01/30/2016 Weekend Update

[nikman]

Looking at recent SPX action makes sense if we draw channels:

On a longer term I see bullish:

- a break up and back into the blue channel at 1975/85 is bullish until 2050/75
- a break out of the red channel to the upside above 2050/75 is very bullish

and bearish:

- a break south below the black channel (now at 1825) is bearish
- a break south below the red channel (below 1800) is very bearish

Summary:

- 2050 is key for a strong bullish move
- 1800 is key for a strong bearish move

Channels.png

Hi Uempel, what are you expecting in the short term? This week and the next? I think you said earlier that the ellipses are forecasting a big move this coming week? Thanks.

Sent from my SM-G920T using Tapatalk

[uempel]

nikman, are you referring to Friday's time signal on the 60 min?

Whatever - break of MA 20 and momentum suggest further upside. But SPX is at center line of blue channel (see daily chart below) and we should be aware of what happened September 17th. My take: most likely some kind of (minor?) correction in the cards before SPX heads higher.

Ellipses on 60 min chart suggested a good move as from Friday noon

Break of MA 20 is bullish, center line of blue channel is resistance

Even though short term momentum points upwards - I certainly would not long on Monday.

Looking at recent SPX action makes sense if we draw channels:

On a longer term I see bullish:

- a break up and back into the blue channel at 1975/85 is bullish until 2050/75
- a break out of the red channel to the upside above 2050/75 is very bullish

and bearish:

- a break south below the black channel (now at 1825) is bearish
- a break south below the red channel (below 1800) is very bearish

Summary:

- 2050 is key for a strong bullish move
- 1800 is key for a strong bearish move

Hi Uempel, what are you expecting in the short term? This week and the next? I think you said earlier that the ellipses are forecasting a big move this coming week? Thanks.

Sent from my SM-G920T using Tapatalk

[uempel]

nikman, now I've found it. It's a weekly chart with a very suspicious/obnoxious time signal for next week. My only concern: did I draw it precisely, is it not referring to January 20th

Weekly SPX log

[josephli]

George Soros on market:

http://www.bloomberg.com/news/articles/ ... se-economy

article is dated, but some of his views deserve a good read.

[josephli]

NYMO reach to a warning level. Not necessary a sell signal.

overall i think the best will be stay sideline and see how market evolve.

http://stockcharts.com/h-sc/ui?s=%24NYM ... 9402947274

[BullBear52x]

From it is what it is department. Multi-time frames focus is the theme this week. A trend change is in progress, will it hold and bottom here that is wrong question, how will we take advantage of the turn " make or fail" should be the main focus.
This time frame say we are approaching resistance.

and this time frame suggests we are bottom

The buying pressure is crazily good.

But all that just confusing if you don't know your time frame to trade. This is the time for risk management and multi time frames approach.

[fehro]

SPY 4hr.. Bears see a H&S red, or yellow neckline. Über bear we stall in this zone.. break red/yellow.. look for 150 SPY. Worse.. pink neckline bounce at 174ish to 185 then down.. target 144… March 2017?. Bulls need to move over the green line, and hold.

[nikman]

Thanks Uempel. This is what I was referring to. Good to know that there is a slight doubt about the timing of the signal.

nikman, now I've found it. It's a weekly chart with a very suspicious/obnoxious time signal for next week. My only concern: did I draw it precisely, is it not referring to January 20th

ltweekly.png

[daytradingES]

3:18 PM 1/31/2016

Starting my weekend warp-up. Trying to gauge next top of the hill

[daytradingES]

another view (two inserts = zoom in)
on this chart

[daytradingES]

another view

[Al_Dente]

“During the month of January, analysts lowered earnings estimates for companies in the S&P 500 for the quarter. The Q1 bottom-up EPS estimate (which is an aggregation of the estimates for all the companies in the index) dropped by 4.7% … during this period. How significant is a 4.7% decline … How does this decrease compare to recent quarters?”
http://www.factset.com/insight/2016/01/ ... q5sZ_krKM8

[DellGriffith]

Found this riddle in David Tang's column in the FT a few weeks ago. The conundrum (which in my view is not a conundrum) shows that what we read or what we see confuses our logical thinking. We only find solutions if we push aside any preconceived (or printed) ideas and use our brain to analyse/solve a problem.

Conundrum.png

Its easiest to see what happens by doing a spatial representation.

