Terry Laundry discussed a short range VO T today at T Theory Observations. The projected top date for that T is February 16, 2011 after which he expects a correction into March.
The longer cash build up line that begins in June 2010 projects a VO T top date of May 17, 2011.
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When does one use the VO Ts vs the AD Ts?
ReplyDeleteI don't know what to make of these calls as I haven't heard an explanation of the May & August (& now December?) top call failures.
Don't really know what to think of short term T theory at this point.
Until the S&P 500 breaks above 1246.59 I will be fading TL. His May 20 top turned out to be a bottom (that one hurt) as did both his August 26 and mid-November tops. I have no reason at this time to believe that the February 16 top won't turn out the same way.
ReplyDeleteI posted this on December 12:
"jasinhbca,
Here is my take on Elliott wave count from the March 2009 low:
http://market-innovations.com/gfx/insights/2010/chart1212.gif
It is a 62% correction of the 2007-2009 collapse IMO that will end next week."
I stand by that and believe the downtrend started on Tuesday December 14. Based on Elliott wave analysis and Gann time cycles I expect 1180 by January 13. We shall see...
GLTA,
Norm
The always debatable Centerpost placement: Nov 16 (the intraday and closing low for the move) or Nov 30. Looks like Terry chose the latter.
ReplyDeleteIn any case I like his hold the breakout approach here. In fact a pull back to the breakout early next week would be absolutely bullish. Relieve some of this overbought condition. A dip buyers wet dream.
The chances of a breakdown before 2011 are extremely low historically this time of year.
My favorite indicator is price. The trend is up and trying to guess tops is a loser. The market can continue to climb for much longer than seems reasonable. Probably will end in a blowoff.
Keep it simple....Staying long until the trend changes....
The Euro weekness and the mirror strength in the USD points to a top or serious correction in stocks,gold,commodities,and a rally in bonds. I thought the recent top call in T theory was near or on the mark for December. I'm glad I use several methods.
ReplyDeleteTo be fair we could rally till after Christmas,but I think this latest top was it.
I might add as a discaimer, I am short here.
ReplyDeleteJack,
ReplyDelete"The chances of a breakdown before 2011 are extremely low historically this time of year."
Not so. I have monthly averaged data of the S&P 500 going back a century. Over that time there were 10 occasions where the market sold off 20% or more.
The most popular months for the beginning of these cyclical bears was December (2) and August (2). If you look at clusters of +/- one month, December (4) and September (4) were the most common. The remaining two bears began in March and April.
BTW, June (3) and December (2) were the most popular bottoming months and July (5) the most common cluster bottom.
Norm
Jan or Feb? This is the margin of error in T Theory. Short Term Theory and EW both.
ReplyDeleteFeb 16th eh? Sound good to me.
ReplyDeletehttp://practicalt.blogspot.com/2010/12/cupid-est.html
Strange calls............got to be right sooner or later I guess!
ReplyDelete"Hold da breakout".........his bias is a bit late for that type comment after all the discussion of "the top in place"! Like I said very strange, but still looking to find some kind of validity in the work!
ReplyDeleteHere is a forecast by a fellow that has a very good record: http://www.smartmoneytrackerpremium.net/Dec_68WO.php
ReplyDeleteHe sees an intermediate correction beginning very soon. The citation is only temporarily free.
I should also note the week's trading ended with the DJIA having a .72% gain, but there was a negative money flow of 5 billion dollars out of the DJIA. The general market was up .33% but had a negative money flow of 13 billion dollars.
Strikes me that we are seeing distribution from the professional money managers to the general public.
joe
Well said waw4, listen to yourself. I started following t-theory in 2006 when terry said manhattan commercial real estate was worth more than gold, check that top on iyr. then he was right maybe once since then. my favorite call was staying short in the 2009 bottom and then flipping after we rallied 100 points from the bottom that one was classic, cost me bundles over the past 2 years, bundles. Do your own work everyone, noone can predict anything, just follow things closely and form your own decisions devoid of emotion and most importantly figure out where your idea is wrong. when everyone is saying the market is doomed get or stay long. when everyone is saying we can't possible keep going up, just put a 10% trailer in and ride the wave.
ReplyDeleteParker,
ReplyDeleteThank your for sharing the results of the variety of tools and methods in your approach to market analysis.
I noticed these statistical studies that may be of interest:
"SP 500 Between Now and Year-End"
http://www.safehaven.com/article/19370/the-sp-500-between-now-and-year-end
http://www.amateur-investor.net/Weekend_Market_Analysis_Dec_18_10.htm
http://www.hussmanfunds.com/wmc/wmc101213.htm
I deleted my last comment because I thought it might have been a bit too harsh on Terry. However, what I want to get across is that short range T Theory is not reliable going by the track record Terry has had this year and new traders who stumbled across T-Theory are definitely advised to exercise extreme caution no matter how convinced Terry is of his short range T's.
ReplyDeleteThanks Jon.
ReplyDeleteI agree with Frank H. that "from a statistical and historical point of view, this might still (despite any 'overbought' indications or indicators) not be the peak time to bet the farm on any short-term mean reversion tendency through the end of the year."
And of course Hussman is right. We are due for a substantial correction. The question is WHEN?
Joe
Your Gary Savage website reference is interesting. He seems to follow a 35-45 day low-to-high-to-low cycle. Those who follow such cycles will conclude that their cycle started on November 30, will peak in late December, and will bottom in mid-January.
Of course, they have a hard time explaining 45-55 days up with no serious corrections from: 1) Nov 2009 to Jan 2010, 2) Feb 2010 to April 2010, and 3) Sept 2010 to Nov 2010.
The Money Flow Ts suggest a stock market top, a volatility bottom, and a junk bond top on ~February 1. The Money Flow Ts also suggest a dollar bottom, Euro top, and gold top on ~February 8.
On the other hand, Gary Savage thinks the dollar is already in a new uptrend, gold is starting a new downtrend, and the S&P should start a major correction either next week, or by Jan 14 at the latest.
Time will tell who is closer to correct.
Amen, Parker. Gary does explain that some cycles extend. But I have a hard time finding a cycle of practical use when it can extend or contract significantly. What I can say for Gary is that he usually realizes when he is wrong when the unexpected move begins, and then he will tell his subscribers to change tactics pretty early in the game. I suspect our Market friend is correct. I do my best when I follow the momentum in the charts and ignore everyone is calling for one move or another.
ReplyDeleteHowever. I am interested in seeing just how much we can glean from money flow. While a dramatic move down did not begin in the market when MFI seemed to call for a top last week, we have entered a consolidation. In addition, it appeared to identify some sort of top in gold.
Parker, do you know why T Laundry seems to have lost interest in the money flow T's? Also, what do you think of his RSI T's?
joe
No change in the control cycle ........one has to be in the right cycle or it is bound to be wrong! Wheels within wheels..just like Gann talked of! Got a Lunar time period Monday..watching Dec 29 with confluence dates!
ReplyDeleteJoe
ReplyDeleteOn the Money Flow Ts, you'd have to ask Terry. He mentioned it briefly in one of the segments yesterday.
RSI Ts work well sometimes. Sometimes they don't. You could also use %B instead of RSI.