The Stock Market

[midas]

Futures indicating may smash 9500 on the DOW tonight No way that the trillions on the side will continue to ignore the market. Lot of people waiting for

"earth shattering news" Buy the time the news arrives we will be at 15000 on the DOW. Im loaded however never long once there is around 10-20% in the kitty Im out and looking for the next little struggling gem.

how do you feel about this zorro ?

http://www.telegraph.co.uk/finance/markets...ck-markets.html

[zorro1]

Futures indicating may smash 9500 on the DOW tonight No way that the trillions on the side will continue to ignore the market. Lot of people waiting for

"earth shattering news" Buy the time the news arrives we will be at 15000 on the DOW. Im loaded however never long once there is around 10-20% in the kitty Im out and looking for the next little struggling gem.

how do you feel about this zorro ?

http://www.telegraph.co.uk/finance/markets...ck-markets.html

"I expect this risk rally to continue into – and maybe through – a large part of August"

well I have another 17 days of profits to go According to your article. Then I may short the market on the way down and keep making money but lets see if we get to 10000 and hold it first

[loong]

Futures indicating may smash 9500 on the DOW tonight No way that the trillions on the side will continue to ignore the market. Lot of people waiting for

"earth shattering news" Buy the time the news arrives we will be at 15000 on the DOW. Im loaded however never long once there is around 10-20% in the kitty Im out and looking for the next little struggling gem.

how do you feel about this zorro ?

http://www.telegraph.co.uk/finance/markets...ck-markets.html

"I expect this risk rally to continue into – and maybe through – a large part of August"

well I have another 17 days of profits to go According to your article. Then I may short the market on the way down and keep making money but lets see if we get to 10000 and hold it first

Sorry Zorro, but are you in or out? You seem to be contradicting yourself. If you already banked your profits and exited your positions with 10 - 20% gain, how are you able to make profits for another 17 days????

The linked article is very interesting and what the fellow has to say makes sense.

Of course, as usual the experts have differing opinions, but I tend towards the bears winning out soon.

[zorro1]

Loong what I meant is if I buy ABC at 1.00 and it gets to 1.20 then I will sell or visa versa if stops are hit, however this could take 3 months or 2 days. Some days I have all my money in and some days around 50%. What I meant is I dont go long as in buy BHP and hold for 5 years. Also Im extremely bullish right now however if there is a sharp turn around then Im out. I was just taking the mickey out of midas by quoting his article saying I have the rest of August to cash in. I don't believe in bearish or bullish analysts, there is always an agenda. I find that France and Germany being out of recession a lot more reassuring

[loong]

I'm interested in your strategy Zorro. It may work some of the time, but seems very risky to me.

Your fictitious example ABC.....

If you buy at 100, will you always sell at 120?

What stoploss level would you use for a buy entry at 100?

[zorro1]

Loong depends on the liquidity of the stock. Using Iress live trading platform I can sell off immediatly using a mental stop. of course text book is 2% but watching volume is important for me. Once a stock shoots through the top bollinger during a rally Im out and either back in on retrace or look for something new. Having said this Im no genius, its just that the last 6 months you can throw darts and make money. Just one rule applys, SELL into a rally, never believe your stock is special, learn t that the hard way, nothing worse than seeing a 10k profit slowly reverse into a loss.

Edited August 14, 2009 by zorro1

[zorro1]

Guys Im no chartist Thats why Im a memeber of a chartists website where the experts live. We are at a milestone right now according the pros with a "Golden Cross" appearing on the dow chart. This week will be make or break time and if the charts are correct we could see some serious money start to flow back into the markets. If that's the case the last 6 months will look like beer money investment. Lets see what happens by next Friday night. The below is Cut n Paste.

the Dow and sp500 have both made a milestone this week by having the golden cross over. As I've read on finical sense the 50 day EMA line has crossed above the 200 day EMA line, signalling the end of the bear run. Is that possible in this negative environment?

So I checked that I'm on my charting system and sure enough that did occur on the 12/13th of August! Is this the point where scared investors finally tip their money in? Is this where long term investors are reluctant to sell?

"Long-term crossovers carry more weight than short-term events.

The Golden Cross represents a major shift from the bears to the bulls. It triggers when the 50-day average breaks above the 200-day average.

Conversely, the Death Cross restores bear power when the 50-day falls back beneath the 200-day.

The 200-day average becomes major resistance after the 50-day average

http://www.tradingday.com/c/tatuto/movinga...crossovers.html

[loong]

We are at a milestone right now according the pros with a "Golden Cross" appearing on the dow chart. This week will be make or break time and if the charts are correct we could see some serious money start to flow back into the markets. If that's the case the last 6 months will look like beer money investment. Lets see what happens by next Friday night.

