Market view and possible direction

[Deleted]

What is the decline on the NYSE's New Highs trying to say?
Today's posted chart shows the raw daily data on the NYSE's daily New Highs. On this chart, a minimum of 100 is a very important level in a rally. 150 is what I want to see. 50 is neutral.)
After looking at the "A" shape resistance lines, two things can be observed on today's chart:?
1.That the New Highs above 150, the positive traction is high and a market positive for any rally.?
2. The second observation, is that New Highs had a peak level on November 5th.? And since then, the trend has been moving down. Unless this trend changes, it will eventually bring the level of New Highs down below 100, and possibly below 50.
Why are those numbers important? Because we want to see New Highs above 100 for a healthy rally, and below 50 is a problem level typically associated with pullbacks or market corrections.?
So, the declining trend has been a slow descent, but its message is that it wouldn't hurt to put the NYSE New Highs on your radar screen during the coming weeks. Be sure to see the "A" shaped resistance lines on today's chart.
stockcharts.com/h-sc/ui?s=$NYHL&p=D&b=5&g=0&id=p92532384074

[Deleted]

this post is conjecture and opinion, feel free to disagree.... this is one of my favorite pet peeves.... i've been guilty, and others are currently guilty when they say over and over again "buy low, sell high", or short high, cover low.... this sounds perfectly normal and what could be wrong with something so straight forward.... what's wrong with buy low, sell high is it involves counter trend trading or trying to pick bottoms.. short high cover low is also a counter trend trade...
take a look each of the 5 break outs KBR has had. each break out has fallen back to some support level before making another new high.... if KBR falls back again for the 6th time, the smart trend trade will be to buy long at support .... the odds favor long only trades when the 50 ma. is sloped up as it is now.... odds are against shorting at this current break out because it would be a counter trend trade....
Yclept's 5,15,50 will never get you in at the bottom, and seldom get you out at an absolute top.... however it will keep you making trades with the highest odds of success.... watch the slope of the 50 period moving average for trading direction..... if the 50ma. is flat, pass on the trade...
i'm breaking all these rules by shorting KBR in this weeks pick of the week game.. but i'm not making a trade with real money and i don't suggest anyone counter trend trade with real money.....

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[rovo]

Nice post in the previous message. I agree and would like to add to avoid going against the trend unless there are specific reasons to do so on a particular stock. Counter-trend plays can succeed in the short term but don't fight the trend in the longer term.

[Deleted]

excerpt from:
cobrasmarketview.blogspot.com/
both CPC and CPCE are way too low. The signal was formerly an intermediate-term signal, but looks like now it’s only effective for 2 to 3 days, but no matter what, the most important of all, this indicator still works.
[a href="http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2393449&cmd=show[s185055197]&disp=P"]http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2393449&cmd=show[s185055197]&disp=P[/a]
if next week has a big down day, it's usually is followed by a big up day, this basically means bulls will have plenty of chances to escape...
the consensus of the gurus i've read don't expect more than a 1% decline next week, and lately all bearish predictions have been wrong...

[Deleted]

DI writes:

"Buy low, Sell high" Sounds like a Hard set, but it is actually subjective.

let's agree to disagree on this one.... in my book there are only two types of trades, counter trend, and trend trades.... the trend trades success depends on the greater fool theory.... counter trend tries to pick tops and bottoms.... counter trend traders don't survive long....
BTW i wish you hadn't moved my joke thread, it's hidden away who knows where now.... thanks

[ModE98]

Majeasy ... Found it! Eureka! ... "When Dreams Come True" now back, should be third thread from the bottom on our board. If you want to add and bring it up ... it is open to post jokes, or whatever.
DI has been redeemed, so easy on the lad .

[Deleted]

Disenfranchised Investor, ModE, and rovo thanks for being great mods.... DI, please except my apology....

[lovetobike]

Here's an article in Bloomberg's Business Week - predicting a significant drop in the S&P

www.businessweek.com/news/2011-01-19/u-s-stocks-near-significant-top-tom-demark-says.html

[ModE98]

Sense it may be getting near term "toppish", though believe only a minor correction is in store (unless we get some unexpected bad economic news). May be a good time to keep a hold on cash for the time being.

