Caution! Nasdaq, Dow, Sp, Nikkei, Hang Seng

[Harmonica]

If you're not out yet, reconsider @ QQQQ=$36.4 and/or DIA=102.9 and/or SPY=113.7-- if the 200-day gets taken out convincingly, consider SHORT positions on QQQQ, SPY, DIA or your individual stocks that show similar high volume declines.

Intermediate-term rally from Aug 13 uptrendlines broken on QQQQ, Diamonds & Spiders.

Downside volume increasing on all three -- bad sign for optimists & bulls.

I got out in December when the Macd uptrendline violation was confirmed by a similar likelihood in the RSI. The highest Nasdaq close was 2178 and my average exit was 2160 -- just 18 points shy of the top .... if indeed Jan 3 turns out to be the actual TOP.

For those still in the market and in luscious optimism there might be a reprieve soon if/when the 200-day gets touched. If the bounce is feeble and on low volume, that will be the cue to say Adios!

[Harmonica]

My reason for placement in this, as opposed to the biz forum should be obvious -- nevertheless my apology to the mods if wrongly placed.

Regards

[taxexile]

If you're not out yet, reconsider @ QQQQ=$36.4 and/or DIA=102.9 and/or SPY=113.7-- if the 200-day gets taken out convincingly, consider SHORT positions on QQQQ, SPY, DIA or your individual stocks that show similar high volume declines.

Intermediate-term rally from Aug 13 uptrendlines broken on QQQQ, Diamonds & Spiders.

Downside volume increasing on all three -- bad sign for optimists & bulls.

I got out in December when the Macd uptrendline violation was confirmed by a similar likelihood in the RSI. The highest Nasdaq close was 2178 and my average exit was 2160 -- just 18 points shy of the top .... if indeed Jan 3 turns out to be the actual TOP.

For those still in the market and in luscious optimism there might be a reprieve soon if/when the 200-day gets touched. If the bounce is feeble and on low volume, that will be the cue to say Adios!

nuclear physics is easier to understand .

could you explain to those of us who dont yet know,

1. what is the "200 day".

2. what is a high volume decline.

3. what is a Macd uptrend violation.

4. what is downside volume.

thanks.

[Diggerbasher]

He appears to be a follower of moving averages to determine a stock markets future direction.I.e the 200 day moving average of an index is watched.High volume is a negative signal as people are acting on their fears.

[Ken]

My reason for placement in this,  as opposed to the biz forum should be obvious -- nevertheless my apology to the mods if wrongly placed.

Regards

<{POST_SNAPBACK}>

Actually there is nothing "obvious" about your post at all. Are you bragging, complaining, advising (are you qualified to give financial advice?), or what?

[Shola]

If you're not out yet, reconsider @ QQQQ=$36.4 and/or DIA=102.9 and/or SPY=113.7-- if the 200-day gets taken out convincingly, consider SHORT positions on QQQQ, SPY, DIA or your individual stocks that show similar high volume declines.

Intermediate-term rally from Aug 13 uptrendlines broken on QQQQ, Diamonds & Spiders.

Downside volume increasing on all three -- bad sign for optimists & bulls.

I got out  in  December  when the Macd uptrendline violation was confirmed by a similar likelihood in the RSI. The highest Nasdaq close was 2178 and my average exit was 2160 -- just 18 points shy of the top .... if indeed Jan 3 turns out to be the actual TOP. 

For those still in the market and in luscious optimism there might be a reprieve soon if/when the 200-day gets touched.  If the bounce is feeble and on low volume, that will be the cue to say Adios!

 

<{POST_SNAPBACK}>

This sounds very simalar to what those dodgy Tele-sales company say when they ring you up for an investment of 10 grand!

[wimpy]

If you're not out yet, reconsider @ QQQQ=$36.4 and/or DIA=102.9 and/or SPY=113.7-- if the 200-day gets taken out convincingly, consider SHORT positions on QQQQ, SPY, DIA or your individual stocks that show similar high volume declines.

