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Complex Bottoming, Part 2: Nearer to a sustainable LOW


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#11 dTraderB

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Posted 09 October 2022 - 10:03 AM

I am in the same camp as the "QUEEN"

 

$SPY trendline tag of the lower channel and bullish into EOY after that is my thesis for now we shall see what happens ( p.s) ignore the dates at the bottom of the chart

https://twitter.com/...2220677/photo/1



#12 dTraderB

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Posted 09 October 2022 - 10:06 AM

...and MAURO.. except I do not see a lower LOW after beginning of November, but next year could be DOWN BIG in Q1

 

 
$SPX looks like today or Monday we could already complete W-1 of V--This means that next week we could see a corrective pullback for 2 before more downside--If the market will follow our projection I am also planning to get some longs once I think V could be in
 
 

I am in the same camp as the "QUEEN"

 

$SPY trendline tag of the lower channel and bullish into EOY after that is my thesis for now we shall see what happens ( p.s) ignore the dates at the bottom of the chart

https://twitter.com/...2220677/photo/1



#13 dTraderB

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Posted 09 October 2022 - 10:12 AM

well... I prefer not to buy because of these reasons etc.... but I may do so in this one:  OXY

 

Why would these guys ask the federal government for permission to purchase an additional 200 million shares, if they didn’t have the intent to do just that? Doesn’t seem too reasonable to me.

At current prices, this would represent another $14 billion of purchases.

To put the materiality of this into perspective, OXY trades an average daily volume of about 25 million shares, or $1.75 billion in market value.

This means it would take Berkshire 8 full days, assuming 100% of the volume belonged to them (not a realistic assumption), to amass their remaining 20% of outstanding shares.

The bottom line is, that's a whole lot of buying.

This kind of institutional accumulation can tilt the supply and demand dynamic for a security and create a serious edge for investors who are paying attention. Talk about having a good "support" system.

In the case of OXY, Berkshire has been putting a relentless bid in the share price all year. With all this potential buying left to do, we don’t think that is going to change anytime soon.

But, it gets even better…

We know exactly where Berkshire is likely to step in and act as support for the stock.

Here’s a look at the chart of OXY dating back to when Berkshire began to accumulate shares. We’ve even highlighted exactly where those purchases took place:

 

Notice a trend?

Berkshire comes out and puts a floor in the stock every time it falls below $60/share!



#14 pdx5

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Posted 09 October 2022 - 10:26 AM

dTraderB, thanks for all the work to post this information from many stock analysts.

My only FF is that it will be a very long time before we see brand new highs in the 3 indexes. 

So I am building long positions (3 year holds or longer if necessary) slowly. 


"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#15 dTraderB

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Posted 09 October 2022 - 11:20 AM

SEASONALITY can be useful but  it is too imprecise for my type of trading. 

DOLLAR peaking, can't go much higher unless geopolitical events occur

FREIGHT rates are falling, the CONTAINER backlog at ports are disappearing, economic slowdown globally

is intensifying.... INFLATION will continue to fall but not plunge

 

Next week is another opportunity for the bulls as we get the August inflation report. Current expectations are for a 0.1% Consumer Price Index (CPI) increase. Notably, that will be compared to a 0.4% increase in 2021. Moving forward, the annual comparisons become more challenging at 0.9%, 0.7%, 0.6%, 0.6%, 0.8%, and 1.2% through March of 2023. In August, the inflation will drop to 7.9% from 9% in June, and if we assume an average 0.2% monthly increase in the index, CPI will hit the Fed’s 2% target in June 2023.

CPI-Annual-and-MOM-Pct-Change-100722.jpg

While the market started out the week strong and triggered a MACD “buy signal,” Friday’s selloff was brutal. As shown, the MACD signal remains intact but was weakened considerably, and the market is approaching short-term oversold conditions. I suspect we could see additional selling Monday morning as investors witness their account balances over the weekend and pre-load “sell orders” for the market open.

%5EGSPC_2022-10-07_16-34-59.png

While there was a lot of volatility this week, the market did finish the week in positive territory. As shown in the WEEKLY chart below, the deeply oversold indicators turned up and are close to triggering “buy signals.” The market is also trading 2-standard deviations below the 50-week moving average.

https://realinvestme...-period-begins/



#16 dTraderB

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Posted 09 October 2022 - 11:25 AM

Sure. I like to see what others are doing or thinking, their opinions, assess, but the final decision has to be MINE! 

 

I do not see brand new highs in the market until at least MAY 2023 (most unlikely) and December 2023 (high probability)

 

dTraderB, thanks for all the work to post this information from many stock analysts.

My only FF is that it will be a very long time before we see brand new highs in the 3 indexes. 

So I am building long positions (3 year holds or longer if necessary) slowly. 

 



#17 dTraderB

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Posted 09 October 2022 - 11:28 AM

CISCO was a star performer in the DOT COM bubble period until it - and many other high-flyers - soared too close to the sun and peroshed

 

Have not looked at it since then... but this may be a good buying opportunity. Honestly, I prefer META at current or slightly lower levels than CSCO.

 

Stock Of The Week In Review

Quality Hiding Places

This week we put our twist on a MarketWatch stock screen offering quality earnings with a high dividend yield. The screen looks at companies in the S&P 500 with relatively lower betas, higher dividend yields, and good prospects for 2024 sales and earnings growth. We take MarketWatch’s top 22 screen results and refine the value criteria to arrive at our five stocks.   

As we have noted previously, using our factor tracker, high dividend yield stocks are the best-performing factor YTD. After the recent bounce from new bear market lows, it may be time to start thinking about shelter in case of another leg lower.

