PST
August 21,2010.
Extremely high probablity that this is
the end of the entire equity move up from the bottom in March 2009.
Gold , however, has hit our first target of 1250
several times. But it has years yet to go in its megatrend up.
For stocks-SELL SELL SELL LONGS.
Shorting broad sectors,however, may be yet risky as the FED may rejigger one
last gasp.
Th most obvious weak stocks likely to work as
shorts are the for profit schools being currently sued for
fraud.
June 28,2010
Short term oversold, longer term dangerous
for stocks.
June 18,2010
Those who forget the past are
condemned to repeat it. That is a famous quote from Santayana. And here we have
the reason why the bull market in equities is on its last legs, even if we are
able to make one last high late August, as seasonality suggests. You always sell
the next to last top, as all boats don't float to the top after a major
hurricane.
June 17, 2010
In my opinion, the risk is now high for another
stock decline, due to over bought oscillators and rebound cycle
duration.
SELL
SELL
SELL
May 31, 2010
Extreme oversold readings in all oscillators will likely produce a
rally, but the bigger picture is unfolding as we predicted months ago. Time
is running out on the bear market rebound which started March 2009. The FED
called Goldman Sachs in for a talk that month and said they would reliquify
so Goldman could distribute stocks at higher levels, so the big banks could
pass risk onto the public, who would be inclined to spend once they saw
their 401K's rebound.
April 2010 saw the top of this last rally, and the mid-May rebound only
hit the moving average, not making it back to the top band.
We did sell off in the predicted time period. After a likely rally now
from extreme oversold conditions, we will most likely see a new spike top
from lower levels, with the next low in the June 11-20 period, which will be
even more oversold.
China looks to have topped as well- look at a 3 year China ETF chart.
May 3,2010
As said before, after this weakness is over,
which is due to the periodic 13-14 week cycle bottoming, which should be soon,
we will head to a May 19 peak, after which the best correction in some time
should occur.
The unheard bell of the next bear leg is
already tolling for late summer as THE last top.
Why?
More and more money is chasing fewer
and fewer winners, both in iindividual issues and in country
ETFs.
April 22, 2010
As we predicted weeks ago, the market,
after a short early March correction, ( SPX Chart) we were to head to a May peak.
Now we are due for some more hesitancy, before the
final push up, first into May 8-9, then a pullback, then a final move up to May
19, before the best correction in some time will
occur.
March 5, 2010
These little intraday pullbacks are
leading to a final test of the previous high areas in the indices, which will
result in a short term top on March 8, and then a decline. Short term traders
should sell into strength here, as we have several days notice of an impending
top due to momentum changes.
After the decline, we will build
a base for rally into May.
March 3, 2010
Market tired should pull back
now
February 25,2010
Complex trading range is in store,
with near term 2 more tops and declines, all setting up a basing pattern for
eventual rise into May.
February 22,2010
A manipulated rise in
almost all indices to the moving average. Now comes the big battle. We
are somewhat over bought; look at the CCI indicator.This is where
numerous long term lines cross, and traders are watching this line in
the sand.
There is a bullish bias in
March, generally, after a February decline. We must watch carefully the
behavior after expiration to see if the normal weakness morphs into a
continued rally, or if instead, Goldman Sachs' overbought position and
likely fallback is a "tell" for a retest of the 1060 S and P 500 area.
In spite of this, we are still headed to a top in early May, of significance.
February 16, 2010
There is a symmetry hit date on Feb
17; momentum suggests a short term top is about 5 or 6 days from
Friday, indicating a top could be in the time window next Wednesday through the
following Monday. History indicates that a/d line trend breaks in a bull
run after a major bear market usually require more than a month after the break
for a sustainable low.There are 9 similar instances.
Therefore, it is likely we will have a short term
top in the indicated time window followed by more decline until a base is built
for the projected rally into early May.
February 12, 2010
About 5 more days up before downtrend
reasserts is likely.
February 10, 2010
We are entitled to rally up
towards the 65 day moving average, but likely it will fail, and most likely we
will continue to sell off after the holiday. Market is searching for a bottom,
but the panic level isn't yet present that allows pros to buy from the public
cheaply enough to make it worth their while to stage another
rally.
February 8,2010
Short covering and tape painting by the manipulators was Friday's story.
The market is entitled to rally a bit, but the bottom isn't in yet. We are
looking for a good bottom with some nice panic and positive
non-confirmations of the lows. Again, it isn't here yet.
February 5, 2010
Terrible failure to rally above trendline
means no buying of long positions is possible until we have a confirmed
bottom.
