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Weekend Watering

Weekend Watering

Postby 99er » Fri Nov 25, 2011 3:22 pm

DWCF

http://99ercharts.blogspot.com/2011/11/dwcf_6690.html

The week that was.

Have a nice weekend.
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Re: Weekend Watering

Postby 99er » Fri Nov 25, 2011 8:28 pm

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Re: Weekend Watering

Postby 99er » Fri Nov 25, 2011 8:42 pm

Honey...just a few more minutes please...

Updates

EURUSD http://99ercharts.blogspot.com/2011/11/eurusd_2343.html
ES http://99ercharts.blogspot.com/2011/11/es_2505.html

Let's go Occupy The Mall!
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Re: Weekend Watering

Postby deacoes » Fri Nov 25, 2011 11:47 pm

Good sentiment indicator IBD Daily Big Picture. Calling Friday action "Down in lower volume in holiday-shortened session".

Stocks Fail To Hold Gains As Losing Streak Persists

Stocks tried to shake their losing ways Friday but couldn't hold early gains. The Nasdaq and the S&P 500 fell for a seventh straight session.

The S&P 500 and the NYSE composite contained their losses Friday to 0.3% each. The Nasdaq trimmed 0.8%. The IBD 50, a proxy for leading stocks, lost 1% on average.

Volume fell across the board, which was no surprise considering the post-Thanksgiving market closed three hours earlier than usual.

Losses for the week were sharp, and technical support lines were violated. The major indexes are now below both their 50-day and 200-day lines. Lows for the year are the next most logical tests — not the place bulls want to be. The S&P would have to fall 7% to hit its October low.

Yet so far, this correction is qualitatively different from the sell-off in late July and early August. In the summer correction, weekly volume was above-average and generally accelerating on both major exchanges.

In the past four weeks, volume has declined each week and has been mostly below average. The falling volume suggests that big money isn't rushing to the exits.

Because the holiday week naturally trims volume, investors will have to wait to see if this slow-trade trend is still intact.

Granted, price declines in lower volume are small consolation if an individual investor is watching his stocks go down. But the disciplined investor probably has raised cash in recent weeks, thanks to the rules.

The 8% sell rule raises cash. The rule to take profits before a winner cycles into a loss raises cash. And the refusal to add to positions or to open new positions during a market correction keeps cash on the sidelines.

The sidelines are the ideal place to be right now. A correction looks different when it's not your money going south.

Investors who pay attention to volume — essential to sound investing — are taking some encouragement from the action.

Some top-rated stocks are holding up fairly well. In most cases, though, that means the outperformers are merely losing less than the market. Still, outperformers are worth watching.

One way to identify these outperformers is to look at the Relative Strength line on a weekly chart. The weekly chart will remove some of the noise of the daily chart and give the investor a clearer read.

Panera Bread (PNRA), for example, has continued its sideways action, which is strength in this down market. Panera's RS line remains near a high.

Other stocks with rising RS lines include, Intuitive Surgical (ISRG), MasterCard (MA), Questcor Pharmaceuticals (QCOR), SolarWinds (SWI), TJX (TJX), Transdigm Group (TDG), Ross Stores (ROST), Hibbett Sports (HIBB), Dollar General (DG), W.W. Grainger (GWW), Ansys (ANSS), Biogen Idec (BIIB), Advance Auto Parts (AAP), Verisk Analytics (VRSK) and Fastenal (FAST).

With further vetting, some of these stocks could be worthy of a watch list. But the rising RS line is no guarantee. If the market correction intensifies, many of these outperformers will get pulled down. And when growth stocks correct, the results can be especially ugly.

For the week, the IBD 50 dropped 5.2% on average. The NYSE composite lopped off 5.3%, the Nasdaq 5.1% and the S&P 500 4.7%.
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Re: Weekend Watering

Postby ocassional observer » Sat Nov 26, 2011 10:08 am

first SPX (from cobra's weekly chart):
spx weekly 26 nov 11.jpg


the first stop is in the 1120-1140 area, so any bounce before that is a sell.
below that i see strong support only around cobra's target at 1010'ish with some support around the october low.
notice the similarities with 2008. it will be worth watching if a similar head and shoulders like pattern appear.

the dollar index:
us dollar weekly 26 nov 11.jpg


the dollar broke resistance that had held it in early october, and this time with no negative divergences on the daily chart (not shown), so continuation is likely, accompanied probably by lower values in the market. i would cover puts when both the dollar and equities reach resistance\support.

fundamentally, europe's financial stress is still on the rise and nothing was solved, so i do not expect a huge rally from here. sentiment survey's are not bearish enough to indicate a bottom yet.
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Re: Weekend Watering

Postby dcurban1 » Sat Nov 26, 2011 10:56 am

"Yet so far, this correction is qualitatively different from the sell-off in late July and early August. In the summer correction, weekly volume was above-average and generally accelerating on both major exchanges.

