45 replies to this topic

[fib_1618]

Chart provided below for emphasis.

What do you think of these favorite indicators of yours?

They are some of my favorites, but there are others. With that said:

NYSI has declined 4 days in a row.

The McClellan Summation Index only measures the distance between a short term (19 day) and intermediate term (39 day) exponential moving average of the advance/decline line. Being that we have seen money flow move in at an accelerated rate over the last 6 weeks, it would be a reasonable expectation that we see some sort of pause in this same dynamic. The key here is the distance between each individual post that is generated by the McClellan Oscillator. If you notice the current 4 day pause, the lack of distance between each post instructs us that the bears have very little control of the action...that the bulls are in the power position. The only way this can happen is if the A/D line itself is continuing to move in the direction of least resistance. And as noted on this weeks cumulative combo chart seen below, we have 3 areas of support still below us that the bears still need to break through before any idea of a declining price pattern, no less a trending one, can even be anticipated.

NYMO has made lower high and lower low since Sep. 13.

Actually, the NYMO had been within the confines of an indecision pattern since the initial July thrust. Given that the McClellan Oscillator measures the speed between the short term (19 day) and intermediate term (39 day) exponential moving average of the advance/decline line, it would then be reasonable to expect that there would be less and less fuel available to drive prices in one direction or the other after the initial thrust. The main technical consideration right now is whether the bears can actually push the directional speed of the A/D line in the opposite direction - OR - will they once again run out of time to do so. Friday's close was close to unchanged which would suggest that there is currently equal balance between buyers and sellers on a near term trending basis (and why the price pattern moved net sideways on Friday), and that one side is about to take control of the action on a short term basis.

NYSE New Highs-New Lows sideways since beginning of Sep. while price advances.

Keeping in mind that the new highs/new lows data is the last to confirm a trending price move, the cumulative NYHL remains in a rising bullish configuration at this time and is within 5% of its all time highs.

Also, take a look at the ROC (Rate of Change)

I don't believe that using a measurement differential of price momentum is an appropriate application to be used with regard to a percentage measurement of a stock's time given simple moving average. With that said, however, one should respect the zero line as their demarcation between bullish and bearish behavior (which, at this time, we are at absolute neutral).

So an assertion that you have categorical (with the use of word impossible) technical evidence against a crash, based on the liquidity conditions, is inconsistent.

It's not based solely on liquidity conditions, but it's a big part of it. You know...this is only my third time that I have EVER made this statement of a crash like event being "Impossible...can't be done" and the last two times turned out to be fully correct in the face of overwhelming bearish fundamental conditions.

By the way, can you name me any technician out there that did predict the May accident? One would do.

But to be fair, and not knowing exactly what one would consider a crash in today's market environment, I will make you a deal:

If the market closes lower by more than 2% on Monday, I will never, ever make a post on this board again (I can hear the cheers now!).

My fearless forecast...with the bulls still in solid control of the action, the odds suggest that we will close up on Monday.

So there you have it...two Fearless Forecasts (in which I never do) in less than a week (XLF the other). So sharpen your axes...I won't run away....you'll always be able to find me to call me on it, in fact, I will be the first one to start the "hangman's post" so that the spotlight will be applied appropriately.

Fib

PS...Melon...I took your question as being a genuine one without your even mentioning it. I was just being cheeky in my reply. Watch your stops...I hope it works out for you.

Edited by fib_1618, 23 October 2010 - 12:58 PM.

[Tor]

Ok I am the culprit that mentioned the term "crash". All of us know crashes are hard to predict, at some point pointless to predict since their occurrence is almost randomly timed and acted by bodies out of our trading boundaries.

What i was trying to say it is a good chance we have topped based on a few observation. The IT divergence, NDX historical high records and IMHO I am very convinced the recent run up was currency driven and any agreement struck to please nations affected by the depreciating USD should reverse the entire situation.

I definitely don't agree with the term "impossible" or "sure" to any direction or occurrence in the market.

*to Fibs
(genuine question) is just to prevent my question being misinterpreted as a challenge or patronizing in any way.

Im sorry, and perhaps you may feel inclined to fade me, but we have an election coming up, we have overt POMO operations, we have bonds weaknening and money going into stocks, we have attractive relative valuations, we have good earnings and leadership from companies lie apple et al. We have interest rates at historical lows, personally I cannot see anything but higher prices, and quite frankly I am staggered by this pervasive pessimism which appears to be in this board.

I am long and I have stops in. I wont even contemplate the short side unless and until 1155 is broken to the downside.

[Tor]

Chart provided below for emphasis.


By the way, can you name me any technician out there that did predict the May accident? One would do.

Fib

fib, I can cofnrim I have precisely called two crashes when no one else was.

I dont call them often so it is not a case of a broken clock being right twice, but I have called probably two which did not happen in the end.

Of the ones I called wrongly the market did move in my favour initially, but i was stopped for a small loss.

[andr99]

we have attractive relative valuations

take a look at the USD and then you will see where these attractive valuations will end in just a few weeks. The first push up in the USD value and this rally is destroyed together with the whole bald man's devotion to the cause of a weak dollar which is unsubstainable because China and Japan and the other USA debt holders are not idiot and don' t want to hold worthless pieces of paper

http://www.gainspainscapital.com/

[melonseed]

http://www.gainspainscapital.com/


..... basically that was what i was trying to say in BIG words.

[fib_1618]

Hey Andr...any comments on your view of the "leadership qualities" of the DAX over the last week? Fib

[andr99]

Hey Andr...any comments on your view of the "leadership qualities" of the DAX over the last week?

Fib

Hey Fib, Ok that English is not my mother tongue, but sometimes it seems to me to be talking in Turkish when I tell you my points of view

Edited by andr99, 23 October 2010 - 01:44 PM.

[andr99]

Hey Andr...any comments on your view of the "leadership qualities" of the DAX over the last week?

Fib

Hi Fib, have you read my prevoius reply ? If not, please read it. Now I want to add here that the Dax made me forecasst the end 2007- beginning 2008 top two days before. And not because it 's a leader, which it isn' t but because all the markets are correlated and sometimes the chart of the dax is easier to be read. Hope this may clarify forever. If not I will try to learn Turkish.


BTW my mother tongue is Venetic

Edited by andr99, 23 October 2010 - 01:53 PM.

[SemiBizz]

Anyone with a brain should not rule out a crash on ANY DAY. Especially NOW. With 70+% of the Volume attributed to HFT. An HFT Trade has a life of just minutes In/Out. Essentially the liquidity we rely on in the equity market is a "vacuum cleaner" Designed to shave points. I have been watching this for some time... The one thing that confuses and befuddles the HFT Model Is UNEXPECTED HIGH VOLUME. As long as volume stays low, the robots continue the vacuuming procedure. When Volume came in during the FLASH CRASH, you saw the HFT rendered helpless. If you feel comfy with a vacuum cleaner providing the liquidity in the markets, you should stay long. But watch out when VOLUME arrives, because that liquidity will be gone in literally a NY micro-second. As we saw on May 6th.

[fib_1618]

I have been watching this for some time...

The one thing that confuses and befuddles the HFT Model

Is UNEXPECTED HIGH VOLUME.

As long as volume stays low, the robots continue the vacuuming procedure.


When Volume came in during the FLASH CRASH, you saw the HFT rendered helpless.

Question...what is the difference between program trading and high frequency trading as it relates to price action and its reaction to movement?

Fib