03/01/2014 Weekend Update

[Cobra]

The interesting part is smart money keeps adding more short, still no new record yet so guess the rally may still have rooms, but might be not much room now.

The institutional buying and selling chart (courtesy of stocktiming) shows more accumulation. The chart doesn't tell future only confirms what happens now, so nothing special.

I see nothing on AAII and II. I'd like to see extremely extreme, for now both are far from extreme.

[Cobra]

Summary of the week's stock picks: viewtopic.php?f=10&t=1217&p=156122#p156122

[Cobra]

preview of the next week's stock picks: viewtopic.php?f=10&t=1224&p=156123#p156123

[DellGriffith]

My thesis as to why the market has topped and why going forward will either be consolidation or a decline.

[koolblue]

We remain on track for higher prices this month, although more chop is expected. The first couple of trading days next week are seasonally positive , and my own work indicates a short term top is possible wed-thurs.

[uempel]

A long term red cycle points to March 2014:

[pezhead9000]

"How Long to the Next Recession? iM's Weekly Update"
http://advisorperspectives.com/dshort/g ... icator.php

[pezhead9000]

Weekly OEXA200R System (the percentage of S&P 100 stocks above their 200 DMA)

"According to this system, the market is now Un-tradable. The OEXA200R ended the week at 82%, up from 79% last weekend.

Of the three secondary indicators:
RSI is NEGATIVE (below 50).
MACD is NEGATIVE (black line below red).
Slow STO is POSITIVE (black line above red).

Following a major market correction, the conditions for safe re-entry are when:
a) Daily $OEXA200R rises above 65% (I follow the Daily but do not publish the chart here)
And two of the following three also occur:
b) Weekly RSI rises over 50
c) Weekly MACD black line rises above red line
d) Weekly Slow STO black line rises above red line"

http://advisorperspectives.com/dshort/g ... Update.php

[rhight]

Thanks for the charts, they look good, as always. I typed up a post, but got timed out and lost everything, so I don't have time to do it over, but will post my charts and let you go figure. Basically, everything appears bullish, but expect a "shot across the bow" day soon that will probably be bought to set up a larger Daily swing high reversal pattern (got that ) Four out of the last five days showed a nervous inverse cup from open to close. That said, there really is only a slight uptrend in NYDNV. The USD broke a 3 month AND 3 YEAR up trend this week! Is that a fake out? Something is not kosher with the Call/Put ratio (I know, I inverted that) big neg dev from January top (bearish by my interpretation) Two new all time highs seems to guarantee that price will find support on the same TL that supported the 2/5/14 turn, at least initially, but that's getting ahead of the curve.

60 min chart shows key trend line for this swing (IMHO) touched 4 times in 11 days. (The SELLS are not trades, just the result of a decision matrix that tells me to start looking for a sell set-up)

This chart shows what I mean by "hits" on the Price Projection chart I usually post. There is quite a Fibonacci Time Cluster early next week, and that could point to the inflection point mentioned. If a new downtrend is in the offing, I would expect it to start out complex with plenty traps, so beware.

[BullBear52x]

I find nothing to be bearish on price pays model. From it is what it is dept. suggest let it runs. Key support is 1847.5

SPY's key support line of 184.69

short term trend finder also confirming bull trend.

Vixies is close to sell, on hourly it triggered selling XIV. but short term is not triggering the sell on equities so for equities I will wait a little more to see what Monday brings.

for short term equities is still bullish

[Xian]

Hi everyone, Thought I'd interrupt your regularly scheduled programing of excellent charts and analysis to bring you something completely worthless.

Here's a brief timeline of events last time Russia decided part of someone else's country was actually theirs.

Of course there was something else preoccupying the world in '08. Can't put my finger on it. Have it written down somewhere.....

[uempel]

Very nice Xian, thanks.

I posted this in Cobra's blog a few minutes ago:

A close look at what's happening in the Ukraine and its implications for Monday morning:

Europe is totally dependent on Russian natural gas. Russian gas is pumped thru huge pipelines passing through the Ukraine and Belarus - approx 30% of European gas consumption goes thru these pipelines. Disruption or merely anticipation of disruption will weaken the Euro and strengthen the USD on Monday.

Why will the Euro be weaker? Remember that silver Porsche in your driveway? E.g. German auto industry requires huge amounts of energy - any disruption will kill German exports.