In the past four weeks, volume has declined each week and has been mostly below average. The falling volume suggests that big money isn't rushing to the exits."

This is why I think the VIX might be the better play right now. Since the VIX is derived from option prices you could infer that lower option/market volume did not move option prices which means the VIX did not react to the market selloff.

Am I on the right track here? I was thinking of an inverse VIX ETF next week after the failed rally.
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Re: Weekend Watering

Postby mozart » Sat Nov 26, 2011 12:21 pm

I am expecting Dow to hit 10200 before any serious bounce, perhaps Christmas run, but who knows, might not happen this year , just like Thanksgiving .
Just another opinion.
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Re: Weekend Watering

Postby cougar » Sat Nov 26, 2011 4:44 pm

Cobra said it all in a few words: “Because of oversold, so chances are we’ll see a short-term rebound but because of the law of inertia, most likely the selling isn’t over yet…”.
However, those who want to really understand why this is so, have to read carefully the whole “Market Outlook” and study his charts.
I shall only post a few examples illustrating our proximity to a potential rebound…which, however, might be delayed…
Until then, lower targets should also be considered.

I will mainly show NDX and the Qs, which I followed and traded last week.

NDX, on 130 min, seems to be ready for a bounce:
Attachments
ndxGIF.GIF
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Re: Weekend Watering

Postby cougar » Sat Nov 26, 2011 4:48 pm

However…QQQ on 60 min is not necessarily bullish…and this is why:
A chart and a scenario:
Attachments
QQQ60gif.GIF
QQQ: a 60 min chart...
SCENARIOgif.GIF
...and a scenario
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Re: Weekend Watering

Postby cougar » Sat Nov 26, 2011 4:54 pm

Other technical criteria, used on a daily QQQ chart, take us to a similar lower level just above 51, which might become a good support…
Attachments
QQQDgif.GIF
Last edited by cougar on Sat Nov 26, 2011 5:27 pm, edited 1 time in total.
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Re: Weekend Watering

Postby cougar » Sat Nov 26, 2011 5:01 pm

For SPX, a drop under the 50% extension (1156, which on Friday was not violated) could take us all the way to the 1124 zone , where a 3x support was now created.
Attachments
spx130.GIF
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Re: Weekend Watering

Postby cougar » Sat Nov 26, 2011 5:11 pm

Also, I would keep in mind the very strong US$ ($DXY) which had no problem, on Friday, to secure the territory it gained by night and to close only 15 cents under the previous October high.
Not bad for a reputably uneventful Friday after Thanksgiving short trading day!
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DXYgif.GIF
$DXY square
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Re: Weekend Watering

Postby ximq » Sat Nov 26, 2011 5:28 pm

asd.PNG

will it be like 4 times before??
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Re: Weekend Watering

Postby 99er » Sat Nov 26, 2011 9:24 pm

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Re: Weekend Watering

Postby Al_Dente » Sat Nov 26, 2011 9:37 pm

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Re: Weekend Watering

Postby Al_Dente » Sat Nov 26, 2011 9:44 pm

For followers of intraday A/D, here’s a 1min rorschach chart illustrating Friday’s sneaky bear.
First, far left, the choppy “lobster” day of 22 Nov.
Then 23 Nov when nydec declining issues shot up >2200 and refused to give up, indicating that the bears weren’t finished yet, even as SPY chopped around. So we couldn’t get too bullish when 2200 of the 3000-or-so stocks on the NYSE were still downticking.
But Friday, 25 Nov, note how quickly the nyadv advancing issues gave up on the bull, at about 11:00-ish nyadv started screaming that the “oversold rally” was toast, and the dollar was yapping about bear spy from about 10:30 ish all the way into the close. So when the advancing issues waterfalled from 2300 to 1600… look out below).
http://stockcharts.com/h-sc/ui?s=SPY&p= ... listNum=15

PS: nice nymo from ximq, and great volume info from deacoes, and VIX from dcurban, and all other great charts, thanks all, more tomorrow.
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Re: Weekend Watering

