Thursday, October 20, 2011
Friday, October 14, 2011
BULL OR BEAR THOUGHTS
Question: hotto, are you still in the bear market camp and thus possibly at the top end of the range or in a holiday rally mode to year end? ty
Hotto:
The questions of IT Rally // or end of Bear market -- I don't "know" as yet. We do have this new period of some "safety" - from sudden downside crash -- due to the 10/3 10/4 "Extreme Negative" Low - which was a complete Retest of the 8/9 Low. That test was not completely successful - but good enough for this "safe" period - where stocks can go back to the high of the Range -- and we can hold stocks longer than a few hours. Tradeable Rally - the old term for this period. The price action since 10/4 has been impressive - but has not had strong Volume to show Urgency of buying. It looks like another Trader move -- across the Trading Range once more -- Air Pocket stuff. I noted last night - Wednesday's move was a full test of the 9/1 SH. Plus Wednesday - peeked Over the top of the Down-Channel. Then closed back under. Volume has not been very strong during the Rallies of the last two years. It's been a time of Short-Covering and ST trading - mainly driving the moves. But - that did not stop the market from a 25% + rally from summer, 2010 to April, 2011. Price matters most. The DJIA is now just under the 9/1 high -- and just below the UBB -- and just below the top of the Down-Channel. If it breaks above that level -- say close Over the UBB - over 11,700 -- then we have some more Upside room. The Top of the Bull market was on May 1 - then PB to June low - then Retest of Highs during July Q2 Earnings Season. 11862 - 11900 was the bottom of the June Lows area - between the double top. I had thought the late August rally would get up there - to test that Resistance. Instead the 9/1 high fell short -- 11717 was the SH. So - that 11900 area is still to be tested for a first time. Just above that -- is sma150 / sma200 -- at 11960 -- and flat to falling a bit. The SP-500 had SH of 1231 on 8/31. And the June low was 1258 - 1268. If the Averages can close Over the 8/31 and 9/1 SHs -- Would be a BTBO -- and give us a new IT Rally leg - still without an "Impulse Rally". The Volume since the 10/4 SL has not been strong enough to declare an "Impulse Rally". . For comparison - look at the text-book IT Rally – of March, 2003. Then - 8 days of "driving" buying. It stands out from the prior days. Note what happened next -3 weeks of forming a Pennant - just under sma200 -- before real BO in April/May of 2003. The "Impulse Rally" at that time - did not mean Instant reward of more Rally. The big buyers took a step back - weeks -- before the actual IT Rally resumed. That was a brief review - for comparison. There are many more words on the website. Back then - the Economy was still growing broadly. A new Rally stimulated a response of "Don't leave without me!" Now - Growth is uncertain. The feeling continues that we can wait a bit - and catch the next train. So - we need Severe Selling - with those Horrible "Extreme Negatives" - to produce "safe" bottoms -- for several weeks. I'm hoping to live long enough to see it change again. Maybe the Election next year will give us at least a good long Leg up - with some "believers" again. After that - we'll see. My thought is more down - after that "new President" rally. I'll be happy to be wrong about that one. For now -- we are just 8 days into the new Rally period - born of the "Extreme Negative" low of 10/3 10/4. And - now in the Q3 Earnings Season -- goes on another few weeks. AA earnings were weak - but we've come to expect that. GOOG gave another super report. Internet use continues to grow - worldwide. That means many tech stocks will participate in this Rally period. Just after Earnings Season -- we will go back to the Fights in Washington . The Super-Committee sits like a sword above all. Europe - we are in a kind of "safe" period - till end of October -- That's when we were told there would be a "plan".
---
So - for now - we watch the Trading Range - and signs of actual BTBO. H/L on NYSE was 31/20 today - per Yahoo finance. That's not exciting - but at least Positive again.
NUAN - an old fav -- touched a nATH today. That's something
SAVE - a recent IPO - surged to ATH
GOOG earnings tonight - will ignite many techs on Friday morning -- likely thru next Tuesday --when AAPL reports. So - the whole market may not BTBO -- or it may. But it's a good time for individual Stocks - or some ETFs.