The new dollars will be risk-off money - they will boost Treasuries and not go into equities.

Why won't these new dollars flow into equities next week? A higher USD is not what the American economy wants - a strong USD will weaken the balance sheet of US companies which operate internationally - e.g. big technology.

Recap for Monday: USD and US treasuries up and Euro down - and equities in developed markets down too. Exception: oil and raw material related equities might be up.

By the way: Russian behavior in regards to territorial integrity of the Ukraine is not very reassuring. Reminds Europeans of Hitler marching into Austria 1938 and into Bohemia and Moravia in 1939.

uempel

Hi everyone, Thought I'd interrupt your regularly scheduled programing of excellent charts and analysis to bring you something completely worthless.

Here's a brief timeline of events last time Russia decided part of someone else's country was actually theirs.

Of course there was something else preoccupying the world in '08. Can't put my finger on it. Have it written down somewhere.....

[Al_Dente]

Hi everyone, Thought I'd interrupt your regularly scheduled programing of excellent charts and analysis to bring you something completely worthless. Here's a brief timeline of events last time Russia decided part of someone else's country was actually theirs. Of course there was something else preoccupying the world in '08. Can't put my finger on it. Have it written down somewhere.....

Hi boss, nice 2 c u again
We always need a scapegoat; this time it’s Russia, next week Greece or fill in the blank: ________.
Otherwise the bobble-head news folks would be forced to say “Traders/computers were looking for any excuse to sell on weakening internals, then
sell-stops got triggered, creating a pile-on cascading waterfall, then BTFD stepped in, etc.”

OFF TOPIC:
Everyone is familiar with the XIV bear divergence
Here is the IWM, RVX bear divergence
A nice clean double bottom on IWM begs for a long bounce
1/RVX (under the price panel) says hooooo-nellie divergence
It’s psychologically easier to long when the volatility folks are on your side, but they just refuse to cooperate these days.
5 min

Volume on IWM may be a “tell.” On Friday it was at a level suggesting a bounce, but glance at the volume action in late Jan/early Feb when the
triple bottom and volume invited a quickie-bounce which failed and attracted more selling. It makes a difference that early Feb we were trading against descending MAs (bear bias) and today the MAs are still holding (bull bias). Anyway, THE KEY is that if (IF) that double bottom breaks down, it will clearly trigger mucho stops (at a few pennies below the double bottom…. and lower). So for traders, the prudent posture on a breakdown would be to sell immediately rather than pondering and reflecting.
60 min

I’m seeing a few of these seductive “double bottoms.”
On XIV, compare Friday’s volume to 19/20 Feb. Friday’s level, which was at a XIV double bottom, had HEAVIER VOLUME vs the 19/20 Feb bottom,
and that is not bullish. Bulls would prefer a double bottom on LIGHTER volume, as the selling dries up.

Gorgeous rain here today
http://www.youtube.com/watch?v=JHBx9bbgNS4

Vote 4 Senor Snake
https://stockcharts.com/public/1684859

[edit: ps I liked your Churchill quote: “If you stop to throw rocks at every dog that barks, you'll never reach your destination.”
Here’s my fave from Churchill: “The Americans will always do the right thing... after they've exhausted all the alternatives.”

[uempel]

Hi Al_Dente, working on a Saturday?

I'm quite sure what the initial reaction in the futures market will be: Sunday 6:00 p.m. and Wallstreet 9.:30 a.m. on Monday it's down, initially perhaps more than 1%.

But what happens after the initial reaction - I don't know. Too many games going on at the moment. I do hope the idiocy of tapering will end this year. Permanently. It distorts everything.

Too many weird games: I wish bank failures were more frequent - to wash out all those snake-oil vendors who manage to push and pull the market/equities in either direction using big, big words and their their clients' money. If we knew that a bank, insurance or broker might fail and would not be bailed out - I think we would be more selective in choosing our financial contacts. But I must be dreaming I'm reading "Wallstreet" by Charles Geisst: nothing much has changed these last 200 years and I guess it never will.

[Al_Dente]

Hi Al_Dente, working on a Saturday? ....

