Weekend Watering

[99er]

Updates

DWCF http://99ercharts.blogspot.com/2011/11/dwcf_12.html
SPX http://99ercharts.blogspot.com/2011/11/spx_12.html

EURUSD http://99ercharts.blogspot.com/2011/11/eurusd_12.html
ES http://99ercharts.blogspot.com/2011/11/es_12.html

And the best for last...a cartoon:

http://99ercharts.blogspot.com/2011/11/ciao.html

[cougar]

Hello guys! Great charts and discussions!

I have been asking myself one question yesterday:
Why did AAPL slip while the market was going up? Bad news? Well, not really…Even his Royal Crookedness “The Street” could find only some minor dirt to “explain” the drop: “Apple shares slipped almost 4% this week as investors digested analyst reports that poked some chinks in the company's armor. Cleveland Research lowered its iPad estimate from 14 million to 12 million units, citing "surprise revisions" to supply chain orders and lack of visibility. Ticonderoga Securities also noted negative supply chain data, with sales hitting well below the October monthly average”.
Lack of visibility for AAPL & iPAD noted by "Cleveland Resesrch" and supply problems detected by “Ticonderoga“?! Let’s be serious!

Other little worms also took a bite of AAPL and you can find their stuff everywhere on the internet…Not convincing, but Money Flow dropped abruptly (see charts)!

Then, what? Well...there are other rumors: European banks and hedge funds raising cash because of some well-known reasons. They “take profit” from wherever they can and AAPL is probably the most liquid asset that they own.


I like this second view. If the AAPL drop was not based on its organic weakness, it should bounce soon. Let us look at some charts which, in my opinion, are compatible with this optimistic scenario, without being bullish…yet.

So r u saying ur bullish bias on the broader market? If hedge funds r raising cash then wouldn't that be bearish?

My bullish view of the aapl divergence is that Apple is acting as a defensive core portfolio position. As a result it's actually beta negative. As a result if the funds r chasin beta, they'd sell apple and by bidu or vmw or etc etc.

The opposing argument is that apple is a leading institutional name. If the institutions, aka smart money is selling, then that could be predicting broader market weakness.

I don't know what's right, these are just thesis I'm thinking about

Well, hedge funds are periodically caught with their pants down… and recently they were trying to be “too smart”.
As for “smart money” selling …I have no reliable information on that …”Marty Canard” should know…LOL!
Anyway, I agree…these are all mental exercises…Time will tell!

[cougar]

99er: great stuff! LOL!

[cougar]

The VIX 130 min chart with Fan and Acceleration Band suggests a further drop of at least 1.5 points. If it drops under both Acceleration Band and the Fan Line close to it, VIX might gyrate for a while in the 27 zone...and lay there blue egg number 8...

This is a noncommittal view and NOT a trading advise!

[Al_Dente]

Great Risk-on, Risk-off charts copyright Ned Davis Research: http://screencast.com/t/8ya9vqD0uI
Ned’s explanation: “… We don’t like to say ‘this time is different’ …But one different aspect of the current market has implications for … where the markets are heading. … the degree of unusually high correlation among the components of our Risk-On and Risk-Off indices…In the aftermath of the worst global recession since the 1930s, the correlations reflect the market’s preoccupation with the recession question. When investors detect economic weakness, it’s risk-off, and the safe havens outperform. When investors see glimmers of economic strength, it’s risk-on, with outperformance from the growth beneficiaries.… The mean correlation with the MSCI All Country World Index has risen to 0.54 for the components of the Risk- On Index (…top clip) while the correlation has dropped to -0.51 for the components of the Risk-Off Index (bottom clip)….”

And Ned’s chart of the week (11/7/11): near record lows on bond fund liquidity
http://screencast.com/t/jjuR1Mbe4WA

Also, cougar, yest: “Is It Time to Short Apple?”
Kool aid: http://seekingalpha.com/article/307268- ... hort-apple

[h2oskier]

Here is one of my “leading indicators” charts, stacked, weekly.
Note how the “leaders” took turns calling tops/bottoms over the last six years, via neg and pos divergences (note especially yield, which called most of the turns).
Yes…what lovely chartS…. point is, I don’t see anything diverging and calling a bottom yet…do you?
Note: this is the first time I’ve used industrial metals as “leading” (so, grain-o-salt there). It is certainly more stable than the bubblicious silver and gold charts, but needs more study as a “tell”.
This is a work in progress; comments encouraged.
http://stockcharts.com/h-sc/ui?s=$SPX&p ... =248618588

Here is my gold chart; I’ll try to post a better one later.
http://screencast.com/t/2YLAighY74

Dr. Al, I'm not sure what you are getting at with your second chart...

I'm attaching 2 charts, daily of GLD and SLV. I look at relativity (daily close/200MA). I highlight oversold and over bought based on relativity. (Zeal created relativity). Silver became WAY over bought this past summer, but the pendulum didn't swing to WAY over sold. So, I'm guessing its on its way down....

[Mr. BachNut]

PAGING Baron von Channeling52x and Rhight:
I could argue that SPY 60min shows a wonky symmetrical triangle, rather than a pennant or a “red light district”. According to Bulkowski, the symmetrical is a bullish coin toss; and volume trends downward 86% of the time with this “pattern.”
SPY may have more room to run, at least to 127.50-ish to take out all the covering, or a breakout above 128 to scare the bejezzus out of the bears, before turning down.
http://stockcharts.com/h-sc/ui?s=SPY&p= ... =248626248

I would place emphasis on your last point. Bulkowski notes how symmetrical triangles can become busted patterns where price breaks out one way only to reverse. The key point he makes is that the move after the reverse is usually a big move.