[Deleted]

Standard & Poor’s Trendline Oscillator
Widely quoted by Jim Cramer & others as one of their favorite market timing tools. Usually referred to simply as “the oscillator.” Calculation is based on a combination of breadth and price. A zero line cross suggests trend change. UPDATED DAILY.

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[lovetobike]

I think this is an interesting perspective from Jim Jubak for the reaction to the upcoming Unemployment numbers that are coming out Feb 4:

This is an excerpt from his newsletter that I subscribe to:

February 4. A date to watch out for and to, potentially, profit from.

That’s the date that the Bureau of Labor Statistics is scheduled to release the non-farm employment figures—the jobs and unemployment rate—for January.

And there’s a good likelihood that for pure statistical—and therefore as far as the actual state of the economy and the jobs market are concerned essentially meaningless—reasons the jobs number and the unemployment rate are going to look bad for January. Even worse than the anemic 103,000 jobs-added number for December.

If you understand why, you might be able to make a few bucks if your fellow investors panic—before they figure out what the data means.

Ready for a trip down the rabbit hole of the way the government calculates unemployment?

In December the unemployment rate fell to 9.4% from 9.8% as the number of people in the workforce fell.

Why did the size of the workforce go down by 260,000 people in the month? Because due to Congressional inaction, unemployment benefits temporarily expired.

The unemployment rate is calculated from an actual survey of households where the government asks the important question “Did you look for work this month?”(The number of people hired or let go is calculated from a survey of employers. There’s nothing to say that the two sets of data have to be consistent.)

Now if you want to collect unemployment payments, you have a strong incentive to answer “yes.” You don’t get an unemployment check if you didn’t look for work. Some folks who answer “yes” lie. Shocking, I know. But I’ve been there (that is unemployed) and in my misguided youth I might have actually fabricated a job search or two in a week when I didn’t actually look for work.

In any case the availability of unemployment payments does tend to add to the number of folks saying “yes” and that, in turn, adds to the number of people in the workforce, according to the household survey.

So what happens when unemployment benefits lapse—with a possibility that they’re gone for the duration?

People lose their incentive to say “yes.” Some people who might have lied, don’t. Some people who really did search for work forget. Others just can’t be bothered to answer.

And since if you haven’t looked for work, as far as the survey is concerned, you’re not in the labor force, then the labor participation rate drops and so does the unemployment rate. I think that’s what happened in December.

And what will happen in January?

Congress finally got around to renewing long-term unemployment benefits for many workers as part of the package that extended the expiring Bush tax cuts.

So more people will have an incentive to say “yes” when asked if they looked for work in January. That will push up the size of the labor force in January and a bigger work force is likely to send the unemployment rate higher for the month.

[rovo]

Very interesting perspective on the unemployment rate. Just how would one play the anomaly in the data?

[safeharbor37]

It looks like the old "Start Investing" board has transformed to a technician's board, but, since it's quoting Jubak, maybe this article won't be out of place.
money.msn.com/stock-broker-guided/are-investors-too-bullish-mirhaydari.aspx
Anthony Mirhaydari asks, "Are investors too bullish." I think he makes some good points, not technical points but common sense points. So....in case you missed it, just left click the above .

The Fed's foibles

For one, the Federal Reserve short-circuited the recovery process by pumping an additional $600 billion in new cash into the financial system with its QE2 initiative just as things were recovering in the wake of the eurozone crisis last spring.

February: No love for stocks?
View more MSN videosGo to CNBC

This came on top of its $1.7 trillion "QE1" stimulus operation that ran between 2008 and early 2010. And it comes on top of a near-zero interest rate policy that's going on its third year now. Not only was this latest effort unneeded, it's threatening to derail the economy by helping to reignite inflationary pressures and a 2008-style commodity bubble.

The Fed seems determined to pursue a strategy of asset price inflation -- the same strategy that was used in the late 1990s and the early 2000s to fuel rises in tech stocks and housing, enabled by ultracheap imports from China -- to keep inflation at bay. But this won't work again. The Chinese economy is being ravaged by rising prices as its laborers demand higher wages. The Guangdong province, the heart of China's export miracle, announced it will raise minimum wages by 19% in March, the second hike in 10 months.