I agree that we do appear to be at a milestone at the moment.

A pretty good resistance trendline was set up by the highs in my and June. It touched again 13th August but did not break it. We've had a small series of higher highs with divergence on the oscillator just recently ( easier to see on the line chart), and so it is looking more probable that the index will fall.

If it does fall, followed by a period of sideways action around 9,200 with a further tightening of the bollinger bands, I'll be looking for signs of a breakout, up or down.

If it breaks down, it could be a very big fall with key resistance at 9,000, 8,600, 8,400 and 8,000.

If it breaks up, who knows how far it will go????

Of course that's a lot of ifs and buts and it can all change tomorrow It will certainly be interesting to see what unfolds.

At the moment for me, it's a case of too early for me to commit to up and down. I will bide my time and act when I feel the time is right.

Incidentally, looking at the GBP/US$ chart, there looks to be about a 70% chance on the Pound breaking 1.70 again soon.

[midas]

I agree that we do appear to be at a milestone at the moment.

A pretty good resistance trendline was set up by the highs in my and June. It touched again 13th August but did not break it. We've had a small series of higher highs with divergence on the oscillator just recently ( easier to see on the line chart), and so it is looking more probable that the index will fall.

If it does fall, followed by a period of sideways action around 9,200 with a further tightening of the bollinger bands, I'll be looking for signs of a breakout, up or down.

If it breaks down, it could be a very big fall with key resistance at 9,000, 8,600, 8,400 and 8,000.

If it breaks up, who knows how far it will go????

.

loong I am just a curious bystander on the sidelines watching ( I was reading apparently Hong Kong's richest person, Li Ka-shing is doing the same ) Anything is possible in 2009 but like someone wrote in an article about why the US economy is not really recovering - “It’s like a female impersonator…just like a real woman in every way, except for the essential ones “.

I am just interested , have the moving average charts as shown in zorro’s post ever been terribly wrong in the past ?

It just seems its only based on sentiment and momentum ?

What happened to the old standard “ show me the money “ i.e. healthy and sound projected corporate earnings not just through cost reduction and other shady financial accounting?

[lannarebirth]

A Golden Cross falls into the higher than average probability of working spectrum. That said, If one isn't invested already, I'm not sure I'd use a daily indicator to determine if a new Bull Market is underway.

[loong]

I agree that we do appear to be at a milestone at the moment.

A pretty good resistance trendline was set up by the highs in my and June. It touched again 13th August but did not break it. We've had a small series of higher highs with divergence on the oscillator just recently ( easier to see on the line chart), and so it is looking more probable that the index will fall.

If it does fall, followed by a period of sideways action around 9,200 with a further tightening of the bollinger bands, I'll be looking for signs of a breakout, up or down.

If it breaks down, it could be a very big fall with key resistance at 9,000, 8,600, 8,400 and 8,000.

If it breaks up, who knows how far it will go????

.

loong I am just a curious bystander on the sidelines watching ( I was reading apparently Hong Kong's richest person, Li Ka-shing is doing the same ) Anything is possible in 2009 but like someone wrote in an article about why the US economy is not really recovering - "It's like a female impersonator…just like a real woman in every way, except for the essential ones ".

I am just interested , have the moving average charts as shown in zorro's post ever been terribly wrong in the past ?

It just seems its only based on sentiment and momentum ?

What happened to the old standard " show me the money " i.e. healthy and sound projected corporate earnings not just through cost reduction and other shady financial accounting?

Midas, are you sure that you are just a curious bystander on the sidelines watching?

You don't trade? You ask the right questions.

As for the question "are moving averages ever wrong?" Yes, most definitely yes. They are one indicator that can be useful, but you have to look at other indicators for confirmation. Moving averages can be a useful tool, but as you can see from the chart there has already been a major upward move before the crossover. In other words, it is a lagging indicator. In all honesty if used with little else to confirm, it is only useful to speculators with a big pair! Maybe the 50/200 crossovers haven't been proved wrong, but it has hardly happened often enough in the last 10 years to be anywhere near conclusive!

You will read about people comparing chart movements to what happened back in the 1930's or the 1970's. This to my mind is totally irrelevant! Only the last 10 years are important. 10 plus years ago people who traded shares used brokers charging huge commissions, it just wasn't feasible to buy shares and hold for a few days or weeks. Nowadays it's a different environment and there have been so few 50/200 day moving averages crossovers in the last decade to base anything on.