Step 1: 3 men pay $10 each or $30.

man 1: 11111 11111
man 2: 11111 11111
man 3: 11111 11111

Now the bill is only $25, so let's separate out the actual bill from the $5 to understand what happens next:

man 1: 11111 1111 1
man 2: 11111 111 11
man 3: 11111 111 11

When you take the $5 and separate it out, the 3 men have paid a total of $25, an unequal amount. 1 man has paid $9 the other two have paid $8 (for the actual meal) and a tip of $5. So when he returns $1 to each man, one man has paid $9 and the other two have paid $8 (for the actual meal) and a tip of $2.

man 1: 1 11111 1111 ($1 returned by waiter, $9 paid in for meal, NO tip)
man 2: 1 11111 111 1 ($1 returned by waiter, $8 paid in for meal, $1 tip)
man 3: 1 11111 111 1 ($1 returned by waiter, $8 paid in for meal, $1 tip)

Did they all pay $9? Yes, but not for the meal.

Simple version:

So the flaw is the bad assertion in the problem. The bad assertion in the problem is that everyone paid $9 just for the meal and that there was $2 left over for a tip. (the $3 returned was not mentioned). That is wrong. The truth is that one man paid $9 for the meal only, while the other two men paid $8 for the meal and paid a $1 tip, with $3 returned.

[DellGriffith]

Another similar puzzle is the "Monty Hall" problem.

Monty hall shows you 3 doors. Behind 2 are goats. Behind 1 is the new car.

You pick door A.

Now Monty opens one of the other two doors and reveals a goat. Now he offers you to switch your choice to the door neither you nor Monty picked. Should you switch?

The answer is yes. Here's why.

Given 3 doors A, B, and C, there are three possible scenarios:

A B C
C G G
G C G
G G C

G = goat
C = car

In THEORY, it is random which door the car is behind, so there is no advantage to switch. But here's why that is wrong. Monty Hall KNOWS where the car is. He must know, because when he plays this game he must ALWAYS reveal a goat before making the offer to switch.

So what you really have is a scenario where you choose door A, and Monty has three options:

1. If the car is behind door A, Monty opens a random door between B and C.
2. If the car is behind door B, Monty has no choice but to open door C.
3. If the car is behind door C, Monty has no choice but to to open door B.

Now, its easiest to explain what this does by reposting the probability grid and Xing out the door that Monty opens in each scenario.

A B C
C X G
G X C
G C X

player picks door A

X = monty opened door
C = car
G = goat

In 2 of the three scenarios, you win the car if you switch.

[DellGriffith]

What most of these mindbenders come down to is that people have a REALLY difficult time separating assertion from truth. Someone asserts something and they just accept it instead of questioning it. And then they get confused. The first one made a bad assertion that everyone just paid $9 for the meal. The Monty Hall problem makes a bad assertion that everything is random when Monty knows where the car is.

[rhight]

Found this riddle in David Tang's column in the FT a few weeks ago. The conundrum (which in my view is not a conundrum) shows that what we read or what we see confuses our logical thinking. We only find solutions if we push aside any preconceived (or printed) ideas and use our brain to analyse/solve a problem.

Conundrum.png

Simple version:

So the flaw is the bad assertion in the problem. The bad assertion in the problem is that everyone paid $9 just for the meal and that there was $2 left over for a tip. (the $3 returned was not mentioned). That is wrong. The truth is that one man paid $9 for the meal only, while the other two men paid $8 for the meal and paid a $1 tip, with $3 returned.

I think it is somewhat simpler than that. The puzzle is worded to fool you into thinking the $2 the waiter took is mathmatically added, when in fact it is subtracted, and there is no unaccounted for $1.

Each customer pays $10, for a total of $30. Then each get $1 back, for a total of $27 out of pocket. Then the waiter takes $2 (27 - 2 = 25) and so there is no dollar unaccounted for.

[daytradingES]

weak Chinese data

"After an almost unprecedented surge in credit (total social financing) and over-invoicing enabled a bounce in China's PMI data in December, both Manufacturing and Services data tumbled in January, confirming South Korean trade data. While manufacturing continues its contraction (dropping to 49.4, the weakest since Aug 2012), it is non-manufacturing's plunge from a one-year high "transition is happening, see" narrative to practically the weakest print since 2008" ZH

---------------
Korean change in exports drop to lowest level since 2009

"Korea is the first major exporting nation to report each month, all eyes and hopeful speculative capital was glued to tonight's South Korean trade data. After a brief respite in November, December's drop was worrisome, but January's just reported 18.5% crash - the most since the financial crisis - has only been seen during a US economic recession. Worse still, South Korean imports plunged over 20% in January as it appears crashing crude and cliff-diving freight indices are less about supply and more about demand (there is none) after all."

[daytradingES]

China manufacturing falls to lowest levels since 2012

Caxin PMI slightly up 48.4 from 48.2

[daytradingES]

Shanghai down 1.5%

[brucekeller]

Shanghai down 1.5%

Needs to get down to about 2660 to hit its trend. My guess is 2666 since DOW was all 666'd out on Friday.