Today we erased that bearish divergence that was brewing between the S&P and the NY Advance Decline line.
I could be wrong, but I feel we are unlikely to get a serious correction unless and until there is divergence between the S&P and either: 1) the NY Advance Decline line (Issues), or 2) the NY Advance Decline Volume.
The Money Flow Ts show a cycle top in stocks and junk bonds around ~February 1, and a cycle bottom in volatility about the same time.
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Parker I am afraid that you are buying into a "Bull Trap". The AD Line did reach a new high yesterday, but it was only 47 above the old high, is that a Breakout or a "Double Top"? Also I think that Terry's original forecast for Mega T #14 to be a bearish T was accurate. If you draw a line from the Vol Ocillator high of 249.9 on March 18, 2009 to the next peak of 134.3 on June 15, 2010 and extend that line through today you get 85.18. This line has been tested 5 times, but has not been broken. Bulls Beware!
ReplyDeleteThe Master Cycle now and into 2011
ReplyDeletehttp://timeandcycles.blogspot.com/2010/12/master-cycle-now-and-into-2011.html
The Master Cycle (MC), when active is a great cycle to know as it is very precise in predicting exact Highs and Lows. (For more information on the MC, please email me at timeandcycles@gmail.com for the free MC 2010 Forecast, where the MC is explained in details)
The MC has been in the market Day for Day for about 7-8 weeks now, since the 11/1/10 Lows and continues to see higher prices, confounding the Bearish outlook.
However, one of these days soon we will see a hard down day, just to feed the Bearish sentiment. The MC knows exactly when to expect that.
In general though this rally should continue into January 2011 and if it is still active, It also has another major High in March 2011 as well.
2011 should be an exciting year and should see lots of Volatility and some large swings Up and Down.
Merry Christmas and a prosperous and Happy New year to all.
nice name perma bear : ))
ReplyDeletehappy holidays all
The current setup (Hussman Overbought, Overvalued, Rising Yield, excess optimism + my proprietary Sell indicators)) has historically produced a 100 SPX point decline within 30-60 days, in 100% of the occurence over the last 20 years. We may have 1 week's lead time, or 1 day lead time. All we need is the SPX closing below its 15 day WMA. And kaboom......no joy for bulls in mudville.
ReplyDeleteUntil the SPX confirmation arrives, enjoy the low tick glorious melt-up. This one is destined for the history book. We will remember this glorious melt-up for a long time. Take a look at the chart of Oct 15, 1987.
http://stockcharts.com/h-sc/ui?s=$NYA&p=D&st=1986-12-22&en=1987-10-5&id=p97804137368
The good time didn't seem to ever end....
Except that the USD is still kicking - whats up with that. Someone is buying it even a pomo rolls on...
ReplyDeletebkx has broken out significantly as well and has a target of 56 before any correction takes place...
ReplyDeleteAccording to my Gann charts, 1267-68 is the next resistance inflection point.
ReplyDeletePrice (ES MARCH) will have to stay above 1252 now to make it to any above sq pricing! SSO must stay above 4740! Closing below these numbers will be first alert! Good trading!
ReplyDeleteI'm trading light at the moment. The trend is the trend until it isn't, right? However, a trend confirmation in $NYAD isn't enough to erase the amount of risk at the moment. I know you weren't saying that, Parker. I'm cautious for these reasons.
ReplyDelete1. the McClellan divergence still exists.
2. it's a light volume time of the year.
3. Investors' Intelligence Sentiment came in at a 38 month high yesterday. Speaking of sentiment, it can be a dangerous sign when everyone is expecting upside. Most everything I read right now expects a slow drift upwards into the new year.
4. we're 9% above the 200EMA at the moment which is "usually" about as high as you get.
That said, I happen to agree that without any seriously disappointing development, we probably WILL drift up into the new year so Cap gains can be deferred 15 months to 2012. I don't dare be long after Dec 31st though until I see something of a correction, but that's me. My two 1/4 size positions are on XLF which is doing well and EUO as a dollar play which is heading in the right direction, but weakly. I do wonder if the dollar may still reverse down, but for now the trend is up along with the market. EUO seems the safer play at the moment due to European concerns, plus if a correction does take place sooner than I expect. Good luck everyone. I enjoy having a place to bounce ideas around.
