08/25/2012 Weekend Update

[Cobra]

Smart money covered a lot but still historically net short.

[Cobra]

from stocktiming. institutional historically low distribution, not much accumulation.

[Cobra]

liquidity from stocktiming, I still think, either this rebound is weak (because the liquidity is far from reaching the max high) or we're still in the early stage of a big rally. I don't believe we're in early stage.

[Cobra]

AAII and II

[Cobra]

the main problem still is gas price. a rough estimation is SPX could reach 1500 before the gas price hitting the previous high.

[Al_Dente]

Smart money covered a lot but still historically net short.

Good morning COBRA
Re: COT “smart money” net shorts are covering
Dumb question: Is there any way to quantify the buying power of these shorts if they continue covering?
In other words: if the shorts covered up to the net-zero, black-dotted line, it would correspond to a QQQ squeeze of xx points?
THANKS very much
ps I voted 4 u today, and will also vote tomorrow

[Cobra]

Smart money covered a lot but still historically net short.

Good morning COBRA
Re: COT “smart money” net shorts are covering
Dumb question: Is there any way to quantify the buying power of these shorts if they continue covering?
In other words: if the shorts covered up to the net-zero, black-dotted line, it would correspond to a QQQ squeeze of xx points?
THANKS very much
ps I voted 4 u today, and will also vote tomorrow

I don't know the way.

Thanks for the vote.

[ClarkW]

Anyone have any thoughts on KONDRATIEFF CYCLE'S and where we are today? Stumbled upon it on an astro's stockmember's charts (won't give credit as Cobra's competitor). And found the following old article (2005) from Mike Shedlock that I thought was interesting http://whiskeyandgunpowder.com/the-kond ... eff-cycle/

[Al_Dente]

PAGING COMMODITIES
Just a cheat sheet, FYI, for stockcharts “spot price” symbols
http://content.screencast.com/users/Al_ ... 0sheet.png

[ClarkW]

$DAX has had a strong move but it's due for a pullback. Don't see it overcoming March high on the first attempt. On the weekly it has some resistance at the trendline

[Al_Dente]

Stockcharts new toys
They now have the capability to use 10 (ten) symbols on one chart, instead of the old 6 symbols.
Of course it costs an arm/leg for the new “PRO” service…it also includes a bunch of other stuff….
like the longest DOW chart known to man (PRO service gets a LIVE version):
http://blogs.stockcharts.com/.a/6a01053 ... e70970c-pi

[Caveat: this is not a recommendation for “PRO” … I don’t have it yet….i’m pizzzed they are charging extra for 4 additional symbols,
plus other stuff that I will NEVER use]

[ClarkW]

$GOLD looks very similar to it's short-term peak in Feb. MACD crossed positively two weeks ago before heading back down.

[TraderJoe]

Hi All,
After Apple won the suit, Dow futures shot up 150 and S&P up 10 late yesterday.

Info from an article::
BofA: 'CODE RED..RISK OF SELL-OFF IS HIGH'

Yesterday, BofA's top North America economist Ethan Harris penned a bearish note on the the U.S. economy, writing that it "is in the eye of the storm" and that a number of troubling headwinds loom on the horizon.

BofA strategists Arjun Mehra and Cheryl Rowan have a warning more precisely aimed at the stock market. In a note to clients entitled Code Red, Mehra and Rowan claim there is "limited upside from here" and the "risk of a sell-off is high."

The strategists point out that stocks have managed to rally even in spite of one of the worst earnings seasons in years and growth slowing in the U.S. and around the world. They think the explanation is the "Bernanke Put;" in other words, investors are expecting more monetary easing in the form of QE3.

But in spite of the dovish language from the Fed this past week, Mehra and Rowan are concerned that the central bank may disappoint.