February 2, 2010
We broke support, and now should
expect a bit of rally before resuming march to lower lows below broken
support. Important day is February 8 or 9; if it was a high,
it is likely it would mark the start of the next leg
down.
January 29, 2010
Violation of 1085 S and P 500, as
discussed, kept us out of attempted long positions;long term moving average
is now resistance.
January 28, 2010
Looking for oversold rally into about February 1.
If 1085 S and P 500 cash holds this bounce is likely.Stopped out of TDF for 7%
loss from the highs, that's a good filter for a moving stop to keep profits.
China showing distribution.
January 26, 2010
We are very oversold and yet not
rebounding yet. Yesterday was a bounce caused by traders covering short
positions, but the close was weak, showing pros selling the little rally. No
sign yet of a turn around, and global markets are weak also. Notice
what the pros do at day end-3.30 or so to 4pm. Until that downtrend is
broken, we have a short term bearish condition. What we thought was a 5%
correction starting the 19th now appears headed to 10% or
below.
January 25, 2010
We got the predicted decline on the
19th January. It was calculated to be about 5%, within the context of a bull
market series of tops, culminating in the momentum peak late spring,and
late summer for the final price peak.
What do we do if this is
wrong?
We employ stop losses. Many traders
use a moving average to decide where to call it quits, and take a small loss,
rather than getting wiped out, like in 1929-1932, or in 1974-75. No analysis can
be perfect, although the momentum cycles have been highly accurate, as well
as the signals on the trading bands.
Lets say one has 100000$ in a 401 K or
a similar retirement vehicle, or in a stock trading portfolio. It declines-where
do you get out and sell, moving to money market or some proxy like a short term
treasury bill fund?
Many traders use 7% from the high as a final
stop loss. One can always buy back in if the markets recover.That would mean a
close below 93000$ would ask for a sell signal.
Never put faith in one analysis- always
admit that one may be wrong and use a stop loss to prevent losses. Each person
needs to monitor their holdings to determine where that point
is.
January 18,2010
No tag of upper band yet, so no
overbought top and retracement. We now need to look for 1167 S and P 500 cash as
the topping area short term, roughly 30 points away. Unless we explode on
Tuesday, the tag of the upper trading band will be later than the projected
19th.
Jan 12, 2010
11 30 AM
We said we'd tag 1150 S and P 500
cash as near term target before a pull back. We got 1,149.74.What's next? Backing and filling
in this current air pocket drop, then a rally.
Looking for a top about January 19 at about 1161 S and P 500
cash and a fast decline, with some fury. That's going to tag the mid band on the
bollinger, thus likely tag 1100.New highs will follow that bottom and subsequent
rally.
January 5,2010
Stocks such as TDF rising well above
strong resistance with consistant buying end of day are leading the
market.
A couple days down was followed by a strong close
as we indicated would happen. We are headed towards 1150 S and P 500 as near
term target.
December 30, 2009
8 AM
6 days up with a weak close means
likely some days down before a strong close negates the overbought
correction.
December 29, 2009
6:30 AM
We haven't
said much here recently, and the reason is that the period from mid-December to
year end was deemed to be seasonally reliably bullish, and so it has been, so
far. The mid-December lows came in at the 1096 area on the S and P 500 on
December 17, and now we are at 1128. Buying the 15th through the 17th would have
led to an average price of 1103, so... so far, that's 25 points to the
good.
Naturally,
readers want to know what will happen in January, and half the time we sell off,
and half the time we don't. However, the sell offs have, 90% of the time, been
accompanied by blatant and clear sell signals, which we don't see yet. If you
are short term oriented and want to take profits due to the 50% odds of a sell
off, then decide where you want to do so-today looks to start up as
well.
Will the major bear
trend return into, or in, January?
Readers are
aware that this is a huge countertrend rally in the macro sense-we haven't yet
completed the 40 and 80 year cycles which call for another leg down.But as of
now, we still have time to the upside. Momentum and time suggest the first top
as April end of first week, a more important top end of first week May, a summer
decline, and a final late summer final top, with the bear returning
then.
As those dates approach,
we will refine the exact dates of tops and bottoms using momentum
cycles.
We have been working on the
mechanics of setting up a model portfolio for here with real time posted trades
of specific equities, as well.
This will give readers something
more to read for entertainment in the new year. As always, this letter is meant
for general observations, and use your own advisor to make financial
decisions.
December 17,2009
Market is a little tired, due to last minute tax
adjustments and post FED positioning. End of year rally is statistically
reliable; short term picture is indecisive to short term over bought and curling
over.
December 7,2009
6 AM
Flat top will most likely eventually be
broken to the upside, especially since after mid-December the market tends to
rise due to FED intervention to support the holiday buying
season.
