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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


August 10, 2009
After a predicted series of zig zags ( after we closed above 950 S and P
500 higher highs were inevitable as we discussed) the market has gone from
overbought to short corrective patterns, soon followed by more buying and
higher highs. This week will likely see the same; that is to say, at least
one more high is likely this week, after short term corrective patterns. So
the upwards zigzags discussed after 950 S and P 500 have not yet lead to
anything so far other than buy the dips. Time cycles suggest this week may
see a short term top, followed by a deeper, more important, but still not
conclusive corrective pattern, followed later by still higher highs.




August 3, 2009
6 45 AM
After the small pullback we discussed, the higher highs we looked for have
arrived. Again short term over bought, but any pullback will still be
followed by higher highs.
July 28,2009
7 15 AM
The 3 days above S and P 500 950, which was a level accompanied by churning,
being significant resistance, gave way to much higher prices as suggested
here.
Market is a bit tired and needs to pull back a bit here.

July 16,2009
7 50 AM
3 days above the former highs 950 S and P 500 means the trading range is over and new highs will ensue. A false test of the highs and a break below 870 gives 824.
Posted July 15, 2009 July 14,2009
Broke support and went a bit further. Now we are in the counter move from oversold. However, the force of buyers is weak-there just aren't the number of players one would expect. A place to look for a possible down move may well occur at 902-912 S and P 500, or DJIA 8300-8500.

June 26,2009
Posted July 13, 2009
http://finance.yahoo.com/q/ta?s=^GSPC&t=1y&l=on&z=m&q=l&p=e50&a=&c=

Inflection point. The market has been trapped for a while, as we noted here.
Sellers come in at S and P 500 925-950, where we suggested selling, and
buyers have been buying the 50 day moving average, at 890. Now we MUST
rally, or fall to the lower band, near 820 or so. Have the market
manipulators sold enough over -hyped stock yet, and want to distribute it?
Cash from the TARP is still available, but perhaps Goldman Sachs senses a
time out for pushing it up higher. I wouldn't be a holder of a long position
if we crack below where we are now, or don't turn up soon. June 25,2009
7 30 AM
Tug of war. As before, an unprecedented flow of mega-billions during a
cyclical down period has put off the day of truth ( that only bankers have
cash to buy the market up). Short term, stochastics war with Goldman
manipulators, so below 880 S and P 500 is bearish, and above 925-956 means
more upside shenanigans. We suggested taking off some profits in the above
925 area, and nailed the to the 890's decline. And yesterday's bias here was
clearly to the upside. Now we have a war, with end of week cash flow which
tends to be positive for rallies, and still eager to take profits bears. No
clear answer as to short term direction, which you rarely hear here.

June 24,2009
6 30 AM
Trapped between 890-880 S and P 500 and 925-950 as support and resistance.
Now at the lower end so bulls will try to take it up, maybe with end of
month window dressing. Below 880 longs aren't safe;more pain will follow if
that's broken. We caught the to the 890's decline as predicted, and the time
element exactly-moving to support as would be expected. Now let's see which
way the big boys will move it.
June 22,2009
6 00 AM
Likely tag the 890 area on the S and P 500 near term
June 17, 2009
6 15 AM
Oversold short term...first predicted downside target tagged exactly at 35.58 region on QQQQ.What now?
A short oversold bounce up, but then, history since 1920 says the next week should see some more selling.The cash flow calender suggests this, as well as the rule that huge imbalances in downside volume ratios of up versus down issues on a down spike don't turn around immediately in 2 days, and immediately rally hard.
So; likely a bounce soon, then some more testing downside in the next 5 days.
June 12, 2009
6 20 AM
We could get a pullback to the moving average sometime soon-say 36.1 -35.8 on QQQQ (nasdaq 100), but that would likely be followed by more upside. Don't short.
930 S and P 500 held, closing at 945. If you are short term oriented and bought at 930 or below you could take some off.
June 11, 2009
Support in the 925-930 area so far is holding on the S and P 500.
However, this is a rally funded by TARP, and the trillions of created dollars washing around are going into bankers' pockets and then into commodities, and stocks. The retail investor will buy the tail end of this, as always.
What is the REAL picture?
Look at this link.
 

