After reviewing additional data, the revised estimated market top is early Dec 2010. The correction projected to occur in the Summer, is unlikely to be THE top. The top will most likely come in Dec 2010. And the aftermath will be a trail of tears and broken dreams for years to come.
The current market condition is similar to that in the eve of 1929, 1973, 1987, 2007. THat kind of makes things sucky. Because the market price momentum, the breadth momentum, the volume momentum etc are all supporting a historical pattern of no decline exceeding 10%, yet the extreme over valuation, extreme bullish sentiment, extreme overbought condition, with rising yield pressure, and the mother of all macro economy mismanagement, we have on our hand a perfect shit storm.
This perfect storm is too treacherous to chart a course and set it on auto pilot. That means no long term bets. We need to navigate this on short term basis and hope that we survive this.
All short term trend indicators are positive. But we are very extended. So a pullback is in the card. My VST tools should pick up the trend change. I have my May 119-108 put spreads as lottery play and a hedge for the longs I have in some biomedical stocks that I have fallen in love with. Barring unforseen external events such as the Middle East war, or Red's stargate at the sea bottom, south of Yemen opens up (LOL), I plan to load up on super high growth stocks after the overbought conditions reset (via a pullback in the market) and have one last rocket ride to the moon before packing it in before Xmas.
Cavaet: Everything subjected to revision upon new development, or the effect of Cognac wears off…whichever comes first.
P.S. My recent forecast has been wrong and the reasons sorted out and correction made. I shall try not to make the same mistake twice. The ghost in this business is the tendency to overrule your own work in favour of those from people you hold in high esteem. To be successful, we need to exsocise our ghost.
TNA had a Hold signal today, was down today, and has a highly reliable SELL-IF signal for tomorrow. The TNA buy was at $56.50. TNA closed at $69.90, up 23.7% since the buy. The candlestick today was a Black Candlestick (normal selling pressure). The last two candlesticks formed a highly reliable Bearish Dark Cloud Cover Pattern.
TZA had a Wait (for a signal) today, was up today, and has a low reliability BUY-IF signal for tomorrow. The TZA sell price was $6.51. TZA closed today at $5.48, down 15.8% since the sell. The candlestick for today was a White Candlestick (normal buying pressure). The last two candlesticks formed a low reliability Bullish Harami Pattern.
Three recent TZA Buy signals have failed and may perhaps serve as a warning: Buy at $7.33, sell at $7.14 Buy at $7.11, sell at $7.05 Buy at $7.04, sell at $6.51
For that matter, recent TNA Buy signals (until this last one) have also been uninspiring: Buy at $55.36, sell at $55.43 Buy at $55.69, sell at $55.63 Buy at $56.50, up 23.7%
Summary of Positive $RUT based ETFs & a few popular ETFs & stocks (Market positive): +3 Hold: GLD(gold, up 0.83%), UCO (2x oil, down 1.0%), EWU(England, down 1.4%)
TNA opened flat (down a penny). TNA was up 2.0% at the high, and closed down 1.3%.
We are now in a New Moon Trade, which tends to favor TZA, but we are now trading TNA, as it is going up, and TZA is not. AmericanBulls had TNA with a Hold signal for today. The TNA buy was at $69.05, and TNA closed at $69.89, up 0.8%.
Volume for TNA today was about normal for the past month.
$RVX (VIX for $RUT) closed up 8.5% with TNA down 1.3%. No divergence. Bad for TNA.
TNA was up for 5 days, down for 2 days, up 4 days and down today. Bad for TNA.
The high for TNA had been from yesterday at $70.98. Today’s high was $72.24, 1.7% higher. Good for TNA.
Yesterday, when TNA rose 3.1%, Ultimate Oscillator fell from 75.7 to 74.8, a divergence. Today that divergence played out as TNA fell 1.3%. Today, TNA fell and reading went from 74 to 69. Bad for TNA.
MACD on the monthly chart has been rising for 9 days, and today well. Good for TNA.
Bollinger Bands for $RVX (VIX for $RUT): Today’s long white candle closed the 50 day MA, a bit below the upper Bollinger band. MACD seems to be rising. $RVX seems to be rising. Bad for TNA.
Bollinger Bands for $RUT: Today’s rare non-white candle touched the upper Bollinger Band and closed below it. MACD is rising. While it’s rare that $RUT has a black candle like today, it does happen, and usually returns to a white candle in 2-3 days. Bad for TNA for tomorrow.
Bollinger Bands for $RUT:$RVX ($RUT vs VIX for $RUT): today’s doji dropped to the Bollinger mid line, which was rising today. Bad for TNA.
TNA had a higher high, higher low and lower close – Neutral for TNA.
Money flow for the Total Stock Market: $1,393 million flowing out of the market 2 days ago. $2,305 million flowing into the market yesterday. $ 17 million flowing into the market today on a down day. Neutral for TNA.
I will post the AmericanBulls candlestick interpretation a bit later.
After reviewing additional data, the revised estimated market top is early Dec 2010. The correction projected to occur in the Summer, is unlikely to be THE top. The top will most likely come in Dec 2010. And the aftermath will be a trail of tears and broken dreams for years to come.
The current market condition is similar to that in the eve of 1929, 1973, 1987, 2007. THat kind of makes things sucky. Because the market price momentum, the breadth momentum, the volume momentum etc are all supporting a historical pattern of no decline exceeding 10%, yet the extreme over valuation, extreme bullish sentiment, extreme overbought condition, with rising yield pressure, and the mother of all macro economy mismanagement, we have on our hand a perfect shit storm.
