02/08/2014 Weekend Update

[Cobra]

The interesting part is smart money has covered a lot which could mean the low was in already. I cannot believe this but well, at least this scale of covering has been the low recently (red lines are just few examples).

The institutional buying and selling chart (courtesy from stocktiming) shows more distribution than accumulation. The chart doesn't tell future only confirms what happens yesterday. Hopefully today's huge up has changed everything.

I see nothing on AAII.

[Cobra]

Summary of the week's stock picks.
viewtopic.php?f=10&t=1198&p=154285#p154285

[Cobra]

Preview of the next week's stock picks.
viewtopic.php?f=10&t=1205&p=154288#p154288

[cletus]

Has the market gone up or down since hedgers went net short? Just curious since it seems like everyone thinks that it's a bad thing when they're short.

[Cobra]

Has the market gone up or down since hedgers went net short? Just curious since it seems like everyone thinks that it's a bad thing when they're short.

come on, it's different time frame. You might not care about 5% pullback, but I and I believe lots of people here do care. For me, 1% is already lots of money, no to mention 5%. Didn't market pullback about 5% recently? At least it proves that smart money historically short is not good thing. You can say, overall, it's still up, yes, on weekly chart, it's not even a dent, but on 60 min chart it's already 2 legged pullback. I'd be very happy to catch those 2 legs. Again and again, we have different time frame. If you insist that 5% pullback is nothing, we're on different time frame, period. I trade ES everyday, you can try to long, say, 20 ES to ride down from 1840 to 1740, which is 20 * 100 * 50 = $100,000, that is at the worst time, you're down $100,000. Well, maybe it's nothing to you but I believe to most of us, down $100,000 is already big enough, so yes, I do care about 5% swing, I care about 1% swing actually, and in fact, in day trade, I care about every tick, that is 0.25 point. Lots of time, miss just a single tick is about losing the whole trade.

[DellGriffith]

SPY weekly ended with a white candle, so the 4 consecutive red candle scenario is dead.

also...

[KeiZai]

I see weekly bullish reversals all around the world, the (intraday) weakness I was looking for came little later (with NFP) than I thought and it was likely a wave2 (right shoulders in some indices eg.RUT) There is still one daily sell pending tho at MA50 (ES) or at potential a=c in SPX (~1810) but atm I think low is in and this is an impulsive structure going for new highs. We shall see next week how will SPX and co. react around averages, resistances but I prefer (in case of weakness) higher lows. GL

SPX

NQ: this really looks like impulsive imo

FTSE looks kind of like in ascending triangle : http://i.imgur.com/7sEtRwF.png

DAX with stoch: http://i.imgur.com/Q1PTrSz.png

[Al_Dente]

that got my vote
https://stockcharts.com/public/1684859

note all here closed above both their 5 and 10MAs (blue and red) EXCEPT the smalls IWM lag

[koolblue]

One mans opinion

[Al_Dente]

Text of the new Working Paper by Reinhart and Rogoff… evidence from 100 historic episodes of “RECOVERY FROM FINANCIAL CRISES...”
http://www.scribd.com/fullscreen/204396 ... ode=scroll

“In a sample that covers 63 crises in advanced economies and 37 in larger emerging markets, more than forty percent of the post-crisis episodes experienced double dips.” [Which means that about 60% did not double-dip.]

“Recovery … following financial crises is often a five-to-ten-year process [the 1930s recovery took 10 years; the average recovery takes 6.7 years].

“… speeding up recovery may require that advanced-economy governments adopt some of the approaches that have been relegated to the emerging markets over the last few decades — but that advanced countries themselves once practiced vigorously.”

“Even after one of the most severe multi-year crises on record in the advanced economies, the received wisdom in policy circles clings to the notion that high-income countries are completely different from their emerging-market counterparts….[and we]… do not need to resort to the more eclectic policies of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression… Delays in accepting that desperate times call for desperate measures keeps raising the odds that… this crisis may in the end surpass in severity the depression of the 1930s in a large number of countries.”

