14 replies to this topic

[Trend-Signals]

Since 7/19 top, only small speculators are slaughtered. As we can see on the COT chart, large and commercials are short while small speculators are long. Remember commercials net positions are hedges.

We have CPI number tomorrow and bearish market sentiment is not changing.

Breaking the current support and trading below it tomorrow will be targeting SPX 1360.

The irony is that market looks to be using what was working in the past as a contrarian indicator; so, be careful.

Edited by Trend-Signals, 14 August 2007 - 04:44 PM.

[Trend-Signals]

Market direction is usually determined by commercials even though large speculators are right since 7/19 I think that it is the time to react for us, instead of picking bottoms ending up being used as contrarian indicators.

THERE IS NOTHING TO BE BULLISH ABOUT AS OF CLOSE. Don't get me wrong, I called 7/19 top and was looking for a reversal at the current support as some of you might have noticed. The worst thing that we can do is used as contrarian indicators.

http://investorshub....age_id=22069547

~~~

60m and Daily price actions are showing positive divergences.

Just need to be cautious - not to be used as contrarian indicators based on what was working in the past. I have noticed that many are using the same methods which I posted before, e.g. extremely oversold breadth indicators.

While I am looking for a reversal, it is better to be aware of the powerful bear force. Until market decides to use the shorts to mark up, we need to be careful - not to be used as contrarian indicators.

http://www.stockchar...09398&r=568.png
http://www.stockchar...77535&r=859.png
http://www.stockchar...40300&r=617.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=60&yr=0&mn=2&dy=15&i=p73797548221&a=79285156&r=517.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=9&dy=0&i=p22232131775&a=76929034&r=724.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=W&yr=4&mn=8&dy=0&i=p49229126946&a=78987374&r=825.png
http://www.stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=0&mn=10&dy=0&i=p31631774778&a=76966992&r=329.png
http://www.stockcharts.com/c-sc/sc?s=$INDU&p=W&yr=4&mn=7&dy=0&i=p06542340040&a=76929550&r=152.png
http://www.stockcharts.com/c-sc/sc?s=$COMPQ&p=D&yr=0&mn=8&dy=0&i=p21609042622&a=76909044&r=764.png
http://www.stockcharts.com/c-sc/sc?s=$COMPQ&p=W&yr=4&mn=6&dy=0&i=p22094758617&a=77295648&r=443.png

Edited by Trend-Signals, 14 August 2007 - 05:31 PM.

[Trend-Signals]

You can see that I do not have the ego to be on the wrong side too long. Markets are still near at the Major LT supports. Any bulls left???

[Trend-Signals]

Caution: EXTREMELY OVERSOLD BREADTH INDICATORS


Remember that many traders are now using "oversold" breadth indicators as market timing since all traders can see that it has worked in the past; but, so far, market is now showing that it is going to work, YET!!

Several breadth indicators are showing as low as 2002 low!


Let us not to be used as "Contrarian Indicator" by the short sell-ers.....


So far, the oversold breadth and sentiment indicators are overflooded traders, those are ... so far, used as contrarian indicators!

Edited by Trend-Signals, 14 August 2007 - 06:00 PM.

[hiker]

a 10% correction places SPX near 1400 thanks for all the good work, TS. and peace.... the most enjoyable nature experience about this week so far is watching from my office window a hawk hunt voles .... those creatures rarely come out of the ground, and somehow this hawk seems to be spot on.

Edited by hiker, 14 August 2007 - 06:00 PM.

[Trend-Signals]

a 10% correction places SPX near 1400

thanks for all the good work, TS.

and peace....

the most enjoyable nature experience about this week so far is watching from my office window a hawk hunt voles .... those creatures rarely come out of the ground, and somehow this hawk seems to be spot on.

Thanks, PEACE??? from which side???


Sure, it is nice Bear fortune cookies wiping out 5mo bull market run-up in 2 weeks.

Edited by Trend-Signals, 14 August 2007 - 06:11 PM.

[thespookyone]

You can see that I do not have the ego to be on the wrong side too long.

Markets are still near at the Major LT supports.

Any bulls left???

No ego here, but I did buy some QQQQ calls at the close. So far, all I see is a perfect entry, subject to change, of course. When something breaks out of a price channel like the Q's did, then comes back to backtest-I love to use the backtest as my entry point. A reasonable stop will provide a limited risk-and the reward in this situation can be quite substantial. As far as NOTHING to be bullish about-I think that word covers a bit too much ground. My ewave count calls for a bounce at the minimum, soon, for one. For another, sentiment polls aside for a moment, equity players showed by their put buying today they have become VERY bearish, with equity PC at 1.08 Sure, I know it's just a rough number, but it's a huge one, as well. I know it goes against exactly what you are saying, but, that PC level is an indicator to me, when combined with my other TA. I suppose, moms and dads may now be able to load up on puts, get paid, no problem-but I'll need to see that first- as their history prohibits me from assuming it. Or, just maybe, as it has happened time in and time out in the past-they may be just a bit early with those puts-and have that cash taken from them with stealth speed. At any rate, with a stop in place-I'm willing to chance that for the equity players-it won't be "different this time".

Spooky

[Trend-Signals]

No ego here, but I did buy some QQQQ calls at the close. So far, all I see is a perfect entry, subject to change, of course. When something breaks out of a price channel like the Q's did, then comes back to backtest-I love to use the backtest as my entry point. A reasonable stop will provide a limited risk-and the reward in this situation can be quite substantial. As far as NOTHING to be bullish about-I think that word covers a bit too much ground. My ewave count calls for a bounce at the minimum, soon, for one. For another, sentiment polls aside for a moment, equity players showed by their put buying today they have become VERY bearish, with equity PC at 1.08 Sure, I know it's just a rough number, but it's a huge one, as well. I know it goes against exactly what you are saying, but, that PC level is an indicator to me, when combined with my other TA. I suppose, moms and dads may now be able to load up on puts, get paid, no problem-but I'll need to see that first- as their history prohibits me from assuming it. Or, just maybe, as it has happened time in and time out in the past-they may be just a bit early with those puts-and have that cash taken from them with stealth speed. At any rate, with a stop in place-I'm willing to chance that for the equity players-it won't be "different this time".

Spooky

Markets are closed NEAR at LT Major Supports, actually slightly closed below it.

We have "CPI" number tomorrow, and nothing indicates that we have a good probability that market will trade up except that 60m and daily charts are showing positive divergences and many traders are positioned for market-break down as you noted.

Market sentiment is extremely bearish. This signaled "Reversal" in the past, but I think that this time seems to be different.

Markets are oversold, so we will see a bounce. If we have successful bounce, the LT supports become stronger. But so far, only bears/short-sides are making QUICK FORTUNE... unfortunately....

Good luck

Edited by Trend-Signals, 14 August 2007 - 06:45 PM.

[Trend-Signals]

Odd. NQ is showing different sentiment. net long sentiment

Commercials are hedges

Edited by Trend-Signals, 14 August 2007 - 07:03 PM.

[Russ]

FWIW....my AIQ software is giving a 98 up rating tonight for the dow/nyse...that is very high and it would be very rare for it not to lead to a rally.