"It just seems its only based on sentiment and momentum ?"

Nail and head come to mind. Technical analysis is totally based on sentiment and momentum, that is why it is advantageous to be aware of fundamental analysis. Fundamental analysis allows you to identify companies that have been driven down by sentiment. As Abrak said earlier, a good company with a decent bottom line and reasonable growth prospects will always rise eventually when a market has been driven down by sentiment.

Usually I will trade individual stocks using fundamental analysis, (at least with what information I have access to ) and indices I will trade according to technical analysis. Of course, I do realise that an undervalued stock is still prone to the pressure of sentiment.

A case in point... I own 2000 shares in Aviva in the UK market. I bought them in 2 lots, some above today's price, some below. Numerous times in the last 10 months I have hedged. When I can see that sentiment is driving the price down, instead of selling my shares, I have opened an equivalent short position via CFDs. This makes sense to me, because it avoids the higher commissions with the broker and of course stamp duty charges.At this moment I am hedged again with a short position at 380 even though I believe fair value to be more than 600! This strategy has put me into profit, whereas a simple buy and hold would have kept me at evens overall.

Midas, I like your questions, they are right for a trader. Technical analysis may be considered a science, but the interpretation is an art.

[loong]

A Golden Cross falls into the higher than average probability of working spectrum. That said, If one isn't invested already, I'm not sure I'd use a daily indicator to determine if a new Bull Market is underway.

Didn't see this before my last post.

One word reply

"sensible"

[midas]

I agree that we do appear to be at a milestone at the moment.

A pretty good resistance trendline was set up by the highs in my and June. It touched again 13th August but did not break it. We've had a small series of higher highs with divergence on the oscillator just recently ( easier to see on the line chart), and so it is looking more probable that the index will fall.

If it does fall, followed by a period of sideways action around 9,200 with a further tightening of the bollinger bands, I'll be looking for signs of a breakout, up or down.

If it breaks down, it could be a very big fall with key resistance at 9,000, 8,600, 8,400 and 8,000.

If it breaks up, who knows how far it will go????

.

loong I am just a curious bystander on the sidelines watching ( I was reading apparently Hong Kong's richest person, Li Ka-shing is doing the same ) Anything is possible in 2009 but like someone wrote in an article about why the US economy is not really recovering - "It's like a female impersonator…just like a real woman in every way, except for the essential ones ".

I am just interested , have the moving average charts as shown in zorro's post ever been terribly wrong in the past ?

It just seems its only based on sentiment and momentum ?

What happened to the old standard " show me the money " i.e. healthy and sound projected corporate earnings not just through cost reduction and other shady financial accounting?

Midas, are you sure that you are just a curious bystander on the sidelines watching?

You don't trade? You ask the right questions.

As for the question "are moving averages ever wrong?" Yes, most definitely yes. They are one indicator that can be useful, but you have to look at other indicators for confirmation. Moving averages can be a useful tool, but as you can see from the chart there has already been a major upward move before the crossover. In other words, it is a lagging indicator. In all honesty if used with little else to confirm, it is only useful to speculators with a big pair! Maybe the 50/200 crossovers haven't been proved wrong, but it has hardly happened often enough in the last 10 years to be anywhere near conclusive!

You will read about people comparing chart movements to what happened back in the 1930's or the 1970's. This to my mind is totally irrelevant! Only the last 10 years are important. 10 plus years ago people who traded shares used brokers charging huge commissions, it just wasn't feasible to buy shares and hold for a few days or weeks. Nowadays it's a different environment and there have been so few 50/200 day moving averages crossovers in the last decade to base anything on.

"It just seems its only based on sentiment and momentum ?"

Nail and head come to mind. Technical analysis is totally based on sentiment and momentum, that is why it is advantageous to be aware of fundamental analysis. Fundamental analysis allows you to identify companies that have been driven down by sentiment. As Abrak said earlier, a good company with a decent bottom line and reasonable growth prospects will always rise eventually when a market has been driven down by sentiment.

Usually I will trade individual stocks using fundamental analysis, (at least with what information I have access to ) and indices I will trade according to technical analysis. Of course, I do realise that an undervalued stock is still prone to the pressure of sentiment.

A case in point... I own 2000 shares in Aviva in the UK market. I bought them in 2 lots, some above today's price, some below. Numerous times in the last 10 months I have hedged. When I can see that sentiment is driving the price down, instead of selling my shares, I have opened an equivalent short position via CFDs. This makes sense to me, because it avoids the higher commissions with the broker and of course stamp duty charges.At this moment I am hedged again with a short position at 380 even though I believe fair value to be more than 600! This strategy has put me into profit, whereas a simple buy and hold would have kept me at evens overall.