June 9, 2009
 5 40 AM
We got some minor pullback, but we are above the 930 S and P 500 for morethan 2 days as discussed, and the 200 day average. Big money ( the banks) is buying dips, not lending money to consumers. Shorts are looking at the 930 level, and that seems to be the line in the sand. This is a manipulated market- look at yesterday's close.As long as we stay above 930 the bullish case is valid.

June1, 2009
5 10 AM
2 firm closes above 930 S and P 500 means the Goldman program traders are going to force it high enough that the retail investors will be drawn in to buy-then it will dump.
Time and price still suggest a retracement here, but the Goldman boys are controlling the market with end of day shenanigans.
May 27, 2009
3 45 AM
After some more noise around the end of the month, a declining phase
should occur after June1. We still have resistance around 929 S and P 500.
May 22,2009
4 00 AM
As indicated, we headed lower, as predicted before the open yesterday. Open was 900 S and P 500; low was 879,close to predicted 875. Vix gave asell signal . If we rally RIGHT NOW, its likely a fake out that will enable shorting from a higher level. We still will see prices lower than seen yesterday.

 May 21,2009
Probably going to tag 875 S and P 500 in near future. Sorry for the long
hiatus - a fire in your dwelling puts the kibosh on any other concerns.

May 1, 2009
We are sorry there will be no updates here for awhile. He had a fire in his apartment building.
April 28,2009
6 10 AM
It wouldn't be surprising to see a test of the bottom of the channel at S and P 500 835, with possible throwover to 818.

April 22,2009
6 00 AM
 
Inflection point. Look at the S and P 500 and notice the channel. Big
buyers have bought the dips recently, and sold at the top of the channel.We
are near the bottom of the channel. Today looks to start down, then the test
will come.Will they buy the dip or will the channel fail?

Oscillators say overbought and it will fail.Recent history says they will
try to force it higher and eat the bears who watch the oscillators and are
shorting. Therefore, don't short and get eaten if they force it up again.But
overbought means a buy entrance is risky here.Therefore, this is a good time
for short term traders to do nothing.
April 21, 2009
6 00 AM  Prediction of a correction immediately in price and time on yesterday's open was followed with a 4% decline the same day.ALL traders made money on he way up in the recent rally, and sold before the drop. Don't short. 
April 20, 2009
4 50 AM
Although we suggested standing aside on Thursday last, having captured a
good profit on the long side earlier, we did get the direction right, which
was UP, and avoided shorting, which in spite of overbought extremes, would
have been fatal.

It's best to come a bit late to the party and leave a bit early. We have
6 consecutive weeks up, and stochastics, a measure of overbought/oversold,
shows extreme overbought. It should correct now, here, and fairly soon in
price and time.
April 16, 2009
5 15 AM
Although we are standing aside after a good profit on the long side, odds favor upside today in spite of overbought. Don't short.

April 15, 2009
10 30 AM
Selling the S and P 500, or equivalents from the long positions bought at815 on Monday's open gave us 852, or about 37 S and P 500 points profit,before Monday's and Tuesday's predicted decline. Standing aside for now. Don't short.

April 11,2009
When we looked at the market Saturday, the obvious thought was-pretty good job, nice entry, pat on the back,etc...
That should make anyone worried.The trading gods hate self-congratulation.
Then we looked further into the history of post-holiday declines after strong pre-holiday rallies. Did you know that
there were 5 times the S&P gained more than +2.4% the day before a holiday. Over the next week, it showed positive returns only one time. The standard return was -2.2%.
Hmm...too greedy?
Let's admit to it, and take the money and run. We are way overbought short term. Let's sell all longs on the open Monday, and hope for throwover from remaining bulls late to the party. Hopefully we keep the 40 S and P 500 points we gained.
After the correction, we will try to enter again at lower prices, which we will try to time correctly again. 
Don't short.
April 10,2009
So far its a very good buy entry. Close was 856.56 S and P 500, from the suggested 815 buy area. If we had hit 770 we would have "doubled up" the long position, following the big money. Protective sell stop stays at 814.50 for longer term players; if we correct hard we will be stopped out with a very small loss.Expect a big move next week.If you wish to move the protective stop up to hold your 40 point S and P 500 profit, and you have a shorter term profit goal, remember that pre-holiday moves often reverse the next week, so that might be wise. If you want to move the protective stop loss up for short term trading, consider the 830 area. Why so careful? Its a BEAR rally. Sentiment is too bullish. Pre-holiday moves often reverse. Its not yet a bull market. Weekend news sometimes makes for surprises Monday after a holiday.
April 9,2009

