34 replies to this topic

[IYB]

Don...again,

Why do you typically use EMAs and now suddenly just MAs?

To the best of my knowledge, I've always used (simple) MA's for long term charts and long term trends- like for 40 years now. It's possible that somewhere in my thousands of posts I may have made a mistake and used EMA on a long term chart somewhere, I s'pose, but if so it wasn't intentional.

I normally to use EMA's for very sensitive trading indicators, where I'm looking to identify the inflection point in market momentum. D

[NAV]

FWIW, I don't like to see big spikes in the % of Bulls in either AAII or II. That said, it's only a short-term Signal.

We're a long way away from a good sentiment set up for a major top.

http://stockcharts.com/c-sc/sc?s=$SPX&p=M&st=1980-01-28&i=p39183268817&a=149688849&r=179.png
Context is everything.

Don,

Go back and take a look at market historical periods with a secular bear trend. Pick a secular bear period (1966-82 for example). What was the average length of a bear run? Keep in mind the recent bear run went from Oct 07 to Mar 09 or 18 or so months. Compare this bear run to historical averages in time and price. You will find it is about avg in time and more than avg in price.

Believe me, I've spent a lifetime studying such things. And the conclusion I reached years ago is that Context is Everything. Look, if we were above a rising 200 day/55 week/13 month moving average, we wouldn't even be having this discussion. In May of 2003, I was shouting the points made by many in this string from the rood tops. You all KNOW that. Because the context was that of a primary bull market. Because we'd had a long term base, a break through the 13 month MA and that MA had turned upward. Because the market having done the necessary work to support a primary bull trend had broken through and confirmed the new primary direction.

I maintain that those who say that we are in a new primary bull market now are arguing with the evidence and the facts. They are guessing, hoping, or maybe just scared or being left behind. The evidence as shown by this chart among other data, clearly says: Primary Bear Market. When that changes, as Ross Perot used to say "I'm all ears" to your arguments.

The whole argument we are are having in this string is not about short term or Intermediate Term signals. It is about CONTEXT. Run those same arguments by me when we are above a rising 13 month (or 200 day) MA, and then you won't get any of this argument from me.

Good trading, D

Amen.

I have one suggestion for those who think a new bull market has begun. Invest all your savings and go on a long vacation. Dont' look at the market. Dont' visit TT. It's a waste of time. Cuz if a new bull has begun here, it's gonna be large and a multi-year affair.

[OEXCHAOS]

We are not in a Bull market by my objective measures. There's some resistance up above. You can pick the top if you have good tools, but for now, none of hte longer term sentiment measurements have given a Sell. That's just a fact. They may not, either.

The nice thing is that if we turn my other indicators down, I can trade it short and if folks start buying the dips I can lean harder. Of course, if they pile on, I'm going to be very cautious with shorts.

Right now, sentiment is very mixed short term and longer term neutral. Not the type of thing that makes we want to step out in front of the Intermediate term up trend.

Mark

FWIW, I don't like to see big spikes in the % of Bulls in either AAII or II. That said, it's only a short-term Signal.

We're a long way away from a good sentiment set up for a major top.

If I viewed the market in the context of a primary bull market, then I would wholeheartedly agree. But I don't. In my world the major top was put in a year and a half ago, and we are in a primary bear market.. Regards, D
http://stockcharts.com/c-sc/sc?s=$SPX&p=M&st=1980-01-28&i=p39183268817&a=149688849&r=179.png

PS- Viewed in my context, btw, Roger's point above is completely valid. In the context of a new primary bull, which I reject for TA reasons, it would not matter, like in 2003, for example. Context is everything.

[OEXCHAOS]

By your own metrics (200dema, 55wema, 13mema) the NDX/qqqq IS in a new bull market....right now. The NDX100 is above each of your moving avgs AND they are upward sloped! So are you calling a bull for the QQQQs? I have read recently you shorting them. The SPX was LOADED with financials which has crippled it so it's lagging IMO. The R2K is close to signaling a bull market by your measures.

In context, the price damage done by this bear run over such as short time period (Oct 08 to Mar 09) is distorting the MAs. There are plenty of other KISS indications I mentioned that argue heavily for at least the strong possibility of a new bull. The problem with using a single minded technique is they simply will not work all the time. Your method has worked in the majority of historical contexts. I even use the 50wkema and slope myself. The problem has been that this bear is ahistirical...similar to the 1973-74 bear. Again, the 55wk, 200d and 13m MA would have caused you to miss the majority of the bull run that sprang out of that one.

I'm not trying to fire up a debate with you...just trying to spur "out of your box" thinking.

Dang! Thanks! I was thinking that the NDX EMA was FLAT, but it actually ticked up. Technically, that's a Bull. Now, that's really a mess!

Mark

[IYB]

I'm not trying to fire up a debate with you...just trying to spur "out of your box" thinking.

I seriously have a great deal of respect for your work Cirrus, so I do truly not include you in this concept, but.....I constantly see new market traders and would-be technical analysts who in their zeal for "out-of-box thinking" discard everything that WORKS over time and apply every new thought under the sun that they or someone else has, and they end up totally LOST. Then run back and forth, from idea to idea, thinking out-of-the-box, and end up shaking their heads wondering why their indicators keep letting them down. In the end, they conclude and often state that "TA doesn't work".

You've seen it too, I'm sure, right here on this forum. Imho "out-of-the-box" is overrated. Markets never change because people never change. Some things that worked 100 years ago work just as well today and will 100 years hence.

My philosophy of market analysis and trading has always been to search through the coal fields until you find that extremely rare diamond- the .0001% of all indicators that actually consistantly "works" -- then hang onto each of those precious diamonds for dear life. Out-of-the-box is fine, as long as one remembers to respect those few extremely precious diamonds that he has tucked away in-the-box. Chances are he paid a high price to obtain them in the first place.

Edited by IYB, 07 June 2009 - 05:30 PM.