[Mr. BachNut]

I think it is kind of hard to have a broad bull market without the financials participating. The downtrend seems alive and well for the moment. Also, while the broader indexes are shaping a symetrical triangle, the financials are looking more like a descending triangle. I think this needs to turn around if we are going to have the Santa Claus rally the bulls are planning on.

[Al_Dente]

PAGING WAVERIDER: I meant no insult when I posted the old Irish guy’s rant.
I’m Irish, and when he signed off “I’m going to the pub for a pint”, I knew exactly which pub in Limerick he was heading to. An Irish “pint” is the standard TALL glass of Guinness-on-tap, poured non-stop in every pub in the nation… In Limerick, after a couple of pints, the entire pub joins in singing “Danny Boy” and other traditional Irish songs at the top of their lungs, when they’re not busy ranting about their government (aka banks) and/or their religion (aka catholic). He’s not “confused”, he’s half drunk, and everyone at his pub is an “expert” on everything… just ask them. Every time I replay that clip I LOL hysterically. He reminds me of one of my wacky relatives.
I use humour to lighten the load of trading and of life, but sometimes it can backfire. I MEANT NO OFFENSE in joking about a very serious subject.
Sincerely yours, Al.
http://screencast.com/t/o2k8O0JmJ9p

[trendfollower]

Food for thought.

Detailed trading video with a few ideas.

http://stk.ly/pFhUKr

[99er]

Updates

BKX http://99ercharts.blogspot.com/2011/11/bkx_13.html
VIX http://99ercharts.blogspot.com/2011/11/vix_13.html

Back tonight with EURUSD and ES developments so stay tuned.

Have a great Sunday!

[BullBear52x]

Thanks everyone, another kick ass discussions and only getting better. I look at few more chart patterns and what I found was a similarity of chart patterns as end of August see here. of all EEM and XLF are the weakest link. If thing repeats only IF focus on exhaustion gap or reversal island like patterns.

[rocstockmarketlevels]

IMO here are the current support and resistance levels for oil, gold, and silver.

http://rocstockmarketlevels.blogspot.co ... 1/oil.html
http://rocstockmarketlevels.blogspot.co ... /gold.html
http://rocstockmarketlevels.blogspot.co ... ilver.html

[BullBear52x]

Follow the money, DBV here, not looking pretty as far as liquidity side of thing.

got one foot down below 1std looking at a resistance at mid BB, one move to bring this back to life is a gap up huge then every thing will be find as usual.

[cougar]

Hey BullBear! Nice “similarity of chart patterns”! Good work!

[Al_Dente]

Another “work in progress” chart here, inspired by the Ned Davis Risk On/Off chart posted earlier.
Use these notes as guide: generally, when risk-off vehicles are moving up, it means bear SPX (risk-off charts move roughly INVERSE to SPX). All red lines on chart mean bear SPX (risk-off). All green lines on chart mean bull SPX (risk-on). All dotted lines indicate divergence. All arrows point to a successful “call” of a top/bottom.
Here’s the shock of the day that jumps out:
XLP staples has called EVERY SINGLE TOP/BOTTOM in the last 4-1/2 years. So, what is it saying now? It is the only one (in this narrow view) that called last month’s low a “bottom”. Today it says “bear SPX” (note last time XLP was at this level was March 09 when SPX was 800 ish).
Re: bonds: I usually use $UST as a bond benchmark (10s notes), but Ned uses Barclay’s longs, and Ned is smarter than Al, so Al’s using 30s $USB longs here.
…More on dollar, bonds, etc., in another post…Finally, lacking here is a global-risk indicator, or at least an EU indicator… I’m working on that.
I ran out of annotations and real estate on suckcharts, so it looks unfinished because it is.
If any of you with younger eyes could point out a date where XLP gave a “buy” signal and then reversed immediately to a “sell” signal, I would really appreciate your info/corrections.
http://stockcharts.com/h-sc/ui?s=$SPX&p ... =248659024

PAGING h2oskier: thanks for yr SLV/GLD charts. I’ll post mine tomorrow (?).
PS: mine look an awful lot like yours, already.

[Al_Dente]

TED SPREAD update, still upticking, still bear SPY
http://stockcharts.com/h-sc/ui?s=$TED&p ... =248214703

[cougar]

Al Dente: Nice! I enjoy your work and comments!

[heavenskrow]

Weekend Bigger Picture Update
http://heavenskrowinvestments.blogspot. ... pdate.html

[Al_Dente]

Follow up on earlier chart of semis and Qs
Copyright Credit Suisse (via schwab): 11/11/11
"Semiconductors. Bottom Line: 3Q/11 Inventory Analysis: Supply chain inventory correction implies upside for semis.
… our C3Q inventory analysis consisting of 174 companies across the technology sector… suggests that heading into C4Q, semi companies are likely to underproduce and undership end market demand setting up for a restocking trade in C1Q/C2Q. Specifically our analysis suggests a 13.3% GAP between semi revenues and end demand for C4Q, while significantly less than the 2008 downturn GAP of 22.4%, it is greater than both the 2004 and 2006 GAPs of 4.5% and 4.4%. Thailand floods still represent a wildcard to our analysis. Tactically we prefer NXPI, structurally INTC.”