As a result, early indicators of inflation, including import prices and input prices for businesses, are on the rise in the U.S. In December, import prices jumped at a 4.8% annual rate, compared with a 1.4% rise in consumer prices. China's seemingly insatiable demand for raw materials, its contracting work force (a result of its one-child policy), and the rise of food and fuel inflation will tie the hands of the Fed -- especially with the addition of two inflation hawks to the Fed's policy-setting committee this year.

For traditional investors, the best advice at this point is to hold off on new purchases or increase your allocation to cash until the storm clears -- hopefully by the end of February. Over the next few months, as we move closer to the June expiration of the Fed's QE2 program and the drop suggested by the decline in commercial eurodollar positions, it could make sense to move to a more defensive stance ahead of what could be a nasty wipeout between June and October. I'll keep you posted.

[rovo]

safeharbor, Just about every class / type of investing is represented on this board. Not only that but we don't even argue with each other. I always figure any input is good input.

[safeharbor37]

Gotcha. I liked the old Start Investing ~ new investors asked questions that made you think before you could answer, keeping you on your toes ~ I lost touch because of my gig at P&M. Will try to drop by more often now.
Regards, Keep up the good work!

[tyfighter3]

Jubak isn't saying anything new, the last 50 years I've heard about going away in May and come back in the Fall. What's Old is NEW again. LOL

[Aman A.K.A. Ahamburger]

What's Old is NEW again. LOL


Classic!!

[lovetobike]

tyfighter - are you talking about Jubak or Anthony Mirhaydari's article? Jubak is talking about the upcoming February unemployment numbers.

The one by Anthony Mirhaydari leans more to your statement "What is Old is New..." statement.

[bimetalaupt]

Less bullish then last year.. esp DJIA and Bonds... bullish on gthe QQQQ... all based on M1,NONE-M1-M2,M2,NONE-M2-M3 AND M3 WITH A LOT OF MATH!!!! CALL HER MMXI GOLD 2011javascript:adds("%20%20")
1/27/11 Central Tendency current discount sd close 2009 2010 profits Target (12/1/2011)
djia 10656.2660265523 11985.44 -11.089905530775% 12.4192% 10428 228.266026552319 11993.4640329705
djtm 13208.45263 13522.05 -2.25561684% 15.6977977% 11182.39 2026.06263 16297.1210517399
djua 428.662939224879 413.390 4.330552% 23.0469335255% 379.200 49.4629392248795 513.772348810095
russell 2m 677.853774990759 793.72 -16.06253638% 19.80116372% 625.39 52.4637749907592 841.475252766388
qqqq 67.6054703037283 56.83 18.9608838707% 18.3309% 45.98 21.6254703037283 75.28499253681

[tyfighter3]

Your right lovetobike. My Bad.

[livinincali]

Very interesting perspective on the unemployment rate. Just how would one play the anomaly in the data?

I've always thought the unemployment rate is understated because it's a land line telephone survey and one of the things I can envision a unemployed person to do is cut off the land line. It's a lot cheaper to use a pre paid cell phone than pay a land line month after month. Therefore I would guess that there's a somewhat larger set of people that work that are able to participate in the phone survey. I've always believed we should report unemployment based on income tax collection because frankly that's the only thing that really matters in the economy. How many people are paying income tax and how much they are getting paid is a much better basis for a government sponsored unemployment rate. I know you miss people getting paid under the table but does it really matter. Those people might not say their working to a government phone survey anyways.

