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Post by ukarlewitz on Mar 28, 2010 10:01:46 GMT -5
Oh Dear. Summation is both overbought and starting its starting to turn down. Once it turns it keeps going. This corresponds with all the recent cycle highs.
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Post by ukarlewitz on Mar 28, 2010 10:10:37 GMT -5
Below is ratio of leveraged bull funds to bear funds and the Spx. As you can see, whenever investors load on the bull funds, the index peaks. Not surprising. And where are we now? At a bull peak.
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Post by ukarlewitz on Mar 28, 2010 10:18:43 GMT -5
This chart looks at the amount of money in money market funds. When we are two standard deviations below the last 40d average, it means everyone is bull and fully invested. This corresponds with market peaks. We are now outside the 2 std deviation band and at the lowest cash level in the past year.
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Post by cosmic on Mar 28, 2010 10:24:34 GMT -5
Great charts UK - this looks a lot like last June, so a slightly longer timeframe shows a very interesting context. RIFIN also looks like it's in an interesting zone. I'm still working the chart but will post it in a few...
One favor? Could you shrink the 11:01am Summation graph a little or go to thumbnail? Thx ;D
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Post by kingdisco on Mar 28, 2010 10:25:33 GMT -5
Great charts UK - this looks a lot like last June, so a slightly longer timeframe shows a very interesting context. RIFIN also looks like it's in an interesting zone. I'm still working the chart but will post it in a few... One favor? Could you shrink the 11:01am Summation graph a little or go to thumbnail? Thx ;D once again cosmic's squishing fetish emerges.
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Post by cosmic on Mar 28, 2010 10:28:09 GMT -5
You call it my squishing fetish. I call it my Anti-Jack. ;D ;D ;D
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Post by ukarlewitz on Mar 28, 2010 10:43:28 GMT -5
I aim to please at all times.
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Post by cosmic on Mar 28, 2010 10:54:22 GMT -5
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Post by ukarlewitz on Mar 28, 2010 11:31:56 GMT -5
There's something going on with banks. Maybe its just bullish and that's it. Maybe a big shareholder wants out of C at a good price. Maybe the banks are being ramped so they can raise capital (because they need it with the MBS program finishing and a load of foreclosures on the way, etc etc). Last week ended with two very bearish candles for BKX.
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Post by cosmic on Mar 28, 2010 11:40:02 GMT -5
UK, I think the banks are getting priced for a real dividend. There will probably be some pullback based on how close expectations match reality.
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Post by Dualism on Mar 28, 2010 11:44:09 GMT -5
Below is a daily chart of VIX. Note, some strength can be observed in the pattern going back 5 to 6 trading sessions. This means puts have been gaining premium relative to calls. Keeping an eye on 19.59 and 21.08 levels for the coming week.
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Post by Dualism on Mar 28, 2010 12:01:37 GMT -5
I think bonds will be the center of attention for investors going into the coming week. Past Friday was Opex for March options on treasury futures. So new position jockeying will take place this week with April options. 114.50 price level on the June contract is likely to be tested soon. But if ZBM10 breaks below 113.50, it will have massive reverberation for the stock market. As bond prices fall, capital exits the stock market in favor of higher yielding bonds. This is a very fluid mechanism. But price violation of major levels will force re-allocation action on some fund managers. Also view a longer term look at the T-bonds. A break below 112.50 will be shocking.
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Post by cosmic on Mar 28, 2010 12:05:30 GMT -5
Dual, maybe this is what Bill Gross was worrying about.
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Post by Dualism on Mar 28, 2010 12:07:52 GMT -5
Dual, maybe this is what Bill Gross was worrying about. I think it is precisely that. Take a look at the weekly chart in the adjacent post.
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Post by cosmic on Mar 28, 2010 12:26:59 GMT -5
Buy Low Sell High
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Post by Dualism on Mar 28, 2010 12:58:16 GMT -5
Just as VIX has shown some strength in its price pattern over the last 6 trading sessions, the same can be observed - price weakness - in the Transportation Average. I wonder what Torre would say about that? ....
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Post by ukarlewitz on Mar 28, 2010 13:05:21 GMT -5
I think the banks need to raise money and the government wants out of C. I also think there was a rotation force. But I could be totally wrong.
I'm trying to find one reason bonds would not break lower, and I can't think of one except that the consensus view has been that they will break lower at some point. But all the props that have been used to keep yields in line have been expended.
