Thread: Market Talk / August 20 - 26

What will life be like when we have 24 hour real time trading? I'm so ready for the market to open - buy'em now before they get even more expensive.

Sunday, August 20, 2006

39-Month Cycle's Excellent Upside Gains
Since the 39-month cycle bottomed in mid-July, the stock market has made excellent gains. While the permabears are counting every rally as just a warmup for the next big crash to oblivion, the venerable Dow Industrials has gained 6.4% (which translates to a whopping 139% gain on required initial margin for the Dow futures -- a gain of 51.4% just in the last week). Even the downtrodden NASDAQ market made an appearance on the positive side of the ledger last week after being beaten up severely and left for dead in the May-July rout.

What we have seen is exactly why we advised investors to buy back into the market with cash we had preserved after selling into the final stage of the rally earlier in the year. Although the rally may ultimately prove to be a bear market rally and we may have a retest of the lows to look forward to in the future (after all, the 4-year cycle is scheduled to land right at the same time as the Congressional Elections this November), the rebound off the 39-month cycle is definitely worth getting back into the market for. In fact, our roadmap for the year -- which uses the analogous years of 1986 and 1994 -- has been working out absolutely precisely and has been telling investors when to move to the sidelines and when to get back into the market. Consequently, we're currently well ahead of last year's big gains in the stock market already, despite the overall neutral trend this year.

It's apparent that the average investor just doesn't get it. While the Dow has been powering ahead, a look at the Commitment of Traders Report, published by the US Government each Friday afternoon and reflecting the position of large traders, commercials (bankers) and small traders as of Tuesday's close, shows that small traders were holding 51% of the total short interest in the Dow -- in other words, traders with accounts too small to qualify as large traders constituted the majority of bears in the market. In fact, those small traders were 84% bearish as a group and only 16% bullish. When you get the crowd of small traders mostly looking for a downturn, it's like taking candy from a baby -- and that's exactly what the market did last week as it ground away at those small accounts and made them even smaller.

The Kingdom of TSP
Daily Edition
August 21, 2006 Closing

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Pro-Yak...................................After 5 days up we needed a pullback. Them socks were gettin hot!

Con-Yak...................................Iran spillover pushes Lube over 72!

Jester-Yak................................Peasants pockets picked by Krude. Whats Constable Dubya doing?

Doodles:
Socks [$SPX] Closed at..............1297.52, dn -4.78
Volume (CMF) (money flow).........+0.110, decreasing.
Averages (MACD) (trend)............+8.886, increasing.
Momentum (S-STO) (signal).........93.33, decreasing.
Strength (RSI) Overbought/sold....[70] 62.65 [30]

Lube (NYM) Closed at..................72.45, up +1.31
Oil Markers................................<70= ok, 70-75= worry, >75= panic.

Tea Leaves:
Charts & Stuff............................Green / Yellow [doodles +5-0 / Lube > 70]

Tin Box:
Position....................................100% socks.
Stops [$SPX].............................Alert: 1289. Trail: 1276.

Iran expected to respond to UN demands to halt urainium enrichment today. They are already signaling defiance. It will be interesting to see how that may effect the market.

Someone is calling for a recession....

http://news.yahoo.com/s/bw/20060822/...20060821478985

German indicator bodes potentially bad news in the future....
http://news.yahoo.com/s/ap/20060822/...ermany_economy

Hey, I'm just reading the news and this stuff pops uppp

Heres another....lowes forcasts on corporate profit...
http://news.yahoo.com/s/nm/20060821/...lowes_earns_dc

PAUL B. FARRELL
Tipping point pops bubble, triggers bear
Ten warnings the economy, markets have pushed into danger zone



By Paul B. Farrell, MarketWatch
Last Update: 8:18 PM ET Aug 21, 2006




ARROYO GRANDE, Calif. (MarketWatch) -- You heard the pop! Forget the happy talk. We just crossed that crucial tipping point, popping the bubble, signaling a bear. Why? The Fed halted interest rate increases.

http://www.marketwatch.com/news/stor...ist=RNPullDown

Paul Farrell says this about the markets....

http://www.marketwatch.com/news/stor...ist=RNPullDown

The Kingdom of TSP
Daily Edition
August 22, 2006 Closing

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Pro-Yak....................................Mixed socks spooked on maybe more rate squeeses!

Con-Yak...................................Lube refigures over 73!

Jester-Yak................................Iran could be ready to yak?

Doodles:
Socks [$SPX] Closed at..............1298.82, up +1.30
Volume (CMF) (money flow).........+0.085, decreasing.
Averages (MACD) (trend)............+9.334, increasing.
Momentum (S-STO) (signal).........93.14, high.
Strength (RSI) Overbought/sold....[70] 63.20 [30]

Lube (NYM) Closed at..................73.10, up +0.20
Oil Markers................................<70= ok, 70-75= worry, >75= panic.

Tea Leaves:
Charts & Stuff............................Green / Yellow [doodles +3-2 / Lube > 70]

Tin Box:
Position....................................100% socks.
Stops [$SPX].............................Alert: 1289. Trail: 1276.

Technician and Pilgrim,

May I suggest you better run through the Jungle and don't look back. CCR.

Dennis - permabull #1

Originally Posted by The_Technician

German indicator bodes potentially bad news in the future....
http://news.yahoo.com/s/ap/20060822/...ermany_economy

German investor confidence fell to its lowest level in more than five years this month, pointing to the risk of a "considerable economic downturn" in the near future, a leading institute said in a survey released Tuesday.

Sounds like another good contrarian indicator.