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| StatTrader |
 Posted: Sat Aug 04, 2007 11:03 am Post subject: BUY!!! |
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Member Of The Month! April
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I just love it when a plan comes together. If Friday doesn't mark the low for the markets, then the low should be seen early this week.
All but one of my statistics is where it needs to be for a strong market rally to take place.
Let's look at them one at a time. The first chart is a 3 year view of the bullish percentage on the SP-500. Note that market lows long-term lows are marked by this percentage dropping below 52%. It is now at 50.4%. It doesn't always shoot straight up from here, if you look at last June/July you can see where it spiked, dipped back down, then ran up. That corresponds to the double bottom in the markets last June/July. The same sort of double bottom could occur here. In general bottoms are quick and V shaped and tops are slow and rounded.
The second chart is a 3 year view of the McClellan Summation Index (MSI). It will take at least 2 up days to turn this index around but it is already in the vicinity that marks a market bottom.
We can also look to the 40 day exponential moving average of difference between upside volume and downside volume. It hasn't been this low since late 2002. This means that we are very oversold.
Another view of volume breadth is the 30-day simply moving average of the difference between upside and downside volume. This is right at the levels of June '06.
Yet another view of volume breadth is a chart I particularly like. It is created in Excel by making one column (daily breadth) the difference between upside volume and downside volume per day. The next column (weekly breadth) is a five day summation of the daily breadth column. The next column is a 30 day moving average of the weekly breadth column. This chart will reach its lowest level Monday and then start rising on Tuesday.
Another view of volume is upside volume as a percentage of total volume. Here we see the 10-day moving average (blue line) got all the way down to 32%, an extreme. The 30-day (pink line) got all the way down to 44% on Friday which is the area that traditionally marks a market bottom. It will start heading upwards from here.
Looking at a chart of market breadth computed the same way as the "Weekly vol breadth" chart but using the difference between the number of advancing stocks versus the number of declining stocks, this too bottoms out by the end of Monday and should be rising by Tuesday. You can see in the chart that it is right at the level of the two out of the last three major bottoms.
In summary, by mid-week the market bottom should be behind us (pun intended). If you have been sitting by the sidelines, Monday and Tuesday should present the best buying opportunities.
As you all know, I love the energy sector. That can be played with ETFs such as XES, XOP, or for the brave, DIG. There is also the financials which could end up being the biggest gainers going into the end of the year, in that sector we have my favorite, BAC, which is currently sporting a 5.4% dividend yield. The home builders could also make a good showing though I don't have personal favorites in that sector, they are down 75% from their highs. Unless the home builders go to zero there isn't much more downside left in them.
Have fun out there. |
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| Im Not Warren Buffett |
| Posted: Sat Aug 04, 2007 7:25 pm Post subject: |
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CFO
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Well, this seems quite simple.
With the Fed meeting this week, does that mean the stars are aligned for a rate cut? It would certainly serve as the catalyst to get the pop you are looking for... |
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| Grimreaper |
| Posted: Sun Aug 05, 2007 2:17 am Post subject: |
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CFO
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| Im Not Warren Buffett wrote: | Well, this seems quite simple.
With the Fed meeting this week, does that mean the stars are aligned for a rate cut? It would certainly serve as the catalyst to get the pop you are looking for... |
There won't be a Fed rate cut until the mawket crashola materializes. Of course da Naz could fall to around 1900 hunnert on Mon and it would force da Fed to cut. But da Fed's job is to head off inflayshun at da pass and to interject liquidity during a financial crisis. When we see the commodititty stocks fall another 20% across da bored this coming week "most" ovus will acknowledge the end to inflayshun. Of course there will be select few of da most clueless variety who will  "buy da pullback"   Lowering intrust rates at a time where da US dallah is on da brink ov a collapse (which it isn't of course....it's just so obvious dat everybudy but maybe 1 or 2 fokes basides meself thinks it is) would sholy send da dallah over the edge. That would cause short term rates to sky!....which of course would bring the financials down even further! I doubt Bernanke is that crazy to lower rates at this time. Let's let da commodititties git deeestroyed....then da fed kin safely lower rates 8 mumphs from now when da stock mawket gits deeestroyed... well maybe not 8 mumphs from now. Commodititty stocks will be down 50% from current levels within 3 mumphs....then i'll see bout crashin n boinin da mawkets ala Oct 1987. Lemme tell ya....it is soooooo kewel bein a superhero!  Oh yeah, one mo thang....when da Fed do actually cut....stocks will continue to tumble. So doan be so ankshuss fer a rate cut. I'm wreckin it would be bettah to wish fo a rate hike. Look how well da mawkets performded as da fed was raising rates. Neat huh?  |
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| StatTrader |
| Posted: Sun Aug 05, 2007 11:43 am Post subject: |
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Member Of The Month! April
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I forgot two charts.