<{POST_SNAPBACK}>

Concur. With 5 high volume distribution days in the Nasdaq in 4 weeks, it is time to become defensive. Have moved to cash, and taken on a small short postion. If it continues to work, I will be adding to it. As you say, it will be interesting to see how the indicies act as they approach the 200 day.

Edited January 22, 2005 by wimpy

[Shola]

If you're not out yet, reconsider @ QQQQ=$36.4 and/or DIA=102.9 and/or SPY=113.7-- if the 200-day gets taken out convincingly, consider SHORT positions on QQQQ, SPY, DIA or your individual stocks that show similar high volume declines.

Intermediate-term rally from Aug 13 uptrendlines broken on QQQQ, Diamonds & Spiders.

Downside volume increasing on all three -- bad sign for optimists & bulls.

I got out  in  December  when the Macd uptrendline violation was confirmed by a similar likelihood in the RSI. The highest Nasdaq close was 2178 and my average exit was 2160 -- just 18 points shy of the top .... if indeed Jan 3 turns out to be the actual TOP. 

For those still in the market and in luscious optimism there might be a reprieve soon if/when the 200-day gets touched.  If the bounce is feeble and on low volume, that will be the cue to say Adios!

 

<{POST_SNAPBACK}>

You sound very intelectual, shouldn't you have posted this in the 'banking, business' forum?

[ProThaiExpat]

I very much appreciate this thread as I lost a bundle in 2002 on individual stocks and so restrict my activity to QQQQ.

I am only interested in buying when it is in the low range, 30-34 and selling in the 37-40 range on a long basis and then reversing it for short profit.

Thus I bought at 33.5 and was ready to increase my investment when it went up to 34.5 but in the interim I subscribed to a timing service that has a computer model that was supposed to detect trends and remove uncertainty.

It had a sell signal in place when I joined, so I dumped my purchase and lost (on paper) on that investment all the way to 37.5 when they issued a buy signal. I bought then at that figure and incretmentally to 40. They still have a buy signal out.

Their sales pitch was not to invest in QQQQ except on tried and true computer models and relax, doing only what the model tells you. Don't guess and don't worry.

This week they made a slip of the tongue in my view. They said in their weekly advisory, that the market, after a 10% decline, is considered to be in a bear market trend and they were considering changing their signal to sell. No mention of the computer model in that blurb. How is their credibility now.

Since I am retired and cannot afford to lose what is left of my nest egg, I will wait for an uptick, and hopefully minimize my losses. Otherwise, I will ride it down and up again. Afterall, with 2% interest per annum as my alterative investment, I will lose a lot less by waiting a year, if it takes that long, for it to recover.

The overall economic news is positive so the likelyhood of a return to 38 is greater that a return to 33. I could buy on margin if it goes to 33 and thereby lower my average purchase price to 35.

My guess is that those of you that follow the moving averages and other sophisticated indicies are traders by definition and move in and out of the market at will. From the foregoing, I think I am a long term investor, happy with 10% retuns per annum. Your thoughts would be appreciated.

[tuky]

Best off in the business/money forum Harmonica.

/mod

[wimpy]

My guess is that those of you that follow the moving averages and other sophisticated indicies are traders by definition and move in and out of the market at will. From the foregoing, I think I am a long term investor, happy with 10% retuns per annum.  Your thoughts would be appreciated.

<{POST_SNAPBACK}>

If I was "long term investor", I wouldn't be trying to time the markets using a "black box system". I would have my money in a couple of very carefully selected mutual funds that have long term records of beating the market averages and low volatility. If you PM me, I will be happy to offer a couple of ideas - assuming you are a US citizen.

[Ajarn]

Since they've proven over and over that jungle animals are better stock pickers than the 'Professionals', and since anything happening, not happening, or rumored to happen/not happen in the world can send share prices in any direction, one has little choice but to realise it's all a gamble, The only difference between this and the lottery is that in the market you don't lose your $$ in one shot...

I'm a day trader. Buy and sell within a few minutes, looking for even a 30 or 40 cent shift before profit-taking (or lump-taking) off of 1000 share purchases and shorts.

Last year I made up my losses for the year before. Just by chance/luck/position of tides-moons-stars.

