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Seven Sentinels and Today's Market


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#21 lennie

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Posted 16 July 2009 - 01:52 AM

Good to see those pretty charts George. I don't follow da internals because George says da futures market controls the stock market. Sometin about it being easy to manipalate with less money. Found dat out quick in 1987. I don know much, but I know there are bunches a ways to trade da markets. Have you done a test on da computer machine? George says that's the best way to know for sure 'cause people tend to create a bias. Dey look at da winners and filter out da losers. Some kinda phyco jumbo mumbo. George says it's like when I only focus on how soft da rabbits are an I don notice they pooed all over me.
S&P 500 -> Goin up. Everything else -> Don't know.

Will update the next swing.

#22 humble1

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Posted 16 July 2009 - 02:54 AM

that last line of your third paragraph nailed it, lennie.

#23 Bullryder

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Posted 16 July 2009 - 03:08 AM

Good to see those pretty charts George. I don't follow da internals
because George says da futures market controls the stock market.
Sometin about it being easy to manipalate with less money. Found
dat out quick in 1987.

I don know much, but I know there are bunches a ways to trade
da markets.

Have you done a test on da computer machine? George says that's
the best way to know for sure 'cause people tend to create a bias.
Dey look at da winners and filter out da losers. Some kinda
phyco jumbo mumbo.

George says it's like when I only focus on how soft da rabbits are
an I don notice they pooed all over me.



Based on your name, I would guess that you believe this downturn will historically be referred to as a depression.

#24 TMN

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Posted 16 July 2009 - 03:27 AM

Thanks for update and analysis IYB!

#25 Tor

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Posted 16 July 2009 - 04:13 AM

Thanks for the most excellent post Don, and I am very grateful for it. All I would say is maybe right or wrong, I am currently flat having closed off yesterday. The bounce we have seen has been strong, driven by EARNINGS or is it options? Time will tell of course. Stepping back we appear to be setting up a nifty fifty stock market environment. The market is getting more and more narrow because companies like Gold-man will benefit at the expense of those which go under or who's reputation is too damaged to do business. The same will be true of other is other sectors, a phenomenon I would label "last man standing". The last man is the strongest man of course. How doe the marekt deal with that? I would guess it has to go down because on balance aggregate demand is struggling, while at the same time the majority of companies are losing while a few gain. You watch, we have more earnings this week in the financial sector, and I wouod imagine those are not going to be as good as the ones earlier in the week. This is when I step back and muse from afar. Of course the macro backdrop can change and of course will change. First of all though, maybe the SPX can progress to new highs or 1000 before the whole game goes belly up. Good trading.

Edited by Tor, 16 July 2009 - 04:23 AM.

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#26 Tor

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Posted 16 July 2009 - 04:41 AM

Don, its probably not my place to advise you and I may be completely out of line, but all I would say is put a stop in as there is a danger you are "tilting".
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The future is 90% present and 10% vision.

#27 zoropb

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Posted 16 July 2009 - 05:53 AM

Nothing less than excellent as usual from Sir Sentinel. Thank you bud for your thoughts and hard work. Z

Love, be kind to one another, seek the truth, walk the narrow path between the ying and the yang.


#28 zoropb

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Posted 16 July 2009 - 06:30 AM

Nothing less than excellent as usual from Sir Sentinel. Thank you bud for your thoughts and hard work.

Z

fwiw
I had to trade something and did not finish...I was a day late on the rally. The SPX went to 4 points beyond where I thought the max would be and the dollar has or is testing the 79.20 area. All is in line so far but the crack of last swing high on SPX and that has me at more neutral than bearish 40% bullish and 60% bearish for the ST now.

I find it hard for this market to rally past 943 with the dollar still over 78 and the Gov needing to keep the interest below 3.70 on the 10 year. Unless everyone thinks that it is more important for the Gov to prop up the equities (like they did to dump the bank shares on the public) over the way bigger problem of housing then I am wrong. If they do not keep equities down the interest on the bonds go way up and game over no recovery and disaster back on at full speed. The equities would tank anyways if they did but if they keep the equities down below 940s they keep the interest down in the range needed to promote home and commercial sales and refi's. Which also means the dollar needs to be kept up for the time being. I know lots of bulls want this thing to rally (I do not care) but keep the big picture in mind is all I am saying. I think the equity markets will be here or lower by next weeks longer bonds auction and every 5+ year auction until the problem has abated to a reasonable level and we are no where near that. We will know shortly if my analysis is correct come every longer bond auction time.

