Market view and possible direction

[Deleted]

excerpt from Cobra's blog
VIX:VXV ratio hit a record low today which to me means not much upside room ahead. Normally when the market rises, you want to see VIX rises as well, because it means people are cautious and therefore bought lots of put to protect their longs, so a pullback, if any, won’t drop much. Now the market rises while VIX keeps dropping which means not many people are buying put to hedge, this is a dangerous situation because once the pullback starts, there’s not much buffer below so the pullback will be sharp and violent.
lh5.ggpht.com/_APmrYvpA45s/TRKN3IiC2iI/AAAAAAAAJiw/EfdDnBsHsXg/s1600-h/VIXtoVXVRatio%5B2%5D.png

[Deleted]

notice the close correlation of the inverted CPCE(equity put to call), the inverted dollar, and the inverted vix to SPX
stockcharts.com/h-sc/ui?s=SPY:$CPCE&p=D&yr=0&mn=7&dy=0&id=p80528839144

[Deleted]

hey Santa,
thanks for the new boards

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[Deleted]

notice the equity put to call ratio,
stockcharts.com/h-sc/ui?s=$ONE:$CPCE&p=D&yr=0&mn=7&dy=0&id=p57726487734
but don't forget a bullish 5,15,50 chart
stockcharts.com/h-sc/ui?s=SPY&p=D&yr=0&mn=7&dy=0&id=p25601541144

[rovo]

majeasy, Are you from the old boards? If so who were you?

[Deleted]

majeasy, Are you from the old boards? If so who were you?

hi Rovo,
Will1

[Deleted]

weekly equity put to call still bullish but worth keeping an eye on.
stockcharts.com/h-sc/ui?s=$ONE:$CPCE&p=W&yr=3&mn=0&dy=0&id=p67208784139

[Deleted]

my guess is a down market starting sometime in january, the VIX shows the least amount of fear in 3 years!!! i like this VIX chart..... notice the last 3 Januarys were down, some were down hard.
stockcharts.com/h-sc/ui?s=$ONE:$VIX&p=D&yr=3&mn=0&dy=0&id=p31932961329

[Deleted]

the trend is still up, but i think we will see a lot of selling soon, in years past the market's value held until after January 1st but the coming week might see some panic selling for tax purposes.... when in doubt Yclept's 5,15,50 is the best
new highs minus new lows
stockcharts.com/h-sc/ui?s=$USHL5&p=D&yr=0&mn=6&dy=0&id=p00723400914
weekly highs minus lows seems accurate
stockcharts.com/h-sc/ui?s=$USHL5&p=W&yr=3&mn=0&dy=0&id=p32042382464

[ModE98]

Believe you are correct in your observation. Little doubt in my mind we may see a "shaky" correction in January. Moot for a little rally late in the month. Depending on the news and events to come, would not be too surprised if we correct 30-40% off the uptrend which began last July 7.

[Small Biz Owner]

Mod E China still hot? What about the recent interest rate rise in China? How do you think that will that effect China stock prices?

[Small Biz Owner]

PS. Glad to see you are still a MOD

[ModE98]

SBO ... Take a look at this new SA article... are red flags flying?

seekingalpha.com/article/243557-outlook-2011-is-the-smart-money-right-about-china?source=email_watchliste

Economic cycles dictate that sooner or later China will feel the crunch. Believe the bloom has fallen from the sage for small cap ADRs. May be a few small cap ADR's that can ride out the gathering storm... but there will be casualties. Will take quick profits from my remaining holding as they may occur.
I'm just a back up here, but thanks. If SI remains like the MSN board, the only problem may will be a drop in troll with a spam post. It happened now and then, so could occasionally one could pop up here. We will purge the trolls and any such tripe.

[Bluerobin]

Dam crystal ball! Always cloudy when I need it! My guess is a small correction, and slow steady growth - nothing spectular.

[Deleted]

there's really only one chart you need for market direction and that Yclepts 5,15,50 stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p64959899448
here are some bearish charts
stockcharts.com/h-sc/ui?s=$USHL5&p=D&yr=0&mn=6&dy=0&id=p28477414318
stockcharts.com/h-sc/ui?s=$NYMO&p=D&yr=0&mn=6&dy=0&id=p86495155567
[a href="http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2393449&cmd=show[s197594903]&disp=P"]http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2393449&cmd=show[s197594903]&disp=P[/a]
[a href="http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2393449&cmd=show[s197681529]&disp=P"]http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2393449&cmd=show[s197681529]&disp=P[/a]
trust 5,15,50, it might be a little slow but it won't whipsaw you to death

[Deleted]

slightly bearish for tomorrow, the last day of the month has been down 14 out of the last 16 times.... don't expect a big down leg at this time, maybe later sometime in January.....
stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2393449&cmd=show%5Bs197594903%5D&disp=P

[yclept]

I actually think tomorrow (12/31) will be up -- no good reason. I think there will be some celebratory buying over the fact that the market had a much better year than anyone would have anticipated this time last year. Then too, there are folks on the sidelines who are beginning to rue that they have missed it (again!). At the same time, it's the last day for end-of-year tax selling, and the mutual funds will be doing some final window dressing. Both of those factors are not fundamentally sound reasons for market movement and so can lead to distorted valuations.
Broadening of market participation is not usually a good thing -- it is often the little uninformed guy buying in at the high. Tomorrow and the first few days of next year might actually be a good time to take some profits. I have one stock that jumped mightily today (BDSI, up 15%). You can bet I'll be watching it closely tomorrow for follow through. Little stocks like this often run for several days since the first big day garners interest where there had never been any before, but if the follow-through isn't forthcoming, I'll probably sell it and wait a bit before re-buying. My original target was 4.95 (closed today at only 3.7) and I still calculate that to be about fair value. But I expected it to slowly rise to that number, not take it in 4 big bites (which if it repeats today's performance a few times would just about do it).

