Thread: Tsunami's Account Talk

Originally Posted by Tsunami

Tom McClellan is also pointing to a potential early August major top using a different method. Hmm.

The Magic of 150 Months - Free Weekly Technical Analysis Chart - McClellan Financial

My favorite Elliott Wave guru "PUG" (stands for Purdue University Gridiron) is also now calling that the top is in or very near... I can't wait until what comes after this decline since that long wave 3 bull rally will make the retirement years stress-free financially. I like that so much, I think I'll "like" my own post LOL. First order of business though is to avoid this coming decline, which is why I've been so careful lately and am back on the lily pad.

https://pugsma.wordpress.com/2015/06...rt-wave-count/

An interview of McClellan's view, which most "experts" are making fun of, a good sign he could be right...
Technician Tom McClellan: Market in Final Stages of a Topping Process

One of the interesting questions to me is "If everyone is predicting a downturn as a result of prior trends based on technical analysis, will that change the behavior of the market?" Have we already unwittingly modified our behavior in a way that avoids or delays a downward cycle? IMHO, to be able to answer those questions borders on science fiction and it will be fascination to watch the way this next year unfurls.....that is sailor speak...

FS

Originally Posted by FogSailing

One of the interesting questions to me is "If everyone is predicting a downturn as a result of prior trends based on technical analysis, will that change the behavior of the market?" Have we already unwittingly modified our behavior in a way that avoids or delays a downward cycle? IMHO, to be able to answer those questions borders on science fiction and it will be fascination to watch the way this next year unfurls.....that is sailor speak...

FS

Well, one should take into account that 'smart' money isn't drawing lines on charts...they're using expensive software algorithms. My point is that everyone isn't doing the same thing.

I suspect these algorithms predict what retail will do based upon retail-t/a and act 'accordingly.'

Nice post and articles Tsunami. I hate letting the negative thoughts creep in because we're still in a bull and you don't fight the trend. Still makes sense to be wary. One very simplified chart I can't help looking at is the S&P on a monthly basis, especially after the MACD rolled over in January.

2XTOPBKOUT.png
You have to ask yourself, "If I pretend just for a minute that this is a daily chart ... not some monthly going back 20 years ... if this was a daily chart, what would be my thinking right now? What actions would I be taking to protect myself? What actions would I be taking to position myself to take advantage if it heads the way it looks?"

I'm not panicking, but I do want to be ready for it. Watch current events close as well, as a major world event could easily be a trigger mechanism. Being realistic, I think a visit down to 1600-1650 (the previous double top, now support) by mid-2016 to early 2017 is likely, and possibly down to 1300 beyond that. Also makes the election year and new administration in 2017 even more interesting, with lots of implications for the winner. Definitely want some deployable cash in hand for when that happens.

Good luck!

Originally Posted by userque

Well, one should take into account that 'smart' money isn't drawing lines on charts...they're using expensive software algorithms. My point is that everyone isn't doing the same thing.

I suspect these algorithms predict what retail will do based upon retail-t/a and act 'accordingly.'

Regarding "smart money", the big commercial traders have been bailing out at an increasing rate, leaving the small traders to hold the bag at the top, as usual...

YTD Cum Money Flows By Client Type 6-23-15 Photo by gridironsaints | Photobucket

Another thought, I don't think it matters at all which way this Greek mess goes. Deal or no deal the media will probably point to Greece as one of the primary reasons for the coming correction.

From my point of view, I'm so close to retirement now I just don't want to screw it up and the ~2.5% possible upside from here versus the 25% or so downside I see isn't worth the risk until the ending diagonal pattern is broken to the upside. So I'm out until that happens and will gladly give up a couple percent, then get back in if I'm wrong. I smell a top though and hope to get back in somewhere in the vicinity of the bottom next year around 1575 as those two previous tops are test as support (and I will also attempt to grab 5% or so on the upside when we get the typical wave B bounce in the middle of this correction, which could likely occur this fall and result in a flat or slightly positive 2015 overall)...then I will set it and forget it (with something similar to the portfolios Paul Merriman touts VANGUARD TAX-DEFERRED ETF PORTFOLIOS - Paul Merriman but without so much in foreign stocks or bonds) and sail off into my retirement years on that long bullish wave through the 2020's.

A break below 2100 starts to increase the odds greatly that the top is in and that's just points away. If you just stand back and look at the forest, and look at the slow rolling top formed over the last year, that's a classic topping pattern versus the "V" pattern you get at panic bottoms. Just my opinion, and we'll know within a few weeks if this is the end of the bull in this 7-year cycle.

The Baby Boomers gave us the boom of the 1980s and 90s...we can thank the Millennials for the next spending wave and stock market boom from 2017 to the 2030s.

US Economy About to Get Hit by Largest Generation in History | Cris Sheridan | FINANCIAL SENSE

Really? I heard somewhere that Millennials are avoiding Wallstreet and corporate America because of what they saw happen to their parents. In many cases mom & dad lost their jobs and their 401Ks at the same time. The trend is that the 20 & 30 somethings are now more inclined to invest in themselves and start their own business. I'll have to see if I can find that article again.

Originally Posted by Cactus

Really? I heard somewhere that Millennials are avoiding Wallstreet and corporate America because of what they saw happen to their parents. In many cases mom & dad lost their jobs and their 401Ks at the same time. The trend is that the 20 & 30 somethings are now more inclined to invest in themselves and start their own business. I'll have to see if I can find that article again.

I'm not referring to Millennials buying stocks (although many are, my 24 year old daughter just made her first contribution to a Vanguard IRA), it's the coming wave of them buying diapers and toys and cars and iPads and phones and chicken wings and anything you can imagine. This new spending wave will be larger than the baby boomer spending wave was and it will drive corporate America (and thus stocks) higher for over a decade. Meanwhile the boomers are spending more of their money on healthcare and keeping that segment roaring. Demographics drive the markets more than any other single factor I think. Just look at Japan, and now Germany is facing the same fate as they age and resist immigration. The U.S. is in better shape comparatively (which is another factor that will drive U.S. markets higher compared to Europe and other demographically-challenged regions) thanks in large part to the mass immigration we've experienced. Sure, the Millennials are in poor shape financially compared to their parents at the same age, but the sheer size of the generation will soon overcome the money being pulled out of the economy by boomers.

I wish I had an IFT left for June, I would have gotten in today.

The fear/greed meter is at extreme fear levels, index's approaching the 200 dma, Elliott waves say to at least look for a bounce back up to 2100...but there's still a decent chance of getting to new highs and getting that final top in early August.

Here's some astro stuff and cycles that point to a bottom early this week: Raj Times and Cycles

And if the S&P can close below the Bollinger band today, we'll have both a VIX and S&P step 1 buy setup for tomorrow per this chart:
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Originally Posted by Tsunami

And if the S&P can close below the Bollinger band today, we'll have both a VIX and S&P step 1 buy setup for tomorrow per this chart:
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Ended up with two out of three buy signal step 1's for the S&P 500 on that chart, but we got the trifecta of buy signal setups for the Nasdaq today. Should quite an explosive rally the next couple of days. I bought a boat load of QQQ calls at the close, gulp. Hope I'm right about the big rally.

$NAAD - SharpCharts Workbench - StockCharts.com

No guts no glory I guess. I won't be able to enter the IFT until this evening in the tracker (security system at work blocks it) but I just went 100% C before the deadline. I could be buying right at the beginning of a wave 3 down though. Gulp.

The divergence in the NYMO indicator (above the last lows at -60 and -55, while the S&P is lower) tells me a strong move up is probable, if it holds into the close today:
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