This perfect storm is too treacherous to chart a course and set it on auto pilot. That means no long term bets. We need to navigate this on short term basis and hope that we survive this.
All short term trend indicators are positive. But we are very extended. So a pullback is in the card. My VST tools should pick up the trend change. I have my May 119-108 put spreads as lottery play and a hedge for the longs I have in some biomedical stocks that I have fallen in love with. Barring unforseen external events such as the Middle East war, or Red's stargate at the sea bottom, south of Yemen opens up (LOL), I plan to load up on super high growth stocks after the overbought conditions reset (via a pullback in the market) and have one last rocket ride to the moon before packing it in before Xmas.
Cavaet: Everything subjected to revision upon new development, or the effect of Cognac wears off…whichever comes first.
P.S. My recent forecast has been wrong and the reasons sorted out and correction made. I shall try not to make the same mistake twice. The ghost in this business is the tendency to overrule your own work in favour of those from people you hold in high esteem. To be successful, we need to exsocise our ghost.
Earl, Thanks for the post, I read it every night.
Tomorrow will be a funny day…
http://midasfinancialmarkets.blogspot.com/2010/…
The Daily view from Americanbulls
TNA had a Hold signal today, was down today, and has a highly reliable SELL-IF signal for tomorrow. The TNA buy was at $56.50. TNA closed at $69.90, up 23.7% since the buy. The candlestick today was a Black Candlestick (normal selling pressure). The last two candlesticks formed a highly reliable Bearish Dark Cloud Cover Pattern.
TZA had a Wait (for a signal) today, was up today, and has a low reliability BUY-IF signal for tomorrow. The TZA sell price was $6.51. TZA closed today at $5.48, down 15.8% since the sell. The candlestick for today was a White Candlestick (normal buying pressure). The last two candlesticks formed a low reliability Bullish Harami Pattern.
Three recent TZA Buy signals have failed and may perhaps serve as a warning:
Buy at $7.33, sell at $7.14
Buy at $7.11, sell at $7.05
Buy at $7.04, sell at $6.51
For that matter, recent TNA Buy signals (until this last one) have also been uninspiring:
Buy at $55.36, sell at $55.43
Buy at $55.69, sell at $55.63
Buy at $56.50, up 23.7%
Summary of Positive $RUT based ETFs & a few popular ETFs & stocks (Market positive): +3
Hold: GLD(gold, up 0.83%), UCO (2x oil, down 1.0%), EWU(England, down 1.4%)
Transition to Market Positive: 0
Transition to Market Negative: -16
SELL-IF: TNA(3x), UWM(2x), ERX(3x energy), EWX(emerging mkts), IWM(1x), SLV(silver), QQQQ, AAPL, DIA, SPY, EWQ(France), EWG(Germany), IYR(1x RE), URE(2x RE), DRN(3x RE), AMZN
Market Negative: -3
Wait: USO(oil), GOOG, GS
Comment: Bearish overall, Neutral Oil, Bearish $RUT, Bearish Real Estate
Action for TNA or TZA for tomorrow: possible buy TZA, possible sell TNA
You're not! I went long DRV today based on a candlestick pattern that I really like.
TNA opened flat (down a penny). TNA was up 2.0% at the high, and closed down 1.3%.
We are now in a New Moon Trade, which tends to favor TZA, but we are now trading TNA, as it is going up, and TZA is not.
AmericanBulls had TNA with a Hold signal for today. The TNA buy was at $69.05, and TNA closed at $69.89, up 0.8%.
Volume for TNA today was about normal for the past month.
$RVX (VIX for $RUT) closed up 8.5% with TNA down 1.3%. No divergence. Bad for TNA.
TNA was up for 5 days, down for 2 days, up 4 days and down today. Bad for TNA.
The high for TNA had been from yesterday at $70.98. Today’s high was $72.24, 1.7% higher. Good for TNA.
Yesterday, when TNA rose 3.1%, Ultimate Oscillator fell from 75.7 to 74.8, a divergence. Today that divergence played out as TNA fell 1.3%. Today, TNA fell and reading went from 74 to 69. Bad for TNA.
MACD on the monthly chart has been rising for 9 days, and today well. Good for TNA.
Bollinger Bands for $RVX (VIX for $RUT): Today’s long white candle closed the 50 day MA, a bit below the upper Bollinger band. MACD seems to be rising. $RVX seems to be rising. Bad for TNA.
Bollinger Bands for $RUT: Today’s rare non-white candle touched the upper Bollinger Band and closed below it. MACD is rising. While it’s rare that $RUT has a black candle like today, it does happen, and usually returns to a white candle in 2-3 days.
Bad for TNA for tomorrow.
Bollinger Bands for $RUT:$RVX ($RUT vs VIX for $RUT): today’s doji dropped to the Bollinger mid line, which was rising today. Bad for TNA.
TNA had a higher high, higher low and lower close – Neutral for TNA.
Money flow for the Total Stock Market:
$1,393 million flowing out of the market 2 days ago.
$2,305 million flowing into the market yesterday.
$ 17 million flowing into the market today on a down day.
Neutral for TNA.
I will post the AmericanBulls candlestick interpretation a bit later.
Overall, it looks bad for TNA.
Carl at day’s end:
1205-1217 estimate for today (12 points)
1207.50–1216.50 actual today (9 points)
Carl nailed the high, close on the low.
Trade: No trades today.
Grade: C (made no money)
XLF broke support at 16.60
GS is dropping big
Yep
http://www.flickr.com/photos/47091634@N04/45553…