[Al_Dente]

“THE 40-YEAR CYCLE”
http://www.financialsense.com/contribut ... ews-stocks


THE COMPREHENSIVE BEER INDEX
“How Many Hours Of Minimum Wage Work It Takes To Buy A Beer Around The World”
http://www.businessinsider.com/hours-of ... eer-2014-2

michelangelo beer.png (180.65 KiB) Viewed 5756 times

[Al_Dente]

LONG TERM view of commodities
$CCI is the Reuters “Continuous Commodities Index,” an equal-weighted composite of 17 commodities. Each component is weighted equally at 5.88% of the pie. (Energy represents 18%, Metals are 24%, Softs are 29%, Agri is 29%, etc.)
[chart courtesy J.C. Parets]

$CCI was in a long-term bullish-descending triangle, and it just broke out
Gold and silver need to hold those long-term double-bottoms before a potential push to the top of their long-term, bullish-descending triangles
Gold Miners are still inside a long-term descending channel
etc

Same CCI chart, zoomed, one year only

Another view: if commodities are indeed in the early stages of inflation, then strength should show in the commodity producers (suppliers; sellers) and the commodity consumers (demand; buyers) chart.
This is based on the notion that an increase in demand will gradually deplete supply, forcing the suppliers to get busy, until equilibrium is reached………
You could argue that demand = China (as they are the biggest global consumers of all commodities),
and demand won’t strengthen until China ramps up again.

[I’ve been watching my “producer vs consumer” charts on Dr. Copper for years, looking for clues. Greg Schnell gave me the idea of expanding it to all commodities. He takes it a step further and charts the “producer currencies” and the “consumer currencies” which I haven’t done yet, but given that our crisis-du-jour revolves around currencies, someone should chart that….]

[rhight]

An update of the Time and Price Projection chart - the 2/5 low corresponded almost exactly with the (Average - 1 std dev) blue box at 1736, and exactly at the 4 time fib cluster - Frankly, this rarely happens - the coincidence leads me to believe this advance will continue for awhile longer - Entering the 2/5 low into the ss generated the new red box price projection, with an anomalous 5 time fib cluster on 2/21, before the red box; it will be interesting to see what happens around then.

The 4 dashed blue lines are copied over from the 4 strong advances from May thru October, with an average slope of 6.4 points/day. The current bounce is very rapid, and suggests a period of consolidation next week, before continuing (or failing.) If there is a continuation, the blue slope lines intersect a potential new down channel derived from the last 2 swing lows, on or about 2/21 (Lower High?) If this is surpassed, then I would look for a consolidation around 1850, before a continuation or reversal (large double top or higher high?) There is another fib time cluster in early March which could correspond to a reversal associated with a negative reaction to the February Jobs report. Just throwing that out there, way to early to really even be considering that.
I should add that the fact that the last swing high did not even reach Avg-1 std dev of its projection, and the (just completed?) swing low did reach it's Avg-1 std dev, clearly suggests that the advance is slowing, also supported by other technical indicators.

[daytradingES]

The interesting part is smart money has covered a lot which could mean the low was in already. I cannot believe this but well, at least this scale of covering has been the low recently (red lines are just few examples).

The attachment SmartMoney.png is no longer available

The institutional buying and selling chart (courtesy from stocktiming) shows more distribution than accumulation. The chart doesn't tell future only confirms what happens yesterday. Hopefully today's huge up has changed everything.

Thanks for the charts Cobra,

I appreciate them and understand your point on time-frame (in your reply to re 5% and $100,000) as I too trade the ES (I trade on an intraday basis RTH only).

I think the downwards move is intact and this ramp of Thursday-Friday is just a show of force by the manipulators - so I'm with the institutions in leaning to distribution. While they may push it higher in the early part of next week they have moved it to a 55% retrace of the 113 points down from 15 Jan and that may be enough but as in the video they could move it to the resistance of the low of Jan 13 (1809.50).

