LONG WEEKEND 4/6/12

[Al_Dente]

Ned Davis Research on NFP, two pages:
http://screencast.com/t/yjiRpigJF
http://screencast.com/t/1yCGeHP2KsI

Mr. Bachnut, thanks. Does the “common stock only McClellan” chart mean that they backed out all the preferreds and ETFs ?
Cool, I wonder if there is a symbol for that on stockcharts.com ?

Keizai: thanks for UBS link; I got a lot out of that (PS: that report date is a typo; IT IS CURRENT)

Thanks to all for comments on gold
The Silver charts are even more visibly in a bear trend, longer term, weekly.
Interesting to note that SLV made a lower low Jan, while spot silver made a higher low Jan,
and that divergence marked the start of the Q1 silver bounce (always so nice and clear in retrospect….)
Gravity (and the inverted dollar) should pull SLV down to the 25 zone, longer term.

http://www.youtube.com/watch?v=HTzGMEfb ... ure=relmfu

[gator11]

al,

couldnt you also view your slv weekly chart as being a 3 push down (ie. cobra's rule). therefore, we should have a two leg up. Meaning we should see another leg up soon. thanks in advance for your time. I learn alot from you.

[Al_Dente]

al, couldnt you also view your slv weekly chart as being a 3 push down (ie. cobra's rule). therefore, we should have a two leg up. Meaning we should see another leg up soon. thanks in advance for your time. I learn alot from you.

The short term daily chart SLV isn’t extremely oversold yet.
Let’s see if that double bottom SLV 30ish holds or breaks… (3/22 and 4/4 is “close enough” to a double bottom 4 me).
If it can hold 30, then it has gap resistance up to 31.54.
I would see a bounce up to the 50dma daily moving average as an opportunity to short, longer term.

But if SLV and spot silver and the inverted dollar all break out “decisively” above that downtrend channel on the weekly that I posted, I’ll reverse too…
Thanks gator

http://www.youtube.com/watch?v=ahob4g7A ... re=related

[theRASPYone]

Perhaps I am in the minority, but I don't see a huge correction now. 80K jobs under forecast is going to be the reason why this market is going to sell off? This market has been shrugging bad news for a while. Is this the straw that broke the camels back? With earnings season starting next week, I can't imagine complete capitulation now. We may see some weakness, but it will be a buying opportunity IMO.

It is not the 80K jobs that matters. It was just used as a catalyst to sell off the market. Just like when the FED hinted that there will not be an imminent QE. The market is way due for a correction and the issues related to China and Europe has already presented itself. With a weaker Euro and a stronger dollar, there is more room for stocks to fall. There will be an even better buying opportunity when the S&P hits low to mid 1300's IMO.

The market has shrugged bad data since January and we've been overbought for so long. Simply saying we are due for a correction is not a valid enough argument. Yes - it will happen. But, I simply don't think we start a correction here. I wouldn't be surprised to see a bear trap on Monday. In a morbid way, this only strengthens Bernanke to pull a QE3 bow out of his quiver. Frankly, earnings season in January wasn't that positive and the market trended up as the Fed has incentivized putting money to work in the equity market. I think we have another move up before earnings season disappoints.

I have a feeling that the markets are going to hold Bernanke up and force him into QE3. (which will likely be called something else, and is something he initially wants to do.) The markets, a bunch of spoiled rich brats being whiny will likely sell off showing Bernanke that the markets can't holdup without free money coming in, like drug addicted fiends. The last serious correction was because QE2 ended, and the american debt ceiling was more of a catalyst. Let's not forget that the banks held up the US in 2008 and 2009 threatening to take down the economy if americans don't fork it over. Isn't that what these QE's are doing still?
The sad part is these wall street insiders and bankers are likely gathering in the Hampton's this weekend (as they do most weekends) and discuss there next move and how all will unfold with major inside information. I'm starting to speculate, but what scares me is if some of these guys could be regular readers of this board. I guess I'm just getting paranoid.

Cobra- "Don't forget the 1st Cobra law, when the world tanks because of US, the next day when US opens, it's usually not very bad."
usctrojan99- "I wouldn't be surprised to see a bear trap on Monday. In a morbid way, this only strengthens Bernanke to pull a QE3 bow out of his quiver."

Monday beginning a short lived up, with a followed bigger trend of more selling until Bernanke says something significant to change the direction?

