Weekend Watering

[Mr. BachNut]

PAGING Mr. Bachnut:
Here’s the auto-refreshed page on the EU debt crisis, updated with yesterday’s rating downgrades (note the debt/gdp ratios)
http://www.nytimes.com/interactive/busi ... &emc=tha25

And here are the all-on-one-page EU yields (also auto-updated)
http://graphics.thomsonreuters.com/F/09 ... PORT2.html#

And here’s my question: isn’t all of this “baked into” the $TED spread easing, or at least it should be baked-in by Tuesday, no?
PS: As you know, historically 0.50 is the “all clear” number on TED, we’re not quite there yet….

Finally, glance at the growing divergence between EU banks and US Banks, specifically since 19 Dec, and please tell me why?
http://stockcharts.com/h-sc/ui?s=$BKX&p ... =252469497

Enough work for now, it’s Saturday night and I’m going dancing
http://www.youtube.com/watch?v=Rf55gHK4 ... re=related

I think the latest ECB facility, which i believe was announced mid-December, lasts three years and is loose regarding collateral (downgraded sovereigns should work). This appears to have alleviated some of the funding strain that was pushing certain banks to the brink and escalating the TED spread. I think it remains to be seen whether the TED spread has truly reversed or if this is just a pause. I plan to keep watching. I think the arguement around bank valuations improving is that in 2011 they were priced for a high probability crisis but now the anticipated crisis looks like it may be lower probability and deferred past 2012. I think your chart of EU vs. US banks is brilliant and awesome. The EU banks are still being priced like there is a problem. This spread will close. The U.S. banks are not immune to EU bank problems. Felix Zulauf had some comments to this effect in Barron's this weekend.

[99er]

cougar, KeiZai and mozart

Thanks for the encouragement but the reason for moving now from Blogger to WordPress has nothing to do with Cobra's BB or some of the comments directed my way. The problem is with Blogger and spam. I'm hoping WordPress has a better handle on this issue and will be able to accommodate some improvements I hope to make to my site. Stay tuned.

Thanks, again.

[cougar]

cougar, KeiZai and mozart

Thanks for the encouragement but the reason for moving now from Blogger to WordPress has nothing to do with Cobra's BB or some of the comments directed my way. The problem is with Blogger and spam. I'm hoping WordPress has a better handle on this issue and will be able to accommodate some improvements I hope to make to my site. Stay tuned.

Thanks, again.

Great to hear that, 99er! I am looking forward to seeing your next series of charts!

Here is an update of my SPY daily strategic chart, which shows how admirably the market was supported on Friday, keeping the uptrend almost intact…
LOL!

[knock]

Is Friday candle a hammer?

[Mr. BachNut]

A few miscellaneous comments:

I think that the market is showing signs of being in a distribution phase. My mechanical model, which is a sum of weighted technical indicators, has been close to maxed out bullish since late December yet the market isn't up that much. Instead of the steady climbing indexes and the withering VIX I would expect to see given the technical backdrop, we have seen these gappy opens with recoveries and retreats to end up at a small gain for year to date. Perhaps it is just heavy resistance at a key level, and I am biased by being a frustrated short, but the cost of being wrong (so far...) has not been severe. So, I speculate that the professionals have been selling into the rally to get ready for the next phase (mark down), which has limited the advance and caused some of the choppiness we are seeing.

Judging by Friday's rebound, I think the market really wants to visit SPX 1300. There is a notion that the market moves to where there is volume to trade. At 1300, there are shorts to be squeezed; there are performance chasers who will be pressured to buy; there are pattern traders who will long, and there are fresh shorts looking to hit that level, amongst others. So, while I am inclined to be bearish heading into this week, I would not be surprised by a pop or even an exhaustion gap to hit this level.

The bullish sentiment readings that were published last week seem at odds with the commentary I have been following on the blogosphere, which seems to have a bearish tilt. Are the blog people excluded from the surveys? Are these contrarians more cleverthan everyone else? Who is dead wrong? Hmmm...