Since this is a slow period for many sectors after Dec., I'm taking a rest for the time being.

Oh, and I never bet of the Thai SET. Think it's not corrupt to the bone?

[Harmonica]

>>>>>> nuclear physics is easier to understand . <<<<

not hardly!

>>>>>> could you explain to those of us who dont yet know,

1. what is the "200 day".

2. what is a high volume decline.

3. what is a Macd uptrend violation.

4. what is downside volume.

days

thanks. <<<<<<<<<<

OK Tax, the 200-day moving average (MA) is the average of the stock market's daily closes over 200 days. Significant because Institutions watch it like hawks.

High volume decline is when sellers are bolting for the exits and unloading their stocks in a hurry and in higher quantity than during the most recent upswing. It suggests the onset of panic and is very often indicative of a market top.

MACD uptrend violation ... MACD is a market momentum indicator that shows general momentum in a trending pattern; nice peaks and troughs -- I have actually, like some other tech. players, applied trendlines to the troughs and/or peaks and have gotten good results. When a momentum trendline breaks (= violation), it is often an early indicaor of what is to come in the price sequence.

Downside volume? ... refer to pt.#2.

How's that Tax?

[Harmonica]

>>>>> Actually there is nothing "obvious" about your post at all. Are you bragging, complaining, advising (are you qualified to give financial advice?), or what? <<<<<<

Ken, see the # of posters in both the General and Biz forums. "Everybody" browses Gen, rel few do Biz. Dig?

If it turns out that my cautionary call is justified (only time will tell) and given that most experts (upwards of 95% via recent online polls) are extremely BULLISH, I might then do more than just brag; right now I'm just plain happy to be out of the market and taken profit and on the sidelines.

My entire post is MY opinion -- if there is the "scent" of advice therein, TAKE it or leeeeeave it!

[Harmonica]

ProThaiexpat,

>>>>> I very much appreciate this thread as I lost a bundle in 2002 on individual stocks and so restrict my activity to QQQQ.<<<<<<<

Yeah, QQQQ is a great way to play both LONG and SHORT with your core funds -- its far less volatile compared to the usual tech stock and moves in well observeable trends. Since you mentioned 2002, I might point out that I and a few other techies see the entire rally from October 2002 to current as ONE long upswing BEFORE the final leg down commences. My call therefore hints at the termination of this long rally.

>>>>> Thus I bought at 33.5 and was ready to increase my investment when it went up to 34.5 but in the interim I subscribed to a timing service that has a computer model that was supposed to detect trends and remove uncertainty. <<<<<

You were abs. spot on to buy @ 33.5 as it is in the region of BIG support for the Q's @ 33-34.

If the market continues down, here is where one could watch for buying entry points -- 36.44 (200-day MA) OR 33.68 (200-week MA) and the same support structure mentioned above where you did your buy entry. As you can see, the 33-34 region is packed like a Sherman tank; consequently if the 200-day fails and momentum starts to decrease to the downside, the odds would strongly favor the 33-34 region to catapult a rally. If however, this region fails I will load up on SHORTS bigtime!!!!

No computer models or automatic signal generation for me -- I don't even use the buy/sell signals generated by Reuter's Metastock software -- just plain old-fashioned Technical Analysis combined with some awareness of the financial strength of the company (debt ratios etc., cash flow etc.)

>>>>>Since I am retired and cannot afford to lose what is left of my nest egg, I will wait for an uptick, and hopefully minimize my losses. Otherwise, I will ride it down and up again. Afterall, with 2% interest per annum as my alterative investment, I will lose a lot less by waiting a year, if it takes that long, for it to recover.<<<<<<

Right on! Add Support/Resistance analysis to your current arsenal and take your performance up several notches. If you want to practise on this, we can use QQQQ daily/weekly charts and post the relevant S/R levels.

>>>> The overall economic news is positive so the likelyhood of a return to 38 is greater that a return to 33. I could buy on margin if it goes to 33 and thereby lower my average purchase price to 35.<<<<<<

Agreed in principle -- but one should watch the momentum and volume during the decline to see if the support @ 33-34 is likely to "fire". If it does so with a burst of volume, then margin would be abs. OK, but would still need watching on a daily if not 120-min. basis as we are at a very tricky juncture.

