Blog Comments

  1. Bullitt's Avatar
    I figure it's about mid November that it started. I know this is one of many in a bear market, but we are in a 'confirmed rally' according to IBD's rules. The projected upside could be around 1000 as well if the reverse H&S is still in play.
  2. tsptalk's Avatar
    Thanks Anthony - yes, triple witching will make things even more interesting this week.

    Bullitt - where does that C&P start, mid-Nov? Or is it bigger than that? Thanks.

    The problem with C&H and head and shoulders patterns, is that they are not as effective in downtrends.
  3. Bullitt's Avatar
    Tom, I can't help but to notice a possible cup and handle forming with a pivot price of about 900 on the S&P 500. What do you think?
  4. anthony's Avatar
    That should keep things hopping this week. It also happens to be an options expiration week, which has a positive bias, but can also be volatile. If that's not enough, tomorrow (Tuesday) there is an FOMC meeting and the Fed will tell us what they plan to do with interest rates. So yes, it will be an exciting week, if nothing else.
    Tom, of note, as I'm sure you know, it's also "triple witching" on Friday, with options, equity index options and equity index futures all expiring. Should be an interesting week.
  5. tsptalk's Avatar
    The strength in the dollar has been tough to gauge. We are diluting it here yet the weakness is the euro, pound, etc., make it look relatively strong.
  6. Bullitt's Avatar
    The US Dollar is now showing major signs of stress. I'm playing for that H&S in the $USD to come to fruition along with a bounce in Oil here. Long Oil via ETF at the open today.

    Commodity producing stocks have established strong positive divergences across the board in recent weeks. Something to think about...

    Who knows, stranger things have happened as we're seeing in US Treasuries, so I won't be surprised if the Dollar blows back up to new highs some time this month.
  7. tsptalk's Avatar
    The S&P cash has held up better than the overnight futures did, staying above the new uptrend support. So far so good, but let's see if can hold into the close.

    We've had some crazy Monday's lately, both up and down.
  8. tsptalk's Avatar
    A little update...

    We saw a little break down today and now, judging by the S&P futures, the S&P 500 is in a do or die situation. If 860 breaks, 816 is the next level of support.



    See you tomorrow!
  9. tsptalk's Avatar
    True. And I like when people look at long term charts of something like MSFT, CSCO, ORCL, etc, and think that they could have bought them for 25 or 50 cents many years ago. But they don't realize that the stock was actually never priced that low. It just appears that way because of all the stock splits.
  10. Bullitt's Avatar
    Such a simple concept, valuations. But the lure of something being 'cheap' in one's own perception is why folks will continually be suckered into buying penny stocks.
  11. tsptalk's Avatar
    Agree. It sure looked like the dollar was going to do a typical C&H breakout. Now it is reasonable to believe that the best support is down near 80.5 - 81, where September's high meets the trendline.
  12. Bullitt's Avatar
    Is that chart a textbook cup and handle breakout or what? This could be interesting to see where support lies in the US Dollar chart.

    Now that the uncertainty in the credit markets has slowly been alleviating, I'm hoping for a progressive move back into equities from the US Dollar safehaven.
  13. Bullitt's Avatar
    Absolutely. Those are great points. Harry Dent had a great thesis as well but he was off by about 10 years. People forget that Peter Schiff was pumping China and commodities when he published his last book, Crash Proof. He also strongly recommended that investors put their money in foreign currency as well. Anything can happen in the future, but those who followed his advice are sitting in a pretty deep hole right now. Like most of the theories, sometimes the long run really means 'the long run'.
  14. coolhand's Avatar
    That's a big lesson I've learned Tom. All those fundamental arguments we see all over the internet only provide a theoretical economic landscape for the future. But so much can be done to manipulate the underlying principles that one cannot bet on any given chain of events. Even if one is right, there's the question of timing. It can and does take take years to play out many economic scenarios. I've been reading Mish Shedlock for years, and even though I've largely agreed with his positions on the economy, it does me little good to use it in any meaningful way to trade my account.
  15. tsptalk's Avatar
    There were a few people on this board basically laying exactly out what we are seeing, ala Peter Shiff. The problem with that is that you can't make money being 3 or 4 years early.

    The same situation will present itself on the upside where some folks will be laying out the bullish / bottom case for another year or two, before the market finally turns around.

    That is why I'm not big of the fundementals but rather in the technicals / charts. My return sucks this year but we have all been looking for the head and shoulders to break with targets getting lower and lower.

    The fundies tell us what may happen. The charts are much better at telling us when it happens. I just have to figure out how to make money with this information.
  16. Bullitt's Avatar
    Did you hear Peter Schiff say that this rally in the dollar will fail and it will eventually "collapse"?
    Believe it or not I've been a fan of Peter for a long time, even as the market was hitting new highs. Yep, I'm not surprised at his 'most recent' prediction. His idea of asset allocation is

    1. Buy gold
    2. Build a bomb shelter
    3. Store all your gold in a bomb shelter.

    Now the dollar can continue higher
    US Dollar failed it's breakout attempt today but is beginning to remind me of equities in 2006.
  17. tsptalk's Avatar
    You nailed that call. It looks like it wants to go higher. Did you hear Peter Shiff (sp?) say that this rally in the dollar will fail and it will eventually "collapse"? A little extreme, but he's been the broken clock that is finally right.

    Not to sound defensive, but I was looking for a short-term pullback to the 20 dma, 50 dma ,and possibly the support line. It only made it to the 20 dma but that was enough for the I-fund to outperform this week.

    This week's returns:
    C = -8.32%
    S = -11.86%
    I = -6.57%

    Now the dollar can continue higher.

    From last Friday's commentary:
    I am not saying that the I-fund will go up. But if the dollar does pull back, look for the I-fund to do a little better than the C and/or S funds - whether they are going up or down.

    I would look for the dollar to pullback to the 20-day moving average, the 50-day moving average, and possibly even to the rising support line, which would be a 2%, 6%, or 8% decline respectively from the current level. This is a short-term observation and all bets will be off if the dollar does reverse up and make a new high.
    Updated 11-23-2008 at 10:20 AM by tsptalk (updated returns thru Friday)
  18. ATCJeff's Avatar
    I mentioned that no one should bet against the uptrend the dollar is currently experiencing. The dollar keeps on rising. Unbelievable. Now, why can't I apply this simple analysis to my own trading. We are obviously in a downtrend, yet here I am watching my account balance deteriorate. I should have never jumped in the market back in October and again this past week. Why can't I learn? That's a rhetorical question. Today's results does help, but I still have a long road ahead to get back to my all time high balance back in September of this year.

    Have a great weekend everyone,

    Jeff
  19. tsptalk's Avatar
    I sure hope that we can hang in there today because it sure feels like something big is going to happen. I think it could be another "shwoosh!" down, but again, my fear could mean it's time to buy.

    I don't like the looks of this so I am going into hiding again for tomorrow. Perhaps we'll get a Thanksgiving rally, but I'm thinking I will have to miss it because we will head down first, and I'll be out of transfers.
  20. ATCJeff's Avatar
    I like the new rules.
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