The Dow closed at 11205 at the peak in late April.
On October 18, the Dow closed at 11143. In the 11 trading days since (with POMO and heading into an election), the bulls could not manage to push the Dow 63 points over the hump. Today the Dow closed at 11188.
While Terry Laundry usually refers to the S&P 500, he has spoken of a "double top" ending to T13. I think it's fair to say that 11205 and 11188 are double tops with respect to the Dow.
On the other hand, the Dow Transports closed today at 4818, eclipsing their April high close of 4806. The breakout of one index but not the other is is known as a "non-confirmation" in Dow Theory parlance.
We await the election results and the Fed statement tomorrow afternoon. Please also note that while the Fed statement is only a few paragraphs, members of the Fed will be making all sorts of speeches beginning on Friday which should clarify any ambiguities in their statement tomorrow.
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Posts
Parker:
ReplyDeleteI'm willing to eat crow, but I think you are doing people a mild disservice by arguing the bear position. What compounds this problem is that all the Terry Laundry people have been directed to your website by Terry himself, which lends an aura of credibility to your work.
I think Terry doesn't give two sh*ts about the equity market anymore, and has given it short shrift vis a vis bonds and gold.
I honestly wish you the best of luck, but to me, it looks like the bears are about to be skinned alive. As I said, I'll be happy to eat crow if I'm wrong but please consider the innocents that travel to this website.
Jim
ReplyDeleteYou've made several bullish comments here. That's cool.
I did remove one of your comments when you replied to someone who asked a question "You're screwed." That type of post was uncalled for, and won't be put up with.
Terry Laundry projects a top in the second week of November. I project an end to T13 on or about November 12. Writing that is not any more or less "dangerous" than you claiming the bears will be "skinned alive." It's all opinion.
I have never once told anyone to "buy this" or "sell that." I do point out evidence that is consistent with my forecasts, as Terry does. But I also talk about bullish events like POMO and Dow Theory confirmations.
I trust the readers of this blog to use their own judgment. I find it odd that you seem to think they are incapable of doing that.
Good luck to you.
Parker great answer. Always amazes me how some people will never realize the market will do whatever it wants - and there are some very smart people like yourself and TL who sometime figure out and edge. An edge can sometimes only be one over half. But as we know it's never 100%. Keep up the good work! I look for your work everyday and love the follow up comments.
ReplyDeleteThis may be a genuine rally, but by any measure (time, multiple divergences, gann, elliott) a correction is due. Thank for 'going public' and don't let the occasional 'challenge' impact your great work. H.
In response to what Jim said, no one knows the future. If you're going to trade, you have to have a plan, and part of that plan is what to do if your forecast is wrong.
ReplyDeleteThere are certainly all kinds of technical indications right now that we are very close to a top. All we can do is put our money where we believe the best odds are. But if we're wrong, then we get out.
Of course, right now we're really not dealing with a free market. When Uncle Ben, on a whim, can create hundreds of billions of dollars out of thin air and those billions end up in the hands of large investment banks and hedge funds, what can stocks and commodities do but go up in price.
So on the one hand TA is screaming TOP! On the other, "Don't fight the Fed" says we'll see higher prices, a LOT higher. Which way will it go? Who the hell knows? But price will ultimately rule the day and that's really the only thing you can trade on.
Parker's bearish posts of the past few weeks are HIS thoughts and analysis. In his videos he always says do not buy or sell based on his recommendation as he does not make or lose anything.
ReplyDeleteTerry Laudry HAS BEEN SUPER bullish throughout 2009 and up to last April's high. Moreso, he was expecting a top between April 20th and May 21st. Prices on the S&P he focuses ARE NOT higher but still below that high. Higher or NOT on the S&P 500 during this rally he has been correct in bonds and/or Gold. When else can one expect? To be 100% right all the time and in all markets? He is kind enough to show his work and record every week his thoughts ... for free.
Both Terry and Parker HAD not been recommending any short or agressive short positon. They talked markets and find that based on their work we shouls be ending tis advance. Unfortunately, there may be some machinations at the Fed/Govn't that do not let the market not ever take a breather. I know they do not need my defense as Terry's especially long time record speaks for itself. If a legendary trader (Marty Swartz) found value on Terry's indicator(s) what do we (the rest) know?
