13 replies to this topic

[da_cheif]

LEAST AMOUNT OF BULLS IN YEARS AND FEWER BULLS THAN MARCH 09.....an incredible feat of prestidigitation by the boyz....getting from wholesale to retail with as few aboard as possible is what its all about......this market is the least risky for the minority bulls in history....the epicenter of primary wave 3 up is slowly gaining momentum ......the dows divisor is now a multiplier   and the fuel for the coming meltup

 

https://3.bp.blogspo...t+5+25+2016.png

[BigBadBear]

What about the amount of bears  ?

[da_cheif]

What about the amount of bears  ?

what about them.......they are all over the place.......bigbadbear    :>)

[Rogerdodger]

http://money.cnn.com...fear-and-greed/

 

http://stockcharts.c.../dpgallery.html

 

Edited by Rogerdodger, 26 May 2016 - 11:34 PM.

[Douglas]

Don, have you taken a look at a plot of the AAII chickens?  The really low AAII bullish number appears on the face of it to be wildly bullish from a contrarian point of view, however, for last couple of years there has been a strange absence of really high bull readings in this survey even when the indexes were marching strongly higher and within a whisker of highs.  Over this period the highest bull reading was a very tame 58%.  Since 2009 this has been the proverbial wall of worry that this monster bull move has climbed.  Extremely high bearish reading are also missing, so most of the survey participants are not bulls, not bears but chickens.

 

As I noted in a post below, to make this muted AAII survey more useful in the intermediate term, I believe you look at the AAII chickens.  This week both the AAII bear and bull numbers fell, but the chicken number (100-bulls-bears) rose more than 6%.

 

Based on the behaviour of this survey over the last couple of years, this chicken number where most folks appear to be hiding is providing a much better contrary indicator for the index behaviour (the higher the neutral reading, the more likely a top is occurring with a bit of data smoothing).  I don't understand why there are so many feathered friends at AAII instead of bolder bulls or bears, but betting against the majority is alive and well if you can just find where they are hiding and lately at AAII it's in a coop.

 

Regards,

Douglas

[da_cheif]

roger....memories can be short in this business    ...if you recall the cnn fear greed index got close to 100% 4 months after the 09 low.....market kept going up for almost 4 more years

[CRUISENAL]

http://seekingalpha....e4c59b&uprof=46

[Douglas]

CRUISENAL, the bottom of the Seeking Alpha article you posted did a good job of showing the AAII high neutral reading (or chickens as I like to call them to keep the animal analogy going) correlation with recent market tops which I noted above.  Unfortunately, now that an article has been published highlighting the indicator sure as the world it will stop working. 

 

Don is definitely right that given how close we are to the index highs, the amount of negativity is absolutely amazing.  It is entirely possible that the market will super size this bubble and continue to climb this wall of worry frying the short BREXIT worrying, FED worrying and Sell-in-May-and-Go-Away crowds in the process just adding more fat to fuel the bull fire.  As I noted in my last trading system update, I do think this coming week is pretty critical.

 

Regards,

Douglas

[AChartist]

I'll probably use UVXY long calls on 6/1 and 6/2 in all accounts.

 

Hope it works will be some capital to switch long on about Jun 16.

 

 

both the daily and weekly cycles will be down short term and we'll see if conditions are right to reverse up about Jun 16.

 

any time it is down is potential for something worse, this is just sacrificing some profits on the UVXY for insurance.

 

 

in the 401k I hope the gold will balance it as it was only 2% gold kept the 401k whole in the last decline, I am at 5% gold and will be

 

7% on Tues.

[CRUISENAL]

Douglas, I do agree. But I also watch the Sy Harding System or the daily MACD after 4/20 any year. The MACD signaled on 4/25 but turned back up on 5/25. Typically he would stay in Cash for the summer months into October 16th. But there have been years where the MACD did not turn down on 4/20 and stayed positive into July. So even though it crossed down on 4/25 it now has turned back up and could go up into July or anywhere in between. The odds suggest that sometime in the next 10 weeks the MACD will cross down again and we go into a choppy summer and fall period. The timing will be difficult. Often this happens but rarely will it be a non choppy period in June thru October. 

 

This suggests that at anytime in the next several weeks, if we get a MACD cross down, then we are starting that choppy down market typical of the summer fall period. Sometimes like 2004, 2006 & 2007 it was very volatile in this period and many other years. So I expect not much change in that cycle. Lots of headwinds as well, with the interest rates in June, Brexit in June, political nonsense the next 6 months, and anything else that comes up in the meantime, any of this can lead to a serious correction or a complete trend change or breakout to new highs. But then I look at the CAPE Ratio at 26.22 and think, why are people paying these high prices for stocks? Are they NUT'S ! ???? Falling sales, but some companies are doing ok with earnings, while others tank. It is obviously a weak economy. But what will push it over the edge? When people realize they won't pay higher prices and when expectations are lower. I don't know when it will be, as we could still rally to higher highs, but PE will just keep rising if earnings suck or get worse.

 

I just put some money with a company that value invests and hedges the portfolio. They are staying away from midcaps because of over valuations in that sector and a couple others. They expect to outperform the S&P 500 in a down market by half to 75% and position the portfolio heavily in Cash for any downside risk and will buy value when it presents itself. And currently will position the portfolio to take advantage of any gains in the future if the market advances.  This account is core money with a longer term perspective. They are not that confident in the next year or two and told me to expect lower returns next year by half their current estimated returns. That smells like a 2017 Bear Market to some degree. 

 

For now, I just see volatility picking up into this summer and fall.