The first is the percentage of stocks trading above their 50-day moving average. Note that this indicator is reaching lows not seen in the last 3 years.
The next chart has a tendency to lag a bit. This is the chart of the CBOE Equity Put/Call ratio. Our low last March was on the 5th whereas this indicator peaked (it goes opposite the indexes) on the 16th. The indicator is now higher than it was on March 5th.
For those that just want to play the SP-500 but want to get twice whatever the S&P returns, the SSO ETF is leveraged to yield twice the SP-500 yield. Of course, when the market is down, then it will lose twice as much also.
Have fun out there, |
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| rick103054 |
| Posted: Mon Aug 06, 2007 2:41 am Post subject: |
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Investing Sr. Associate
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| maybe is time to buy but not sure why. happy monday everyone |
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| StatTrader |
| Posted: Wed Aug 08, 2007 8:12 am Post subject: |
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Member Of The Month! April
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Please remember that more often than not, the lows are retested. I.e. over the next two weeks we could easily see much of this weeks gains wiped out, allowing the market to form a double bottom, before the rally gets going in earnest.
Be careful and have fun, |
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| Grimreaper |
| Posted: Wed Aug 08, 2007 8:22 am Post subject: |
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CFO
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Be careful sheeple. Stat may very well be da pawn o'da mawkets! Foist he gots fokes in fer the top in the energy pigs. Now he is rampin ya into a total salamie. Go to da VIX vs Naz bored to read da Reaper's take...the ONLY take dat mattahs.  Ifn ya wanna buy sumphin maybe buy somma my DUGski fo da next wave up as I take Stat doooooooown! |
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| StatTrader |
| Posted: Wed Aug 08, 2007 8:35 am Post subject: |
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Member Of The Month! April
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If I remember properly, I indicated that $80 for CVX was a good price. At the time of this writing CVX is at $84.82 and rising. I don't believe that I ever suggested that any stock would go straight up without any corrections. I still maintain that CVX is a good long term hold even though it is off its 52-week high, as is the rest of the market.
Time will tell whether the current call of a market bottom is correct or not. Over the last 10 years, whenever the indicators have reached the levels they were at last weekend has either marked a major market low or been very close to a major market low (i.e. within 2 weeks).
Grim is predicting that I am wrong and that anyone who buys now will lose money. He may be correct. Just because the indicators have correctly forecast bottoms for the last 10 years is no guarantee that they will continue to do so in the future.
