Thread: Market Talk / July 23 - 29

Tom moved 50% into the S Fund last week. Now the S Fund and small caps could go lower, but it sure looks like we are at a double bottom. He also pointed out it seems everyone is getting pretty bearish here. Mr Market makes it very hard to pick a bottom, but it sure looks close on small caps.

I'm thinking on adding some S Fund Monday if its looks to head down for a possible rally on Tuesday. I'm currently only 25% long after taking some profits after the rally last week. So, I'll join Wheels and Tom for some S Fund next week. Currently some C Fund IRA's and some 2010 in TSP.

We could go lower here, and I'm going against the TA's that advise me, but all I'm getting these days is sell signals and that is usually a Contrarian Indicator. I hope it is this time.

TA's 5 Cash / 3 short ETF's / 3 Long 25% to 75%.

We also have a 39-week cycle low due and this could give us a rally after being complete next week.

Plenty of things to stop it from happening. Not to many good things to cause a rally. That's why we could get it. We could test the lows early week and maybe again around Thursday. This is only opinion and Mr. Market will do what it wants, but I have to choose a position to make money. Long, short, or cash... Cash is probably the smart way, but I'm looking for some action now that I have some small gains again...

Good Investing / Trading!!!

Small caps look like they could bottom out this week and might give us a short-term rally. High Risk Trade!!! Coin toss, all news driven!! Remember rallies are being sold these days....

http://www.wilshire.com/Indexes/Broad/Wilshire4500/


http://www.google.com/finance?cid=700373

Oh boy! Mike says down again..


Conclusion
We may see support hold near the current levels, otherwise there is no evidence of a bottom.

I expect the major indices to be lower on Friday July 28 than they were on Friday July 21.

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The major indices were mixed last week with the blue chip indices up and the small cap indices down so I am calling last weeks negative forecast a tie.

Thank you,
Mike Burk
YTD W16/L4/T9

The prediction by Caterpillar, the world's biggest maker of earth-moving equipment, that it is on course to record its highest annual profits and revenues in 40 years follows upbeat pronouncements by other global manufacturers such as General Electric and Honeywell. The rust belt is the new leadership - forget tech.

From Henry To:

What is interesting is that Lowry's buying powere gauge of U.S. domestic equities has now reached an all-time low (going back to 1938) - and any rush of foreign investors or retail investors back into the equity markets could easily contribute to a 10% rise from current levels.

Dennis - permabull #1

Double bottom: when a new low forms it tends to shake out the weaker bulls and makes it easier for the other bulls to drive the price higher. The buy trigger is when stocks break above the mid point peak, between the two-troughs (the pivot point). Ideally, higher than average volume confirms the trigger.

However, with the market having the woes it does, I wouldn't guarantee nada.

The mideast, oil, possible slow growth. We could be range bound till things cool off a bit. But, sooner or later we will get back up there.

Kind of need a cool glass of patience!

Spaf,

I notice you are patiently waiting also - walking the talk per say. I prefer to wait and do DCA and dividend reinvestments while in progress. Nobody in their right mind wants to own stocks - just the environment for a bull to graze. Some of the indicators are worse now than in 3/03 and 10/02 and you know what happened - up 3000 points with only marginal look back. We have based now for 2 years and more - waiting, waiting on the Fed, waiting on geopolitics, waiting on earnings guidance, waiting for Godot, waiting for hell to freeze over - but the mega bull will come. I'll become bearish at Dow 17,000 and SPX at 1700 - but I got to get there first.

One of the few bright spots among the Dow's components was Microsoft, which saw its shares jump 4.5% following the announcement late Thursday of a plan to spend $40 billion repurchasing its own shares.

Birch,
I'm staying even if she gets more skiddish. Averaging Down is not a good idea for stocks that are losers. But, we have index funds, so that was my strategy. In the mean time my G-fund is accumulating for DCA

We had a gunship that for nose art had two buzzards sitting on a limb. One buzzard said to the other one "Patience my ass! I'm gonna kill something!" That was high risk!

Well I'm out of there! Now it's still risk, but not like before!....So.I'll just sit in the hanger and let it come to me, hopefully......

Direction of Stock Market Remains Complete Gamble With Raft of Key Economic Reports Due
NEW YORK - With a raft of key economic reports scheduled this week, the stock market's direction remains a complete gamble. Wall Street caught a brief whiff of optimism last week when Federal Reserve Chairman Ben Bernanke told a congressional panel that economic activity was abating and inflation was so far contained -- a sign of a possible end to the central bank's interest rate hikes. However, he maintained the troubling stance that high energy costs, while putting the squeeze on consumer spending, could also drive up prices elsewhere. He also acknowledged the difficulty of balancing growth and inflation, and that under- or overshooting on interest rates will have serious consequences. That tenuous error margin is why Wall Street will likely continue its pattern of erratic trading in the coming weeks, analysts say. And while investors may welcome upbeat economic data, they have a host of other issues to consider, such as political tension in the Middle East or disappointing corporate earnings. How investors will react to any combination of news is of course impossible to predict.
http://biz.yahoo.com/ap/060723/wall_...head.html?.v=4

Emotions And Trading

The stereotype of the perfect trader (market timer) has many of the same traits as Mr. Spock on "Star Trek." Mr. Spock looks at events logically and objectively, and follows a rational plan when creating a solution to a problem.

In some ways, Mr. Spock would appear to be the ideal trader.

He would carefully formulate a detailed trading strategy, find the market conditions that suggest his strategy will produce a profit, and then and only then, would he execute it.

But, in the end, it is important to realize that Mr. Spock is a fictional character. And even if he were real, he is a Vulcan; he isn't human.

Traders are humans, however. In addition, market participants are humans, and they don't always behave rationally. Indeed, they tend to be driven by fear, hope, and greed, and thus, forecasting market behavior has proven much more difficult than space travel.

In the real world, humans are emotional. Emotions rule everything in the markets. The decision you must make, however, is whether you are going to control your emotions in order to trade decisively and profitably, or let your emotions rule you.


http://timing.typepad.com/timer/

Market Update 09:00 am: S&P futures vs fair value: +3.8. Nasdaq futures vs fair value: +6.0. Futures are still trading above fair value, setting the stage for stocks to regain some upward momentum today. With the S&P 500 slipping into negative territory for the year on Friday and the Nasdaq extending its reach to the downside, the absence of potentially disruptive economic data is also clearing the way for buyers to get back into an oversold market / oversold on a short-term basis.
http://finance.yahoo.com/mo

Stock Futures Up on M&A News
U.S. stock market futures on Monday advanced on a flurry of merger-and-acquisitions activity, including reports of the largest-ever leveraged buyout.
Dow Jones futures were recently up 44 points, S&P 500 futures rose 5.7 points, and Nasdaq futures improved 7.5 points. The wave of buyout talk threatens to obscure another wave of earnings releases.
http://biz.yahoo.com/ap/060724/wall_street.html?.v=3