[ModE98]

A lot of institutional "window dressing", last minute profit taking, etc. May be down in morning and up late before the close as bargain hunters may be on the prowl. Fun, fun, fun for all.

[Deleted]

anybody out there drawing trend lines? i'm not.... my support and resistance lines come from past highs and past lows, and sometimes the 50 ma....

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[ModE98]

Good call, yclept.

[yclept]

Well, it wasn't as I hoped. We were actually down today based on the broader indices -- my port was also down a little, primarily because the BDSI I mentioned above retraced about half of yesterday's gain and TBT whacked me a bit as did DGZ. The BDSI fell immediately out of the gate.
Come Monday we might get a feeling for which direction this market is pressured to go. I don't think the last two weeks count for much in determining market forces.

[Deleted]

i also lost money today,
pic of broader indices

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[Deleted]

Sooners Finish 12-2, Fiesta Bowl Champs
Oklahoma tops UConn, 48-20, in the Tostitos Fiesta Bowl Saturday night in Glendale, Ariz.
www.soonersports.com/sports/m-footbl/recaps/010211aaa.html

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[Deleted]

entertainment only! bearish 0 line cross
[a href="http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1926808&cmd=show[s181107814]&disp=P"]http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1926808&cmd=show[s181107814]&disp=P[/a]
at least 2 of the 4 advisors i read are bullish for tomorrow's trading

"Friday’s Jobs Report: No Downside Surprise Likely
By Rennie on Thursday, January 6th, 2011 at 2:51 pm .The S&P500 briefly ran up to a new intraday high this morning at 1278.17 before selling off. Historically, when the S&P touches a 40-day high on the day prior to the Employment Report release, the market has a strong track record of NOT posting a significant selloff on the day of the release. Over the last 30 occurrences stretching back to 1995, not a single instance coincided with a 1% down day for the S&P500, and only 2 out of 30 involved more than a 0.5% drop."

[ModE98]

What would be the effect of gradually rising interest rates later in 2011 and beyond have on stock market prices, gold, REITs. and Treasuries. It may be a good idea to plan for some investments moves should this began to take place.
Any strategy ideas, suggestions, etc., that may help us all to weather a possible rising storm on the horizon (assuming the economy will continue to gradually grow throughout the next few years. How do you plan to prepare?

[yclept]

Mod,
That's why some of us own TBT (short treasury bonds): interest rates up, bonds down! The earliest moves by the FED won't be as transparent and vocal as a rise in the prime rate, but rather will consist of them selling the bonds they bought as part of the "quantitative easing" supports which they can do without a lot of fanfare if they so chose. They announced QE far and wide to bolster morale in the economy; I suspect reversal of the actions will be as quiet as a cat burglar. Other FED support money has already exited the economy, by which I mean the TARP funds that have been paid back -- I'm too lazy to try to look up the numbers, but my guess would be the latest round of QE probably didn't do much more than offset the returned TARP money. I think we're seeing the market already starting on the road to tightening, mortgage rates, for example, are higher than they were about a month ago. I'm pretty sure I read that at one of the latest treasury auctions the bills sold for a lower price than had been prevalent (thus indicating a higher interest rate return for the buyers).
The stock market and economy can thrive in a slightly inflationary environment with low (albeit slowly rising) interest rates. Bond prices should go lower as they are directly affected by interest rates and don't have the offsetting cushion of higher profits, increased sales, etc. that can bolster stocks.
One of the things to watch with stocks will be lower efficiencies in companies as they hire new employees with all the attendant training and error issues.

[Bluerobin]

DI, I have a bit of a contrarian attitude about bonds too. I think the exit is starting, and I am waiting to buy. Time will tell.

[ModE98]

Do you think the REITs with good dividend payouts currently be adversly affected by rising interest rates? They probably could continue to do fine with only a slight rise, but if the Fed really decides to slap on the breaks, those dividend rates may come tumbling down in lock step.
I would want to bail out of my REITs... Probably a bit early yet though. What warning sign would you use to clean the port of a REIT? Those divis sure a nice thing for now, so do not want to bail too soon.

[ModE98]

Thanks, DI. Don't think anything of an immediate problem is developing, but it is always wise to be prepared to act promptly if any "red flags" begin flying.

[Deleted]

Vix news!
www.youtube.com/optionmonstertv#p/u/0/3zZicHdNtME
www.youtube.com/optionmonstertv#p/u/0/3zZicHdNtME