09/15/2012 Weekend Update

[TradingJackal]

I did some research over the weekend on the importance of 127.2 and 161.8 fib extensions based on my experience with Wolfe waves. I had a hunch and wanted to back test it. You are welcome to give feedback or add to it.

http://tradingjackal.blogspot.com/2012/ ... sions.html

[ClarkW]

Bullish Gartley is here on $SSEC as I mentioned last weekend. I didn't buy PEK as mentioned because it's too thinly traded, got cold feet . Would like to play SOMETHING with a tight stop but the question is what? Below the chart I have some ETF's and their correlation to $SSEC.

EDIT: PGJ is an interesting play with China Mobile the largest holding at 8.63% http://www.invescopowershares.com/pdf/P-PGJ-PC-1.pdf and has a total of 86 securities. FXI seems to be the ETF typically used but it's only 26 securities http://us.ishares.com/product_info/fund ... ew/FXI.htm

[ClarkW]

Any Elliot Wave Tech. have any thoughts on $SSEC for daily and/or weekly?

[TradingJackal]

Any Elliot Wave Tech. have any thoughts on $SSEC for daily and/or weekly?

Two things -
1. Looks like SSEC is about to start a wave 3. We had a deep 78.6 retrace in wave 2. A=C and B=76.4Fib of A.
2. More importantly, the weekly Stochastics are turning up.

Here is the weekly chart.
Since China pegs its currency to the USD, with the USD going down, China may also have to do a QE of their own. That should feed the frenzy.

What ETF would you use for China?

[ClarkW]

Any Elliot Wave Tech. have any thoughts on $SSEC for daily and/or weekly?

Two things -
1. Looks like SSEC is about to start a wave 3. We had a deep 78.6 retrace in wave 2. A=C and B=76.4Fib of A.
2. More importantly, the weekly Stochastics are turning up.

Here is the weekly chart.
Since China pegs its currency to the USD, with the USD going down, China may also have to do a QE of their own. That should feed the frenzy.

What ETF would you use for China?

Wave 3 sounds like fun China announced a stimulus package last week http://www.telegraph.co.uk/finance/chin ... ckage.html
WHAT ETF is definitely the question. I'm interested in PGJ. Any thoughts?

[TradingJackal]

I'm interested in PGJ. Any thoughts?

ClarkW, SSEC based ETF would have been a good bet as it includes 872 companies. I have heard EEM mentioned a lot too. However, I can't find any ETFs based on SSEC and my research on the internet shows that whatever is peddled here in the US is 'not the same thing'.

I only invest in companies listed on the DOW or ib the 4 indexes themselves - DJIA, SP500, NASDAQ100, RUSSELL 2000 Plenty of money to be made (or lost) here.

[ClarkW]

How about DDD? Didn't you hear, we'll all be able to make our own guns or tinker toy or mini car soon

[TradingJackal]

How about DDD? Didn't you hear, we'll all be able to make our own guns or tinker toy or mini car soon

You love risky stuff

Nothing says the rally is over other than that wave 5 is 161.8 extension of wave 3. Based on the research work I did earlier on fib extensions, this would be a good time to take at least a breather but more likely a retrace of a higher degree.

[3DM]

From Sentimentrader.com:

"There used to be an old market adage about buying stocks on the Jewish holiday Rosh Hashanah and selling on Yom Kippur. That worked for awhile, but recent market history has proved that the opposite is a better bet.
If we buy the S&P on Rosh Hashanah and sell on Yom Kippur, then over the past 40 years we would have had only 43% winning trades (17 out of 40) with an average return of -0.6%. There are usually 7 or 8 market sessions between the two holidays.
Taking a spin through the recent history of some popular exchange-traded funds, here's how that seasonality has panned out:
Ticker.....Market............% Pos....Avg Return
SPY..........S&P.................38%...........-1.5%
QQQ.........Tech.................42%...........-2.2%
IWM..........Small Caps.....27%...........-3.1%
GLD..........Gold.................83%..........+2.0%
TLT...........Bonds..............38%...........-0.1%
USO.........Oil.....................40%...........-3.7%

Small-caps have fared the worst, while gold did quite well (a persistent bull market helps). Taking a longer-term view of gold, it didn't fare nearly as well prior to the recent bull market. Since '71 it was positive only 47% of the time between those two holidays.
As far as Wednesday's drop goes, checking for other times that a 3-day rally in the S&P 500 was halted by a -2% or worse decline during a bear market, results going forward were modestly weak. The index rallied during the next 2-3 days 42% of the time, but most of that weakness was prior to 1970. Since then, it was closer to even.
If we stipulate that the -2% decline didn't wipe away all the gains from the 3-day rally, then the results become a bit positive, with a rally occurring 5 out of 8 times. Nothing too special.
I haven't been able to check the active option series for the ISE options exchange, but today's overall trading volume was exceptional. There were only 71 equity call options bought for every 100 put options.
In the five years of history that's available, there have only been two other days that saw a more skewed call/put ratio - January 17th and March 10th of 2008. Both were at or within 2 days of multi-week rallies.
There's a 10-year history for the overall ISE ratio (that includes both equities and indexes). That ratio slumped to a remarkable 53 on Wednesday, meaning only 53 calls were bought for every 100 puts. The only other date in the past decade that was lower was August 7th, 2007. After that, stocks took 6 days to bottom, then a multi-week rally ensued.
One day of declines isn't going to give us many oversold readings, and indeed we don't have them. If the poor seasonality follows through again this year, and we slump to new lows during the next 1-2 weeks, then it should set us up well for a multi-week rally.