>>>> My guess is that those of you that follow the moving averages and other sophisticated indicies are traders by definition and move in and out of the market at will. From the foregoing, I think I am a long term investor, happy with 10% retuns per annum. Your thoughts would be appreciated. <<<<<<<

I'm a medium-term and sometimes intermediate-term trader, never been a true long-term investor. I don't daytrade and rarely watch the market (during market hours, that is) -- all analysis done on the basis of daily closing numbers. 10% is good, but add just a couple of features to your toolbox and you could bring it up to 25% with relative ease.

Glad to see that you have a plan w.r.t. your plays, for without one, one is surely lost.

Regards

[taxexile]

How's that Tax?

appreciate your explanations of those terms , but i guess unless i was immersed in the markets on a daily basis they will remain beyond my understanding.

these days i keep my mega-billions in sterling offshore accounts and am happy with 5% returns , no worries , no hassle , no problems.

although i must say , pro-thai expats mention of 10% caught my eye.

[ProThaiExpat]

Many thanks Harmonica for your insight. I found it interesting that when I looked up the word "resistance" in the Timing Cube glossary that I couldn't find it. Support levels are important. Do you have an online source for resistance and suipport levels for QQQQ or would you care to lay them out for me from 30 to 40 or even 25 to 45.

I have laboriously made a five year weekly closing chart with closing price and weekly highs charted thereon. I certainly can put many other things on there you deem advisable. The chart certainly shows the rally from the low of 2002 and the 40.35 reached in the past month as the high. When QQQQ kept bouncing off 38 for three or four trading days in the past couple of weeks, I guessed that was a support level?

I therefore placed a stop/limit order for 39.99 and was shocked when it didn't execute, for as you know, for the first time this week, the QQQQ market opened almost a full point lower, thus not triggering my stop/loss. Thus I am in my current quandry, awaiting Monday's opening.

If I understand you correctly, the 36.3 level is a critical juncture and if a bounce occurs, it will be off this price. At that level, I will be more than 10% under water and really don't want to take the loss. Thus my thought about awaiting the 33 level to make some margin buys. I have a hard time believing the price will go below 33 with the economic recovery in place and the potential of the tax repatriation plan at work. As a technical type, you don't pay attention to economi news, do you. Just was the technical analysis says?

[Harmonica]

>>>> although i must say , pro-thai expats mention of 10% caught my eye <<<<

Tax, you ain't seen nothing yet -- that 10% could soon be 25% -- stay tuned

[Harmonica]

ProThaiexpat,

>>>>>> Do you have an online source for resistance and suipport levels for QQQQ or would you care to lay them out for me from 30 to 40 or even 25 to 45. <<<<<<

I don't know of any service that offers this -- its best to do it yourself; the concepts are deep, but with some effort and dedication I don't see why you couldn't nail it!

In my next post I'll try to give you a basic explanation of the underlying concepts and then list the support levels for QQQQ.

>>>>>>I have laboriously made a five year weekly closing chart with closing price and weekly highs charted thereon. I certainly can put many other things on there you deem advisable. The chart certainly shows the rally from the low of 2002 and the 40.35 reached in the past month as the high. When QQQQ kept bouncing off 38 for three or four trading days in the past couple of weeks, I guessed that was a support level?<<<<<<

If you're not already doing it, I would recommend you use a software package to do some of the tedious work in charting -- Microsoft Excel can do the job, but I'd go for Reuters Metastock or Tradestation. The chart will be created in an instant and then you can add indicators and other stuff.

You're going to enjoy this -- the resistance QQQQ reached @ 40.35 is none other than the same one reached in December 2001 -- repelled then and now repelled again -- question is...can it regroup and re-attack this resistance and take it out? We wait and see! Then look at the January 2004 high as $38-39 support level you mention.

Read this many times as many a techie does not do it correctly -- previous peaks act as support levels when a market descends towards them and conversely, previous bottoms act as resistance when a market ascends towards them.