[Mr. BachNut]

I am glad you will continue posting 99er. I study many of your charts every day.
Cobra is awesome, but the site would be like a cake without icing if his collection of contributors wandered off.
All of you core posters, and you know who you are, really make this thing hum.

On the same topic, has anyone spotted DowTrader in awhile? I think his perspective could be timely at this juncture in the market.

[jarbo456]

I am glad you will continue posting 99er. I study many of your charts every day.
Cobra is awesome, but the site would be like a cake without icing if his collection of contributors wandered off.
All of you core posters, and you know who you are, really make this thing hum.

On the same topic, has anyone spotted DowTrader in awhile? I think his perspective could be timely at this juncture in the market.

seems as though they may have dropped off. his trading blog hasn't been updated in over as month as well.

i am also worried about the overly bearish tone of many on the blogosphere. i'm not hearing a chorus of bulls, and that's always concerning.

[trendfollower]

Article: "Gold Trend Forecast For 1st Quarter of 2012"

http://goo.gl/F3Oyl

[Al_Dente]

PAGING BULLS
Here’s a portion of the “Ned Davis Research”market outlook from Friday the 13th, split into five screenshots for readability:

http://screencast.com/t/hcbpwFkh3KD
http://screencast.com/t/4goyzcyg
http://screencast.com/t/VUcEILH3
http://screencast.com/t/ohVAsnkwe
http://screencast.com/t/11blgl7cuURw

Mr. Bachnut: note he agrees with your analysis of the EU “worry” (thanks for yours).
PS: Ned is one of the "smart cookies"… and his “analysis” is intermediate term….not short term…. not intraday...

Happy Birthday Dr. Martin Luther King, Jr.
http://www.youtube.com/watch?v=s_vcTaDn ... re=related

[Al_Dente]

FWIW: Ned’s sector weighting is:
Overweight: energy, materials, information technology
Marketweight: discretionary, staples, health care, industrials, utilities
Underweight: financials, telecommunication services

[Edit] Sorry, Ned updated his sector weighting on 1/13, with these two changes:
Consumer Staples Overweight
Industrials Underweight

[noob]

Europe is rallying, because of what? This is a weird market.

[cougar]

Article: "Gold Trend Forecast For 1st Quarter of 2012"

http://goo.gl/F3Oyl

Mr.or Ms. “trend follower”: are you a human being or a BOT set up to pump Chris’s site?
You continuously sneak in the same spam …
Give us a sign of human intelligent life!

[Mr. BachNut]

PAGING BULLS
Here’s a portion of the “Ned Davis Research”market outlook from Friday the 13th, split into five screenshots for readability:

http://screencast.com/t/hcbpwFkh3KD
http://screencast.com/t/4goyzcyg
http://screencast.com/t/VUcEILH3
http://screencast.com/t/ohVAsnkwe
http://screencast.com/t/11blgl7cuURw

Mr. Bachnut: note he agrees with your analysis of the EU “worry” (thanks for yours).
PS: Ned is one of the "smart cookies"… and his “analysis” is intermediate term….not short term…. not intraday...

Happy Birthday Dr. Martin Luther King, Jr.
http://www.youtube.com/watch?v=s_vcTaDn ... re=related

One thing that I ponder with my mechanical model is that the reading is so bullish right now that I am not sure a swift significant correction would flip it from a buy to a sell. So, I have to entertain bullish possibilities such as Ned Davis.

[Mr. BachNut]

Follow-on thought to prior post. From a chart perspective, if the December low holds in the event of a correction, it would probably draw major buying into the market. Not sure about November low.

[mitzatreat]

Cobra,99er, Dr. Al, Jarbo, Cougar and other traders,

I don't know how to express my gratitude. At the end of every trading day, I'm so happy to learn from you all. I love your charts and comments, particularly those of 99er. It feels so good to follow this forum. Please don't even think of leaving this site.
Thankfully,
Mitzatreat

[SB73]

Gosh even in the futures market there is an end of the day ramp job. People excited about holding overnight as they should be since they are mostly gap ups. It is interesting to me that there is weakness overnight until about 4:00 AM and then the invisible hand steps in. I fully expect to be dead come Tuesday.