6 10 AM
Pre-holiday trading is random at best, due to few participants. Traders who went long at the predicted price of 815 S and P 500 got 2 chances, one at 814 and change, and the other nearby. Close was 825.16, 10 points to the good so far. Let's use the entry, 814.50, as a stop loss. This is still countertrend- a bear rally, and so, being overbought short term, and countertrend as well, we could lose our long position today or Monday easily due to being stopped out. but so far, its 10 points to the good.
April 8, 2009
Let's recap the action we have discussed here.Traders were advised to buy into the countertrend rally on the way up and not to SHORT it, as so many others were trying to do. We then said to scale out into the 8000 DJIA resistance area, by selling the S and P 500 or equivalents into strength, and multiple attempts at 8000 DJIA enabled that to be done easily and elegantly. We then said there would be a correction as the trade was too crowded and everyone was screaming "buy", and that happened. Now this is what we should expect...large money S and P 500 traders will ease into long positions lightly at 815-807,and double up if 760-770 is tagged. Next week will likely see FTSE and S and P 500 rise, and another attempt at closing above resistance. We should see a short term top about May 2.
April 3,2009
LIkely we will have a pullback soon to test the breakout, followed by higher highs, and tag the upper band, as we are close to the midband at this point. In addition, the new life in the CRB, the relative strength of NASDAQ versus S and P, and the falling of the dollar implies this stock rally can go further.
April 2, 2009
Change in accounting rules for banks may be enough to push us above resistance, especially if we get some weakness in the dollar. Next few weeks historically are strong. It appears that we will go above resistance and that the NASDAQ which has lead in price will win over the laggard indices which confused the outlook.

 
March 31,2009
6 25 AM 

Inflection point. We failed at 8000 DJIA, and we found support yesterday
at the fall lows of 7500. We were oversold long term, and overbought short
term.

We had suggested gradually scaling out of long positions bought during the
rally, bought admittedly not at the exact lows, yet unlike others, we didn't
suggest SHORTING the rally, as that was like pushing down on a balloon
underwater, an exercise against nature. So those who bought, all made money
and escaped the latest carnage once again. What to do now? We are still in
whipsaw world, as seasonality is bullish, yet the revisited numbers of 8000
and 7500 are indicating indecision on traders' parts. Big commercial players
are largely short at this point, indicating they are playing against small
speculators who believe the rally has legs, but the big players can be early
in taking positions as they must acquire size slowly to avoid tipping off
the public.Maybe its time to wait to see if 8000-8200 is exceeded, and stand
aside.At this point, ALL traders covered their hugely profitable S and P 500
shorts near the lows on the way down in the crash over several days,
comfortably and easily below 7188, and sold their longs bought on the way up
recently, into strength, near the recent rally top. No position recommended
now.

March 30,2009
Numerous non-confirmations indicate rising risk for long positions.We
suggested selling long S and P 500 positions by scaling out gradually into
strength during the last several days of this rally. Don't short. If we are
wrong, you will have sold "too soon", but another bus will come along soon
enough, so we will take that one, instead. Those who insist on buying at the
exact bottom of declines and shorting at the exact top can get caught with
one foot in the bus and one on the sidewalk-its exciting but not great for
your long-term health.The plunge protection team ( read the FED), and big
funds engineered this rally to make the end-of-quarter numbers look good,
for retail investors, to keep the genie in the bottle longer- (buy-and
holders who won't EVER sell).

March 27, 2009
6: 00 AM
End of quarter means the big funds want to avoid giving a heart attack to
their depressed clients,so they are buying their own holdings to make their
lists look better. After Tuesday they could well dump those same issues to
raise cash.

          March 25, 2009
4 15 AM

We got the 800 S and P 500 retest and the
throwover above Monday as expected where we suggested remaining longs be sold,
giving several opportunities before yesterday's retreat. Scale in, scale out.
Scaled out of shorts on the way down to 666 S and P 500 from 800, in that
excessively crowded field of bears, who got caught shorting this rally and gave
up all their profits. Now its all bulls and no one wants to sell, so we said
sell, but not short.
Likely now is somewhere soon to retest the breakout and 7500 -7200 DJIA, and then more probing of 7600 to 8000 DJIA. Don't chase the market here.