Al_Dente- "The FEDs Lacker believes that the markets had already baked-in QE3, implying that now we may need to …aaaaaaaa …."unbake-it." ........
"Still, I can’t help believing that when the banks can continue to borrow at the fed window at free/zero rates, that is a kind of synthetic QE, no?"

Great thoughts Al Dente!! Bernanke is quite the chess player. He understand the market dependence and is cooling off the heat of QE3 until the street begs for it. I think the Sell in May fits in here, Bernanke knows he can not disrupt that natural wall street sell trend and is either trying to disrupt it or go with it.
(Plenty of IMO's) IMO a form of QE 3 is likely inevitable. Please share ideas folks! (especially if your a wall street insider/ banker insider/ Fed intelligence insider-HA Ha!)-Thanks

[Al_Dente]

HI RASPY
I had no idea Ben played chess, or perhaps u meant that figuratively or LOL-ish…

“You may learn much more from a game you lose than from a game you win.
You will have to lose hundreds of games before becoming a good player.”
[Jose Raul Capablanca, Chess Champion]

http://www.youtube.com/watch?v=L3xPVGos ... re=related

[grachu]

Cobra, on MONDAY ... on the live thread can you tell what your feeling of the day is for you... and if you feel this would be the beginning of the correction... Like many others I think there is a lot of people short and long .. and would be good to know your Sense that day.... if you feel the selling is the real deal or once again... the dip is bought, apple saves the day and then we go to the next galaxy. Sometimes your gutt feeling says a lot to us.. so please include that on monday when you see whats happening .. SPECIALLY before the close... I need to make some decision come monday.. THANK YOUUUUUU !!!

[grachu]

Cobra, on MONDAY ... on the live thread can you tell what your feeling of the day is for you... and if you feel this would be the beginning of the correction... Like many others I think there is a lot of people short and long .. and would be good to know your Sense that day.... if you feel the selling is the real deal or once again... the dip is bought, apple saves the day and then we go to the next galaxy. Sometimes your gutt feeling says a lot to us.. so please include that on monday when you see whats happening .. SPECIALLY before the close... I need to make some decision come monday.. THANK YOUUUUUU !!!
grachu

[pezhead9000]

Institutional distributions are slightly higher than the accumulation now.

Should we see a corresponding negative money flow with block trades? Are there any secondary derivatives that would show institutional distribution?

[BullBear52x]

Another busy weekend, thank you all for great posts.

Flat for the last three weeks on spy

on the shorter term we have triangle. bearish pattern always fail so lets not hope for much on the bear side but a good start if you are bearish.

[TraderGirl]

Daneric posts a nice count, but hasn't updated for Friday's overnight action, so it looks like we have more down to go.

http://danericselliottwaves.blogspot.co ... -2012.html

There are three turn dates this week, Monday, Tuesday and Friday. Monday looks like it will open down and it looks like we will get 5 waves down for this potential third wave, then it looks like we could turn up on Monday for wave (4), then turn back down Tuesday to complete wave (5). Friday has the potential of ending this correction..?? Astro's are indicating that April 21st thru 29th have very positive aspects and I think we could definitely hit new highs around that time...IMHO...

(Don't pay attention to price levels of attached chart...)

[taggard]

The sad part is these wall street insiders and bankers are likely gathering in the Hampton's this weekend (as they do most weekends) and discuss there next move and how all will unfold with major inside information. I'm starting to speculate, but what scares me is if some of these guys could be regular readers of this board. I guess I'm just getting paranoid.

Much value is ascribed to insider information and the implied idea that thus the future can be traded. But there is another way--by "not knowing" but being very relaxed and just listening or flowing with the move as it comes.

It's very important not to underestimate your opponent--but it's also very important not to overestimate him.

Smaller traders who are 100% able to chose their own moves freely and play at the level they chose--have an important advantage. generally this idea of small and fluid is undervalued--and the idea of large and powerful is overvalued. Amusingly hedge fund and even major wall street guys have trouble in bad eg "tough to understand" markets.

if you want to explore these ideas in a nice classical Chinese form try the art of war--there are many translations. i really like the Mimford one. Ideas in this fine text about dealing with larger forces (and esp the first chapter)

(For those wishing to dig even deeper--the art of war is really just a minor application--of ideas from the tao te ching--and in turn the really breathtaking i ching (the Wihelm princeton press edition as one source at least-- if (like me) you don't read Chinese). These books are tricky for anyone--but even more so for modern western guys.

