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| admin85 |
 Posted: Thu Sep 20, 2007 7:32 am Post subject: |
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Investing Associate
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| ya... me too... i got my lost today........... |
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| StatTrader |
| Posted: Fri Sep 21, 2007 3:25 am Post subject: |
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Member Of The Month! April
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Back to the market...
This market will be much healthier and better able to continue a long term climb if it takes a breather and spends some time digesting the recent gains, like a few day to a week of going mostly sideways or giving back 20% of this past weeks gains. If this market continues shooting up then the gains will be much harder to retain. |
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| prs1065 |
| Posted: Fri Sep 21, 2007 11:49 am Post subject: |
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Investing Manager
Joined: 01 Sep 2007
Posts: 230
This Month: 0
263.79 e$
Net worth: 31,277.29
Portfolio Value: 31,013.50
Monthly Return: -7.72%
Trades this month: 0
Churn Rate: 0.00%Items
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| StatTrader |
| Posted: Sat Sep 22, 2007 10:52 am Post subject: |
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Member Of The Month! April
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| I just ran through all of my charts, every chart including breadth charts, volume charts, CBOE Put/Call charts, McClellan Summation Index, Bullish Percentage,... are showing that the uptrend should continue unabated for the intermediate term, i.e. more up than down over the next few weeks. |
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| Dave Rathbun |
| Posted: Sat Sep 22, 2007 3:58 pm Post subject: |
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CFO
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| I will be very interested to see how your fortune telling turns out over the next few weeks. Other than what I have invested, I'm sitting on the sidelines for now. |
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| StatTrader |
| Posted: Sun Sep 23, 2007 3:18 pm Post subject: |
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Member Of The Month! April
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Dave,
I prefer to think of it as betting that the future will be like the past. Some examples below.
The McClellan Summation Index (MSI), the market has a tough time going opposite this indicator. It is now firmly rising. Additionally, after major drops, it takes a while to reach a top and then generally stays up there for a while. As long as the MSI stays near the top of the page rallies tend to continue.
We also have the percentage of stocks trading above their 200 day moving average. This indicator goes up and down with the market. After a correction such as we've just experienced, the rally usually doesn't end until after this indicator gets above 70% and stays there a while. We have quite a ways to go before we get there and getting there will require the market to rise.
Then there is the bullish percentage on the SP-500. After a correction, this indicator usually gets above 72% before the rally is over. The market has more work to do here also.
Then there is the CBOE Equity Put/Call Ratio. The chart below is the 30-day moving average. Note that this indicator moves inversely to the markets. Right now it is falling. Personally, I don't expect the rally will end until this indicator stops dropping, and it probably won't do that until it reaches 60% or so.
The next two charts are 30-day simple moving averages of the weekly breadth and weekly volume. They are calculated the same way; each day is assigned a value of advancers-decliners for breadth or up volume - down volume for the volume chart. I then assign each day a sum of the preceding 5 days. In order to "see" where these charts are likely to go in the week ahead, I plug in neutral numbers, 0's. This lets me see the effect of the numbers that are going to be dropped from the average moving forward. If negative numbers are being dropped then we'd require even bigger down days than the days being dropped in order to keep the indicator from rising and vice versa. These charts are showing over-bought and over-sold conditions. Currently they both show that we are still oversold. Market generally don't go against these indicators, they either go sideways or with the indicator, its a rule that holds about 4 times out of 5 or better.
If people weren't still being cautious, if they really believed in this rally, then these charts would already be at the top of the page and I'd be raising the caution flag. You've seen my posts in the past. I tend to call the bottoms pretty closely because most bottoms are fairly V shaped; but I'm usually early raising the caution flag because tops tend to take much longer to form.
Have fun out there.
/Tom |
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| admin85 |
| Posted: Mon Sep 24, 2007 8:26 pm Post subject: |
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Investing Associate
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| am i good or i don;t know how to read the chart?? |
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| StatTrader |
| Posted: Mon Oct 01, 2007 3:54 pm Post subject: |
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Member Of The Month! April
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I'm a bit surprised that we haven't seen more profit taking so far. The charts still suggest that there is more of this rally ahead of us between now and mid-November. Whether we see 15-20% of the recent gains given back in short-term dips is anybody's guess, though past history gives it a better than even chance.
Personally, I invest for the intermediate cycles and tend to ride out the short term fluctuations, as painful as they may sometimes be. I maintained my positions through the sideways period we just experienced and continue to hold. The statistics have not finished their journey to the other extremes and until that happens I'm holding on.
When I bail out, it doesn't mean that the market will necessarily fall, it just means that the statistics will no longer support the market. At that time I treat the market more as a gamblers den and move my money to safer havens. I'm not bailing yet, there is still easy money to be made. |
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| DKnightSr |
| Posted: Mon Oct 01, 2007 5:25 pm Post subject: |
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Member of the Month
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Stat- As for the profit taking....after hours reports indicate it's happening on several that I follow. I believe tomorrow (Tuesday) should be most interesting. Australia and Japan are enjoying the party now (late Monday...early Tuesday for them)....but come 0930 EST I think the streamers and balloons will come down. We have several fairly important reports this week that may well set the stage for the options. Once they start swaying....anything can happen.
I'm sitting on the bench on the sidelines, drawing my measley T-Bill interest. This current altitude is too high for me, I'll wait for the lowlands. But hey....best of luck to you buddy! No guts...no glory  |
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| StatTrader |
| Posted: Sun Oct 07, 2007 10:40 am Post subject: |
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Member Of The Month! April
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Although we still have further to go, I'm no longer confident that the momentum behind this rally will continue past the end of October. One indicator, the percentage of stock trading above their 50 day moving average has already returned to the top of the page.