Gross is right. At some point you have to realize that the private economy is mired in high debt, crappy loan portfolios (with balance sheets that need to be repaired) and poor demand drivers. The government program to forestall collapse was probably the right call, but that is now over. The next phase is a slow recovery. An IMF-type program (that market forces will install on the US) has high rates, low consumption and high savings. It's a bummer near term but that strong medicine leads to health longer term. The New Normal.
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Post by ukarlewitz on Mar 28, 2010 13:13:46 GMT -5
IWM has been strong but also shows recent weakness. Like trans, no net gains in the last 10 sessions.
Broken record: watch FXI. China is supposed to buoy global demand. But the SSEC is below the 200dma, as is FXI. And (doah) their trade balance just went negative. They have stimulated the crap out of that economy with literally out of control local bank lending (this from a friend on the ground in Asia). Money spent, now what?
The Vix weekly looks bullish - long tail candle. Daily closed on the critical 20dma. Needs follow through, imo.
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Post by Dualism on Mar 28, 2010 13:17:56 GMT -5
The next phase is a slow recovery. An IMF-type program (that market forces will install on the US) has high rates, low consumption and high savings. It's a bummer near term but that strong medicine leads to health longer term. The New Normal. I think your conclusion quoted above is dead on. Moreover, we need a new phrase/term for this state. It isn't quite stagflation. It is a slow healing, recovering process of sort. C'mon Jack and Cosmic, our in-house wordsmiths, here is your chance to coin a new term. ;D
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Post by Rich on Mar 28, 2010 13:29:30 GMT -5
This thread is rapidly becoming my favorite. Thanks fellas. The coffee clutch ain't bad either. Get a blast of caffeine and post your ass off
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Post by ukarlewitz on Mar 28, 2010 14:25:35 GMT -5
This thread is rapidly becoming my favorite. Thanks fellas. The coffee clutch ain't bad either. Get a blast of caffeine and post your ass off Get Cosmic to put a sticky on it!
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Post by Dualism on Mar 28, 2010 16:04:12 GMT -5
By the way, the Utility Average gave back its gains of mid-March all too quickly and decisively with loss of advancers' breadth momentum in the past week. Also note, at this rate the 50dma and 200dma are bound to cross (and paint a more bearish picture) in the next 3 days or so.
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Post by benvestor on Mar 28, 2010 17:22:49 GMT -5
So from the info here i have deduced we are approaching the top.
How much longer do we all think it will last?
I think if the C chart starts turning, Goog backs off china for good and The Dem Bank Regulations pass that will be a good turning point Fundamentally.
So I am going to watch for this important stuff in the news.. And of Course the Greece hot button + Bernake talking eesh..
Ohh and the Revised GDP is down btw, monday could be pretty choppy.
Just my two cents!
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Post by benvestor on Mar 28, 2010 17:24:01 GMT -5
And Apple seems to be hitting nosebleed territory.
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Post by Rich on Mar 28, 2010 17:41:25 GMT -5
I agree Ben.
Right now I would view all pops with suspicion.
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apc905
Margin Account Trader
Posts: 23
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Post by apc905 on Mar 28, 2010 21:26:18 GMT -5
I exalt you Ukarl for all the great information and charts you provide us. Thanks, Lane
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Post by ukarlewitz on Mar 29, 2010 16:30:09 GMT -5
Just an observation, not prognostication: Other crossovers observed in: DJT, Russ 2k, QQQQ, FXI, EEM and GS, among others.
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Post by cosmic on Mar 29, 2010 16:44:50 GMT -5
The next phase is a slow recovery. An IMF-type program (that market forces will install on the US) has high rates, low consumption and high savings. It's a bummer near term but that strong medicine leads to health longer term. The New Normal. Moreover, we need a new phrase/term for this state. It isn't quite stagflation. C'mon Jack and Cosmic, our in-house wordsmiths, here is your chance to coin a new term. ;D This was easier than Please Please No! IMFlation
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Post by jack on Mar 29, 2010 16:55:41 GMT -5
Moreover, we need a new phrase/term for this state. It isn't quite stagflation. C'mon Jack and Cosmic, our in-house wordsmiths, here is your chance to coin a new term. ;D This was easier than Please Please No! IMFlationYes I second that one by Cos the veritable wizard of the linguistic universe (not to mention the hemorrhoidal one). I wonder if a further refinement might prove usefull, e.g.: IMPflationlol!
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Post by cosmic on Mar 29, 2010 16:58:50 GMT -5
Depends on which way they getcha Jack.
Might be best to bring the younger generation dialects in...
PWNflation
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