The ideas expressed seem simple--but are very complex. modern western writing tends to be exclusive in meaning--eg the effort is made using words to be exact and exclude data. the classical Chinese stuff is inclusive--so the words are set up as clues to include many meanings--at many levels of thought. and being very mundane and at the same time esoteric is a way of life with this stuff. it works in love combat and philosophy at multiple levels (of meaning). While it's true that in the past Chinese education has focused on rote memorization--it's also true that the object of memorizing the great ideas was to later be able to play with them much like western jazz guys improvise over a theme.

With that in mind consider a gem of a quote "i dare not make the first move but would rather play the guest--i dare not advance an inch but would rather withdraw a foot". This is a very core idea in all "soft" or "internal" Chinese combat. (hint consider the national strategy under deng xiaoping (say the 80s) Now compare these ideas with al trend entry concepts on a 5 min chart.

so as a smaller player you are (often) looking for the move after the move.

Now consider how this all fits with "insider knowledge" or "more powerful opponents". all that power is just more for you to use--if you listen and then move (in harmony) with it.

If this is true what do we most need to do to take advantage of it? (a)quiet the (emotional) mind--(b)sharpen our intent(yi)--and (3)rise the sprit (shen).

to do this relax completely when observing (as opposed to thinking too much--or being overly excited--either positive or negative) and reflecting (reflecting is an interesting word) on the charts we are using. They can only be in one of two states a trend or a range. the trend will eventually become a range and any range will eventually resolve into a trend--but there are only these two states at any one moment in any one time frame.

if there is a fast trend going on--jump in fast. The odds are you will do ok. If there is a slow trend--look for the first or at most the second pull back in that trend and enter. again the odds are in your favor.

larger money--may or may not ( i have no clue how exactly to attribute this sort of thing--it could be history shoving forward or a future event pulling us in. it could be the universe breathing (eg some sort of larger event that we can only see part of) create the first move you are talking about using "insider information". But you can use that move just as a sailboat uses the wind.

It's very hard to accept--but the honest truth is--we just don't know--why the market is doing--or where it is going lots of the time--despite all the stats models and so on. Even if we are very good at market reading--we will fail using predictive modeling enough so that epic compounding or leverage will eventually be an issue if we are not in the moment.

But by being very relaxed and just following simple rules we can still win.

The next time you are looking at the first pull back on what appears to be a trend--or if you like one of Cobra's 2 part moves (so first one happened and pull back and you are sitting there) try to take just a second and pay very close attention to exactly what you are experiencing. Are you thinking? Are you confused? Are you afraid? What exactly is going on in your head? Is your body tense? How is your breathing and heart rate? Really check things out.

If you are relaxed attentive and observing and listening---then there is likely not much thinking or feeling going on--not much running around to indicators or matching markets--what appl is doing is of minor importance--in short less is needed as we are more attentive to what is there. so less information actually becomes more by way of perception.

It's often hard to explain "relaxed" to people. sung is one translation to our fighting/trading context--and i would say very roughly this means "relax in structure". so there is a stance or attitude--yet inside this your mind muscles tendons (all connective tissue) organs are relaxed. what is the advantage of this?

there are two very easy demos that are done for students--beginning students are told to tense their whole body and then strike--and then relax and strike. the relaxed strike is much faster. thus the move can start after the opponent's primary move starts and yet arrive first (hence the wonderful quote about "first moves and being the guest".

the second example usually can only be done later after some practice--the object is to find the "beginning of the opponent's move". students start by being able to see muscles tense slightly around an arm or leg that is about to move (usually forward) eventually they can trace this movement to the core of the body. still later they can see "the intention" of the other guy prior to really specific movement. The trick here is that by relaxing one's (emotional) mind and one's intent--one becomes by default more sensitive to what is going on in the other guy. this allows us to spot the others' intention--earlier.