Screen Criteria

  • 12-Month Beta < 1
  • Dividend yield > 3.5%
  • 2024 EPS Growth > 4%
  • 2024 Sales Growth > 4%
  • Forward P/E < 12

Cisco Systems (CSCO)

 

SEASONALITY can be useful but  it is too imprecise for my type of trading. 

DOLLAR peaking, can't go much higher unless geopolitical events occur

FREIGHT rates are falling, the CONTAINER backlog at ports are disappearing, economic slowdown globally

is intensifying.... INFLATION will continue to fall but not plunge

 

Next week is another opportunity for the bulls as we get the August inflation report. Current expectations are for a 0.1% Consumer Price Index (CPI) increase. Notably, that will be compared to a 0.4% increase in 2021. Moving forward, the annual comparisons become more challenging at 0.9%, 0.7%, 0.6%, 0.6%, 0.8%, and 1.2% through March of 2023. In August, the inflation will drop to 7.9% from 9% in June, and if we assume an average 0.2% monthly increase in the index, CPI will hit the Fed’s 2% target in June 2023.

CPI-Annual-and-MOM-Pct-Change-100722.jpg

While the market started out the week strong and triggered a MACD “buy signal,” Friday’s selloff was brutal. As shown, the MACD signal remains intact but was weakened considerably, and the market is approaching short-term oversold conditions. I suspect we could see additional selling Monday morning as investors witness their account balances over the weekend and pre-load “sell orders” for the market open.

%5EGSPC_2022-10-07_16-34-59.png

While there was a lot of volatility this week, the market did finish the week in positive territory. As shown in the WEEKLY chart below, the deeply oversold indicators turned up and are close to triggering “buy signals.” The market is also trading 2-standard deviations below the 50-week moving average.

https://realinvestme...-period-begins/



#18 K Wave

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Posted 09 October 2022 - 11:32 AM

I am in the same camp as the "QUEEN"

 

$SPY trendline tag of the lower channel and bullish into EOY after that is my thesis for now we shall see what happens ( p.s) ignore the dates at the bottom of the chart

https://twitter.com/...2220677/photo/1

Pretty much there as well....but low could be way lower than that.

 

See how the next 2-3 weeks of earnings season goes. If market does not collapse in this window, then it probably will not.

 

Still think we could make bottom on Fed early Nov.


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#19 dTraderB

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Posted 09 October 2022 - 11:33 AM

I note a few people suggest the SUMMATION INDEX may be at an extreme low and could signal a reversal. 

 

"What might be working in the bulls favor right now? We’re oversold on a number of metrics/indicators. One that I think is important to watch right now is the McClellan Summation Index. The McClellan Summation Index is a long-term version of the McClellan Oscillator, which is a market breadth indicator based on stock advances and declines. While the McClellan Oscillator signals short-term overbought and oversold readings, the longer-term Summation Index gives us a bigger picture reading and context.

 

I must emphasize that no individual technical indicator, or breadth reading, etc., is a panacea. But at times some give a more timely and pertinent reading based on a combination of factors. The Summation Index has had a substantial decline since mid-August, as the S&P 500 has declined 15.5%. The Summation Index is now at its lowest level since the March bottom of the 2020 covid decline. Does that mean that it can’t go lower? It certainly can, and I will always change my view on a dime if the news and/or market action warrants it. But presently, it’s a bit of a stretched rubber band.

Another short-term factor that bulls have in their favor right now is the fact that we’re nearing a seasonal bullish period: mid-October through December. While I don’t take seasonal data as gospel, I do incorporate it into my outlook depending on whether they confirm a larger technical and macro narrative at play. In fact, back in an August 17th newsletter, A Pause to Refresh or Something more, I wrote that seasonal considerations were one of the numerous reasons I expected a meaningful market pullback to begin when we had just had a strong summer rally. If you recall, we had a 16% market pullback from August 16th through September."

 

See here for SUMMATION INDEX :
 

https://www.marketin...summation-index



#20 dTraderB

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Posted 09 October 2022 - 11:33 AM

I note a few people suggest the SUMMATION INDEX may be at an extreme low and could signal a reversal. 

 

"What might be working in the bulls favor right now? We’re oversold on a number of metrics/indicators. One that I think is important to watch right now is the McClellan Summation Index. The McClellan Summation Index is a long-term version of the McClellan Oscillator, which is a market breadth indicator based on stock advances and declines. While the McClellan Oscillator signals short-term overbought and oversold readings, the longer-term Summation Index gives us a bigger picture reading and context.

 

I must emphasize that no individual technical indicator, or breadth reading, etc., is a panacea. But at times some give a more timely and pertinent reading based on a combination of factors. The Summation Index has had a substantial decline since mid-August, as the S&P 500 has declined 15.5%. The Summation Index is now at its lowest level since the March bottom of the 2020 covid decline. Does that mean that it can’t go lower? It certainly can, and I will always change my view on a dime if the news and/or market action warrants it. But presently, it’s a bit of a stretched rubber band.

Another short-term factor that bulls have in their favor right now is the fact that we’re nearing a seasonal bullish period: mid-October through December. While I don’t take seasonal data as gospel, I do incorporate it into my outlook depending on whether they confirm a larger technical and macro narrative at play. In fact, back in an August 17th newsletter, A Pause to Refresh or Something more, I wrote that seasonal considerations were one of the numerous reasons I expected a meaningful market pullback to begin when we had just had a strong summer rally. If you recall, we had a 16% market pullback from August 16th through September."

 

See here for SUMMATION INDEX :
 

https://www.marketin...summation-index