I read the distance from the 200 over time using PPO on stockcharts of (1,200,1) which is simply the distance of the 1day EMA from the 200day EMA with no signal line). $COMPQ (Nasdaq) is also at it's extreme highs around 12-16 (on PPO).
ReplyDeleteif the Mayan calendar date Dec. 21, 2012 IS significant as many people (me too) think, today is f15 on the backward Spiral Calendar anchored from that date.
ReplyDeleteThe print high of 1259.38 is very close to a .618 retracement of the drop from the Oct. 2007 ATH to the Nov. 21, 2008 low, which by some EW interpretation could be the orthodox low of wave "A".
if you plot the Gann Sq. 9 with 741 in the center, 1258 lies on the 270 degree cardinal line. if you plot the Gann Sq9 using the August 1982 low of 102 in the Center, 741 lis on the zero degree carkinal line.
Geometric harmonics perhaps? dunno, but a reversal from a high today could prove internesting.
Gann's Master Math and Sq 144 Forecast
ReplyDeleteif you run 1x1 @ .33 line and 1x2 @ .33 line from Nov 9, 1909 (one of the major 6 market crashes with a 47% drop to DOW 42) you can set the Gann Sq. for this Market Activity from 8/96
The top is SPY @ 155.31 (hi 7/08 & 10/07 and the bottom is SPY @ 60.03 (Low 8/96).
You have 3 Gann Sq 8/96-9/02, 9/02-7/08, 7/08 - 6/14.. Charted the markets in the first sq traveled up the 77 degree ang and collapsed, second sq followed the 45 degree angle, third sq it is between the two angles so in in a megaphone.
The center of the current sq is 9/11 @ 109.42 SPY. Price is tracing the inner circle (the circle within the sq within the circle inside the Gann Sq.)
One theory is the center of the Sq is "HOT" acting as an attractor and detractor. The fact that price is avoiding the center means price will roll up and over it so will come down about 9/11. The major risk is it can drop into the "HOT" center in which case it will be spit out either higher or lower in a dramatic fashion.
You allign the sq in Gann timewise using the position of Jupiter, Mars, Uranus, etc.
What the trend lines (1x1 and 1x2) actually tell you is what the compound interest rate is that contains the valuation of the markets.
Price actually hit the lower line exactly on March 2009 just as it did in Nov 1909.
I agree with Parker's confirmed uptrend and I appreciate the work that he posts here including the MFT...This uptrend was forecasted last week on these astro charts...SPX & USD...The SPX and the USD charts were forecasting opposite trends which is how they have been trading lately...I updated them today and extended the forecasted trend to just past Jan 10th...
ReplyDeleteSee them at...http://bit.ly/e79yIH
DanielB...I watch similar indicators as you do...but I act on my Trend Following signals since it is very difficult to trade from some indicators including sentiment indicators...My Trend Following signals have done well so far for 2010...Performance is posted on my blog...http://bit.ly/hdXnic
I then use my astro charts as a potential road map...
I will update three charts weekly for all to see, SPX, GLD, USD...so feel free to take a look and maybe leave a comment...
Happy Trading!
I no longer understand half of the comments on this blog, but whether I understand or not, it's pretty surprising how many people remain bearish inspite of the ever higher price action. Obviously there has to be a pull back at some point, markets can't go straight up forever. However, there is very little evidence to suggest a major pull back at this point. How many overhead resistance levels have to be broken before people "believe in the rally"? For me, I spent a full year after the March 09 low convinced the market would roll over any day because of 101 fundamental and technical reasons. I no longer fight the trend.
ReplyDeleteFor the record, I am long copper (JJC), long wheat futures (March contract), and just had my trailing stop in cotton hit yesterday (very profitable trade). I will be looking to get back into cotton once (if) this pull back starts to find support. I'll probably sell wheat tonight or tomorrow since I am up nicely and don't want to hold over the long weekend.