The ETF flows from January 1, 2014 to Thursday Feb 27 (the latest data) are eye popping to say the least.
I have put lipstick on this pig, and double-triple-checked it, and the reality is:
$22.8 BILLION DOLLAR OUTFLOW FROM SPX SINCE 1 JAN THIS YEAR
(The math: SPY= $17.1[corrected] billion outflow plus IVV the spy clone = $3.9billion outflow plus SSO the 2x spy = $1.8billion outflow equals a total outflow
of $22.8 BILLION DOLLARS)
Boss I had plenty more to yakk with you about, but I am ABSOLUTELY FLOORED AND SPEECHLESS by these numbers and I must take a breather and
go to “Le Happy” where I will buy u a tall one and we’ll discuss it.
btw: the “other” thingy worked just fine

If anyone can show DATA (not crap) that counteracts these numbers, please I beg you show it.

le happy.png (369.86 KiB) Viewed 5766 times

[Al_Dente]

edit
I just corrected my math typo

[uempel]

edit
I just corrected my math typo

You at "Le Happy"? I'm at the Totò

[user13]

Very nice Xian, thanks.

I posted this in Cobra's blog a few minutes ago:

A close look at what's happening in the Ukraine and its implications for Monday morning:

Europe is totally dependent on Russian natural gas. Russian gas is pumped thru huge pipelines passing through the Ukraine and Belarus - approx 30% of European gas consumption goes thru these pipelines. Disruption or merely anticipation of disruption will weaken the Euro and strengthen the USD on Monday.

Why will the Euro be weaker? Remember that silver Porsche in your driveway? E.g. German auto industry requires huge amounts of energy - any disruption will kill German exports.

The new dollars will be risk-off money - they will boost Treasuries and not go into equities.

Why won't these new dollars flow into equities next week? A higher USD is not what the American economy wants - a strong USD will weaken the balance sheet of US companies which operate internationally - e.g. big technology.

Recap for Monday: USD and US treasuries up and Euro down - and equities in developed markets down too. Exception: oil and raw material related equities might be up.

By the way: Russian behavior in regards to territorial integrity of the Ukraine is not very reassuring. Reminds Europeans of Hitler marching into Austria 1938 and into Bohemia and Moravia in 1939.

uempel

naturalgas.png

Hi everyone, Thought I'd interrupt your regularly scheduled programing of excellent charts and analysis to bring you something completely worthless.

Here's a brief timeline of events last time Russia decided part of someone else's country was actually theirs.

Of course there was something else preoccupying the world in '08. Can't put my finger on it. Have it written down somewhere.....

Good write up Ump...I am thinking along the same lines as you. Idk why but this move by Russia gives me a pit in my stomach. I don't like saying this but I think the best option for the US is to stay away. This could escalate way beyond anyone could imagine. Just like WW2 next Poland will have to become involved and start beefing up the border forces...Then NATO...

[Al_Dente]

You at "Le Happy"? I'm at the Totò

Hi Boss: I toasted one to you… well okay a few….
Here’s the stuff I had ready to chat with you before the outflow forced me to seek an inflow of alcohol.
The Friday selloff was masked by the end-of-day bounce, so the Dow closing up +49p did not give a clue to the intraday turmoil.
When a “Bull Trend Day” reverses mid-session, it is never a good sign.
Here are the ROUGH numbers for those playing the “Home Game” version:
February had 19 trading days and ended the month up about +622 Dow points.
Of those 19 trading days, 9 were “Bull Trend” days (one of which was a nasty mid-session reversal, namely Friday), and only 2 were “Bear Trend” days
(one of which was a nasty mid-session reversal, namely 2/5).
For the 19-day month, we had one “Zweig Breadth Thrust” signal for the bulls, and 19 pseudo-crises to infuse enough fear (“wall of worry”)
to keep sober people away from the bull.
Conclusion pending. I’m either Cassandra or Pollyanna, I forget which is which, but here’s Janet explaining it all:
http://www.youtube.com/watch?v=ldi9677mj60

After a few drinks I see everything will be fine. After all, the TA alerts are green:

And the "OY" sectors especially health care and utilities are looking great this month.

Here’s a nice Bespoke thingy just in case:
http://www.bespokeinvest.com/thinkbig/2 ... tocks.html

luv u

[Al_Dente]

Buffett’s famous “Annual Letter to Shareholders” just came out today:
http://www.berkshirehathaway.com/letters/2013ltr.pdf

Key points here:
http://www.businessinsider.com/warren-b ... ter-2014-3