Very light volume this week. Hard for me to read too much into the price action, except for two things that stand out:
1. The US dollar is currently down 2% for the week.
2. Silver is making new 30 year highs.
As you may recall, I have Gold and the Euro making a cycle high on ~February 8, with the dollar making a cycle low about the same time.
As for equities, I have the S&P and Junk Bonds (equity equivalent) making a cycle high on ~February 1, with volatility making a cycle low about the same time.
These forecasts are based on the Money Flow Ts, and contradict the work of many other cyclists. However, they tend to "fit" with Terry Laundry's current thinking of a "Short" volume oscillator T expiring in February, resulting in a cycle low in March.
Happy New Year to everyone! I hope 2011 is joyous and bountiful for you.
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Posts
Charles Nenner is really good.
ReplyDeleteParker,
ReplyDeleteWhat do MFTs say about USO (Crude Oil ETF) and UNG (Natural Gas ETF) ?
Achilles
ReplyDeleteMFTs are best suited to trending securities.
UNG has been going sideways for 3 months. I don't have a current MFT projection for it.
One of the inverted MFTs that could be drawn projected the end of the downtrend in mid-October 2010. October 25 is the all-time low.
It may well be basing at $6 for a new uptrend after falling from $63.
Likewise, USO has been trading in a range from 31 to 42 for 18 months, and has no current MFT projection.
On a side note, one thing I dislike about USO and UNG is that they don't accurately represent the spot price of oil and natural gas.
For example, West Texas crude has gone from $35 to $90 since December 2008, while USO has gone from $27.5 to $39.
USO is a sucker ETF in my book, only to be shorted during oil downtrends and never to be bought long during oil up trends.
Parker: would very much appreciate your thoughts on the US long bond?
ReplyDeleteParker,
ReplyDeleteThanks for your input.
Are ETFs (in general) sucker plays in your book?
What is your vehicle for trading oil and/or natural gas?
Parker, I agree with the last request on the long bond. I looked at the TLT, but I see no way to measure for another move up. It appears that the last T is past and we have no peak in the MFI to project another top. Is this true on not? Thanks and a good year for you and your blog.
ReplyDeleteAchilles
ReplyDeleteNot all ETFs are sucker plays. AGQ (double silver) is an excellent ETF to trade for example.
USO, UNG and a lot of other ETFs have built in decay as a result of monthly contango losses (they roll over the front contract every month). They are sucker plays from the long side.
Spec & Cycleguy
My last MFT on TLT showed a cycle bottom on December 8. That was exactly 1 week early. There is no basis to draw a new MFT at the present on TLT. Just because we have completed a cycle bottom does not necessarily imply the next phase is an uptrend.
More generally, if stocks and junk bonds are due for a cycle top in early February, I don't think that's bullish for long treasuries.
However, QE2 is having crazy effects across the board, so I don't have a good feel yet for what's going to happen.
Parker, Achilles
ReplyDeleteJust fyi.. my Momentum Change indicators generated a new buy signal on Wed at 92.
I have no idea how far it can travel, just the momentum is now to the upside... I took almost 10 points out of a short in TLT, covering the short at 93.90 a week and half ago.
It will go up until it doesn't.
Bill
Happy New Year to all.
ReplyDeleteParker, thanks for the blog and your hard work.
Parker thanks for explaining T-theory.
ReplyDeleteHappy New Year!
Short here,looks very toppy.
If anyone can make heads or tails of Terry's comments today, I would greatly appreciate it. He referred to the S&P as being in a bull market, but I recall that he issued a long recording announcing the commencement of a mult-year bear market in equities.
ReplyDeleteHis thoughts today were confusing and muddled. I am not sure what to make of it. I have followed him for a long time, but he seems to be making post hoc rationalizations. It was only weeks ago that he was pointing to massive insider selling and positive sentiment readings to support his thesis for a correction. Today, there was no mention of these persistently high numbers, and he specifically mentioned that he did not foresee a January correction. I am not trying to bash him--I am only trying to discern his approach and outlook.
ETFtrader and everyone, this is just my opinion and I don't know your track record, but I see red flags of a possible selloff, but no confirmation (which is a requirement for me). VIX is up 15% from Dec 22, but no reversal yet. Sometimes, when the lows hold, the VIX reverses back down due to a short squeeze. Also, watch out for the first-of-the-year mutual fund inflows. The first week or two of January seems to carry on upwards before earnings season. Also, the dollar dropped hard on friday breaking lows after reaching the Fibonacci 61.8% retracement of the August high which seems to show it is reversing back down though it may still be a bullish flag. If it breaks friday's lows on a closing basis, I'll be short the dollar, long 1/2 position equities. Selloffs usually occur with the dollar and bonds spiking together, but they're opposite for the moment so I rely more on the price action for equities in that case. The last week of Dec may have been part of the rest it needs to run ahead a little more.
ReplyDeleteTim
ReplyDeleteI thought today's comments were about getting back to basics, and focusing on envelope theory, cash build up phases, T Theory Accumulation Lows and Cycle lows. About the only thing new were the cycle midpoints.
As for revising forecasts, that comes with the territory. Terry has not been alone in this regard in the age of QE2.
Parker
ReplyDeleteI was looking for a new post to work with.. glad this is still active.
My Momentum Change indicators have generated new Sell signal for the Q's on Thursday, 12/30, at 54.60. And a confirmation in the COMPQ also. For those inclined to trade the levered ETF's I also recognized a new Buy signal for the QID at 11.55
These new signals come just after a new Buy signal in the TLT. It looks like Mr Market might be signaling concern.. maybe the "Risk Off" trade is back.
Best to your trading!
Bill
WhadidItellyaaaaaa! (Monday morning)
ReplyDeleteGood call Daniel!
ReplyDelete