09/28/2013 Weekend Update

[Cobra]

The week's headline is massive short increase from smart money, 2nd record high. Something is going on, be careful.

[Cobra]

Institutional buying and selling actions chart from stocktiming. Rapid increase of institutional distribution although market not down much, interesting.

[Cobra]

II and AAII

[ricster3]

So, Gravity does not exist in $FB Land, does it?

Will it ever pull back again? Every 20 cent dip is bought... will it ever pause?

Looking for the pro's views

thanks!

[Cobra]

Preview of the stock picks for next week.
viewtopic.php?f=10&t=1074&p=143169#p143169

[jack black]

Institutional buying and selling actions chart from stocktiming. Rapid increase of institutional distribution although market not down much, interesting.

I noticed that myself that dumb money is buying this post FOMC dip very aggressively. I assumed smart money was selling. It turns out institutional money is selling. I still think Rydex crowd is dumber money.

[DellGriffith]

Not much of an update from me. My composite signal is still utterly bullish, and will remain so all thru this upcoming week. I will not be selling this week.

[jack black]

Not much of an update from me. My composite signal is still utterly bullish, and will remain so all thru this upcoming week. I will not be selling this week.

What time frame is your signal? I don't think this is The Top, but we are in the topping process already.

[Al_Dente]

Here’s a look at that current short-term weakness in financials, when comparing the various sectors to SPY using relative-strength ratios.
The charts are stacked in order of each sector’s weighting in SPY (one-month only view).
This shows strength in the aggressive sectors, and weakness in the defensive sectors (XLV, XLP), a profile consistent with a bull market.
The exception is financials, considered an “aggressive sector,” which should be stronger.

Is the weakness in financials enough to take down the entire market? No…. they’ve been relatively weak throughout the entire run since 2009. A grizzly bear would need much more support. IMHO.

Just as a reminder, going back to the Oct 2007 top, it was the financial and discretionary sectors that broke first (same chart, 10-year weekly view).
Since then, XLY (purple) has been the constant driver of the economy and of the 5 year bull (forget the FED for a moment), and not surprisingly, its trajectory most closely resembles that of SPY. According to Newton, it will remain in forward motion unless acted upon by an outside force. Thus, any deceleration or decline in XLY would be quite a red flag.

I am NOT SUGGESTING that today's market is a 2007 clone, it is not, I am just looking for analogs and clues. And comparing a one-month view to a 10-year view just illustrates that this is a short-term pullback in a long-term bull market…. until further notice…..

Just for fun/comparison, here’s the “Ken Davis Research” current recommended sector allocation, for “Sector Rotation Strategy” folks.
And Schwab’s below that
[both from yesterday, Friday]

And an interesting seasonal sector study just posted by Bespoke:

[Al_Dente]

“Economist Wins Genius Grant For Proving That Most Traders Are Idiots”
This guy got $625,000.00 from the MacArthur Foundation for “proving” that we should cut our losses quickly, and hold on to our winners.
Oy....
http://www.businessinsider.com/colin-ca ... ant-2013-9

[Al_Dente]

Goldman Sachs calls this “An Investment Opportunity We Haven't Seen In At Least 25 Years”
http://www.businessinsider.com/stocks-p ... ars-2013-9

[jack black]

I am NOT SUGGESTING that today's market is a 2007 clone, it is not, I am just looking for analogs and clues. And comparing a one-month view to a 10-year view just illustrates that this is a short-term pullback in a long-term bull market…. until further notice…..

Not clone for sure. The history doesn't repeat itself, but it rhymes. The 2007/2008 crisis was caused initially by housing/financials and later by the energy spike after Fed through some gasoline in the fire.
The 2011 crises was caused by Euro panic.
The upcoming 2013/2014 could be caused by meltdown of emerging markets debt (I guess) or USA default and downgrade. I don't know and can't see future.

What I do know is the market speculation levels are comparable to the 2000 and 2007 tops. And this bothers me.



Furthermore, credit situation is worsening (short term):

[jack black]

Goldman Sachs calls this “An Investment Opportunity We Haven't Seen In At Least 25 Years”
http://www.businessinsider.com/stocks-p ... ars-2013-9

This is totally over my head. However, the last time we had those low levels was 2006/2007 whatever that means.

[Al_Dente]

Furthermore, credit situation is worsening (short term):

nice one, thanks

[shaca]

yesterday: nyse -0,43%, new lows only 14, tick at the close +540; this seems very bullish to me, 10 days tick MA is at 360.

usually tick's MA goes down a few days before a serious correction, and that means distribution; this is not the current case, tick never closed below 0, so i'd expect new record highs or at least a 2% pullback

[Xian]

.

[BigPicture]

Goldman Sachs calls this “An Investment Opportunity We Haven't Seen In At Least 25 Years”
http://www.businessinsider.com/stocks-p ... ars-2013-9

I think this is just a function of the rise of etfs like spy and xlf, etc. The commoditization of stocks trading as an asset class en masse. So of course P/Es will tend to coalesce. So you can find undervalued low P/E stocks, but the question is does picking a good stock mean anything anymore, or will the mass effects just overwhelm all else? Maybe that is the reason for the phenomenal success of the cult stocks like TSLA , AMZN, PCLN, etc: stocks that don't slavishly follow the etfs are so few and far between that everyone piles into what few there are.

[DellGriffith]

Not much of an update from me. My composite signal is still utterly bullish, and will remain so all thru this upcoming week. I will not be selling this week.

What time frame is your signal? I don't think this is The Top, but we are in the topping process already.

Typically it takes weeks to get signals. Rarely they happen in just days. Rarely they take months. It takes a while to build up to one and my system isn't even close right now, so I can tell I'll be twiddling my thumbs all week. No need for me to do anything but give a weekend update.

[jack black]

The upcoming 2013/2014 could be caused by meltdown of emerging markets debt (I guess) or USA default and downgrade. I don't know and can't see future.

There is some evidence China could trigger the next crisis:

http://online.wsj.com/article/SB1000142 ... 99812.html

[Auole]

Two little cannaries, WHR and EFA. Patterns are patterns cuz they repeat themselves. So,, comparing last couple of hi's, patterns here show they wanna go for another up move....however... this interim period is with weaker indicators.
As for the real mine for the canaries gold 'n silver. Hmmm. Do NOT like the H&S. Deep pit coal lantern hope is pattern in pink ovals. Point is to try to be UNbiased. Perhaps volume will be the tell if PMs do dip down.