Best of luck to everyone!
Good job RobW! Very happy for you.
ReplyDeleteJust to clarify my stance, I don't trade sentiment or any breadth indicator. Price signals rule buying and selling while breadth (my four points above) should determine position sizing. We all have our different styles and I prefer to wait for a pullback (not necessarily a big one, maybe the 50day) for a better risk/reward condition.
ReplyDeleteROB W
ReplyDeleteFunny how much of life is a perception we have created…trading isn’t any different! I am sure many on the site are long and are looking for a profit taking area of price and time. My choice is to be pro active rather than asleep at the wheel. The only way to do this is to do the work if one knows how! And as stated my price and time is 12/26 and a stop in the EMINI at 1251 with targets at 1261 and the upper at 1271……… I have also chosen to buy a % of PUTS against a rather large SSO long position! When I see your exit in Wheat we could say the same about your thought……………”why would anyone exit Wheat when price and time isn’t close” loll……………BUT dats what makes trades, two sides to the coin! Happy Holidays to all!
DanielB...Noted
ReplyDeleteHave a great Holiday!
I,
ReplyDeleteCan you explain how you arrived at your price and time for 12/26 for the S&P. Thanks
Food for thought - Alan Newman's Stock Market Mania was sounding the alarm all the way back since 1999. And again in the 2006, 2007 against Large Banks' extreme leveraging. He is not a trader - he advises long term value investors.
ReplyDeletehttp://www.cross-currents.net/charts.htm
and
http://www.cross-currents.net/monthly.htm
http://www.cross-currents.net/outlook.htm
Fred,
ReplyDeleteI use mainly Gann’s work for price, time and cycle work along with Andrew’s and simple Elliott counts………as in mass pressure, master cycles, square etc. I am not trying to hedge as I have posted 1000’s of charts when I was active on a live forum………but it would be impossible to explain much here! There is plenty of course work available at SACRED SCIENCE INSTITUTE and Brad is a great guy, on Gann’s work and much free on the web! BTW take a look at the EURO and FXE! Good trading!
$NYAD divergence vs SPX is not an absolute condition necessary for market crashes.
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$NYAD&p=D&st=1999-12-23&en=2002-12-23&id=p58586208834
Following NYAD would have gotten you killed during that time.
SC
ReplyDeleteI don't understand your point.
First, if you pull the start date back to Dec 1997, you'll see that the first bearish divergence between NYAD and Price (mid 1998) produced a 20% correction.
What you are showing in 2001-02 is the NYAD making higher highs while price makes lower highs. This is called a negative reversal, and is a sign that the downtrend in price will continue, which it did.
The negative reversal is more commonly used with momentum indicators. Here's the theory. In a downtrend, price makes a rally. During the rally, momentum (RSI for example) makes a higher high than the last rally. But despite the push from momentum, price makes a lower high. This is a sign the downtrend is strong and will continue.
Positive reversals happen in uptrends. Price corrects. Momentum makes a lower low than the last correction, but price makes a higher low. Despite the downward pressure of momentum, price cannot make a lower low. Thus the uptrend is strong and will continue.
the cumulative adv decl line in Esignal is still showing divergence. about another 1000 to go or so. not sure how they calculate theirs but just an FYI.
ReplyDelete$NYAD in cummulative mode, is not an oscillator.
ReplyDeleteHow do you explain $NYUD pattern in the samwe period then? And how do you square your explaination with the price pattern of $SML during that same period?
I understand the negative reversal and positive reversal theories. They apply to oscillators, due to their fixed lookback period. That is simply a mathematical properties. Same osc indicator, you change the lookback period and you can get a different pattern for the same period.
A cummulative indicator is open ended with no fixed lookback period.
same Cum $NYAD, with SML
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$NYAD&p=D&st=1999-12-23&en=2002-12-23&id=p94989125926
Here is the Cum $NYUD
http://stockcharts.com/h-sc/ui?s=$NYUD&p=D&st=1999-12-23&en=2002-12-23&id=p13427657826
There hasn’t been a down year in the third year of a presidential term since 1939. Granted, if anybody can do it....it is the socialist Obozo.