Postby deacoes » Sat Nov 26, 2011 11:17 pm

Attached is a screen capture of one of the chart windows I use to intraday trade. Trade ES and use USD futs, VIX, NYSE up volume minus down volume, NYSE advancing minus declining, and NYSE ticks. Typically set all to 5mins or 15mins, while ticks always at 1min. I also switch between regular and HA candles. Charts zoomed out to show a weeks worth of action.
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flex1.jpg
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Re: Weekend Watering

Postby Al_Dente » Sun Nov 27, 2011 9:04 am

LONG TERM VIX
Over the past sixteen years, VIX (aka “the fear index”) has pierced through the “danger zone” of 40-45% volatility on six different occasions. Each of those occasions marked a bottom or near-bottom in SPX.
Five of those six SPX bottoms were signaled early via positive/bullish divergence on the VIX (exception was the interim bottom of 2001).
On the linked chart the regular VIX is on top with SPX and the INVERTED VIX overlaid on the bottom panel, making it a bit easier to read divergences.
Obviously 2008-2009 was the black-swan exception, where the bottom was QUITE A BIT LOWER than expected; nonetheless the Mar ’09 bottom was predicted by a very strong bullish divergence on VIX.
And yes, I am calling our current VIX a “near bottom” signal for SPX, because in October when SPX made a new low, VIX failed to make a new high, hence we are currently operating under a bullish divergent VIX signal.

http://stockcharts.com/h-sc/ui?s=$VIX&p ... =236164135

Conclusions? Perhaps just two obvious either/or scenarios: Either we are near a bottom where SPX will rally and VIX will calmly return below 30 and STAY under there, or the markets will insist on another anomaly crash where SPX makes deeper lows and VIX returns to >49, in which case, it was nice knowing you all.
[Caveat: my eyeballs are aging; best to double check all this]
PS: Some of this is arguable, eg: u can argue that in 1998 the VIX gave a coincident indication, not a leading signal of a bottom, etc. etc…..
Just note that sometimes these signals take a month or more to work out…and that a “near bottom”, in terms of our bank accounts and our patience, can be VERY different from a “bottom.”
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Re: Weekend Watering

Postby cougar » Sun Nov 27, 2011 9:43 am

Yesterday, a knowledgeable friend expressed his deep concern on Europe, after he read some recent commentaries in the British press. “It’s not only the facts…it’s the tone…”

Here are some excerpts from “The Telegraph”:

"They need to wake up fast; it's happening before their very eyes. In its current form, the single currency may always have been doomed, but it has been greatly helped on its way by an extraordinarily inept series of policy errors.

First there was the disastrous suggestion from Angela Merkel and Nicolas Sarkozy that if Greece didn't buckle under it might be chucked out. Markets reacted logically, which was to sell bonds in any country that looked vulnerable and chase "safe haven" assets, thereby making it much harder for governments to fund themselves.

The blunder was compounded by attempts to underpin confidence in the banking system by forcing banks to mark their sovereign debt to market. This may only have recognized the reality, but it also destroyed the concept of the "risk free asset", forcing banks for the first time to apply capital to their sovereign debt exposures. Unsurprisingly, they stopped buying sovereign bonds, again making it harder for governments to fund themselves.

But perhaps the biggest sin of the lot was effectively to render all credit default swaps (a form of insurance against default) on sovereign debt essentially worthless, or void, by making the Greek default "voluntary".

This has made it impossible to hedge against eurozone sovereign debt purchases, and thereby destroyed the market. Worse, it's made investors believe that the euro cannot be trusted, that it'll repeatedly find ways of reneging on contract. That's the point of no return. This is no longer a serious currency."

And:

“As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.
Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis.
The Treasury confirmed earlier this month that contingency planning for a collapse is now under way.
A senior minister has now revealed the extent of the Government’s concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time.
“It’s in our interests that they keep playing for time because that gives us more time to prepare,” the minister told the Daily Telegraph.”

…………WHY?
Because:

“What happens if the eurozone breaks up?
It would make the collapse of Lehman Brothers look like a mere rehearsal. The risk is that if a eurozone government – say Greece or Italy – defaults on its debts, it will send such a shock through the European banking system that there would be a cascade of bank failures and the seizing-up of basic transactions.
In such conditions, it is hard to see how the eurozone could be calmly picked apart by policy-makers: its break-up would be rapid and disorderly, with some countries leaving the euro and a chaotic slump in trade, consumer confidence and demand for goods and services.
Is a collapse looking likely?
Until recently, the idea that the eurozone could break into pieces seemed outlandish. But increasingly, it appears to be the most likely outcome. Last week, the markets even turned on Germany, which is usually seen as the ultimate safe bet. On Wednesday, more than 30 per cent of the 10-year bonds that it was trying to sell went unbought.”
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