[stevej]

I shall die with you..........dead........guess I should of done the month by month plan...

[cougar]

Follow-on thought to prior post. From a chart perspective, if the December low holds in the event of a correction, it would probably draw major buying into the market. Not sure about November low.

BachNut: good commentaries!
It is important to know what they say and how they phrase it…but also what they actually do.
One of the thing they did recently, was to take bearish positions on TLT! Some people who seem to know what they are doing opened BIG bearish butterfly put spreads, aiming at a TLT target between 110 and 116 before the March OpEx! The interpretation of the trade is “fundamentally” straight forward: money gets out of treasuries and back into equities. Why? Because a continuous “resolve” to support the market has become evident in 2012! LOL!
Some people also claim that, technically, the recent uptrend of TLT lacks conviction and shows a “weaker momentum“… Some quote, to support this view, an ascending triangle, a tightening BB and some SMA supports which should give up…
BUT…they already took these positions. Too early?
Well, I will show some of my TLT and TBT charts, without divulging my opinion:
1. A Daily TLT chart with Fan and ellipse.
2. A TLT fast Renko with equidistant, simple Harmonic Levels and a Gann’s Rule of 4.
3 and 4: a contrastive analysis of TLT and TBT on daily charts, both displaying the ”%R & Stochastic Strategy”

[BullBear52x]

Is Friday candle a hammer?

No one take the question ha? well, it is a hammer, but all hammer required gap up and close white candle, if confirmed most likely higher trade out look.

[Al_Dente]

PAGING Mr. Ted Bachnut: talking about intermediate term on a board full of day traders and swingers…continued…

Just as unnerving as watching all the bearish divergences demand a correction is trusting the bullish signs.
I am trying my best to believe none of it, impossible of course, nonetheless trying to let SPX tell me.
Yes, I am expecting a short term correction soon, just to “cure” all the overboughts and realign some divergences, but what follows the pullback is the real challenge. I don’t need to guess or make projections…let the markets and Cobra tell me what to do (I know, lazy trend follower, but why not…what’s my hurry?)

Not sure what’s in your “mechanical model” but my quickie “back of the envelope” watch shows this IMHO ONLY:

BULL:
Inflation expectations ease a bit (see my gold/inflation charts earlier). Last CPI was 3.4% on 11/30/11
TED spread easing a bit (EU crisis “not as bad” as believed) but we’re not out of the woods until $TED is below 0.50
SPX passed the “first five days in Jan” test, bullish
AAII investor sentiment is so low (17.16%) it’s bullish/contrarian.
Germany maintains its credit rating
$BKX surprise “recovery rally” in U.S. banks (overbought short term)
Corporate and junk bonds confirm risk-on (both dealing with double-top resistance)

NEUTRAL:
Earnings season should help the bulls/bears decide (early reporters last week: AA neg, JPM neg)
FOMC meets 24-25 Jan. Perhaps that will give us a forward view of fed funds rate and QE potential
31 Jan will tell us who won the “as goes Jan, so goes the year…” contest…and Cobra will give us the stats…
(I also believe like you:) the December low is KEY. If we have a red Jan, then DOW DECEMBER LOW MUST HOLD OR ALL BETS ARE OFF FOR THE YEAR (closing low was 12/19/11 at Dow 11,766.26, but I haven’t double checked , and am not sure if I should include intraday low…)

BEARISH:
The big gorilla bond market
The big gorilla U.S. dollar
Any/all bad news or rumors such as EU surprises, Iranian threats, et.al.
Other EU nations have ratings cut
EU banks lagging

[My real list is too long… barely scratched surface here… gotta stop hogging board…you get my point, right?]

PS: mitzatreat, you have expressed your gratitude quite beautifully, and i thank u very much for your comments.

http://www.youtube.com/watch?v=852gverK ... re=related