Now apply this to a weekly chart of QQQQ and you will be astonished by the plethora of coincidences. Fundamental analysts call this wishful thinking or "thoughting" -- but the profits are very real and for this they have no explanation.

[Harmonica]

ProThaiexpat,

>>>>I therefore placed a stop/limit order for 39.99 and was shocked when it didn't execute, for as you know, for the first time this week, the QQQQ market opened almost a full point lower, thus not triggering my stop/loss. Thus I am in my current quandry, awaiting Monday's opening.<<<<<

The gapdown is very important -- how the Q's behave @ the 200-day average will further confirm the importance and message of this GAP. Patience called for here.

As for Monday's open -- here I'm repeating the fact that reinforcements are close at hand -- there's a battalion @ approx. 36.44 and the whole Navy @ 33-34. Its your decision as to how you're going to play this; I'm just giving you troop strength location. Be calm and don't panic --- I know, easier said than done!

[Harmonica]

ProThaiexpat,

>>>>>> If I understand you correctly, the 36.3 level is a critical juncture and if a bounce occurs, it will be off this price. At that level, I will be more than 10% under water and really don't want to take the loss. Thus my thought about awaiting the 33 level to make some margin buys. I have a hard time believing the price will go below 33 with the economic recovery in place and the potential of the tax repatriation plan at work. As a technical type, you don't pay attention to economi news, do you. Just was the technical analysis says? <<<<<<

OK then, to the meat -- the 36.3 (today=36.44) level is the reading for Friday's 200-day moving average -- changes a teeny bit daily (as per its definition & hence calculation) -- the importance of this level? The 200-day MA is a BIG factor in whether you're going to invest or get ready to go SHORT -- Institutions watch this and swear by it and they, as we all know, are high volume buyers/sellers. Furthermore, if you just eyeball the Q's you'll quickly see that STRENGTH=staying above the 200-day MA!!!!

So its very important and it is indeed rare that a stock or index will not BOUNCE when it descends to it. Since August 13th, 2004 this is the FIRST time the Q's are coming down towards the 200-day. Lord knows I'm tempted to gamble and go LONG now -- but I am NOT going to do this as it is very very possible that a change of trend is occurring and I'm a terrible gambler.

Then there is the 33-34 level, which if taken out, will definitely spur me to go SHORT at the next rally peak.

Keeping an eye on the Economy and its intrinsic parts etc. is fun and interesting and yes, I do this too -- but the stock market precedes the Economy -- the stock market foretells the likely direction of the economy -- between 6 months to 18 months in advance -- and Technical analysis is where I bet my own cash -- regardless what Economists or fundamental gurus say.

[Harmonica]

>>>> And my $37.00 What should I do with that? <<<<

Rav, you mischievous fellow, you -- is it the use of fractions you're poking fun at? If not, $37=? Explain amigo.

[ProThaiExpat]

Harmonica:Thanks for for your last. AmericanBulls web site gives the various length moving averages so I will keep my eye on it and if QQQQ goes below the 200 Day moving average, I go short big time, correct? What volume would you consider to be heavy for QQQQ, ie. above what level should I conclude that the big boys are moving the market????

[William Osborne]

If you're not out yet, reconsider @ QQQQ=$36.4 and/or DIA=102.9 and/or SPY=113.7-- if the 200-day gets taken out convincingly, consider SHORT positions on QQQQ, SPY, DIA or your individual stocks that show similar high volume declines.

Intermediate-term rally from Aug 13 uptrendlines broken on QQQQ, Diamonds & Spiders.

Downside volume increasing on all three -- bad sign for optimists & bulls.

I got out in December when the Macd uptrendline violation was confirmed by a similar likelihood in the RSI. The highest Nasdaq close was 2178 and my average exit was 2160 -- just 18 points shy of the top .... if indeed Jan 3 turns out to be the actual TOP.

For those still in the market and in luscious optimism there might be a reprieve soon if/when the 200-day gets touched. If the bounce is feeble and on low volume, that will be the cue to say Adios!

nuclear physics is easier to understand .

could you explain to those of us who dont yet know,

1. what is the "200 day".

