9 replies to this topic

[Douglas]

According to my risk summation system, the days next week with the highest risk of a turn or acceleration of the current trend are Monday the 11th, Wednesday the 13th and Friday the 15th.  Of those three days Monday has the highest number of risk cycle turns, and   Wednesday has the least, but all three have enough to make the grade for elevated risk.

 

Last week the Monday the 4th risk window tagged the low for the week, but the Thursday the 7th risk window missed the corrective low in the DJIA by one hour at the close on the 6th, so the Thursday risk window must, by the narrowest of margins, be labelled a dud.   

 

I was obviously wrong yet again with my assertion that last week would be "pivotal".  My better judgement is being clouded by what has been a pretty reliable long cycle low which should occur near the end of May or very early June.  The last low in this cycle did not form properly which I just put down to the FED money flood occurring at that time.  It's starting to look at lot like the low that I have been rabbiting on about may be a case of those who fail to learn from history are doomed to repeat it.  The FED again has been printing an absolute flood of funny money which may yet again kill this cycle.  I won't throw in the towel on  this cycle until early June, but it's round 7  and so far the cycle hasn't laid a glove on the market.  Cassius Clay Powell has been beating the bear senseless.  Just to add salt to the bear's wounds, the FED open mouth committee will be out in full force Tuesday, Wednesday and Thursday this week making speeches trying to keep the market kite flying high up in the clouds.  

 

Regards,

Douglas

 

[Rogerdodger]

I guess it's hard to fight the FED, especially at dump of $100,000,000,000,000 in 28 days! 

 

Federal Debt Tops $25 Trillion for First Time; Jumped $1 Trillion in Just 28 Days!

[K Wave]

A little Taper Tantrum coming soon???

 

https://www.zerohedg...t-7-billion-day

[Douglas]

K Wave, I will be listening to the FED speak this week to see if they tip their hand concerning the taper you note in your interesting graph.  The money hogs on Wall Street always want more in their troughs, not less.  Maybe there's  hope yet for the cycle low that I keep going on about if a taper tantrum develops.  

 

Rogerdodger, I expect lots of B-school dissertations to be written in the next couple of years on how the FED can print trillions of dollars, give it to all the rich folks and not cause the phoney baloney BLS inflation numbers to rise.  Whoa be unto the FED if the hoi polloi ever figure out that the FED is the chief architect of the great wealth disparity in the US. For years the FED has been taking 2-5% (depending on whose inflation numbers you believe) of the salary of working stiffs every year and giving most of it to the asset owning wealthy through inflation.  Recently Uncle Sam sent the unwashed masses $1200 each.  The FED "sent" the 15 million or so reasonably wealthy in the US an average of $166,000 each (2.5T / 15 M).  It's good to be rich.

 

Regards,

Douglas 

[robo]

I went flat at the close Friday ( closed all long positions based on some of my trading indicators).  IWM, and $NYA are still under their 61.8% retrace levels.... And we have a  lower BB tag which is usually good for 50 SPX handles or so lower. That is a Risk Management move not a call for what will happen next week.  

 

Thanks for the update.

 

Daily

 

https://stockcharts....958&a=751665975

 

 

Monthly LT data

 

The SPX is moving up nicely, but $NYA and IWM still haven't confirmed. The Banksters will continue to work on that I'm sure....  Just 4 or 5 stocks pushing the SPX higher, but the overall market needs more Fed dollars.

 

https://stockcharts....901&a=751805361

 

Their was a WOW chart posted last week, and it does look very Bullish if this is a Bull Market. 

 

The bottom line:  If we are in a Bull market that data is very Bullish. But if we are still trying to find a bottom,  and we are in a Bear market,  I would be careful if placing a new bet if you are a LT investor based on this data. For us VST traders the data doesn't mean much. Just another trading day.

 

As a trend trader I don't trade using this type of data, but track it.....

 

https://stockcharts....309&a=751814845

 

My system is probably to simple for most traders here, but it's what I use.

Edited by robo, 09 May 2020 - 03:15 PM.

[Douglas]

Robo, my short term system gave a sell signal a few weeks ago which I ignored since it wasn't confirmed by my long term system.  Both have since drifted back to a neutral reading.   Mr. Dow seems to be going through an identity crisis trying to figure out if he's a bull or a bear, or maybe he's just a chicken like all of us virus isolators waiting on the second wave to hit the shore.

 

Regards,

Douglas

[pdx5]

39 states partially opened for business this week. That was the news to drive the market on Friday.

Watch the news next week, forget all the charts.

This is a purely news driven market. Traders have no clue where it goes next looking  at charts.

Even volume is meaningless, A/D is meaningless because none of the traders have a clue what the next news will be.

Does anyone know for example, if opening 39 states will accelerate deaths or stay even next couple of weeks, and by how much?

I rest my case.

[risktaker]

Thanks Douglas!

Apr 29 might still be the top for most of the major indices except Nasdaq.

Edited by risktaker, 10 May 2020 - 12:38 AM.

[Douglas]

pdx5, you must not have drank the Kool-Aid.  All dyed-in-the-wool chartists believe that the reaction to all known news is already baked into charts.  Charts are the I Ching of what is known to be happening in the world.  Only true black swan events that occur out of nowhere are not reflected. 

 

For example, before the severe turn down attributed to the virus which started on February 20th, the NASDAQ AD line was seriously diverging from the index giving a solid sell signal.  Traders with contacts in China or with inside knowledge of what was going on there had already started selling early before the unwashed masses learned about the crisis on the tube. 

 

Currently there was just the first hint of a new divergence this past Friday which should either be confirmed or erased in trading the first half of this coming week.  As soon as this second wave is perceived by enough traders with inside knowledge, there will be a market reaction seen in the charts well before you see it mentioned on CNN. 

 

Watch the charts.  They can tell you in advance what the "news" is going to be in the future.  The rub is figuring out how to correctly read them.

 

Regards,

Douglas

[Douglas]

Edited by Douglas, 10 May 2020 - 06:50 AM.