[bimetalaupt]

Jan 27, 2011 11:08:41 GMT -5 bimetalaupt said:

Less bullish then last year.. esp DJIA and Bonds... bullish on gthe QQQQ... all based on M1,NONE-M1-M2,M2,NONE-M2-M3 AND M3 WITH A LOT OF MATH!!!! CALL HER MMXI GOLD 2011javascript:adds("%20%20")
I AM TRYING THIS AGAIN..
1/27/11 Central Tendency current discount sd close 2009 2010 profits Target (12/1/2011)
djia 10656.2660265523 11985.44 -11.089905530775% 12.4192% 10428 228.266026552319 11993.4640329705
djtm 13208.45263 13522.05 -2.25561684% 15.6977977% 11182.39 2026.06263 16297.1210517399
djua 428.662939224879 413.390 4.330552% 23.0469335255% 379.200 49.4629392248795 513.772348810095
russell 2m 677.853774990759 793.72 -16.06253638% 19.80116372% 625.39 52.4637749907592 841.475252766388
qqqq 67.6054703037283 56.83 18.9608838707% 18.3309% 45.98 21.6254703037283 75.28499253681

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[bimetalaupt]

Jan 27, 2011 11:41:04 GMT -5 bimetalaupt said:

Jan 27, 2011 11:08:41 GMT -5 bimetalaupt said:

Less bullish then last year.. esp DJIA and Bonds... bullish on gthe QQQQ... all based on M1,NONE-M1-M2,M2,NONE-M2-M3 AND M3 WITH A LOT OF MATH!!!! CALL HER MMXI GOLD 2011javascript:adds("%20%20")
I AM TRYING THIS AGAIN..
1/27/11 Central Tendency current discount sd close 2009 2010 profits Target (12/1/2011)
djia 10656.2660265523 11985.44 -11.089905530775% 12.4192% 10428 228.266026552319 11993.4640329705
djtm 13208.45263 13522.05 -2.25561684% 15.6977977% 11182.39 2026.06263 16297.1210517399
djua 428.662939224879 413.390 4.330552% 23.0469335255% 379.200 49.4629392248795 513.772348810095
russell 2m 677.853774990759 793.72 -16.06253638% 19.80116372% 625.39 52.4637749907592 841.475252766388
qqqq 67.6054703037283 56.83 18.9608838707% 18.3309% 45.98 21.6254703037283 75.28499253681

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[Deleted]

euro $1.37 to the dollar
www.freestockcharts.com/tweets/?chart=5d483b9d-af1d-4795-b69a-8625c1ab3752&refURL=http%3a%2f%2ffsc.bz%3a81%2fAss

[ModE98]

View of Mark Hulbert ...
www.marketwatch.com/story/contrarian-indicator-with-bullish-message-2011-01-28?siteid=yhoof

[ModE98]

As Egypt continues to "boil" and worries of that the unrest may spread to other North African and Middle East countries with similar problems, the market may be in for some good sized "dip" near term until things settle down.
Concern over the Suez Canal for oil traffic is cited by some. Add all this to the fragile nature of the whole area, and there is good reason for concern. How bad this gets still remains moot.
Red flags are flying, that's for sure. Good luck to all in implementing any quick exit strategy if appropriate.

[ModE98]

Nobody honestly should "overreact", just be cautious, and deal with the situation that best fits their individual position. Following a panicked crowd is not a good idea. Yes, DI, the "gold bugs" may use this as an excuse to drive up the price of gold (if they can). and oil prices may also rise, but the world keeps on a-turning. No panic, just adjust as appropriate as things play out. It may be over in few days. Certainly not the end of the world (YET) 12/21/12 ?

[Deleted]

watch the dollar real time, it has a 70% reverse correlation to our stock market.... the dollar goes up, kills our exports, kills our market.... short FXE (euro) maybe .....
www.freestockcharts.com/tweets/?chart=5d483b9d-af1d-4795-b69a-8625c1ab3752&refURL=http%3a%2f%2ffsc.bz%3a81%2fAss

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[Deleted]

i'm going to stick my neck way way out, and predict that i think the euro is at nose bleed levels.... tehehe i could be very wrong
stockcharts.com/h-sc/ui?s=FXE&p=D&yr=0&mn=6&dy=0&id=p87816428201
i hope i am wrong because if the euro tanks the dollar rises

[safeharbor37]

Stocks up again today [thus far]. I guess that the Egyptian crisis, etc. isn't damping the market's enthusiasm.
"i hope i am wrong because if the euro tanks the dollar rises " ~ I'm presuming that you aren't planning a European trip anytime soon.
I'm still predicting that the markets will end higher this year, but with at least one dip between now and then.