So in the meantime Don I agree with your analysis until proven wrong.
Z

Edited by zoropb, 16 July 2009 - 06:35 AM.

Love, be kind to one another, seek the truth, walk the narrow path between the ying and the yang.


#29 Tor

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Posted 16 July 2009 - 06:50 AM

Nothing less than excellent as usual from Sir Sentinel. Thank you bud for your thoughts and hard work.

Z

fwiw
I had to trade something and did not finish...I was a day late on the rally. The SPX went to 4 points beyond where I thought the max would be and the dollar has or is testing the 79.20 area. All is in line so far but the crack of last swing high on SPX and that has me at more neutral than bearish 40% bullish and 60% bearish for the ST now.

I find it hard for this market to rally past 943 with the dollar still over 78 and the Gov needing to keep the interest below 3.70 on the 10 year. Unless everyone thinks that it is more important for the Gov to prop up the equities (like they did to dump the bank shares on the public) over the way bigger problem of housing then I am wrong. If they do not keep equities down the interest on the bonds go way up and game over no recovery and disaster back on at full speed. The equities would tank anyways if they did but if they keep the equities down below 940s they keep the interest down in the range needed to promote home and commercial sales and refi's. Which also means the dollar needs to be kept up for the time being. I know lots of bulls want this thing to rally (I do not care) but keep the big picture in mind is all I am saying. I think the equity markets will be here or lower by next weeks longer bonds auction and every 5+ year auction until the problem has abated to a reasonable level and we are no where near that. We will know shortly if my analysis is correct come every longer bond auction time.

So in the meantime Don I agree with your analysis until proven wrong.
Z


I agree with your point on the dollah but the banks in Europe have been less than open about things and if this is the next shoe to drop then I hope it drops fast, euro down, europe down, dollar up and markets down.
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#30 Cirrus

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Posted 16 July 2009 - 07:03 AM

The weight of the evidence says we have NOT, repeat NOT set up the internals for an advance.

When a day like today occurs that triggers all 7 of seven sentinels positive, most of the time, because the market has not done it's work in setting up the internals for an advance, that event is a "false positive" and marks a ST TOP. When that occurs, I treat it as a ST top and get fully short. That, again, occurs when there has been no divergent set up, as right now.

The other perhaps 20% of those 7 of 7 events mark a real SS Buy Signal. THAT occurs when all 7 of seven go to a buy position after a true divergent set up - like on March 12, 2009 for example. When that occurs I treat it as a REAL Seven Sentinels Buy Signal, issue an announcement, mark it on the chart and get fully long. That is NOT the case here.

CONCLUSION: This is a bull trap - a ST trading top. The correct position currently is SHORT. JMHO, of course.

We could well be in the early stages of that set up process, as todays internal strength was truly impressive. Time will tell. Right or wrong, I just wanted to make my view of today as clear as possible. Good Trading, D


First, let me say that I, as everyone else, appreciate your work here.

I would just point out that perhaps you have over-optimized your indicators via this requirement for such substantial divergence in what may well have been a brief consolidation period.

Certainly if you are right this market should reverse immediately and now plunge through the neckline. And while I'm flat at the moment, I certainly don't see that at this point in the hourly charts. Looking at the daily chart at this time would lead me to believe that after some corrective type action, we should take the highs out.

Either way, I respect your work, and appreciate all the effort. And as I say, I'll be the first to try to capitalize on the short side if the charts start to look that way. For the moment they do look overextended, but that doesn't necessarily lead to anything more than corrective action.

By the way, I found it interesting that better than 50% of the pollees tonight are expecting the market to go down, and are positioned that way. This following a very strong day.

IT



Couldn't have said it better myself. Don, thanks for keeping everyone up to date with the sentinels. I'm not flat but my longs are not 'beta' trades....they are longer term positions with their own stops. Should this thing tip its hand and start down I'll be shorting. Most internal stuff I follow WRT divergences is neutral right now.