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SPX WEEKLY POLL


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Poll: SPX WEEKLY POLL (44 member(s) have cast votes)

Does the SPX close higher or lower next week?

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#1 selecto

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Posted 03 March 2007 - 11:14 AM

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#2 hiker

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Posted 03 March 2007 - 12:34 PM

last week's incorrect call for the market being higher by week end had a 69% majority vote...only two instances in 2006-2007 had a hihger % majority vote... I am a little surprised this high confidence vote by 23 voters was so wrong last week...btw, I voted for a lower market in last week's vote and did so in this week's vote, but am not as confident this time aroound...will depend on taking out Tuesday's lows...I do think that will happen but am not highly confident about it at this time...would rate my confidence level at more than 50% though what you think selecto..we take out Tuesday's lows?

#3 selecto

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Posted 03 March 2007 - 01:00 PM

Hi, Hiker.I too was surprised at last week's poll results at the time, as my stuff semed clearer than usual that we were headed down. I put up a couple of charts that seemed to say so. I note that no vote (5) 69% or higher has yet been correct. Go figure. As for next week? I posted this FF below: Monday we start down. Can't call the close yet. Stuff says we need to flatten / bounce in here. Week closes down. Watch the Yen. It is now at the point where every uptick in the Yen forces a cary trader sale of something else. Similarly, every downtick in whatever the trader bought now requires action. Those yen have been leveraged out the wazoo so its hairy. A bunch of rich terrorists could probably hit the Yen ask all next week, and "blow up" the world.

#4 hiker

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Posted 03 March 2007 - 01:12 PM

thanks, Selecto....and thanks for keeping up this poll...it is the only one I have ever consistently voted in anywhere. I like the data results being transparent, and the history efficiently viewed

Frank Barbera at Fari's site thinks SPX and Gold have likely put in a tradable bottom...see Friday's post -

http://hamzeianalytics.blogspot.com/

Fari had up chart setups in the last couple weeks at his blog that were flashing big warning signs for a pause or pullback, then it appeared to me that prior to Tuesday the content was shifting toward less caution...I am going from memory on this, and the archives are all readily available to read

Sally wrote an article on Monday which ended with an expressed belief that the commodity market is beginning another leg up in its bull market..

what Sally stated just prior to Tuesday's selloff repeats what Eric Bolling from the NYMEX has been publicly stating about the commodity bull markets being in the early years of what typically last 11 or 12 years

here is Sally's article written Monday about SPX and commodity bull mkts -

http://hamzeianalyti...ity-prices.html

Edited by hiker, 03 March 2007 - 01:19 PM.


#5 selecto

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Posted 03 March 2007 - 04:08 PM

Here is a copy of a post by Brad Reid over at Crystal Ball which pretty well sums up the Yen carry problem: John/Michael, If it only stopped there... borrow at .5% and invest at 4.5%... the primary risk would be Yen/Dollar ratios strengthening in favor of the Yen and the 4% would cover some of the currency risk. It could get ugly even in this case, but there's a worse scenario. What actually happens is they borrow at .5%, buy T-Bills at 4.5% netting +4%, then use the T-Bills as margin to purchase 20X as much dollar value of stock index futures or some other levered derivative stock or bond or mortgage product. So, borrow a million at .5%, buy $1 million worth of T-Bills with the proceeds, and control $20,000,000 of SPX index. That works out to be an out-of-pocket annual expense of $5,000 per year to control, say, $20,000,000 of equity. One can quickly see how the carry trade can flip over amazingly fast... two culprits come to mind. One has already been mentioned where the Yen appreciates strongly against the dollar, so a currency loss on the $1,000,000 loan is suffered. The second is that the SPX market corrects, as it did last week, and the $20,000,000 controlled by the stock index futures is now worth $19,000,000. In this case, the poor bastage who is out-of-pocket $5,000 in annual interest, has a $1 million dollar loss in his derivative account and the broker is looking for more margin... a margin call is issued. And, that only reflects a 5% drop in the SPX... at 25%, the dude is down $5,000,000 on his $5,000 annual payment. So, they have to sell the derivatives and their selling exacerbates the sell-off in the SPX negatively affecting other players, so everyone runs for the door at the same time. These sorts of strategies work well until they don't. You know you have really screwed up when your doorbell rings, you open front door, and a 300 lb. Samurai Warrior with a frown on his face and a big blade asks for his money back. Who says they don't "ring bells" at market tops. Ha!Ha! Brad