From the note:

Risk of a sell-off is high

Economist Michael Hanson points out an interesting circular relationship between the stock market and Fed policy. There are some who believe the Fed will not launch QE3 so long as stock prices remain high, yet the stock market is high because it anticipates QE3. Should the Fed disappoint at the September 12-13 FOMC meeting, the risk of a stock sell-off is high. S&P 500 support on a correction is in the 1360-1325 area. Additional support is at 1300-1250. Attention will be on the Jackson Hole symposium next week to get a feel for the Fed’s tone.

Macro catalysts increase the risk of a correction

Our strategists see an unusually high number of macro catalysts over the next 3-6 months that could take markets lower. We expect economic growth to disappoint in the second half of the year in anticipation of the fiscal cliff. This would exacerbate any slowdown from the deepening recession in Europe and decelerating growth in emerging markets. There is also the ongoing tension in the Middle East, the potential for a US credit downgrade and accelerating downward analyst estimate revisions. To top it off, September is seasonally the weakest month of the year for stock price returns.

The BofA strategists conclude that with the VIX at record low levels, those looking to hedge against a correction should buy put options on stocks while they are cheap, echoing a message several Wall Street analysts have relayed on television and in client notes over the past week.

[Cobra]

Stockcharts new toys
They now have the capability to use 10 (ten) symbols on one chart, instead of the old 6 symbols.
Of course it costs an arm/leg for the new “PRO” service…it also includes a bunch of other stuff….
like the longest DOW chart known to man (PRO service gets a LIVE version):
http://blogs.stockcharts.com/.a/6a01053 ... e70970c-pi

[Caveat: this is not a recommendation for “PRO” … I don’t have it yet….i’m pizzzed they are charging extra for 4 additional symbols,
plus other stuff that I will NEVER use]

That Pro idea is outrageous. I thought it were additional features added on the current services so that they can compete with freestockcharts.com. No, it's not, how can they charge more and more while competing with free services?

[Cobra]

Hi All,
After Apple won the suit, Dow futures shot up 150 and S&P up 10 late yesterday.

Info from an article::
BofA: 'CODE RED..RISK OF SELL-OFF IS HIGH'

Yesterday, BofA's top North America economist Ethan Harris penned a bearish note on the the U.S. economy, writing that it "is in the eye of the storm" and that a number of troubling headwinds loom on the horizon.

BofA strategists Arjun Mehra and Cheryl Rowan have a warning more precisely aimed at the stock market. In a note to clients entitled Code Red, Mehra and Rowan claim there is "limited upside from here" and the "risk of a sell-off is high."

The strategists point out that stocks have managed to rally even in spite of one of the worst earnings seasons in years and growth slowing in the U.S. and around the world. They think the explanation is the "Bernanke Put;" in other words, investors are expecting more monetary easing in the form of QE3.

But in spite of the dovish language from the Fed this past week, Mehra and Rowan are concerned that the central bank may disappoint.

From the note:

Risk of a sell-off is high

Economist Michael Hanson points out an interesting circular relationship between the stock market and Fed policy. There are some who believe the Fed will not launch QE3 so long as stock prices remain high, yet the stock market is high because it anticipates QE3. Should the Fed disappoint at the September 12-13 FOMC meeting, the risk of a stock sell-off is high. S&P 500 support on a correction is in the 1360-1325 area. Additional support is at 1300-1250. Attention will be on the Jackson Hole symposium next week to get a feel for the Fed’s tone.

Macro catalysts increase the risk of a correction

Our strategists see an unusually high number of macro catalysts over the next 3-6 months that could take markets lower. We expect economic growth to disappoint in the second half of the year in anticipation of the fiscal cliff. This would exacerbate any slowdown from the deepening recession in Europe and decelerating growth in emerging markets. There is also the ongoing tension in the Middle East, the potential for a US credit downgrade and accelerating downward analyst estimate revisions. To top it off, September is seasonally the weakest month of the year for stock price returns.

The BofA strategists conclude that with the VIX at record low levels, those looking to hedge against a correction should buy put options on stocks while they are cheap, echoing a message several Wall Street analysts have relayed on television and in client notes over the past week.

