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Risk Windows This Week


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#1 Douglas

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Posted 04 October 2020 - 07:47 AM

According to my risk summation system, there appears to be a "W" shaped risk window this week with somewhat higher risk of a turn in or acceleration of the current trend on Monday the 5th, Wednesday the 7th and Friday the 9th.  The Monday signal may just be the trailing edge of the very large risk window in the middle of last week.  

 

The huge risk window straddling the middle of last week managed to tag a top of sorts, but the only serious selling after the top occurred overnight and into the very first thing Friday morning.   This top has created something resembling a head and shoulders pattern in the hourly DJIA chart with a neckline at about 27,400, but volume is not trending down through the pattern, so it's hard to get too excited about it.

 

Last week had the largest average risk summation in four years, gridlocked stimulus negotiations, flailing BREXIT talks and a B-52 sized black swan sick POTUS to boot, but somehow the DJIA managed to close up for the week.  Last week was a risk train wreck with virtually no consequences. Amazing.  It's hard to comprehend what it might take to turn this market down.  In this environment even a themonuclear war might be seen as a net positive, driving a new rebuilding boom.  Strangelove indeed.

 

Regards,

Douglas



#2 salam

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Posted 04 October 2020 - 06:49 PM

Smells of pure distribution to me Doug.

 

earnings season will be the usual of many companies beating forecasts (that have been already reduced)!
 

Emperors clothes with PE ratios at cycle extremes. Waiting patiently for the elastic to coil back to the mean here.

 

Seasonally, we are in a very vulnerable spot.


I'm not sure what my future holds... But I know who holds it.

#3 Douglas

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Posted 05 October 2020 - 02:20 AM

Salam, one man's "pure distribution" is another man's consolidation.  I, for the life of me, can't tell the difference until it breaks out of the trading range. My crystal ball says distribution, but that cracked thing has gotten me into a lot of trouble in the past.

 

They should call it lack of earnings season and just drop the "E" from PE since there isn't any.

 

I'm also waiting for the "elastic to coil back".  I want to buy a basket of the UK no earnings zombie companies which used to pay a decent dividend. I hope that the survivors will make up for the ones that go under and will start paying out again on the other side of this pandemic helping to support me in my dotage.  The trick is going to be figuring out which ones the UK government plans to lavish support on to keep them alive.  The rest are just doing a walking dead lurch towards bankruptcy.  

 

My recent top call was largely based on the "seasonality" reflected in long cycles that I track.  Trouble is the FED, BOE, JCB, ECB, etc. printing like mad appear to be distorting what would "normally" happen.  That seasonality turns sharply positive sometime in the fourth quarter or early next year depending on the potential for delayed U.S. election results distortion.   I want to be aboard that rocket when it launches. 

 

Regards from Lyme Regis,

Douglas


Edited by Douglas, 05 October 2020 - 02:20 AM.