14 replies to this topic

[Douglas]

According to my risk summation system, the day this coming week with highest risk of a turn in or acceleration of the current trend is Wednesday December 9th.  I thought you might be interested in seeing one of the charts that I use to SWAG the risk windows.  I use five different summations of the risk cycles.  The Cycle Subset below has recently been one of the more accurate.  Note the small spike in risk this coming 9th of December. Also note that low and high values are of interest.  The charts plot turn risks each day.  For example one of them this coming week is Don's WWW of course on Wednesday.  

 

 

Last week the Monday risk window tagged the low for the week, the Wednesday risk window was a higher low making it somewhat of a dud although I was expecting a low of some sort on Wednesday, and the high for the week occurred at the very end of the Friday risk window.  Tomorrow's market action will tell if Friday was actually a high or just a another stepping stone in the road to El Dorado.  A higher close on Monday makes Friday a dud too.

 

 

 

The rising wedge that I posted about as a response to one of Mark's notes continued on Friday to reach the top trend line of the wedge.  If it breaks out above that line, there's something like a 65% chance that it will run sharply higher squeezing all the top calling shorts.  Of course it could just head back down towards the lower trend line, or it could choose the 35% option of pattern failure by faking a breakout and then heading back down shafting both the longs who buy the break out and shorts who cover on the breakout.  Monday might be more interesting than my summation system thinks.

 

 

Regards,

Douglas

Edited by Douglas, 06 December 2020 - 06:47 AM.

[LMF]

Equity only 10 day put call ratio is getting pretty frothy again. Not a great timing tool but were in the zone for a decent smack down at some point.

Lee

[Douglas]

Lee, funny you should mention the options.  I thought about posting something on it in the update, and you're right it's not always a precise next day tool, the way I use the data at least, but it is pretty consistently accurate in calling turns if you're patient to wait for it to reverse directions.  In the 10 day average example below it was correct roughly 9 out of 11 signals if you're generous and the time to profitability was pretty short.  Currently I'm waiting on the moving average of the ratio to turn back up before I say this market's goose is cooked.  One risk of this strategy is that currently the absolute value of the ratio is so low that it may turn so fast that I miss the dinner party and end up eating leftovers. 

 

 

Regards,

Douglas

[salam]

Hey Douglas. So far so good my friend.

 

WWW proved to accelerate selling. With Da Cheifs rationale, this indicates a rally into triple witching next week.

 

im expecting a a revisit to 3620 by Friday,

 

Am I being irrational? 

[Douglas]

Salam,  other than Don's WWW, there's a lot of potential positives which could give you a rally in the next week or so.  Today I guess all eyes are on Christine Lagarde and the ECB.  She can definitely move the market needle depending on how much funny money she's willing to print through purchases.  This coming weekend Boris and his EU counterparts must come up with some sort of agreement.  Next Wednesday the FED will announce how much new printing it will do to kite the stock market.  And of course every granny in the first world is lining up to get a covid shot which should be the beginning of the end of the pandemic.  To top it all off next week all the US election shenanigans should begin to dissipate when the electoral college votes on Monday. 

 

On the negative side is sentiment which is crazy bullish.  Witness yesterday's DASH public offering.  Here's a company that is not forecast to ever make money which is essentially a bicycle food delivery service dependent on subminimum wage workers with no barrier to entry by a competitor whose stock shot up 80% on the first day of trading and is now worth more than a good fraction of the companies listed on the NYSE.  This bullishness is further confirmed by the equity put/call ratio setting new five year lows.  At some point this chicken will come home to roost but it's not at all certain when.  You're not being irrational, but remember the market can remain irrational longer than most shorts can remain solvent.  

 

Regards,

Douglas

[salam]

Douglas,

 

thank you so much for your prompt, yet erudite response.

 

I particularly am grateful the way you have listed the days certain events may affect sentiment. 

 

I only bet the farm.......after the horse has ‘ just ‘ left the stables.

 

the horse is currently very restless with greed!   

 

there is so much the ECB and fed can do. We are totally on the same page regarding sentiment & mania.  Dash and Tesla are great examples at different ends of that spectrum.

 

Eventually the tulips have to be sold. 

 

As for this being the beginning of the end for Covid, it may well be for the wealthy nations that have stockpiled it. But, the stupid will still continue to refuse to take it, and continue to spread it. Global pandemics don’t fizzle out that quickly, the rate of spread of cases in the emerging countries, is a sad harbinger of things to come.

 

FWIW my pivot for the month. 3660. Buy above, sell below. 
 

stay safe sir! 

Edited by salam, 10 December 2020 - 06:55 AM.

[traderx]

As for this being the beginning of the end for Covid, it may well be for the wealthy nations that have stockpiled it. But, the stupid will still continue to refuse to take it, and continue to spread it. Global pandemics don’t fizzle out that quickly, the rate of spread of cases in the emerging countries, is a sad harbinger of things to come.

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Agree, Covid will be here for long time for "all" countries. Copy this forecast. We will see.

[salam]

Edit

 

pivot for December is 3680

 

3660 pierced twice like butter 

[Douglas]

You got Russia, China, America, Britain, you name it countries and companies all falling all over themselves to rush out vaccines.  I predict that by late next year if you bend over in a crowd, someone will be sticking a needle in your bum and asking for twenty bucks from someone.  You won't be able to fly without a vaccination certificate, go to a movie, kiss a girl, getting access to just about everything good will require proving you've taken your dose. 

 

These drug companies are printing money almost as fast as the FED, so they are racing to benefit humanity by first handsomely benefiting their share holders.  Governments getting backhanders from these companies will cooperate by making it at least de facto mandatory that you get your shots.  At something like $20/dose and two doses required per capita, and ~65% of the world vaccinated ultimately you're talking $20 x 2 x 0.65 x 7.8 x 10^9 = $203 billion.  That ain't chicken feed so they are all highly motivated to stick every mother's son with their vintage of the cure before their competitors do.   

 

If the vaccines work, and I have to admit given how they've rushed them that's a very big if, then the light you see at the end of this tunnel next year is indeed the sun and not the headlights from another train coming to meet you.

 

Regards,

Douglas

Edited by Douglas, 10 December 2020 - 10:52 AM.

[12SPX]

Always find it interesting that when a person has an opposite opinion they are called stupid.  I for one am totally against taking the vaccine but I don't call the people who do take it stupid.  I do think what is stupid is the fact that if you take it why are you worried if I take it or not,,, your not going to get sick because you took it anyhow so what does it matter if I do.  I just got over Corona with barely a symptom and I and my other 11 friends who also got it were barely affected.  I believe it's because were all in great shape.  One friend got a fever and quite sick likely because he is a bit obese and has other conditions.  Maybe a good idea for him to take it.  Nonetheless I think its rude calling people stupid because they have a different opinion, a better start may be,,,,, interesting, why do you feel that way, I'd maybe listen to your opinion then as we are supposed to be adults here!