Thread: Market Talk / Feb. 4 - 10

Febuary 4th, 2007
Market Update:
By Dominick


It wasn’t easy to present yet another update last week that anticipated additional highs in the face of an outside down week, which has a great track record of being correct. The January 28th update stated:


“Could the reversal looking pattern only be part of a larger correction that’s stalling for time? When I look over many of my charts, the answer that pops out is yes. So, even though I can label a top is in, I won’t do it yet for several reasons. The sentiment on that drop wasn't what I wanted to see and, believe it or not, I have two very valid setups for additional highs. Another huge leg up isn't in the cards, but I'm not about to be short prematurely into the squeeze of all squeezes and get taken out of the position minutes before it turns.”


Once again, the market had most traders convinced last week the top was in only to leave them on the sidelines or, worse, short. It’s amazing the market simply won’t pull back and continues to grind upward leaving no one a chance to get in cheap.

I’m sure sentiment has played its part in recent weeks and is still fueling the markets’ move higher as the old tops appear on the radar screen. Last week started with some decent sentiment readings, but closed with everyone again throwing money into puts trying to be top pickers. Of course, sentiment can change in a day, but that’s what the numbers read as of Friday’s close.

Still, an interesting development occurred as a different tune arose from the bearish camp late in the week. Every single bear I spoke with on Thursday and Friday now wanted to buy after having fought the relentless upward move every day, week and month since June. All of a sudden, the S&P has hundreds of points to rally, and quickly. That, my friend, is the smell of capitulation!

When the bears capitulate, it’s usually the sign that we’re topping. Short term, sure, you can still make some money on the long side. But for the most part, these were not short-term trades I was hearing from the former bears. I think an exaggeratedly bullish view can be as bad as an unbearably bearish view, so I’ll pass on the idea of a several hundred point rally from here and work with something a little less biased. In fact, I think I’ll stick with last summer’s idea that I thought the ultimate target for the NYSE was a hidden Fibonacci magnet of 9314.

http://www.tradingthecharts.com/phpB...pic.php?t=1521

Originally Posted by robo

Febuary 4th, 2007
Market Update:
By Dominick

Still, an interesting development occurred as a different tune arose from the bearish camp late in the week. Every single bear I spoke with on Thursday and Friday now wanted to buy after having fought the relentless upward move every day, week and month since June. All of a sudden, the S&P has hundreds of points to rally, and quickly. That, my friend, is the smell of capitulation!

When the bears capitulate, it’s usually the sign that we’re topping.

http://www.tradingthecharts.com/phpB...<br /> <br />

Hummm...

1. Colts beat "Da Bears."

2. Tokyo begins the trading day with a downward thrust. Nikkei now down 0.91&#37; as of 10:22 pm. eastern time.

That's the one-two punch that will lead off to lower prices Monday.

Will Monday be the day for "Da Bears" to emerge from Chicago, and go roaming around Wall Street?

Growl.

Originally Posted by James48843

Will Monday be the day for "Da Bears" to emerge from Chicago, and go roaming around Wall Street?

Growl.

I do believe so! At least for the (I).

SINGAPORE (AP) -- Oil prices rose Monday in Asian trading as market participants anticipated a jump in fuel demand prompted by a late winter cold snap in the U.S. Northeast, the world's largest heating oil market.

Light, sweet crude for March delivery rose 5 cents to US$59.07 a barrel on the New York Mercantile Exchange midmorning in Singapore.

If overseas is any indication of whats in store for US markets Monday prepare for a drop.

Originally Posted by mayday

If overseas is any indication of whats in store for US markets Monday prepare for a drop.

Hoping for a drop.

Originally Posted by weatherweenie

Hoping for a drop.

If R2K falls anywhere near 795 or SPX falls near 1435 I'm jumping back in.

08:00 am : S&P futures vs fair value: -2.7. Nasdaq futures vs fair value: -4.8. Per usual for a Monday morning, there's some M&A activity in the news. Triad Hospitals (TRI) agreed to a $6.4 bln private equity buyout while State Street (STT) agreed to buy Investors Financial (IFIN) for $4.5 bln in stock. However, with the Dow, S&P 500 and Nasdaq surging 1.6&#37; on average last week, such sizable gains are prompting investors to take some money off the table, setting the stage for stocks to open on a downbeat note.

Another one of my precious ones is being bought out - saves me from having to choose which one goes. I do want a higher price for it though, so we need another bidder to pop up. Dow getting ready to go positive.

The DJUA is at a new all-time high of 462.25. Snort.