24 replies to this topic

[SilentOne]

I'm testing longs from yesterday's close.

oooooooo

Maybe NOT!

Someone let me know when you get a buy signal.

Back to the bunker.

cheers,

john

[PorkLoin]

Ha! Exactly - "let me know when you get a buy signal." Y'all (I'm writing from my wife's any my place in GA versus OH), I have some money in a bond fund that I would like to deploy into stocks, and I'm really just waiting for what I perceive to be a stock market bottom.... Sweeeet - Doug.

[EntropyModel]

Thanks for the input guys...and hope you all had a relaxing thanksgiving, same for all those reading these posts.

Ha! Exactly - "let me know when you get a buy signal."

Will do, I still don't have any swing buy signals, and most of my technical indicators are back to sell, or moving toward sell, maybe a little more upside possible first. I started adding short positions today ( see blog)....because there is some well defined risk/reward setup....quite likely I'm a little early..hence the tight stop, but I believe another large decline is coming before any chance of a significant swing low, and certainly alomost ZERO chance of an intermediate low here.

What I see right now, is the SPX has actually been in rebound, internally at least, but price has declined, the NDX shows the truer price picture if one wants to look for patterns in that sense.

I've only got time to mark up a couple of charts to show the idea of what I'm seeing -

Charts are quite large, so probably best to just click the links here:

Summation chart

BSPX chart

Sentiment indicators also never gave buys, and are moving back toward sells. Yes, there are some sentiment surveys giving buy signals like AAII, but that has been very unrealiable, for example during 2003 it gave continuous sell signals whilst the bull market began. But if you look at investor intelligence, Lowrisk, consensus bulls and some others, none are giving buys....which is unusual to say the least.

We could see some more rally attempt here, but I am seeing nothing yet to indicate the decline is done, so I will continue to view rallies as shorting oppertunities.

Good trading to all


Mark.

Edited by entropy, 27 November 2007 - 10:17 PM.

[gannman]

hey fellas fwiw i have the sp since 11/21 at 1105 am doing an irregular abc in a wave 2 of 3 i believe we enter into a wave 3 of 3 soon which sb about 110 to 120 points so i could definitely see us tagging 1320 to 1330 area regards g

[EntropyModel]

I put this chart together from data at sentimentrader. Its hard to show alot of history as detail is lost.

But my take from examing this data, is that the market is behaving differently this time to any previous decline, the total put/call actually never penetrated its lower band, and both are already approaching sell - equity already is a sell, total pc needs a close below 1 tomorrow I think.

TA seems to be held hostage to surprise FED moves the last few months, so I hestitate to refer to 'history', and we are in 'the matrix', but based on history, if this move is to be immediately tested, we will close down tomorrow, but if we rally tomorrow, then likely we rally time wise longer, but the put/call suggest not much price progress.

Bottom line as I see it, tomorrow is the decision making day on this move. Most of my indicators say we pull back, but, if the FED cuts rate every hour tomorrow by 50bps then I could be wrong on that...am I joking? with this FED one never knows. .

Edited by entropy, 30 November 2007 - 12:20 AM.

[iloli way]

Yes, with this Fed.

Thank you, entropy, your latest chart is very interesting, in fact, I find all your posts interesting and insightful.

One of the iron rules sold to and accepted by public and most investor/trader alike is this 'lowering rates cause markets to go higher' effect. Without getting into fundamentals, just look at some charts, this common sense is more like a myth, or even a flat out lie, at least by these charts(borrowed from T. Wood):






I am no expert on this and there are much more other data/charts, but the most recent 15 years history no doubt should still posses some definite power to cause markets to react in similar pattern. If history won't repeat, at least rhyme? These charts reveal the true relations between Fed actions and S&P 500 price reactions which are totally opposite to what media and most investing community want us to believe. Fed's actions do cause wealth shifting hands; markets go down not up. Is this 'common sense' by design? so to benefit smart money? If so, anyone can be smart money and get ready to short the markets when Fed already begun another binge slashing. Where am I wrong? correct? Like to hear your thoughts.

Thank in advance,

goflow

[Tor]

I put this chart together from data at sentimentrader. Its hard to show alot of history as detail is lost.

But my take from examing this data, is that the market is behaving differently this time to any previous decline, the total put/call actually never penetrated its lower band, and both are already approaching sell - equity already is a sell, total pc needs a close below 1 tomorrow I think.

TA seems to be held hostage to surprise FED moves the last few months, so I hestitate to refer to 'history', and we are in 'the matrix', but based on history, if this move is to be immediately tested, we will close down tomorrow, but if we rally tomorrow, then likely we rally time wise longer, but the put/call suggest not much price progress.

Bottom line as I see it, tomorrow is the decision making day on this move. Most of my indicators say we pull back, but, if the FED cuts rate every hour tomorrow by 50bps then I could be wrong on that...am I joking? with this FED one never knows. .

Hi Entropy, thanks you for a most excellent chart. can you please tell me the data u use on the bottom two parts of the chart?

thanks.

[Tor]

Hi Entropy and thanks for the excellent post. Can you please tlee me what the bottom two data series are? Many thanks to you and good trading.

[EntropyModel]

Yes, with this Fed.

Thank you, entropy, your latest chart is very interesting, in fact, I find all your posts interesting and insightful.

One of the iron rules sold to and accepted by public and most investor/trader alike is this 'lowering rates cause markets to go higher' effect. Without getting into fundamentals, just look at some charts, this common sense is more like a myth, or even a flat out lie, at least by these charts(borrowed from T. Wood):

...
I am no expert on this and there are much more other data/charts, but the most recent 15 years history no doubt should still posses some definite power to cause markets to react in similar pattern. If history won't repeat, at least rhyme? These charts reveal the true relations between Fed actions and S&P 500 price reactions which are totally opposite to what media and most investing community want us to believe. Fed's actions do cause wealth shifting hands; markets go down not up. Is this 'common sense' by design? so to benefit smart money? If so, anyone can be smart money and get ready to short the markets when Fed already begun another binge slashing. Where am I wrong? correct? Like to hear your thoughts.

Thank in advance,

goflow

Thanks for the charts goflow. Yeah.. it makes total sense that falling rates are bearish, since rates are falling to stimulate the economy i.e. falling kitchin cycle, and the market tends to anticipate recessions by about 6 months.

What maybe short term bullish, are the initial rates cuts, as we saw this time, but the effect doesn't seem to last. But the length of decline is vary variable from very short, to very long like 2000-2002. which saw 50% cut in market, 90% drop in Nasdaq, so called 'pushing on a string', but of course eventually the rates took effect, mainly by inducing another credit based boom. So the challenge is that at some point the rates cuts will stimulate the economy, and the market will also anticipate that by going up.


Mark.

Edited by entropy, 03 December 2007 - 11:50 PM.

[EntropyModel]

Hi Entropy and thanks for the excellent post. Can you please tlee me what the bottom two data series are?

Many thanks to you and good trading.

Hi Tor
top one: 5day moving average total put/call
bottom:5day ma of equity put/call

The bands are proprietary to sentimenttrader.com, and I don't have the spec for them, but they are standard deviation based.

Mark.

Edited by entropy, 03 December 2007 - 11:55 PM.