Just because it reached the top of the page doesn't mean the market is going to fall, it is just that this indicator no longer supports a rising market.
The percentage of stocks trading above their 200 day moving average is still rising and has a ways to go, but it has already come pretty far, all thge way from 30% to 60%. This indicator will continue to be supportive of the rally until it reaches into the low 70% range. Given ho fast it has been rising, it might not take too long to reach there.
Then there is the McClellan Summation Index (MSI). As long as it is rising it supports the market, and it has been going like a rocket. At the current rate of ascent, it won't take long for it to reach the 800 area, where most rallies start to lose steam.
We also have the up/down volume ratio. This indicator is computed as the ratio of the 20 day exponential moving average of the volume on the trailing up days divided by the 20 day exponential moving average of the volume on the trailing down days. As long as this stays above 100% the market shouldn't start falling, but it has reached a high and will probably start walking down toward that 100% level soon.
Then there is the weekly breadth and volume breadth moving averages, where each day is the sum of the breadth (or volume breadth) of the previous 5 days and we take the 30-day simple moving average of that number. Both the breadth and volume breadth graphs have reached highs and will start heading down early this week. Again, until they approach or breach the 0 level, the markets probably won't start falling, but these two indicators will no longer be supportive of continued rallying in the markets.
There is also the CBOE Equity Put/Call Ratio. Below is 30-day moving average of the ratio. This moves inversely with the market. It can be seen that it has traveled pretty far, dropping from 74% down to 65%. Once it stops dropping it will stop supporting the rally. It will probably bottom out in the 57-59% range. Given how fast it has been falling, it could be there by the end of the month.
The Bullish Percentage on the SPX is also nearing the levels that it will stop supporting the market. It has risen from about 32% to almost 68%. Once it gets above the 72-73% level, it will stop supporting the market.
Last but not least is the SP-500 itself which I've shown below with its 25-day TRIX. As long as the TRIX is rising the safest bet is to be long this market. It usually rolls over well before the market actually starts dropping as part of a new correction.
In summary, the rally is not over, it should run at least another few weeks. After that the indicators will have all gone back to the top of the page and won't be supporting the rally any longer. That doesn't mean that the bottom will fall out of the markets. It just means that the biggest bang and the easiest money will be in the past. The rally will probably continue but with fits and starts intermixed with more small drops. The big danger sign of imminent collapse will be when the market continues to make new highs while the percentage of stocks trading above their 50 day moving average drops. That is the negative divergence which traditionally warns us to move out of equities and into safe havens. |
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| StatTrader |
| Posted: Wed Oct 10, 2007 2:36 pm Post subject: |
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Member Of The Month! April
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| This market definitely needs to slow down a bit, maybe give a little back. It is unusual for the market to go this far, this fast, and continue without some sort of pause. Looking at the MACD (30, 50, 9) on the number of NYSE Advancing issues, it may be getting ready to take a short breather in here. |
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| StatTrader |
| Posted: Sun Oct 14, 2007 4:11 pm Post subject: |
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Member Of The Month! April
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This rally is starting to get a little ragged around the edges. Some of the indicators still suggest that this rally has further to go, and it probably does. But enough of the indicators have gone as far as they probably will which justifies taking some of the money off the table and banking some of the profits.
On the bull side, we have the SP500 Bullish Percentage which usually gets to the low 70% range before petering out. It is now just below 70%. This suggests that we should get enough more out of this rally to win over a few more converts.
And there is the percentage of stocks trading above their 200-day moving average. That too usually gets into the low 70% range and it is still below 60%. It has plenty of room left to continue rising; a move which requires the market to rally further.
The McClellan Summation Index is still rising, which is supportive of the markets. It also has further to go, though the extend of its recent rise is consistent with the extent of previous bull market rises meaning that it could peter out soon.
For the bears we have the 30-day moving average of weekly breadth and volume breadth. These have both clearly begone to fall.
We also have the ratio of the 10 day moving average of up volume to down volume on the SP-500 (calculated using the 20-day ema of trailing up days divided by the 20-day ema of trailing down days). This has dropped from over 112% on September 25th to 106% currently and it is still falling.
And the percentage of stocks on the NYSE that are trading above their 50-day moving average has clearly peaked at a level consistent with market tops.
And last but not least, in the bear camp is the CBOE Put/Call Ratio. Although the 30-day (pink line) is still falling, the 10-day (blue line) has bottomed at slightly above 57%, the same level it has stopped at in previous rallies. This means that the 30-day will bottom also, most likely within 2 weeks. The 21-day average (most commonly used) is already reaching the levels that usually mark its bottom.
This rally probably has more life in it but it is getting tired. As I've said before, the easy money is to be made when all these indicators are at the bottom of the page and they have nowhere to go but up. As more and more of these indicators work their way out of these over-sold conditions and get back into over-bought territory, the harder and harder it will be to make money on the market.
Had you purchased DIG as recommended at the open when I started this thread you would have gotten in at $87, it just closed at $117 for a gain of $30 per share, over a 34% return in two months.
The last two months we enjoyed the steep ascent that rallies start with. They then tend to go into a longer slow topping formation before they experience another correction. These topping formations can last anywhere from 6 weeks to many months during which the markets generally make multiple new highs. What these topping formations generally lack are the meteoric rises that the rallies begin with. The momentum languishes. There is more and more sector rotation.
We are now heading into the topping formation. It is very difficult to judge when the topping formation will end and the next correction will begin. Hopefully you have some nice healthy profits. Banking some of those profits now is prudent. Maybe move some your money from riskier stocks to more stable stocks; this will allow you to take part in further market rises while leaving you a bit less exposed when the next correction starts. |
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