Midas, I like your questions, they are right for a trader. Technical analysis may be considered a science, but the interpretation is an art.

Thanks for your detailed reply loong

“but as you can see from the chart there has already been a major upward move before the crossover “

Got it – now it makes sense – thanks.

Absoultely no - I would never trade in this rally – it never made sense from the beginning when

I was reading references to it being a “ suckers rally “ -but people were saying never mind there is still a lot of money to be made – like our friend zorro.

How can the DJIA be so bullish when American consumption is so weak ( forget about cash for clunkers )? But then I remembered this how it happened in the depression – i.e. there was still “Irrational exuberance “ just before the crash.

Also I just regard the whole market as being too corrupt now as far as the small time trader in that the “ odds “ now seem heavily stacked against the small guy.

.e.g. flash trading competing against you, the Obama Plunge Protection Team ( supposedly State street Global Advisors )manipulating the market,the SEC not doing their job ( look at how the Bank of America shareholders were dealt so badly courtesy of Bernanke and Paulson ), financial company’s that are now allowed to effectively value their own assets using their own criteria etc – it ‘s crazy and totally out touch with reality and fairness.

I have traded options on the Australian Stock Exchange because I like the opportunity to deal in put options on the way down.

When I read of zorro’s expectations in his earlier post that he was hoping for the Down to reach 15,000

I just thought well if it does then we really have lost all touch with reality.

I don’t see any difference now to the roulette table – simply chosing red or black- why bother with all these charts or reading company reports-

and anyway CAN YOU TRUST what anyone is telling you today in their annual reports- everyone is lying?

fundamentals seem to have been tossed out of the window ?

[zorro1]

Midas there are those that entered and those that didnt we cant change that now. Im dissapointed I enetered only back in November. What about those that bought when the dow was 6500. Millions of dollars made at the height of the recession. To be honest If i wasnt already in I would be cautious right now. I would wait for a break as Loong has suggested. However if the bollingers squeeze and we break upwards we should see 10000 in a flash. Then it becomes risky again whilst we consolidate and retest lows. Its a viciouse cycle that can cause you to miss the rally altogether. who wants to buy RIO when its $150 again? not me thats the time to sell. So far The golden cross gives the bulls a slight advantage. Fmg and Rio had golden crosses recently and Lei is about to. Both fmg and Rio rallied hard. I was on Rio but missed FMG. However a reversal is a strong possibility but wont matter for me as sell button is inches away on my mouse. Can always buy back in. How long will you ignore the rally Midas and if you decide to trade when would you enter? or will you hope for a crash in which case you can short the market right now

Edited August 16, 2009 by zorro1

[lannarebirth]

A Golden Cross falls into the higher than average probability of working spectrum. That said, If one isn't invested already, I'm not sure I'd use a daily indicator to determine if a new Bull Market is underway.

Didn't see this before my last post.

One word reply

"sensible"

Carl Swenlin, a respected technical analyst has a different sensible take on the signal:

http://decisionpoint.com/ChartSpotliteFiles/090814_ltb.html

[zorro1]

A Golden Cross falls into the higher than average probability of working spectrum. That said, If one isn't invested already, I'm not sure I'd use a daily indicator to determine if a new Bull Market is underway.

Didn't see this before my last post.

One word reply

"sensible"

Carl Swenlin, a respected technical analyst has a different sensible take on the signal:

http://decisionpoint.com/ChartSpotliteFiles/090814_ltb.html

great article

"Bottom Line: A new long-term buy signal was generated this week, which means that we are technically in a bull market, and that bull market rules apply. The failure of new highs to confirm the rally is a mechanical issue, not a demonstration of internal weakness."

Interesting next week ahead to say the least

[loong]

A Golden Cross falls into the higher than average probability of working spectrum. That said, If one isn't invested already, I'm not sure I'd use a daily indicator to determine if a new Bull Market is underway.

Didn't see this before my last post.

One word reply

"sensible"

Carl Swenlin, a respected technical analyst has a different sensible take on the signal:

http://decisionpoint.com/ChartSpotliteFiles/090814_ltb.html

Thanks for the interesting link, but is his viewpoint so different?

To quote from the article....

In fact, my recommendation regarding this signal is to use it as an information flag rather than an action flag. For example, we use the long-term signals to determine whether or not the market is in a bull phase or a bear phase. As of Tuesday we consider that we are in a bull market, and this is the long-term context within which we will interpret medium-term price action and technical indicators. Bull market rules apply. The market will tend to stay overbought, and, while overbought conditions require increased caution, they are not necessarily selling opportunities in a bull market.

