8 replies to this topic

[OEXCHAOS]

I'd love to be able to confidently say that the low is in. I really would. That said, we have to look at the indicators and accept that it's probable that the low is in. Maybe the low for the year, even. I'm not optimistic. I can see all manner of reason for the market to fall apart this fall. I just don't think it will, if only because everybody else sees those same reasons. Meanwhile, Hulbert reports that Naz advisors are heavily short, and AAII took a huge Bearish jump last week. My momentum measures have turned up from oversold conditions and my favorite bottom spotter has been going off for days and has turned up. The OEX P/C is very low, while the CBOE P/C is high. The 10-day OEX P/C is way down in Buy territory. So, either the low came in on Thursday or it is about to come in. Near term, we've got some problems. TickerSense has a ton of Bulls, and some short term sentiment indicators allow for some chop to shake folks loose. My feeling is that the best way to play this is picking off longs on weakness, but leave enough powder dry so that you can handle a draw down in case we're wrong.

[Cirrus]

Thanks Mark. Interesting observations. I still have some minor negative technical divergences in the three major indexes I follow closely: IWM, QQQQ, SPY. We could be dealing in different time frames and I think it likely we get some sort of ST and possibly IT rally from here (lasting days to possibly a few weeks). I would think it probable that these lows are tested againg but who knows. FWIW, the only technicals that I really follow are price, volume and then NHs, NLs and A/D lines....and I'm referring to the latter two.

[Mike McCarthy]

Interesting comment from Inger about when bears go long because everyone is too bearish: they aren't really bears. "Given that the ‘interrelationship’ of psychology, technicals and poor fundamentals, for all realists was interlocked, there was no sustainable bullish argument in these recent weeks, and we said that too. The two typical arguments presented are that values by now are ‘cheap’ and that too many players are bearish, so the market has to go up. If too many believe the latter, then the counter-counter is that they’re not defensive, but are buyers, thus interestingly negativity isn’t an ‘operative’ view if they’re heavily long."

[NAV]

Interesting comment from Inger about when bears go long because everyone is too bearish: they aren't really bears.

"Given that the ‘interrelationship’ of psychology, technicals and poor fundamentals, for all realists was interlocked, there was no sustainable bullish argument in these recent weeks, and we said that too. The two typical arguments presented are that values by now are ‘cheap’ and that too many players are bearish, so the market has to go up. If too many believe the latter, then the counter-counter is that they’re not defensive, but are buyers, thus interestingly negativity isn’t an ‘operative’ view if they’re heavily long."

If the contrarians outnumber the confirmists, then what Gene Inger says makes sense. Otherwise, it just has some rhetorical value. I don't see any facts preseneted by him, to support his argument.

[Mike McCarthy]

Interesting comment from Inger about when bears go long because everyone is too bearish: they aren't really bears.

"Given that the ‘interrelationship’ of psychology, technicals and poor fundamentals, for all realists was interlocked, there was no sustainable bullish argument in these recent weeks, and we said that too. The two typical arguments presented are that values by now are ‘cheap’ and that too many players are bearish, so the market has to go up. If too many believe the latter, then the counter-counter is that they’re not defensive, but are buyers, thus interestingly negativity isn’t an ‘operative’ view if they’re heavily long."

If the contrarians outnumber the confirmists, then what Gene Inger says makes sense. Otherwise, it just has some rhetorical value. I don't see any facts preseneted by him, to support his argument.

I don't necessarily agree with his "facts" but he lays out quite a few. His 4th of July letter (http://www.decisionp.../TAC/INGER.html) is as bearish as he gets. He's been bearish since April and says the worst is still to come, with perhaps some wild swings along the way.

[gorydog]

Interesting comment from Inger about when bears go long because everyone is too bearish: they aren't really bears.

"Given that the 'interrelationship' of psychology, technicals and poor fundamentals, for all realists was interlocked, there was no sustainable bullish argument in these recent weeks, and we said that too. The two typical arguments presented are that values by now are 'cheap' and that too many players are bearish, so the market has to go up. If too many believe the latter, then the counter-counter is that they're not defensive, but are buyers, thus interestingly negativity isn't an 'operative' view if they're heavily long."

If the contrarians outnumber the confirmists, then what Gene Inger says makes sense. Otherwise, it just has some rhetorical value. I don't see any facts preseneted by him, to support his argument.

I am still in the "one more low" camp, but I hope everyone can see how things are ready to pop. ! don't love this count, but am thinking of it as an alternative. There is more economic news next week and plenty of time to move higher before that.


GD

[arbman]

The Low

???

On a five days basis, the banks and consumer stocks have been leading down, this is while many were looking for a bottom soon and buying calls on every bounce. RUT has started to lead down just yet.

This is not my idea of an IT bottom. BTW, this market is nowhere near as bearish compared to January of 2008, for example. We have not yet even seen yet a day where the market declined with the rising P/C ratio. Almost all declines came with the declining P/C ratios, in other words, they kept accumulating CALLS into the declines [intraday] after buying the puts at the open. This explains why this market cannot put even one trend day after some 11-12 day of weakness, imho...

My conclusion is that this is the 4th of July week, the volume is low, this is the week we should see at least a decent bounce and so far, where is it? They are still distributing into the bounces. Once the o/s is relieved for the week, we are headed to put in the lows below 1000 over the following 2 weeks...

[thespookyone]

The internals are in no position to paint "a low for the year" here. No texture, no bottoms above bottoms-and MUCH more. Oversold bounce. trin very clearly indicating all squeeze-enjoy the moment.

[OEXCHAOS]

It's early, yet. I'm not married to it but I just smell one of those crummy rallies that just wear you out.