Personally I prefer to wager based on the future looking pretty much the same as the past. It worked last June and I suspect the odds are in my favor that it will work again. |
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| vetelmo |
| Posted: Wed Aug 08, 2007 8:40 am Post subject: |
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| Grimreaper wrote: | | Be careful sheeple. Stat may very well be da pawn o'da mawkets! Foist he gots fokes in fer the top in the energy pigs. Now he is rampin ya into a total salamie. Go to da VIX vs Naz bored to read da Reaper's take...the ONLY take dat mattahs. Ifn ya wanna buy sumphin maybe buy somma my DUGski fo da next wave up as I take Stat doooooooown! |
Nobody has been more wrong than you, not even Crammer himself, so you have no place to warn people about stats advice. |
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| Grimreaper |
| Posted: Wed Aug 08, 2007 8:55 am Post subject: |
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CFO
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| vetelmo wrote: | | Grimreaper wrote: | | Be careful sheeple. Stat may very well be da pawn o'da mawkets! Foist he gots fokes in fer the top in the energy pigs. Now he is rampin ya into a total salamie. Go to da VIX vs Naz bored to read da Reaper's take...the ONLY take dat mattahs. Ifn ya wanna buy sumphin maybe buy somma my DUGski fo da next wave up as I take Stat doooooooown! |
Nobody has been more wrong than you, not even Crammer himself, so you have no place to warn people about stats advice. |
Well, VLO never made it to $60...where everybudy wassa gonna buy. Of course it never made it to $80 or $105 either per yer price tawgets. May I suggest you buy right cheeeeeya at 67.47 so I kin pummel you about da face a little harder this time? BTW, DUG wassa at 47.22 when I posteded my take....watch this! |
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| vetelmo |
| Posted: Wed Aug 08, 2007 9:04 am Post subject: |
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Nah, it needs to reach 68.50 before I buy again, out of my 10 + positions in VLO, only 2 are down.
My target isnt 80, thats Im not WB's. You forget Im calling for it to get above 100 and then reverse 3 to 1 split in 08. I have made one call on this and one only, while you have made hundreds and nearly alllll of them have been wrong, lol.
The faucet controlling level of stupidity flowing from your brain needs to be turned down so you can get a grasp of reality. |
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| damon |
| Posted: Wed Aug 08, 2007 9:09 am Post subject: |
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Investing Sr. Associate
Joined: 04 May 2006
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| vetelmo wrote: | | Grimreaper wrote: | | Be careful sheeple. Stat may very well be da pawn o'da mawkets! Foist he gots fokes in fer the top in the energy pigs. Now he is rampin ya into a total salamie. Go to da VIX vs Naz bored to read da Reaper's take...the ONLY take dat mattahs. Ifn ya wanna buy sumphin maybe buy somma my DUGski fo da next wave up as I take Stat doooooooown! |
Nobody has been more wrong than you, not even Crammer himself, so you have no place to warn people about stats advice. |
*cough* http://www.einvesting.com/viewtopic.php?t=5446 *cough |
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| Grimreaper |
| Posted: Wed Aug 08, 2007 9:26 am Post subject: |
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CFO
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| vetelmo wrote: | Nah, it needs to reach 68.50 before I buy again, out of my 10 + positions in VLO, only 2 are down.
My target isnt 80, thats Im not WB's. You forget Im calling for it to get above 100 and then reverse 3 to 1 split in 08. I have made one call on this and one only, while you have made hundreds and nearly alllll of them have been wrong, lol.
The faucet controlling level of stupidity flowing from your brain needs to be turned down so you can get a grasp of reality. |
Well at least we agree on sumphin. VLO is goin to $35. The only diffrunce is you think it's gonna git there via a stock split. |
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| Im Not Warren Buffett |
| Posted: Wed Aug 08, 2007 12:56 pm Post subject: |
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CFO
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| vetelmo wrote: | | My target isnt 80, thats Im not WB's. |
Technically, my target was (and remains) $75 to $80, so the 52-week high at $78 and change doesn't surprise me. Once we get back up into that range, then I'll re-work the valuation model and see if there are any material changes to my estimates.
If anything, I'd really love to see a bit more M&A in the energy sector so I can get a more up-to-date picture on how things are being valued. Deals can be immensely helpful in getting updated pictures of book values and the like - as you can see with offshore drillers or oil refiners. |
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| vetelmo |
| Posted: Wed Aug 08, 2007 3:10 pm Post subject: |
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| Im Not Warren Buffett wrote: | | vetelmo wrote: | | My target isnt 80, thats Im not WB's. |
Technically, my target was (and remains) $75 to $80, so the 52-week high at $78 and change doesn't surprise me. Once we get back up into that range, then I'll re-work the valuation model and see if there are any material changes to my estimates.
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She'll be there next week matey!!! |
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