Hello, about the Sentimentrader study of buy Rosh Hashonah & sell Yom Kippur,

1) Volume should be lower for this period, and how does that impact your trading or assessment. For Sept 17 through 26 the quieter days are 17, 18, 19, 26 and to a lesser extent the others during this period. Oct 1 slightly less volume as well.

2) Curious about which days they execute with "buy on RH & sell on YK". If one wants to buy on RH, since RH starts at suppertime the day before, on Erev RH, then buy the day before because thats the day RH really starts. Asia & Europe gets head start as well. Want to sell YK, then sell on day of Erev YK.

In the spirit of the holidays, here is the Jewish calendar for September, have a joyous week,

[Cobra]

database crashed, just fixed. sorry for the inconveniences.

[ClarkW]

How about DDD? Didn't you hear, we'll all be able to make our own guns or tinker toy or mini car soon

You love risky stuff

Nothing says the rally is over other than that wave 5 is 161.8 extension of wave 3. Based on the research work I did earlier on fib extensions, this would be a good time to take at least a breather but more likely a retrace of a higher degree.

It's one of those that I watched for awhile, didn't play it and forgot all about it. Then you play the "you idiot, why didn't you..." game. THe idea of 3d machines is very interesting. Seems like the lawyers will love it more than anything as people can theoritically make many different things on their own.

I need to learn Elliot Wave! Thanks for your analysis. The daily looks interesting to me but the combination my feeling the market needs to breathe for a but and your ew analysis I will just monitor.

Thanks again.

[ClarkW]

database crashed, just fixed. sorry for the inconveniences.

Thanks for your continued hard work Cobra!

[KeiZai]

Dollar (daily) - 8:1

Weekly bounce area (after dollar completes 5 waves down IMO)

Prefered scenario

[Cobra]

Weekly stock picks: viewtopic.php?f=10&t=673&p=95120#p95120
Chinese version here: http://www.hutong9.net/forum.php?mod=vi ... tid=186670

[Cobra]

database crashed, just fixed. sorry for the inconveniences.

Thanks for your continued hard work Cobra!

I stayed later last night until 2am ET. got up too late this morning around 10:30, should have found the problem earlier. Hope it's not down too long.

[KeiZai]

Bullish Gartley is here on $SSEC as I mentioned last weekend. I didn't buy PEK as mentioned because it's too thinly traded, got cold feet . Would like to play SOMETHING with a tight stop but the question is what? Below the chart I have some ETF's and their correlation to $SSEC.

EDIT: PGJ is an interesting play with China Mobile the largest holding at 8.63% http://www.invescopowershares.com/pdf/P-PGJ-PC-1.pdf and has a total of 86 securities. FXI seems to be the ETF typically used but it's only 26 securities http://us.ishares.com/product_info/fund ... ew/FXI.htm

Clarky check YINN, I am working on chart although I don´t like to be long ETFs I didn´t find anything better inverse is YANG I would like to short it but movement is weird (yeah it´s etf)

[KeiZai]

BKX (bullish or bearish both counts are showing ~63 as level of interest)

Bearish take: in green (personally I don´t believe anymore in bearish counts )
Bullish : (A) would be wave 1, (B) wave 2 and we are in wave 3

EDIT: I know that Inverse H&Ss are reversal patterns formed in downtrend but bulls are cheaters so it can play out easily

[Mr. BachNut]

Random and idle weekend thoughts and speculations:

1) Something bad may be in the works. There is a saying that nothing happens in Washington by accident. Why would the central banker go all in with: economic growth positive albeit muddling, financial markets liquid, no significant signs of deflation, gas and grain quotes at the highs and the Euro central banker already having stepped up to do what it takes and all a few weeks before the election? Perhaps the bad employment number explains it all, but the optics don't look good and don't look right. It may be that something is on deck, and the Fed needed to get things in place now. Maybe Greece is about to get its eviction notice. I don't know. My idle speculation is that there may be some interesting news ahead.

2) What does this have to do with the price of rice (and chicken) in China? The Chinese economy has been going soft and the leadership transition is in process (and a little weird at the moment). At the same time, inflation has been an issue as they have to print big time to maintain their currency peg to the $. Hitting China with QE to infinity is going to cause stress. I am not sure what is worse for them, unemployed workers or employed workers who cannot keep up with the price of food. They are going to have to respond.

3) We're gonna get a bubble in something. The recent record shows that the Fed punch bowl is not pulled until after the party has gotten out of hand. Without a fundamental pick-up in the broader economy or some deflationary event, the hot money at the margin is going to find a place to go. Need to watch where the crowd moves.

4) The Pain Trade is on. I know a number of asset managers who have been prudent and cautious given the risks and uncertainties surrounding Europe. Their allocations to cash have been on the high side. With the Mario and Ben one two punch and new equity highs, I have been hearing a different tune this weekend. They're gonna be putting money to work.

5) If this rally holds up into month/quarter end, the earnings season should be pretty dynamic. My sense is that we could see some deterioration in the numbers and guidance. I would say the bears may have a go in October except that we may still be in this good news is good news/bad news is good news market.

Sorry for the ramble on and I recognize some of the ideas above conflict with each other. Just day dreaming possibilities.

[BullBear52x]

How about DDD? Didn't you hear, we'll all be able to make our own guns or tinker toy or mini car soon

Interesting, here is my take on DDD, nice daily buy the dips spot, Friday hammer candle with tail wick resistance right at 50%fib give a caution. daily line in the sand is 37.12

The short term swing basis line in the sand is sitting at 39.49. dead on Friday close

[KeiZai]

Watching Encana closely, she is close to bottom or already bottomed

Weekly

Daily