The one minute ES bar of Friday morning with a t 7:30 speaks volumes, I feel.

http://screencast.com/t/DzarprxqHY

[rhight]

Another view: if commodities are indeed in the early stages of inflation, then strength should show in the commodity producers (suppliers; sellers) and the commodity consumers (demand; buyers) chart.

Nikkei obviously skewed by Abeonomics
FXE/FXY has the highest correlation to US equities (lately), I keep an eye on that (Daily EOD); it had a lengthy negative divergence with spx during Jan high

Oh, I figured out how to work around the change that Stockcharts made to their interface (invisible data no longer has a numerical read out in the upper left hand corner by the stock symbol) - In many cases, I still want the data to be invisible, so that I can concentrate on an average (trends and divergences) - and so, I had to turn on the "Y Axis Labels" - not as quick and easy a read as far as I'm concerned, but workable

[gappy]

Spot to inverted trade weight dollar.

Capture.PNG

[BullBear52x]

I think if you're bullish you're already buy in and wait for the reaction on 20/50 ma. and if you are bearish base on hourly time frame. here is something for you, new evil act, if you're agreed with me I'll wish you best of the luck, Monday the chase starts

same view all week, mid to long term = sell.

[Al_Dente]

Another view: if commodities are indeed in the early stages of inflation, then strength should show in the commodity producers (suppliers; sellers) and the commodity consumers (demand; buyers) chart.

Nikkei obviously skewed by Abeonomics
FXE/FXY has the highest correlation to US equities (lately), I keep an eye on that (Daily EOD); it had a lengthy negative divergence with spx during Jan high...

good point
I do watch the euro/yen pair as well as the aussie/yen pair on my 30min charts, and have posted many times about how closely SPY has followed them since the early Jan Emerging crisis.
Here I was working with country indices that have “tradeable proxy” ETFs
Example: I use $FZA for the So African Index because it has a good tradeable ETF proxy: EZA. I can’t use the So African measure $ZADOW which shows a completely different picture.

I think I will eliminate Japan from that commodity “watch” entirely, or else I will use DXJ, which is “yen hedged,” (or EWJ which is straight equity exposure) as a substitute for the $NIKK index. Currently both DXJ and EWJ have a high (94%) correlation with the euro/yen FXE:FXY, and a high (95-97%) correlation with SPY, which compares favorably with the euro/yen’s 93% correlation with SPY.
Thanks, I appreciate your feedback

[Al_Dente]

Another cautionary missive from Goldman Sachs
"Our Global Leading Indicator [GS’s proprietary index, a measure used as a proxy for global growth] now suggests that the period of accelerated growth ended in September of 2013."
“…the most recent weakness, while not unusual and still not alarming, is likely a fair reflection of the current macro landscape.”
“While Goldman and most other shops across the Street don't expect the slowdown to persist, the worry is that recent volatility in financial markets could feed back into the real economy, and the slowdown could enter a new phase.”

http://www.businessinsider.com/goldman- ... own-2014-2

[Cobra]

The interesting part is smart money has covered a lot which could mean the low was in already. I cannot believe this but well, at least this scale of covering has been the low recently (red lines are just few examples).

SmartMoney.png

The institutional buying and selling chart (courtesy from stocktiming) shows more distribution than accumulation. The chart doesn't tell future only confirms what happens yesterday. Hopefully today's huge up has changed everything.

Thanks for the charts Cobra,

I appreciate them and understand your point on time-frame (in your reply to re 5% and $100,000) as I too trade the ES (I trade on an intraday basis RTH only).

I think the downwards move is intact and this ramp of Thursday-Friday is just a show of force by the manipulators - so I'm with the institutions in leaning to distribution. While they may push it higher in the early part of next week they have moved it to a 55% retrace of the 113 points down from 15 Jan and that may be enough but as in the video they could move it to the resistance of the low of Jan 13 (1809.50).

The one minute ES bar of Friday morning with a t 7:30 speaks volumes, I feel.

http://screencast.com/t/DzarprxqHY

Thank you.