7 replies to this topic

[arbman]

I looked a bit harder to my charts, I don't see much downside, but Monday can finish the ST consolidation and I will sell a gap up for a trade and then the market should rally well for the reminder of the week and I will weight more in the long side there. At this juncture, any sell off indication tomorrow might attract more bearish interest in the markets. There is not much failures in many measures at this time to warrant a big big sell off anymore, imho.

As I said earlier, the odds for higher prices over the next 5 sessions have increased after Friday, the majority of the stocks are near their ST cyclical lows timewise and most of the prices managed to stay near the lower channels. They can slip lower some more, my pattern matches from June 12 were actually calling for the lower prices here, but the lows has to come quickly from here and I don't think there is enough time for a big decline. So, given the larger trend, I think a low will come sooner than later. Any sell off needs to be very strong to break the trend here and there is not even enough speculation...

For the IT, the sector leadership in the tech, industrials and energy say there is enough strength to pull forward and actually we might get a strong rally, if a sell off happens early next week. I see RUT and NDX outperforming since June 12 low and it means the participants are still willing to take the risk. I don't expect the banks to do much since the direction of the rates is clear...

The market's energy is generally increasing in my analysis for the short term, so it can undershoot the channels and it is not very strong for the intermediate term for the summer, however these levels are not where the long term failures should happen yet, imho. So, I will rather look to buy escapes below the channels in the weeks ahead until a clearer picture emerges...

Here, I tried to break down my signals into smaller timeframes, unfortunately there is quite a bit noise and less clarity. I think the dealers see enough buying interest and borrowed to buy more for their clients, the level of borrowing is very high and it confirms that a big decline should not come out of the current setup either. So, this only leaves one direction for the market; UP, eventually.

Good luck,
- kisa

[ogm]

It seems so many people are looking for a bounce this week, amazing. Honestly, I don't know what stuff are you guys looking at, but to me at least on daily charts it looks like most technicals have just rolled over, and internals have been weak and getting weaker for quite some time already. So many charts breaking down, starting with REITs, Financials, retailers, taking out one support after another. Heavy volume too. MACD, Stochs, RSI, DMI, CCI, Summations, Bullish %, on and on and on... you name it and its all declining. And nowhere near oversold levels. This market has so much room to drop and so little room to go up. Risk/reward just isn't there. I still think the worst of this decline is yet to come, and we'll probably have one very solid down day sometime this week. With DOW down 200-300 points.

Edited by ogm, 24 June 2007 - 09:25 PM.

[arbman]

You may be right...

A quick sell off on Monday would set up the rest of the week higher. That's what I am thinking, the rally might not amount to much maybe, but I think it is getting closer to a low probably than a high at this rate of decline.

I don't think the internals are in the acceleration mode, I think they are more like at the bottoming mode, so this sets up a trading range for a while, especially if the market manages to rally ahead of the 4th of July week.

I think this week is pivotal in many ways, an acceleration will definitely change my charts too. The high range consolidation would turn into diamond patterns basically. However, there seems to be too much activity at these levels for a failure yet...

If it can not rally, it will probably fail, but this will take some time. The commercial credit growth is not very bullish on the markets, however you have to still wait until the market spends the ample liquidity. The Blackstone IPO is an indication, there is too much money...

- kisa


BTW, ogm, yes some sectors are doing very poorly, but some sectors are doing better and better, it is the money chasing performance and there is still too much...

I still think the worst of this decline is yet to come, and we'll probably have one very solid down day sometime this week. With DOW down 200-300 points.

If there is such a day coming, it will be probably earlier in the week...

[OEXCHAOS]

Kisa, we need more fuel for the EOQ rally. Thus, they'll take it down pretty hard, I think today and/or Tuesday. Mark

[Cirrus]

The biggest surprise would be a decline into Friday. IMO everyone would be caught flat-footed expecting some window dressing and 'bonus support'. Kisa...your work is very impressive. Thanks for your posts.

[OEXCHAOS]

Yeah, what Cirrus said! Nice work, Kisa. Mark

[arbman]

Thank you for the nice words. It is not possible to analyze the trend before analyzing the volatility associated with the trend. If one can not filter out the wiggles, one will not be able to determine the underlying trend accurately... What basically I came up with tries to remove the phasing problem in the volatility as much as it can. I try to determine the dominancy based on the amount of noise like many other software but also by the number of issues showing the same cyclic characteristics. It is nearly impossible to completely separate out by looking to a long term or short term cyclicality alone of an index. If you consider the long term only, you might get faked out by the phase changes even if you use the right cyclical periods. If you look at the short term only, you might not be hitting the right harmonics since it is harder to seperate out due to the noise. The core system is a lot more complicated than this, I tried to really simplify to a few charts for this demo... Another issue is where the market is in terms of changing volatilities, not every rising volatility mean a decline, sometimes the volatility only increases near the end of the moves... Finally, we owe a big "thank you" to Airedale for consistently showing an application of the cyclical trading here, and bringing out the awareness... - kisa

[traderpaul]

Kisa, Here is my observation without those fancy bands and oscillators.....MER up 2 divisions 5 days ago, down 6 divisions 4 days ago, up 2 divisions 3 days ago, down 3 divisions 2 days ago, unchanged today so far.....as you can see the down days are stronger (on the down saide) than the up days.....