7 replies to this topic

[watson]

Everyone seems to have jumped on the bullish bandwagon so fast here that I'm wary. The move up from the August low looks like an A-B-C or abc-X-abc. The first part (A or the 1st abc) definitely looks corrective, and the third part (C or the 2nd abc) is perhaps a fake-out. The rally after the Fed announcement yesterday contained a diagonal triangle, suggesting weakness rather than underlying strength, in spite of the size of the move. Any thoughts?

[OEXCHAOS]

I still see a lot of Bearishness, after a big rally. I'll be closely watching for renewed Bullishness, however. I just don't see it yet. Mark

[fib_1618]

The rally after the Fed announcement yesterday contained a diagonal triangle, suggesting weakness rather than underlying strength, in spite of the size of the move.

Sorry...but what time frame did you see a diagonal triangle? The rally after the announcement looked impulsive to me.

The move up from the August low looks like an A-B-C or abc-X-abc. The first part (A or the 1st abc) definitely looks corrective, and the third part (C or the 2nd abc) is perhaps a fake-out.

With yesterdays lopsided positive breadth and volume plurality, maybe the corrective look was a simple series of 1's and 2's leading to the post FED impulsive move?

Fib

[OEXCHAOS]

Hulbert just reported essentially no rise in Bullishness on the cut.

From MarketWatch:
Consider the latest reading of the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest. As of Tuesday night, the HSNSI stood at just 17.4%.
That represents just a 3 percentage point increase for the day, which is surprisingly modest, given the 336-point rally in the Dow Jones Industrial Average

[watson]

The rally after the Fed announcement yesterday contained a diagonal triangle, suggesting weakness rather than underlying strength, in spite of the size of the move.

Sorry...but what time frame did you see a diagonal triangle? The rally after the announcement looked impulsive to me.

Here's the SPY 1-minute chart from yesterday, 9/18/2007:

Yes, the move up from the Fed announcement felt impulsive, but C waves feel impulsive, sometimes exaggeratedly so.

The diagonal triangle wasn't at the top, but usually diagonal triangles only start appearing near the end of a move, when there's underlying weakness.

Also, notice all the overlapping waves.

The move up from the August low looks like an A-B-C or abc-X-abc. The first part (A or the 1st abc) definitely looks corrective, and the third part (C or the 2nd abc) is perhaps a fake-out.

With yesterdays lopsided positive breadth and volume plurality, maybe the corrective look was a simple series of 1's and 2's leading to the post FED impulsive move?

Fib

Could be. If this move up really is impulsive, the count would need to be something like that.

But if that's how the majority is interpreting it, then that interpretation is wrong. (Most people don't do EW analysis, of course, so what I really mean is: If the majority is behaving as if that's the proper interpretation, then that interpretation is wrong.)

[watson]

Hulbert just reported essentially no rise in Bullishness on the cut.

From MarketWatch:
Consider the latest reading of the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest. As of Tuesday night, the HSNSI stood at just 17.4%.
That represents just a 3 percentage point increase for the day, which is surprisingly modest, given the 336-point rally in the Dow Jones Industrial Average

That's interesting. On the hand, Birinyi's Ticker Sense website had blogger sentiment tying the 6/18/2007 all-time bullish record, at 50% bullish -- and this was before the Fed announcement.

If we are approaching a top, although bullishness would rise, I would not expect bullishness necessarily to hit a mania peak like at the top of a bubble. After all, it would just be the top of a bear market rally.

[SemiBizz]

Well... here's what the volume says...



http://bigcharts.mar...&mocktick=1.gif



We're still within the impact zone of the "Twin Towers" of 8/8 and 8/9... the two highest volume days in Nasdaq History... in short, the doji you see here on the daily on less than 2/3 the volume over those highs gives an impression of air sickness... if there's a gap down tomorrow, it gets uglier from there. Basically, Today's doji is saying " What in the Hell am I doing up here?"



We have already failed once at this price level, daily trend is still pointing Down.

[OEXCHAOS]

Hulbert just reported essentially no rise in Bullishness on the cut.

From MarketWatch:
Consider the latest reading of the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest. As of Tuesday night, the HSNSI stood at just 17.4%.
That represents just a 3 percentage point increase for the day, which is surprisingly modest, given the 336-point rally in the Dow Jones Industrial Average

That's interesting. On the hand, Birinyi's Ticker Sense website had blogger sentiment tying the 6/18/2007 all-time bullish record, at 50% bullish -- and this was before the Fed announcement.

If we are approaching a top, although bullishness would rise, I would not expect bullishness necessarily to hit a mania peak like at the top of a bubble. After all, it would just be the top of a bear market rally.

Well, I participate in that poll and I interpreted that result as Bearish, but that was this weekend. The data that I saw Monday turned my opinion around for Tuesday. I'm of the opinion that the Blogger poll group opinion is pretty nimble and short-term. Take a look at the May, June, July data.

I'm coming off of some pretty serious beared up readings. That suggests higher prices longer term. Near term, a correction is reasonable, but I'm doubtful that it amounts to much, since folks are so quick to get Bearish and the Fed is pumping and has demonstrated that they are willing to take aggressive measures to maintain liquidity.

Mark