November 30, 2009
7 AM
Small stocks still weaker than
their larger cousins. IWM shows small business has problems, while large caps
are stronger.
The FED will do everyting
possible to avoid a stock crash during shopping season, including managing bad
news.Downside risk most likely is no more than 3.5% lower, at this point.
November 27,2009
With the FED determined to
prevent a holiday panic, and lack of retail holiday buying, all efforts
will be made to shore up the market when traders return in force on Monday and
Tuesday. Until then, and the beginning of next week, we could see a good drop on
low volume due to lack of participants, and the default of Dubai debt is the
reason. We will hope the plunge protection team will succeed, as it would be
unusual for a big bear leg to start right now.
November 23,2009
The market begins a seasonally strong period now
that has been fairly consistant since 1950.Don't go short. Monday has been up
during recent weeks due to reinvestment of large
institutions.
November 19,2009
Overbought on oscillators, at top of channel, time for a pullback, short
term players could take some long side profits here, another down day
confirms some profit taking will occur.
November16, 2009
We see a split market-some areas, such as the small stocks, looking weak,
and some areas looking strong. Non-confirmations resulting from the split
market abound.
However, many indices have moved back above important moving averages. Will
the FED allow the market to break down at the start of holiday buying
season? Not if they can prevent it.
Many advisors are bearish, due to the split tape, and low volume.
Volume fuels rallies, and low volume spells trouble.
Traditionally, however, we start a seasonally bullish period now; the
start of options expiration week, and the FED induced /media induced "good
news" that inspires holiday shopping and credit card use. The fall decline
was well-managed, and we got a selloff from about 1100 to the 1039 area.
Resistance on the S and P 500 is about 1107; and the advances versus
declines have put in a double bottom.
As long as we do not break the double bottom and 1107 is exceeded soon we
cannot be bearish, as billions of institutional cash is waiting to be
deployed if the bottom holds and the highs are exceeded.
Don't go short here. If 1070 S and P 500 holds, and we can take out the
highs, we have to be bullish. So far, the professionally-managed parallel
channel is holding. A break of it would be bearish, but it hasn't happened
yet.
November 11, 2009
8 15 AM
Overbought, due for some pullback, possibly towards the lower ascending
uptrend channel. Inability to crack the channel means it is still
well-supported.
There was a top September and again in October in the range of 1080-1100 S
and P 500, but unless the uptrend channel is cracked violently to the
downside, seasonality makes it hard to recommend shorts.
No new position,
but probably will have one Monday.
November 10,2009
When we examine over 80 years of market history, we must look at
seasonal patterns as well as market internals.
We got the fall decline, but it stopped at the midband, and didn't fall to
the lower band, as would be typical from the high level of evidence of the
split tape( some indices doing well, some under distribution).
We saw evidence the government would do anything possible to avoid a
break of the advance /decline line, even enlisting W.B. to announce a big
buy at a pivotal day.
Another major non-confirmation was hit on yesterday's tag of the upper
trading band, using number of issues declining.
But does the FED want a stock panic before the holiday shopping season?
Don't think that would sit well with big business.
So, at this point exceeding the resistance is bullish, seasonality after
the next 2 weeks is very bullish, and market internals are still horrible.
These contradictions are why we removed the short IWM suggestion before
the last rally.
No new position at this time.
November 6, 2009
7 35 AM
When markets fall hard, as we did from the 1100 S and P 500 area down to
the 1030's, we get oversold readings, commonly followed by short covering
bounces.
Stochastic reversals from oversold can be violent and catch the eager short
position owners unaware, causing more buying, and buying feeds on buying.
The longer term trend has been up, and we suggested shorting was risky, even
though a decline was due. Now we are back up near the 1070 S and P 500 area,
and the market LOOKS strong, and some much shorter term indicators gave a
buy on the reversal. So what do we do?
Downside risk is still about 940 S and P 500, and upside the current channel
tags 1120 or so, and the market has been a slave to this channel, suggesting
it is manipulated, and that the FED is well aware that a break of the
support would be bad for the normally bullish holiday rally season.
In prudence, we will remove the short suggestion which was to short the IWM,
weakest of the indices, on the retag of 1070 or so on the S and P 500, thus
using the IWM as a proxy for shorting the S and P 500. We never got there..
But buying right now isn't prudent... there are still too many red flags of
declining volume, etc, to feel comfortable. At a crossroads, we could go
higher or turn Friday and head back down. All this up and down and back and
forth is not normally very bullish at rally price highs.