Prices are still pressing the top of an ascending wedge formation. A pullback is possible, but I think, if it happens, it will be quick.

Edited August 16, 2009 by loong

[flying]

Interesting next week ahead to say the least

[Abrak]

I dont now anything about charts but I would agree sentiment (in that it is cautious) and momentum are both in favour of the marKet going higher.

However, I cant escape from the simple fact that the rapid deceleration of broad money growth must be negative for marKets sooner or later. I certainly wouldnt trade against it.

[midas]

Prices are still pressing the top of an ascending wedge formation. A pullback is possible, but I think, if it happens, it will be quick.

Do you think he means quick and deep or quick and shallow ?

[lannarebirth]

Germany and France today announced an increase in GDP, supposedly their recessions have ended!

Dax not broken highs on this news yet and Euro is weakening against GBP.

Why haven't the Bulls jumped on this news?

Maybe the Dow will break 9,500 today, the Bulls are still winning the tug of war with the bears, but for how much longer?

5-15 hours methinks.

Turns out to have been 5.

[zorro1]

Germany and France today announced an increase in GDP, supposedly their recessions have ended!

Dax not broken highs on this news yet and Euro is weakening against GBP.

Why haven't the Bulls jumped on this news?

Maybe the Dow will break 9,500 today, the Bulls are still winning the tug of war with the bears, but for how much longer?

5-15 hours methinks.

Turns out to have been 5.

LOL looks like 9200 next. I did sell down around 30% when futures were around -80 today. -122 now

Thats okay we needed a retrace . Just not a retraction! Looks a doozy tonight, that will be 2 in a row followed by resumption north again . I hope

[midas]

Germany and France today announced an increase in GDP, supposedly their recessions have ended!

Dax not broken highs on this news yet and Euro is weakening against GBP.

Why haven't the Bulls jumped on this news?

Maybe the Dow will break 9,500 today, the Bulls are still winning the tug of war with the bears, but for how much longer?

5-15 hours methinks.

Turns out to have been 5.

LOL looks like 9200 next. I did sell down around 30% when futures were around -80 today. -122 now

Thats okay we needed a retrace . Just not a retraction! Looks a doozy tonight, that will be 2 in a row followed by resumption north again . I hope

zorro they have casino's just over the border in Cambodia if you need a fix

[zorro1]

If they let my play with a stop loss i would wing it over tonight. Imagine black jack where you can fold on frist card if you didnt fancy it and keep your cash , Now that's my kinda casino! No panick yet , worse case would be breakout under 9000 when I would sell everything except a few . many stocks like EXT ignored the dow and went from 50c to $7 in the last 12 months. Lets see what happens still to early to call, either way I rode the bull wave and am very happy with results

[lannarebirth]

Some things appear more clear when you're standing on your head:

[ronz28]

Short!

[zorro1]

Just announced CNN Japan out of recession today. Not short yet , maybe good buying tomorrow?

[loong]

Some things appear more clear when you're standing on your head:

Lanna - I'd be realy interested if you posted your interpretation of the chart - what are the blue horizontal lines, Are they Fib retractment levels?

CCI. , I'm not familiar with, so it would be good to know what you read from this chart.

I'm always happy to learn from other people.

[lannarebirth]

Some things appear more clear when you're standing on your head:

Lanna - I'd be realy interested if you posted your interpretation of the chart - what are the blue horizontal lines, Are they Fib retractment levels?

CCI. , I'm not familiar with, so it would be good to know what you read from this chart.

I'm always happy to learn from other people.

First of all ignore the abc labels. Next ignore the symmetrical triangle continuation pattern that led to a 300% rise in the $SPX in 5 years. I just included that to needle Harmonica.

Sometime peoples are able to appreciate information more easily if its presented in one fashion rather than another. Many people grew up in a Bull Market and those are the signs they can read best. This to me looks like a chart that could possibly lead to a prolonged Bull Market. Broad base, nice double bottom, beautiful possible symmetry. The thing is though its all upside down so its the opposite conclusion that must be drawn (by me for the time being).

Price is probably going to find its way back to that trendline at some point and that probably means higher prices will print in the Fall(down is up remember). That's just conjecture and I reserve the right to change my mind at any time.

Currently we are at the 68 week ema which should prove ST resistance. Also the 13 month ema which has been a real Bull/Bear demarcation line.

[Abrak]

Some things appear more clear when you're standing on your head:

Many thanks for the explanation - trying to stand on my head was proving well beyond me and risking potential injury.