Anyway, my point is that, as Parker said, that is his opinion on the blog.The fact that he stands out and takes based on HIS work the opposite side is true contrarianism and shows courage. Really. How can Jin explain the skinning of the bulls in May-July in a matter of days? Months of gains had been evaporated in a matter of gains. The bears skinning of late at least is a slow torture. But this is how markets work. They frustrate both sides.
It increasingly looks like both sides will be trapped (as bears are already) before we finally get at least a decent pullback. The very fact that no-one is talking about a correction anymore (but only of a pullback) is a testament of the excessive bullishness of the market. It looks like it will be more than of a pullback ...and that will trap the bulls wrongfooted as well. It is the bull's skinning that is due. It is all about turns.
Just my thoughts ... and my two cents
I need to point out that printing money is not analogous to a rising stock market and furthermore creating money to buy US treasuries does nothing to create real output and there is a real risk of creating future inflation. QE1 did not work as output has not increased and unemployment has remained steady if not worsened. Until someone bites the bullet (That's all of us) we will continue to dig a deeper hole. Forget about the guy who made that comment. He has the right to his opinion. He's listening to somebody else who thinks the bull market will continue. There are several reasons why this will fail to hold. The US is basically ignoring the fact it has an immediate debt problem and keeps trying to push it further out. The consumer is not spending and is unlikely to start anytime soon. GDP was 2% and 1.6% of that was inventory. If inflation does start (think 1973-74) with all this debt what do you think will happen. When one cannot pay his debts and the cost of living rises purchasing declines. Yeah the stock market is going to keep going up.
ReplyDeleteLet me defend Parker a little bit here before I write my opinion. He openly expresses his opinions and that is it. Nothing wrong with that.
ReplyDeleteMy problem with the US market is that the recent QE 2 chatter and all the hoopla has created a one-sided bet. We all know that these kind of moves when they lack fundamental structure they ALWAYS fail. Simple as that. And we do know that the US economy apart from some high-margin businesses like Apple (which admits that margins will get hit from rising raw material prices) is not growing sufficiently. This is NOT a recioie for a healthy advance.
The FED pumping as occured in late 1999 went only that far (March 2000 in the NASDAQ market). We could have the same incident here as well. However, claiming that this will advance WITHOUT a minor pullback and "skin" the bears is at least nonsense. Lets get one first and then will see what happens.
Even during bull phases there were pullbacks. This time it looks like a 2,4% is more than sufficient. A new paradigm that says market WILL NEVER correct more that 2,4%? Just as in April. Remember what happened next? It is just a matter of time.
Is it possible that no one wants to cash some chips? All participants are money managers who missed the rally? Who were the ones that bought the August lows? Are these people entirely in? Volume suggests that this is a traders/HFT market.
It looks like those who benefit from an equity advance have succeded in convincing the market that it will never correct so they have to buy NOW.
I cannot wait for that exhaustion then. It will be a momentuous moment in markets and one to behold. The same people who are today saying all is bullish and there will bo no more stops of the bull-train will come out and say this will be a healthy correction to buy. Perhaps. But can some tell me when the best unloading of stock is done? Hint: create too many support zones/gaps where would-be-buyers will line up to get in (again). This is where the most buyers (and bears to cover) will be ready to buy the stocks that the unloaders will be selling! Simple as that,
and Parker ...keep the great postings.Thanks for that.
Jim
ReplyDeleteI agree with your comments. Terry has been stumped since the spring of this year, and downright wrong since late August. Now we are here, in November still talking about trying to pick a market top. Why is it that all of the amateur blogs are bearish, while the big money hedge funds are raking in huge gains this year. Parker has done some unique refinements to Terrys work, but they both should have a huge disclaimer at the top of their websites - for entertainment purposes only. Because claiming otherwise is irresponsible.