SOXX SMH - the Semis - SOXL is the *3 of SOXX
XLK is Technology ETF
TYH is 3* Tech ETF
Hotto:
The questions of IT Rally // or end of Bear market -- I don't "know" as yet. We do have this new period of some "safety" - from sudden downside crash -- due to the 10/3 10/4 "Extreme Negative" Low - which was a complete Retest of the 8/9 Low. That test was not completely successful - but good enough for this "safe" period - where stocks can go back to the high of the Range -- and we can hold stocks longer than a few hours. Tradeable Rally - the old term for this period. The price action since 10/4 has been impressive - but has not had strong Volume to show Urgency of buying. It looks like another Trader move -- across the Trading Range once more -- Air Pocket stuff. I noted last night - Wednesday's move was a full test of the 9/1 SH. Plus Wednesday - peeked Over the top of the Down-Channel. Then closed back under. Volume has not been very strong during the Rallies of the last two years. It's been a time of Short-Covering and ST trading - mainly driving the moves. But - that did not stop the market from a 25% + rally from summer, 2010 to April, 2011. Price matters most. The DJIA is now just under the 9/1 high -- and just below the UBB -- and just below the top of the Down-Channel. If it breaks above that level -- say close Over the UBB - over 11,700 -- then we have some more Upside room. The Top of the Bull market was on May 1 - then PB to June low - then Retest of Highs during July Q2 Earnings Season. 11862 - 11900 was the bottom of the June Lows area - between the double top. I had thought the late August rally would get up there - to test that Resistance. Instead the 9/1 high fell short -- 11717 was the SH. So - that 11900 area is still to be tested for a first time. Just above that -- is sma150 / sma200 -- at 11960 -- and flat to falling a bit. The SP-500 had SH of 1231 on 8/31. And the June low was 1258 - 1268. If the Averages can close Over the 8/31 and 9/1 SHs -- Would be a BTBO -- and give us a new IT Rally leg - still without an "Impulse Rally". The Volume since the 10/4 SL has not been strong enough to declare an "Impulse Rally". . For comparison - look at the text-book IT Rally – of March, 2003. Then - 8 days of "driving" buying. It stands out from the prior days. Note what happened next -3 weeks of forming a Pennant - just under sma200 -- before real BO in April/May of 2003. The "Impulse Rally" at that time - did not mean Instant reward of more Rally. The big buyers took a step back - weeks -- before the actual IT Rally resumed. That was a brief review - for comparison. There are many more words on the website. Back then - the Economy was still growing broadly. A new Rally stimulated a response of "Don't leave without me!" Now - Growth is uncertain. The feeling continues that we can wait a bit - and catch the next train. So - we need Severe Selling - with those Horrible "Extreme Negatives" - to produce "safe" bottoms -- for several weeks. I'm hoping to live long enough to see it change again. Maybe the Election next year will give us at least a good long Leg up - with some "believers" again. After that - we'll see. My thought is more down - after that "new President" rally. I'll be happy to be wrong about that one. For now -- we are just 8 days into the new Rally period - born of the "Extreme Negative" low of 10/3 10/4. And - now in the Q3 Earnings Season -- goes on another few weeks. AA earnings were weak - but we've come to expect that. GOOG gave another super report. Internet use continues to grow - worldwide. That means many tech stocks will participate in this Rally period. Just after Earnings Season -- we will go back to the Fights in Washington . The Super-Committee sits like a sword above all. Europe - we are in a kind of "safe" period - till end of October -- That's when we were told there would be a "plan".
---
So - for now - we watch the Trading Range - and signs of actual BTBO. H/L on NYSE was 31/20 today - per Yahoo finance. That's not exciting - but at least Positive again.
NUAN - an old fav -- touched a nATH today. That's something
SAVE - a recent IPO - surged to ATH
GOOG earnings tonight - will ignite many techs on Friday morning -- likely thru next Tuesday --when AAPL reports. So - the whole market may not BTBO -- or it may. But it's a good time for individual Stocks - or some ETFs.
SOXX SMH - the Semis - SOXL is the *3 of SOXX
XLK is Technology ETF
TYH is 3* Tech ETF
Thursday, October 13, 2011
BUY SIGNAL
ZBT - Zweig Breadth Thrust Indicator. Compute as 10 day Exp Average of (Advances / ( Advances + Decliners ) ). Marty Zweig developed that long ago. His research said we get a Momentum Buy signal when... Within a 10 day period.. the Indicator moves from below 40 to above 61.5. It gave 14 signals from 1945 to 1984. The average gain after a ZBT signal was 24.6%.. within average 11 months.. AFTER the signal was given.
T2103 rose to 61.2 today -- and Intraday was at least 61.8 ---now close to another ZBT Buy signal. Remember - according to Zweig's research -- After a ZBT buy signal - the stock market is likely to rise an average of approximately 25% within the next 11 months - on avg. Some took a bit longer. Some of the advances were as little as about 15% -- From the point where the ZBT was signaled. Some were as big as 30%+. Sometimes - (in the Zweig study) the market fell back Before the larger advance began. We had that in August - September. Now waiting for the move - approximately 25% above the late August highs -- by approximately July of 2012. The ZBT buy signal has never failed -- so far. That makes me uneasy. :)
---
T2103 rose to 61.2 today -- and Intraday was at least 61.8 ---now close to another ZBT Buy signal. Remember - according to Zweig's research -- After a ZBT buy signal - the stock market is likely to rise an average of approximately 25% within the next 11 months - on avg. Some took a bit longer. Some of the advances were as little as about 15% -- From the point where the ZBT was signaled. Some were as big as 30%+. Sometimes - (in the Zweig study) the market fell back Before the larger advance began. We had that in August - September. Now waiting for the move - approximately 25% above the late August highs -- by approximately July of 2012. The ZBT buy signal has never failed -- so far. That makes me uneasy. :)
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Friday, October 7, 2011
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