ReplyDeleteRule number 1. Forget the news, remember the chart.
And thx to all the bears in advance for covering your shorts and driving this thing higher.
J...Sacred Science is an excellent recommendation...I have been using them for years...Brad has made a lot of great works available to the public...
ReplyDeleteJust Signals
ReplyDeleteI agree, I have nothing to do with them, except as you say if it were not for him much would have been lost. He was the top student of Baumering and that says it all as the man was a genius and made a fortune, before is tragic death! But a genius seems to have problems grounding to this dimension! Best to you and yours!
Jack
ReplyDeleteSince 1833, here's what happens in pre-election years when the midterm year is up > 5%
13 = Up > 5%
2 = Flat up 0 to 5%
3 = Flat down 0 to -5%
2 = Down < -5%
Based on this small sample size, there's a 65% chance of an up year in 2011, 25% chance of a flat year, and 10% chance of a down year.
Before traders put their $ on 2011 being an up year as investors.........be aware the greatest advances and declines occur at the end of the 20-year and 30-year cycles, and again at the end of the 50-year and 60-year cycles, which are stronger than the others. Therefore, it would be wise in my opinion to be fully aware of this upcoming anniversary. I believe that 2011 will put in the finish of the 10 year cycle and be up into the first half and finish down in the 2nd half drowning most! Good trading! Be careful out there!
ReplyDeleteSentiment is very bullish ....
ReplyDeletehttp://blogs.decisionpoint.com/chart_spotlight/2010/12/sentiment-is-very-bullish.html
Achilles
ReplyDeleteI think Swenlin hit the nail on the head with his comments:
"While high levels of bullish sentiment among advisors, investors, and money managers usually occur at market tops, market tops do not always occur when sentiment is very bullish.
Sometimes people respond to the obvious and correctly align their market posture with the price trend. In situations like this we have to wonder whether or not they are wrong.
Bottom Line: An excess of bullish sentiment is a caution sign and should cause concern because such sentiment peaks are often followed by price corrections, if not bull market tops; however, we do not use sentiment as a timing tool, just a indicator to help paint a picture of the market environment.
So far we have no indication from our trend-following models that there are major problems ahead."
I think there is a serious methodological issue with T Theory as it stands today. I mentioned it earlier in another comment that NYAD already made new high early in Dec and that was based on intraday ADV-DEC line using pure common stock issues rather than all NYSE issues (which now have a large number of non-common stock and in particular increasing number of non-stock issues). Another serious problem is that issues on NYSE are increasing as well which tend to skew cumulative advance decline line. I believe it would be far better to measure SP 500 cumulative advance decline line and Terry did embark on that project once (you can still find the chart in the archive from earlier this year). However the result of SP500 only cum ADV is shocking to say the least as it doesn't even come close to time symmetry that at least appears sometime under NYSE CUM ADV that Terry dropped the idea immediately.
ReplyDeleteParker
ReplyDeleteI have reviewed every chart in my confirmation/non-confirmation chart list and the only 2 that confirm this move currently is the T theory confidence indicator and the Summation index.. (Oh, wait! and the daily A/D now) every other one is flashing major non-confirmation....and Parker's VIX:VXV just tripped another decline warning.
somebody please tell me what the heck is going on? To paraphrase an old song.."somehow, somewhere, somebody is going to get burned"
Best to your trading!
Bill
Bill
ReplyDeleteWhen are we going to get a serious correction, and will the first correction be the serious correction? These are the questions I am trying to answer.
The VIX is showing lots of complacency. There are many negative divergences to be found.
But there is no divergence between SPX and NYUD. The one thing in common with the 2010 tops in January, April and August was divergence between SPX and NYUD. There was no divergence at the November top, but there wasn't much of a November correction either. Currently, there is no divergence between SPX and NYUD.
And, the ARMS sell warning has worked itself off.