March 23, 2009
7 45 AM
Wait for some retracement on the S and P 500 before trying the long side. If we end up Monday, scale out of remaining longs on this bear rally. It isn't a bull market-its still a sharp bear rally.We got the 800 S and P 500, and we were down from 800 to 768 Friday. Now it looks as if we will try for 800 again,or maybe even throwover above Monday.

7 45 AM
March 20, 2009

(Note that he isn't predicting an immediate wipeout, but an eventual low below the recent lows)

An instructive read from the greatest hedge fund guy out there, posted on Yahoo..."Out of those four historical examples, Dalio says that our current situation most closely resembles the Great Depression because of the global breadth of the problems. But he doesn't like to use the term "depression." He thinks it's too scary, evoking as it does images of hobos and Hoovervilles, and distracts people from focusing on the mechanics of what is going on. He prefers to use a term he coined: "D-process."

Most people, says Dalio, think that a depression is simply a really, really bad recession. But in reality, the two are distinct, naturally occurring events. A recession is a contraction in real GDP brought on by a central bank tightening monetary policy, usually to control inflation, and ends when the central bank eases. But a D-process occurs when an economy has an unsustainably high debt burden and monetary policy ceases to be effective, usually because interest rates are close to zero, and the central bank has no way to stimulate the economy. To compensate, the value of debt must be written down (risking deflation) or the central bank must print money (a trigger of inflation), or some combination of both.

In recent years the level of debt as a percentage of GDP in the U.S. has skyrocketed past previous highs last seen in the early 1930s. And the Federal Reserve's benchmark rate is now hovering just above zero. To Dalio, therefore, it's clear that a D-process is under way. "It seems very likely that stocks will get materially cheaper," he says. "We have to go through an important debt restructuring process, and a lot of assets are going to be for sale, huge numbers of assets. And there's going to be a shortage of buyers."

Even investors in most hedge funds won't be immune. According to research by Bridgewater, the hedge fund industry in aggregate is 75% correlated to the S&P 500, an issue on which Dalio has been sounding an alarm for a couple of years now. "Too many people have a systematic bias toward positive economic growth," he says. "I think that what we're going to probably have is an economy that's going to get worse, with most people positioned for it to be better." By the end of the D-process, he expects that the reverse may well be the case."


March 19, 2009
Put call is .61, which says there is no fear in short term traders' minds.Relative strength indicators are stretched and hugely maxed out. Although short term traders may SAY they are fearful-they don't want to miss this rally, and their call buying says they are SAYING fear but buying hope...Of course, we suggested for those who wanted to play this rally that they use smaller positions as it was countertrend. Its STILL countertrend. And we got the point projections we listed here, for sure. 800 S and P 500 is here, where we saw the breakdown before.Broken previous support attracts price on bear rallies, like a sponge attracts water in a desert flash flood.
If you were long the rally I'd take the money and run. But don't short here, even though its screaming OVERBOUGHT. That is conservative strategy and we weren't SHORT this rally, and we should scale out of bought long positions here NOW like we scaled out of shorts on the WAY DOWN.
The FED has decided to trash the US dollar, announce what they are actually doing, (what they have been doing)and continue to print money like its party time after the Superbowl. They will buy debt with this money- thus using money to buy money, which is fake money buying toilet paper, in hopes that the inevitable hangover can be postponed. So bonds rallied, dollar fell, gold rallied, and often bonds up soon means stocks down.
If we are wrong and the rally continues, you will have sold too soon. When asked how he became wealthy, one famous billionaire once said..."I always sold too soon."

March 18, 2009.
Same comments as yesterday.

March 17, 2009
Small pullback from overbought.
Bear rallies tend to be violent and sharp.
If we don't sell off a lot from here, and reach even more overbought, there will be fierce resistance at 800-810.
Bear rallies,after the initial plunge and 50% recovery, stop usually at the point of retracement near the 55 day average, at 800-810.

March 15, 2009
2 30 AM
Extremely overbought short term-5 days up in a row in a bear market, often leads to sell off. Put/call bearish, indicating too many short term bulls.Similar readings occurred Jan.2, 2009, before the decline after a strong rally.