WOW. Since Parker has been defended here, I am going to defend Terry. I dont remember anyone as Bullish off that March09 bottom than Terry. He has Been CONSISTENT with a May TOP along with End AUG as possible double top. Okay another s.t. T has crept in and now he projects a Nov 12ish Top to a mid Dec.low. As the previous comment stated, we havent taken out April26th Top yet have we? I Know we have hammered that Feb05 low though, And he has been SPOT ON in bonds, fagix as well as vustx, along with GOLD Bull Mrkt, every dollar up. Traders embrace uncertainty thats why we Skin the Weak Traders. Lighten up. Parker and Terry have never been perma Bulls or Bears. Sharing and showing their Work for Free is Rare and done in a professional tactful way. If they are so wrong?and amateur? go ahead and fade them, But GOOD Luck with That exercise. Keep up the Great Blogs and Twits Parker.
ReplyDeleteDoes anyone remember how the oil/gold/commodity run-up ended in the summer of 08'. What was the sentiment then vs. now and once the down move began, how did it end again? Those with all the party hats on that stayed for "one last drink" ended up crying in their drinks. I personally have been using Terry and Parker's insights to get to cash, rather than going short. Once the down move starts, there will be many longs holding on and hoping for the Fed to rescue them until they finally realize that there will be no more rescue - and the end of year tax sellers may also cry uncle(which may form that December low). Thanks again Parker. and disclaimer here, wtfdik, remember, I live in a van, down by the river.
ReplyDeleteLove the site. Thanks. The largest speculative, fiat, inflation induced, mania in history has fooled a lot of people into thinking that real wealth can be created out of thin air. Should be really interesting when the long term oscillator finally reaches bottom.
ReplyDeleteJeffrey, you are right that the Fed "only" buys treasuries. So how can their buying treasuries drive up the price of stocks and commodities?
ReplyDeleteWell, the Fed buys treasuries say from an investment bank or hedge fund. Now what do you suppose that bank or hedge fund is going to do with the money they got from selling their treasuries to the Fed?
Pima,
ReplyDeleteYour missing the point. First the money the Fed uses really doesn't even exist hence the idea they print money. They are different then you or I. They can write checks with no money in the account. As that money filters into the system through buying treasuries it dilutes every dollar you and I make. Secondly, it creates nothing of real value like jobs. If the consumer is 67% of our economy and that section is getting hammered then how does higher stock and commodity prices fix that? Do you think the average Joe is getting rich in the stock market. Heck the average Joe isn't anywhere near the stock market. This is all artificial and in the end the stock market is not going up period. It's smoke and mirrors and a lot of proaying that we can bide enough time that it begins to fix itself. How much of a chance would you have of paying off your credit cards with other credit cards. You can skate for awhile but sooner or later it buries you.
Found this fresh after writing the previous post which is more confirming news that the US markets are not likely to see continued higher prices.
ReplyDeleteStill no signs of inflows into U.S. mutual funds, according to TrimTabs. Charles Biderman phoned to say that U.S. equity funds continued to see outflows of $5 billion in October. Still, it's the smallest outflow since April.
International equity funds had modest inflows of $5 billion, continuing a trend that has gone on for more than a year (out of U.S., into international).
Bond funds? The tsunami continues...$24.5 billion inflows.
Why does the U.S. equity market continue to show no signs of inflows, despite a terrific two-month run? According to Biderman, the average investor since 1998 has invested in the S&P 500 at roughly 1,400 — with the S&P at 1,200 many are still under water.
How is that, since the S&P has only been near 1,400 for at best 4 of the last 12 years? Because many only put money in when markets are moving up to new highs, Biderman notes.
Jeffrey, Charles Biderman would be the last one I would quote to support the bear's case. He was bearish since the Mar 09 bottom all the way till Apr 2010 when he finally went bullish. If you read their latest investment research advice, they still believe that the bull has another 2 months to run (i.e., till the end of the year) because of 3 factors: slowing withdrawal from U.S. equities, high short interest that are deep underwater and a large number of hedge fund managers chasing upward momentum who missed the rally from Aug bottom needing to show sufficient performance to earn a performance fee.
ReplyDeleteNo one is quoting Biderman. The important part of that article is the Mutual Fund Outflows. It's amazing whaat you want to focus on. It could have been Santa Claus reporting that info. It just doesn't matter. Another thing of importance is I am neither supporting the bulls or the bears case. I am neither. I am a technalist that pays attention to fundamental information and then I let the market tell me what it wants to do. I am not concerned what the market will do in 2 months from now. I am only concerned what its doing right now and based on my best guesstimate it will not hold up much longer.
ReplyDelete