Both example focus on sung--one is more physical--the other is more "mental".

so how to get to this place. first see the idea repeat over time and be very clear about what a first second and third pull back is in a trend (it's faster to learn on 5 min because more reps in shorter time frame) second work on relaxing and becoming less concerned about the outcome of the move--which cannot be known--and more concerned with "trade management" (or as i like to think of it fleeing in terror if i messed up--or hanging on in terror if i somehow got it right). The tricky part is to just observe the action rather than become to involved with (1) being in front of it. (2) being really sure where it's going to end. (3) getting upset our attempts at (1) and (2) fail.

in this way you can find ways to benefit from being clueless while they know everything. in this context--insider knowledge by insiders is money in your pocket as "the guest".

[Al_Dente]

Thanks Tag, your stuff is like poetry, I luv it

And Happy Easter to everyone on Planet Bunny

48bunny.png (366.11 KiB) Viewed 4124 times

Relative strength ratios show the mid and small caps still deteriorating.
Most analyst kool-aid says that when “investors” flee from all but large caps, a top is in the making.

http://www.youtube.com/watch?v=0cWzxJvgWc8

[Harapa]

[quote="Al_Dente"]
Relative strength ratios show the mid and small caps still deteriorating.
Most analyst kool-aid says that when “investors” flee from all but large caps, a top is in the making.
/quote]
I am not sure if chart below supports this contention. It may take a while (even a long while) for a top to form by this measure, like post 87-90, 94-00. This doesn't mean I am not concerned by these divergences; I just don't know what action to take based on this observation .

[Al_Dente]

Thanks harapa, I agree…… and that’s all I’ve got……

PAGING NDD
Here’s a fringe idea for you, re gold.
Not enough (?) has been written/analyzed about the relationship between gold and the price of industrial metals.
The common theory is that when the price of gold gets too high, industrial folks can’t afford it, and they substitute cheaper materials.
And the reverse: when gold gets cheaper, they abandon “inferior” metals and buy/use gold for fabrication.
I think it needs updating and more current analysis (?)

Here’s a chart just to show you that the symbol we use for industrial metals is $DJUSIM (there are others), and you can see that industrials (in black)
can top out (red circles) before the price of gold does, but this is just a 10 month visual, and it is performance based, not overlay.
And bla bla bla; just a thought.
http://www.youtube.com/watch?v=pDUtECQe ... re=related

[BullBear52x]

GLD, just something to look at. Have a good one.

[Al_Dente]

WTF: What is wrong with this picture?
Hopefully someone has noticed, and can comment more intelligently on how closely/not SPY is tracking her underlying SPX !!!

[Al_Dente]

The new stockcharts.com newsletter is out this morning.
Art Hill has a killer chart of KRE our regional banks, with an ITB home construction overlay (both overbought).
(Also a note to harapa: see very interesting: Bowley shows small caps BULL BIAS ….)
You may or may not be able to see this depending on your membership level:
http://stockchartscom.createsend1.com/t ... A886AB700A

if you can’t see that, here’s my version, banks…
[Edit: XLF target 15-ish is based on the simple notion that once a stock crosses below the centerline bolinger, the target move is to its lower bolinger line]

[Xian]

Cobra,

What about the usual patter of open low go higher or open high go lower for NFP?

Does the holiday AND how bad the miss was void those "typical" patterns?

Thanks very much!

[Harapa]

WTF: What is wrong with this picture?
Hopefully someone has noticed, and can comment more intelligently on how closely/not SPY is tracking her underlying SPX !!!

The attachment 48spy.png is no longer available

SPY price is dividend adjusted. This matches perfectly with my SPY dividend adjusted chart.

and Thanks for Stock Chart link regarding Bullish Bias for Small Caps for next couple of months. I hope it works out this way .

[Al_Dente]

...Hopefully someone has noticed, and can comment more intelligently on how closely/not SPY is tracking her underlying SPX !!!...

48spy.png

SPY price is dividend adjusted. This matches perfectly with my SPY dividend adjusted chart.

SPY_DA.png

and Thanks for Stock Chart link regarding Bullish Bias for Small Caps for next couple of months. I hope it works out this way .

Okay, I’m with you, sort of, hmmmmm, it still doesn’t explain bla bla, but u do make A LOT OF SENSE…thanks harapa.

Hmmmmmm, but SPY dividend-adjusts every quarter every year, even when its chart much more closely aligns with the SPX chart, like last year, year before, year before that, yada yada. I’m not trying to fight you, I’m just not totally with you…. yet.

PS: if u could see that Bowley chart, u should be able to email subscribe to that stockcharts newsletter (twice a month, free).