ADS short signal update

The daily and hourly ADS line are both dancing around the zero line... the hourly is below again (after a brief pop back above yesterday)... the daily also had popped back above zero, and is now heading back towards the zero line today. Both are suggesting a fall in the SPX. The way I'm playing this is by adding bearish option spreads (credit spreads) to balance the delta of my options portfolio for Oct and Nov expiry. FWIW. Charts attached:

Thanks for update TA Just shorted TSX. Feels early but we shall see.

Thanks TA. Clearly a significant weakening in breadth. Only question is how long price diverges and stays up/continues upward. Appreciate the updates. Regards, D

We are in a stand off: The hold/hope hedges are saying global growth is near Vs. the technicians saying probably not.

Today the hedges shorted the bond etfs. They are expecting a quarter point shortly, maybe between meetings.

Check David Rosenburg's "V Shaped Recovery" Gluskin Sheff + Associates Inc. Extract:

"On an operating (“scrubbed”) basis, the trailing P/E multiple on the S&P 500 has expanded a massive 10 points from the March lows, to stand at 27.6x. Historically, when the economy is taking the turn away from contraction towards expansion, which indeed was the case in Q3, the trailing P/E multiple is 15x or half what it is today (and that 15x is also calculated off depressed earnings level of prior recessions – we have more on the historical comparisons below). While we will not belabour the point, when all the write-downs are included, the trailing P/E on “reported” earnings just widened to its highest levels in recorded history of nearly 140x, which is three times the levels prevailing during the height of the tech bubble."

Edited by Islander, 09 October 2009 - 05:38 PM.

We are in a stand off: The hold/hope hedges are saying global growth is near Vs. the technicians saying probably not.

Today the hedges shorted the bond etfs. They are expecting a quarter point shortly, maybe between meetings.

Check David Rosenburg's "V Shaped Recovery" Gluskin Sheff + Associates Inc. Extract:

"On an operating (“scrubbed”) basis, the trailing P/E multiple on the S&P 500 has expanded a massive 10 points from the March lows, to stand at 27.6x. Historically, when the economy is taking the turn away from contraction towards expansion, which indeed was the case in Q3, the trailing P/E multiple is 15x or half what it is today (and that 15x is also calculated off depressed earnings level of prior recessions – we have more on the historical comparisons below). While we will not belabour the point, when all the write-downs are included, the trailing P/E on “reported” earnings just widened to its highest levels in recorded history of nearly 140x, which is three times the levels prevailing during the height of the tech bubble."

BUT DADDY ? all that matters is what the primary dealers are doing and bernanke

no, really look at this more amazing by the day chart

http://decisionpoint...AC/SWENLIN.html

thanks for the paper islander, and chart snorkels... i would like to see an inflation adjusted S&P 500 P/E. i googled it but haven't found it yet (up to date, that is).

We are in a stand off: The hold/hope hedges are saying global growth is near Vs. the technicians saying probably not.

Today the hedges shorted the bond etfs. They are expecting a quarter point shortly, maybe between meetings.

Check David Rosenburg's "V Shaped Recovery" Gluskin Sheff + Associates Inc. Extract:

"On an operating (“scrubbed”) basis, the trailing P/E multiple on the S&P 500 has expanded a massive 10 points from the March lows, to stand at 27.6x. Historically, when the economy is taking the turn away from contraction towards expansion, which indeed was the case in Q3, the trailing P/E multiple is 15x or half what it is today (and that 15x is also calculated off depressed earnings level of prior recessions – we have more on the historical comparisons below). While we will not belabour the point, when all the write-downs are included, the trailing P/E on “reported” earnings just widened to its highest levels in recorded history of nearly 140x, which is three times the levels prevailing during the height of the tech bubble."

thanks islander. i found the paper on this blog that anyone can download: http://expectedretur...d-recovery.html

Thanks for update TA
Just shorted TSX. Feels early but we shall see.

covered this morning 1.3% loss. Assume no interest in my trades
but I inadvertently stated position so....housekeeping

Thanks for update TA
Just shorted TSX. Feels early but we shall see.

covered this morning 1.3% loss. Assume no interest in my trades
but I inadvertently stated position so....housekeeping

Hey Jack! sorry about the small loss... what made you cover this morning? I'm playing this ADS thing by selling OTM option spreads... the position i took after i first posted was to sell some oct. spx call spreads above 1100 (i also sold some deep OTM put spreads to collect some extra premium on the oct)...

the ADS went negative at today's close. I sold some spx nov call spreads above 1160 to start a play on this... i'm waiting before i sell any puts, if i do.

Hey Jack! sorry about the small loss... what made you cover this morning?........

Can't be around markets for a day or two and my 60min CPCE swing signal is almost there.
A signal that can be almost there for 2 or 3 days while the market plunges, but I'll be frying other fish.
All the best