Friday shot high was due to Helicopter Ben hint that he'd do QE3. AAPL won the suit was in AH. SPY didn't move much after the news out.

[BullBear52x]

Inflation by way of DBA, I mentioned this before gold and silver shot up. I said I see inflation coming if so the metal should follow. BAM! here we are, same chart posted then.

now that DBV show some signs of stalling, here I see trap in no man's land, what say you Dr. Ben?

Dr. Economy expansions or contractions? by way of Dr.Copper, all this is too much and too long over my pay grade to even want to know

[Apple]

Hi All,
After Apple won the suit, Dow futures shot up 150 and S&P up 10 late yesterday.

Info from an article::
BofA: 'CODE RED..RISK OF SELL-OFF IS HIGH'

Yesterday, BofA's top North America economist Ethan Harris penned a bearish note on the the U.S. economy, writing that it "is in the eye of the storm" and that a number of troubling headwinds loom on the horizon.

BofA strategists Arjun Mehra and Cheryl Rowan have a warning more precisely aimed at the stock market. In a note to clients entitled Code Red, Mehra and Rowan claim there is "limited upside from here" and the "risk of a sell-off is high."

The strategists point out that stocks have managed to rally even in spite of one of the worst earnings seasons in years and growth slowing in the U.S. and around the world. They think the explanation is the "Bernanke Put;" in other words, investors are expecting more monetary easing in the form of QE3.

But in spite of the dovish language from the Fed this past week, Mehra and Rowan are concerned that the central bank may disappoint.

From the note:

Risk of a sell-off is high

Economist Michael Hanson points out an interesting circular relationship between the stock market and Fed policy. There are some who believe the Fed will not launch QE3 so long as stock prices remain high, yet the stock market is high because it anticipates QE3. Should the Fed disappoint at the September 12-13 FOMC meeting, the risk of a stock sell-off is high. S&P 500 support on a correction is in the 1360-1325 area. Additional support is at 1300-1250. Attention will be on the Jackson Hole symposium next week to get a feel for the Fed’s tone.

Macro catalysts increase the risk of a correction

Our strategists see an unusually high number of macro catalysts over the next 3-6 months that could take markets lower. We expect economic growth to disappoint in the second half of the year in anticipation of the fiscal cliff. This would exacerbate any slowdown from the deepening recession in Europe and decelerating growth in emerging markets. There is also the ongoing tension in the Middle East, the potential for a US credit downgrade and accelerating downward analyst estimate revisions. To top it off, September is seasonally the weakest month of the year for stock price returns.

The BofA strategists conclude that with the VIX at record low levels, those looking to hedge against a correction should buy put options on stocks while they are cheap, echoing a message several Wall Street analysts have relayed on television and in client notes over the past week.

Friday shot high was due to Helicopter Ben hint that he'd do QE3. AAPL won the suit was in AH. SPY didn't move much after the news out.

Ben: http://articles.marketwatch.com/2012-08 ... tion-twist and Jon: http://blogs.wsj.com/economics/2012/08/ ... _news_blog (I like the "...we notice it now..." ).

I guess it has been predetermined that if the market is down on open, Monday's article in the WSJ will provide more 'news'.

[Harapa]

An interesting/intriguing observation that may help to neutralize concerns about low volume.
http://www.mcoscillator.com/learning_ce ... ot_so_bad/

[ClarkW]

I don't see $Silver busting above the descending triangle on first try with this move so strong already. Currently long a small holding in ZSL (NOT A RECOMMENDATION, DON'T FOLLOW). ChiOsc is high and using Cobra's trick to see how far it's away from 9 day moving average (using PPO) shows it's a little extended as well. I'm thinking market will be disappointed from Jackson Hole next week.

[ClarkW]

Paging candlestick experts: Please see the circled area for UUP Daily, the last three sticks looks like a reversal pattern. Morning star? heck if I know...that's why I paged you.