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Lots of Resilient Bearishness


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#11 OEXCHAOS

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Posted 20 February 2007 - 11:24 AM

Nothing happens in a vacuum, but the keys to remember are a) very few folks really get sentiment. It's NOT linear, nor as simplistic as "Lots of Bulls = Bearish, Lot's of Bears = Bullish" Sometimes that's valid and sometimes it's not. I can go on, but I've done it elsewhere. Bottom line is, folks will misuse sentiment which will tend to keep it a valid indicator. The other thing to remember is b) we don't have to predict sentiment, only use sentiment to predict the market. Every day they turn over a new card and we can decide if we want to stay in the game or bet more, or fold and go fishing. Mark

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#12 Pabst

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Posted 20 February 2007 - 11:33 AM

...... the market craters, at least for a short period of time.



Looks as if the "crater" was an hour long, shallow dip down to 52.

I have very valid resistance in SPX. I'm short. I'm cognizant though that short (or under invested in portfollio world) is a crowded trade.

Thus I have backspreads on in case this stuff pops.

I'll post something interesting later.
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#13 Gary Smith

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Posted 20 February 2007 - 11:38 AM

Nothing happens in a vacuum, but the keys to remember are a) very few folks really get sentiment. It's NOT linear, nor as simplistic as "Lots of Bulls = Bearish, Lot's of Bears = Bullish" Sometimes that's valid and sometimes it's not. I can go on, but I've done it elsewhere. Bottom line is, folks will misuse sentiment which will tend to keep it a valid indicator.
The other thing to remember is b) we don't have to predict sentiment, only use sentiment to predict the market. Every day they turn over a new card and we can decide if we want to stay in the game or bet more, or fold and go fishing.

Mark


And as we have seen recently there seems to be a lot of disagreement as to market direction among those who use sentiment. Sentiment is an art, always has been and always will be. The newer practitioners of sentiment are all about turning that art into a black and white science.

Edited by Gary Smith, 20 February 2007 - 11:39 AM.


#14 SemiBizz

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Posted 20 February 2007 - 11:41 AM

NOW... let's say we do break the high today? What does that mean for longer term trading?



http://bigcharts.mar...&mocktick=1.gif



BEARISH UPTHRUST on MONTHLY.... that's what. So if you are really bullish here you'd like to see it not break the high. There is a a snowball's chance in hell we break out on volume with 6 trading days left in the month...
If a breakout occurs the target is 2516 per ABC's and Nasdaq pivot points.

Edited by SemiBizz, 20 February 2007 - 11:46 AM.

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#15 OEXCHAOS

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Posted 20 February 2007 - 11:43 AM

We have enough volume now to break the high on Nasdaq. If that doesn't happen then we're looking at a stealth sign of weakness. If you read my previous posts, I said there was 2 outcomes available here, and one of them is to resume FAST UPTREND. That could be what is happening, but if we can't break the high it's probably NOT. There you go, quantified. Break 2508 good to go.

This doesn't take a PhD to understand. The sign of weakness on the hourly came on the break on volume today, but did not break on 30 min. 3 min chart turned up starting around 10:40 on 5 green candles. Today we have 4 green candles on the Nasdaq daily. If we break the high on volume or just close up that daily chart is pointing UP at the end of the day. Clarity.

But if you're not sure then you can wait til tonite's poll and then decide... (but Nasdaq could be up 30 pts from here by the end of the day).





This attitude is why you were fishing instead of making huge money on the longside last summer/fall as sentiment was powerfully revealing you should.



There's NOTHING in the sentiment what would have precluded you buying the turn back up this morning. The CONTEXT was one of being open to either direction. The sentiment tools we're talking about are not going to tell you to go long or short intra day. Of course, one could easily look at the intra-day $-weighted P/C ratios, but that's not what I'm talking about.



In the current sentiment context, when we didn't fall apart and the volume came in, one could and should have bought or covered around 1456 on that nice volume spike on the ES. Why? Because Bearishness was still mighty high and thus you pay attention to the flow of money in, just as one would pay attention to daily sells from the breadth and trend indicators.



Here's another thing, should things turn back down today on volume, it's likely a short-term sell sell too. If you do short, you keep your stop close because we've not turned things down. Should we fall apart, though, you'll still be short and positioned for a larger move (that you might add to).



The big move, however, is still undisclosed. Just as the volume leaves it undisclosed (as I gather).



M

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#16 SemiBizz

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Posted 20 February 2007 - 11:49 AM

This attitude is why you were fishing instead of making huge money on the longside last summer/fall as sentiment was powerfully revealing you should.




Yes, but don't forget who shorted AMD and BRCM at 38... :lol:



Not only that, but I want to trade with harmony of price and volume and the rally that started after the big decline in May, June and July has been DISSONENT.



Besides, that is the best time of the year to fish... :lol:
Price and Volume Forensics Specialist

Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"

Volume is the only vote that matters... the ultimate sentiment poll.

http://twitter.com/VolumeDynamics  http://parler.com/Volumedynamics

#17 OEXCHAOS

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Posted 20 February 2007 - 11:56 AM

"Besides, that is the best time of the year to fish" THAT, I can't argue with at all. M

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#18 SemiBizz

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Posted 20 February 2007 - 12:11 PM

Nasdaq is in harmony now Bearish Upthrust on daily, weekly and monthly. Daily Signal can be reversed with a volume of over 2.6B today... This can easily turn into FAST UPTREND from here...
Price and Volume Forensics Specialist

Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"

Volume is the only vote that matters... the ultimate sentiment poll.

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#19 OEXCHAOS

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Posted 20 February 2007 - 12:48 PM

And as we have seen recently there seems to be a lot of disagreement as to market direction among those who use sentiment. Sentiment is an art, always has been and always will be. The newer practitioners of sentiment are all about turning that art into a black and white science.





It might be quantifiable, but not by most folks. Frankly, one of the most important things for folks to remember is that anything that can be readily quantified will be exploited away...it's almost a better fade.



Mark

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#20 SemiBizz

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Posted 20 February 2007 - 12:53 PM

My volume algorithm projecting 2.5B today for Nasdaq at present pace. Now thinking ahead, you must remember that these things always want to test volume at swing points. That means we're vulnerable to the 2480 low we made today. If there is a strong pullback that will be the target. On the other hand let's say we pulled back from here and ended the day just under 2500, that could set up a test of today's high and reversal on lighter volume in the days ahead If this is the real Magilla, we should blast out of this trading range on FAST UPTREND with strong volume to the target on the daily of 2618... 100+ points north of here...
Price and Volume Forensics Specialist

Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"

Volume is the only vote that matters... the ultimate sentiment poll.

http://twitter.com/VolumeDynamics  http://parler.com/Volumedynamics