4 30 AM
November 2,2009
So ...we have the top at 1100 S and P 500 in September 23, and again
October 14-22, a rolling, slow, "sell- to- the- good -news- fools" top that
caught many unaware. Of course, the bad news that is causing massive
professional dumping of stocks will come out later, as it always does. We
suggested trying to short the reaction rally to 1090 but only got 1070 or so
before it sank
Now we are oversold so we should try to rally soon, or it is going to be
lemmings jumping cliffs.But if it does rally, you don't buy, as it is
another chance to sell.
If you want to try to short it, pray for 1060 to 1070 S and P 500. Use
IWM as the short, that is, short IWM if we tag 1060-1070 S and P 500, with a
3% stop loss.
Its going to fall more- no question about that. A/D trendline break was
the final clue, as mentioned previously.
October 27, 2009
Looks like the rolling top may have rolled over. The channel of advances
has been broken. Even if we do attempt a rally, anywhere in the S and P 500
1090-1100 area looks like a good short, using the proxy IWM As always, be
aware market makers eat shorts for lunch, so use tighter stops than normal,
when attenpting to short a comeback rally.We may not make it back to the top
area.
It looks so far as if we nailed the top.
October 23, 2009
It is still likely we are in formation of a
top and rollover process. Attempts to short the market, however, have been hard
due to panic short -covering by eager bearish investors.
Another thought we might
advance would be to wait to short the market until the declines
overtake the advances in the current trend.. That hasn't happened yet; shorting,
therefore, is still early as of yesterday's action. We will continue to watch
this and post when the most ideal point for shorts is
reached.
October 22,2009 SELL SELL SELL
Yesterday's reversal fits all the conditions for the TOP and sell
reversal. It would be wise to sell any remaining positions in US stock
indices. Yes, we were early... yes, we sold at 1083 S and P 500 cash instead
of 1100...but we had 5 chances to sell into strength...always sell BEFORE
the top.
Shorting rallies now with tight stops is in order.Make your own
determination what risk level you are comfortable with.
YES, yesterday WAS the TOP...huge amounts of money by pros is leaving
rapidly...and we called it early by about 20 S and P 500 points and 8 to 10
days...next time maybe to the exact minute...
October 12, 2009
Things are overbought on all measures. Valuations, fundamentally, %
above moving average, time elapsed during rally phase, etc.
Momentum is falling as is volume (or "oomph" to the move).
After examining over 30 charts the best conclusion is to stand aside,
having has 3 chances to sell in the 1080 cash S and P 500 area, and here is
the latest one.
If the last few points are missed so be it. Yet shorting without screaming
divergences is risky, so don't short although a drop is scheduled. Market
makers can still eat you for lunch, as they have been doing recently to
shorts.
October 9,2009
We will have an extended post on the weekend, but for now the position is
as follows:
The bullish case is that end -of -day buying is still strong, and we
aren't yet back at the upper part of the wedge where blatant sells have
occurred at the last 5 touches.
The bearish case is that seasonality and time elapsed since the last
major correction imply one is due any day now, and volume is dropping,
indicating fewer believe the rally has safety.
When we computed the place where time and price coincided along the
wedge, it centered on mid-October, where we hoped to see sells screaming in
all technical windows. We sold at 1083 S and P 500, and that was end of
September at the two available tags of that price.
We are now at 1065.
So for now, don't short and don't buy. We will see if another leg up
occurs soon enough. More on the weekend- the entire case for bull or bear.
October 6, 2009
7 00 AM
The recent pop off the arms spike gives a better feel for the top and short
date.
Oct 14 is still probable as the top but it is wise to be out of any
remaining longs by Oct 12 and begin speculative short positions on the 12th,
as long as prices are still rising.
October 5, 2009
7 20 AM
Spike low Monday highly probable, then from that oversold low, the rally
will likely begin that finishes and tops on October 14. May even spike to
1013 S and P 500 cash before last retail investor is cashed out by the pros.
October 2, 2009
7:45 AM
We received numerous questions today from readers who asked-"could the
September 23 momentum top at 1080 S and P 500 have been the price top as
well?"
Well, if it was, we are in great shape, as we sold long equity positions
INTO the top, scaling out GRADUALLY to avoid getting caught on the
downdraft.
We did say 1080 was the target, and we had a chance to sell there again on
September 29 as well as the 23rd.
What if we missed the IDEAL place to short? Then you will have nailed the
profits down on the long side of the ledger, as we are now at 1029, and
merely await the next opportunity.
Actually now we are quite oversold, so don't short as it is very high risk
when a snapback rally is over due.
Time still suggests another top on October 14, which is where shorts will be
reexamined for high probablity of profit on numerous nonconfirmations as
they occur.
