let somebody else do the talking this week… The following story hit Bloomberg on Friday….

Equity Strategists: Granville Predicts 2005 Dow Crash

2005-02-04 11:16 (New York)

By Ari Levy

Feb. 4 (Bloomberg) -- Joseph Granville, who accurately forecast in 2000 that U.S. stocks' bull market would end, is at it again. He expects the Dow Jones Industrial Average to suffer its biggest annual loss this year since the Great Depression.

``We're in the critical portion of a coming collapse and the market's screaming to get out,'' said Granville in an interview from Kansas City, Missouri. ``Everyone's bullish. There's going to be a tremendous surprise and it's going to be to the downside.''

Granville, publisher of the Granville Market Letter since 1963 and a technical analyst for almost 50 years, also foretold a stock-market decline in 1976. He misfired in 1982 and 1995 by calling for losses before share prices surged.

The 81-year-old analyst expects the Dow average to retreat to at least 7400 by year-end. The forecast amounts to a plunge of 31 percent. The last year in which the benchmark fell that much was 1937, when it lost 33 percent.

As a technical analyst, Granville predicts the market's direction by using criteria such as trading and price patterns, rather than earnings and economic growth. He started developing his stock market theory at what was then E.F. Hutton & Co., a New York-based brokerage, from 1957 to 1963.

`Pants Down'

Granville's main indicator is called on-balance volume, or OBV, which he developed. The idea ``caught me, quite literally with my pants down,'' he wrote in ``The Book of Granville,'' published in 1984. ``One August morning in 1961 I sat on the toilet in the men's room, away from the hubbub of the research department, musing about the stock market.''

OBV gauges a stock's momentum. If a stock rises, the day's volume will be added to a cumulative OBV figure. If the share price falls, the total will be subtracted. Granville applies this analysis to all 30 stocks in the Dow each day.

``Volumes are pointing to declines based on what I've learned,'' he said.

The Dow average has dropped 1.8 percent this year to 10,593.10, led by Merck & Co.'s 12 percent slump. Granville predicted that the benchmark would tumble 12 percent in the first quarter, to 9500.

Granville also follows charts that track the daily number of advancing and declining stocks, the number of stocks reaching 52- week highs and lows, and investor sentiment. He compiles the measures into what he call his ``Net Field Trend Indicator,'' used to predict the market's direction.

`Last Legs'

In his Jan. 20 newsletter, he wrote that his indicator had retreated to its level on Oct. 21, 1929, eight days before the Dow's two-day, 24 percent plunge. ``The Dow is technically on its last legs,'' he wrote.

Granville, who has written books on subjects ranging from stamp investing to winning at Bingo in addition to the stock market, has made accurate forecasts in the past.

On March 11, 2000, the day after the Nasdaq climbed to a record 5048.62, Granville wrote that investors in technology stocks ``will soon be burned.'' The index plunged 78 percent before bottoming on Oct. 9, 2002.

In 1976, in his book ``Granville's New Strategy of Daily Stock Market Timing for Maximum Profit,'' he said a bear market would occur from 1977-1978. The Dow plunged 26 percent from the beginning of 1977 through February 1978 after a two-year surge.

1987

Granville has also been wrong. He was bearish from 1982 until early 1986, according to the Hulbert Financial Digest, a service of MarketWatch Inc. that tracks and ranks more than 180 financial market newsletters. Over that period, the Dow had a 17 percent annualized return.

During the Crash of 1987, he was bullish, Hulbert said. The average plunged 23 percent on Oct. 19 of that year.

Granville, who charges a $250 annual subscription rate for his weekly market letter, was also incorrect in predicting a stock-market plunge in October 1995. He turned bullish in July 1996, after the Dow industrials climbed about 20 percent.

``Unlike most letter writers, I admit when I'm wrong,'' he said. On March 14, 2002, he published a letter entitled ``I Was Wrong'' that admitted to ``staying cautious'' for too long in February 2002. The Dow gained 5.9 percent between Jan. 31 and March 13, the day before his admission.

``He's very well respected as a market technician, but the bottom line is the bottom line,'' said Mark Hulbert, editor of the Hulbert Digest. For anyone who followed his advice during the past 20 years, ``Would you be better off than putting your money in an index fund? The answer is no.''

5 Percent

Granville's record as a market timer is better for the five years ended in December, according to Hulbert's data. Investors using his recommendations to buy and sell a fund mirroring the Wilshire 5000 Index would have produced a 5 percent annualized return. Investors who bought and held the index fund for those five years would have lost on average 1.4 percent a year.

Even with his bleak forecast, Granville isn't the most bearish technical analyst. Robert Prechter, chief executive of Elliot Wave International, has predicted the Dow may eventually fall below 1000.

Granville is more bearish than strategists at investment banks, who focus more on fundamentals such as earnings. They expect the S&P 500 to climb 3.1 percent to 1250 in 2005, based on the median estimate in a survey of 14 analysts by Bloomberg.

In his view, it's better to follow his advice than to listen to firms on Wall Street, which ``seldom get it right.'' Charts show ``the market will go up on falling earnings and down on rising earnings,'' Granville wrote on Jan. 27. This ``makes one wonder about the level of Wall Street intelligence.''

http://www.lewiscapital.net/week.asp

Show-me wrote:

[align=left]Tom,
[/align]
[align=left]I went back to study your market comments for Fri.and this part I can't get out of my head.

[/align]
[align=left]And, perhaps most important of all…[/align]

• 
  
  [align=left]If the market did cartwheels for the jobs report and closed higher by 0.5% or more, there was only a 33% chance that is was still higher 30 days later. If it fell out of bed and declined by 0.5% or more, there was a 93% chance of it being higher after 30 days. [/align]

If thisis to be true Feb. could be the terrible month that follows a terrible Jan. A 67% chance of a lower market is not good odds to me. How much weight do you think this carries? This seems to follow the general tone that some are having. Good luck everyone.

The cartwheels had to do with rallying on a good jobs report. We didn't get one so I'm not sure what caused the big rally Friday.

It is confusingsincethe surprise weak report usually causes a downturn that becomes a buying opportunity after a few days. Investors jumped the gun Friday. Maybe it's like the Januarysmall cap effect that now starts in November. If there is a pattern to be seen, everyone want to be the first onein (or out).

Thanks Tom. I will remain cautious. Good luck all.