March 13, 2009
We got the predicted 740-760 S and P 500 target but it took 3 days, not 2. We are overbought short term on stochastics and put/call, which suggests a profit taking day today or Monday, and after that it gets interesting.Previous selling occurred at 791 S and P 500, and more importantly, 806. Above that, we can get a blast off bear rally to possibly 950. But its still a bear rally. Alternately it could turn and fall to low 700's. If you go long on the retrace here, be aware its countertrend, and use small positions and tighter stops.

March 12, 2009
6 20 AM
We got the projected 2 day rally, although the close was muted. We tagged about 10 S and P 500 points below the resistance projected for 740 area. Selling at the last 30 minutes is big money selling, so that will be the clue as to the health of the 2 day rally. As of now, it could well see profit taking and a new level of shorting from this higher level.

March 11,2009
6 30 AM
The "plunge projection team" read my commentary of yesterday and sent out good news in a package. End the short sale on downticks rule scared some shorts, Citi's "profits" (which don't account for credit default swaps and credit card delinquencies) caused a financials rally, and some merger stuff added gas to the pop. We could tag the previous breakdown at 740-760 S and P 500, possibley a 2 day rally.Beyond that, let's be "from Missouri", which means a supposed bull leg up further will have to prove itself with more than 2 up days and a hold above the previous breakdown.  

March 10, 2009
Inflection point.
We are at the bottom of a trading channel in a bear market.Historically whenever it holds and rallies, it will try to tag the top of the channel.That means the market MUST rally now, or the alternative is a torrential wipeout. A close below 6473 means the torrential decline is starting.

March 9,2009
Mondays in this market are up the least of all days of the week. Thursdays are up the most. This reverses the normal bull market pattern, with down Thursday having been the rule. Insiders are still selling heavily. That means big money sells the end of the day. Nothing other than short covering is occuring now.

7 15 AM
March 6,2009
Stopped out of long USD versus EURO trade. Tag above 1.27 at 1.2713. Small loss on this one. Probably should have entered short the EURO at a higher level, after the right shoulder was crossed below, on the head and shoulders pattern. This is the first missed call in a long while. The market is never wrong- follow the market, not one's preconceptions of what SHOULD be.Small losses, let your profits run.

March 5,2009
7 20 AM
We may see more countertrend pop but risk is still very high for long side trading.

March 4, 2009
10 15 AM
Close the long dollar position versus EURO if we tag above 1.27 with that as stop loss.

Oversold and an unbelievable series of down days in a row make a bounce likely. Don't buy it.Unless we go above 7500 DJIA its all noise. Big money is selling rallies to get cash, or shorting them.We didn't get the 670's on the S and P 500, but we ended down into the 690's.

March 3, 2009 Predicted low for today was 695 S and P 500. Print low was 699.70.High near open was 729.57. High to low tradeable points were 30 some S and P 500 points in one day. We got the direction  and amplitude right for sure.

We captured the majority of the recent huge decline and posted the point objective and the predicted date of February 21 at the end of January. The break of 8000 DJIA demanded at minimum 7188, due to momentum factors and the head and shoulders breakdown. The decline is still in force- at some point we will have a sharp 4 -6 day countertrend rally, after which shorts can be entered again with a less crowded field. You don't have to trade all the time- when you have too much company with your trades, its time to be careful.

US dollar is trash, but other currencies are worse trash.Euro looks terrible, due to debt default counterparty risks in Eastern Europe. Countries like Latvia can't pay Germany what they owe. We favor the US dollar over the Euro. Head and shoulders breakdown of the Euro implies it will fall further, versus the dollar. Shoulder was the 1.30-1.275 area. Euro is now 1.26.Eventual target could well be 1.2 or lower.Could fill the gap at 1.265, but eventually we will likely see 1.2.

*** The S and P 500 could tag the high 670's today.

March 2, 2009
8 30 AM
S and P 500 target is now 695 for today or Tuesday in spite of oversold conditions.

Feb 27 , 2009
Fridays in this weak market tend to sell off, and we didn't pass the 7500 DJIA where we broke down from. Oversold readings are warring with selling pressure at the close of the day by big money. We could see the 740's on the S and P 500,or we could rally. We know a big move is coming, but after a huge point gain in the last 8000-7188 DJIA decline captured here, we are going to stand aside, not short or long except from shorts from way back near 11000 DJIA, still held. Gold is nearing short term oversold, but longer term is still overbought.

**Total put/call ratio is bearish for DJIA currently.



Feb