Learn to wait for the ideal setup...
Always sell early in advance of turns...
Scale in, scale out...
October 1, 2009
End of day buying the dips is weakening. That means the pros are getting
ready for the October decline.They have been selling into the end of
September, as we suggested, all the while preparing for the coming drop.
September 28, 2009
We got the end of September momentum peak as suggested. Now the next rally
is the one you sell your remaining short term equity positions, if you
didn't already gradually into the end of September momentum peak, as was
suggested. We will get a rally sometime soon, which will attempt to draw in
more of the curently more bullish public who have been told by the news
outlets that its safe to invest again. So you do the opposite, knowing that
tme and price will soon intersect in October for a 7.5-15% correction.
Readers here know not to hold to the last day, but to scale out near tops
and prepare ahead for trend changes. Leading into October 14 we will get a
tradeable top and the predicted decline. The 14th is the best calculation
for the shorting date, but the sell longs early advice was more easily
implemented.
September 23,2009
Momentum is slowing, as we expected, no top yet though.If they decide to
really kill the bears we could overthrow to 1120 S and P 500 cash. We are in
the 1063-1080 area we looked for, but its possible we could bust above prior
to the Oct 14 top date.
September 15,2009
7 40 AM
Pullbacks have occurred but are during
the trading day, and met with end of day
professionals
eating the public short positions, all the while they are quietly
hedging
for the fall decline to come. We will see at least 1063-1080 S and P 500 cash before
pros sell their positions
end of September, and move to net short by
mid-October.
September 10, 2009
7:15 AM
S and P 500. Overbought sort term, pullback a bit likely, but top is not yet
in, as non-confirmations are not yet screamng at us.
Gold, if above 1030 for 3 days, in spite of world govt. wishes, projects
1285.
September 7, 2009
Now oversold, we will likely rally from the moving average here. Bollinger
bands tend to contain moves, so a move towards the upper band is likely next
in store for the S and P 500. Remember the larger picture- this next move up
is setting up for the fall decline of over 7% from the top of the bollinger
band to the lower band, straight through the moving average... so, pros are
selling into the next rally or two and distributing stocks on strength
gradually to the public and slow moving institutions. Two important dates
with trend turn significance are September 14 and October 14.
September 3,2009
Two weeks ago we saw a decline in the S and
P 500 to 979.73. The recent decline hasn't gone there, or gone below that point.
If we hold here and rally, we can have one or two more higher tops before the
fall decline of over 7%. If we break here, and then rally from much lower
levels, you sell the next rally.
August 31,2009
The big picture:We are in a mini-bull market that is a reaction to the
vastly oversold bear that started in 2007 and bottomed about 17 months
later.The bear will resume its down path likely sometime next year after a
long topping process.
The intermediate picture: We are setting up for a fall decline of at least
7%-a full and sharp, scary decline from the top of the bollinger band to the
bottom.
The short term picture: We suggested selling for short term traders
approaching near 1039 S and P 500, and 1035 was tagged before profit taking
occurred. On Friday, the 1039 was tagged as predicted. We could still rally
next week into the institutional reinvestement date of September 4 near
1048, but we are due for 5 days down soon, in a zig zag pattern.
Don't short.
August 25,2009
Tagged 1035 S and P 500 - close to the predicted target of 1039, then we sold
off a bit. After the short term profit taking, yes there will be higher
highs, yet what is the big picture?
There will be a full bollinger band correction this fall, of 7% minimum from
top to bottom.The top date and price are not yet apparent, but 3 things make
this a certainty. Seasonally, the number of days from previous lows and
highs suggest this will happen.
Sentiment suggests this will happen.
Rate of change reverting to mean suggests this will happen.
September/October will see a top and decline.
Soon the date may be more exactly calculated, when more data comes through.
Cross currents end of month/beginning of month have to be factored in first.
August 24, 2009
Short term S and P 500 top approaching near 1039, followed by another
pullback.Near 1039 is good place to sell for short term oriented traders,
selling as it is approached.
August 17, 2009
The recent zig zag pattern isnt over-expect one or two more down days before
the rally resumes.
August 12,2009
Apparently we've topped Friday -Monday, and begun to correct. The next step
is likely a correction of deeper dimensions-at least 9210 -9000 DJIA. One
more attempt at highs will occur after the correction.
August 11, 2009
On another note, the global consensus on a warming trend has found a
serious researcher who shows that 100 years of COOLING may be next. His long
term forecasts are so good bookies won't take his bets, and farmers buy his
data. Look at these links, and think about the longer term implications for
grains...
www.weatheraction.com