2. what is a high volume decline.

3. what is a Macd uptrend violation.

4. what is downside volume.

thanks.

<{POST_SNAPBACK}>

Obviously a "cut & paste" invester but maybe some form of cockney speak as they seem to get around these days

[Harmonica]

>>>>>AmericanBulls web site gives the various length moving averages so I will keep my eye on it and if QQQQ goes below the 200 Day moving average, I go short big time, correct? What volume would you consider to be heavy for QQQQ, ie. above what level should I conclude that the big boys are moving the market????<<<<<<

Stockcharts.com is also good and the Tech. honcho there is the author of several top-notch well known books on the subject.

Go short bigtime if QQQQ dips below 200-day? --- ouch! March and May 2004 are examples of how the inexperienced can get fooled @ the 200-day average's penetration -- nicked quite well, but the market turned around and rallied. Then on July 9 it dropped below the 200-day and continued south until August 8 -- that's when the reversal occurred. Get my point? The trick then is to watch the volume along with the Macd and RSI indicators -- these showed good odds of the trader being right at the 3 dates mentioned as to whether to go short or long!

[Khun ?]

Those that have problems picking good stocks to stick with play trends.

Here is a site that can do it for you.

http://www.terrystips.com/stock_leaps.shtml

There is many ways to make money in the markets.

The worst I have seen, seem to be some of the proclaimed market experts

that write news articles in Thailand. They lock your money up into long term

investments that lose money in a very limited selection of mutual funds that they get big comissions from while still proclaiming to be expert market analyst. Stay away from these off shore gougers. They are not professionals, other than being salesman only interested in

their commissions. If you want to know what someone else has to say about the markets just continue to read the articles they scalp off the net and from investment letters that anyone can buy. The best investment advise you can get is stay away from these people and use an advisor from back home where things are regulated........ Definetly don't use the ones that start their own investment company up in Thailand that feed on foreigners. They are the worst of the lot.

[taxexile]

taxexile

  appreciate your explanations of those terms , but i guess unless i was immersed in the markets on a daily basis they will remain beyond my understanding.

pro-thai expat

I go short big time,

now you're talking.

[ProThaiExpat]

Harmonica: What do you think of relying on probabilities with QQQQ.

My first post suggested my strategy of buying near the bottom of the annual trading range and shorting when it gets near the top.

The probabilities, it seems to me, are very strong that the bottom or the top will not be breached, short of a major event, and if so, will return to the market sentiment just prior to the event.

In recent memory, had I stuck to my guns at 43.5 I would have made six points on the move to over 40 and would be 3 points to the good on the short side.

Since we are now in mid-range, if there is a bounce off the 200 day, my plan calls for liquidation of the short position, satisfying myself with a small return, ie 5% and wait until the index approaches 40 or 33.

Clearly, if there is a blowout near the top or annnual bottom, I would be under water, as I am now, however, the upward or downward potential as the case may be, would be strong for a correction back to the range. What do you think? Do you think the probabilities increase toward a reversal as one approaches either end of the range and can this probability be used to lessen risk in a strategy similar to mine. Keeping out of the middle of the range, seems to me to minimize risk while relying on probabilities near the extremes makes sense???

[Harmonica]

>>>> What do you think of relying on probabilities with QQQQ. <<<<

Yes, very much so -- its always about the odds, never the absolutes. Your comments on TRADING RANGES (that's what they're called, by the way) are accurate. I know at least one heavy dude who thinks we might be in yet another trading range -- I am not so sure about this; that's why I'm sidelined. See next post.

[Harmonica]

ProTE,

I have NO position currently. This means that I have NOT captured SHORT gains from 2178 to 2034 (via the Nas composite). I will wait for the bounce off the 200-day and/or 1932 and will also skip that bounce entirely -- that means, I will not be buying that either. But the top of that bounce I will nail SHORT and then ride first class all the way to Mexico City, where I will be happy to disembark and have lunch. If however, the previous high is taken out, which means I'd be a fool to go SHORT, I'm not going to play -- too risky and also means that my analysis has failed!