29 replies to this topic

[ogm]

Just a tidbit of information as an example.. Mortgages in Russia were provided by the US banks, with Russian banks only serving as intermediaries. There is no social security numbers sytem or ability to track borrowers and their creditworthiness information in any reliable way in Russia at all. And yet the US banks were handing out mortgages, car loans, etc left and right. I bet the same with India, etc.... This is a global credit system and its in trouble. Even if Ben manages to unclog it a little, the ability to create massive credit going forward is severely crippled, so global growth theory is shot even now. But we have only seen the top of the iceberg of the bad loans. Subrime is nothing comparing to the stuff that is still left out there. Monthly charts are roilling over.

[NAV]

Nav,

that momentum price redevergence that you find has a favorable outcome...i am wondering how it looks different compared to 2000?

same set up then with momentum rolling down but price holding...I fact i would argue that the armies are leaving the generals!!!

IC,

Negative divergence and reverse divergence are different things. You could do a search on the web and i am sure you will find plenty of articles on them. What we had was a series of negatively diverging tops in 2000 and then it fell off the cliff. What we are dealing now is a potential rev divergence setup. Plus comparing with 2000 is meaningless ( The A/D line diverging for nearly 2 years, the out of the charts bullish sentiment, the massive public involvement, running up the garbage stocks to the moon, IPO craze). Geez what a party time that was !....fond memories.

Can the indicator cross below zero and go to a bear market ?. Sure it can. You could have got the same feeling or illusion during 2004 bottom and 2006 bottom, that the bottom was about to fall out. But we moved higher.

This indicator is a demarcation zone between the bull and bear. If you are predicting that the indicator will cross below the zero line, then you already have made up your mind, in which case you don't need the indicator. Indicator just determines the context. Now when i get a IT buy signal, while the indicator is in the bull context, i will have to give the benfit of doubt to higher prices. As simple as that.

Now if i get a IT sell and the indicator remains above zero, will that be a bear market ? Heck no !. That's how so many bull market tops have been called in vain during the last few years. If the IT goes to sell and the the indicator flips below zero, yes then you have a potential bear market. That's when i would get defensive about my financial investments. Until then, "dont' worry be happy" will be my attitude towards life !

[NAV]

This time ain't gonna be different. The bull is not going to end without Euphoria.

i think the euphoria was the peak of the housing market two years ago.

That was the euphoria of a sector called "Housing", not the stock market.

were you using different indicators in 2000?

My system was still in development in 2000.

My FF is welcome to the bear market.

Here's a link to your other thread: http://www.traders-t...?...81091&st=10

IT

Be always late in calling a bear market. BTW, what's your definition of a bear market ?

Edited by NAV, 16 December 2007 - 12:55 AM.

[NAV]

There is euphoria, its just not in the place everyone is looking here.

I feel Euphoric

[Tor]

Just a tidbit of information as an example.. Mortgages in Russia were provided by the US banks, with Russian banks only serving as intermediaries. There is no social security numbers sytem or ability to track borrowers and their creditworthiness information in any reliable way in Russia at all. And yet the US banks were handing out mortgages, car loans, etc left and right. I bet the same with India, etc....

This is a global credit system and its in trouble.

Even if Ben manages to unclog it a little, the ability to create massive credit going forward is severely crippled, so global growth theory is shot even now. But we have only seen the top of the iceberg of the bad loans. Subrime is nothing comparing to the stuff that is still left out there.

Monthly charts are roilling over.

there are 3 billion people in china and india who may be looking for credit. by the way, they only have a 10% internet penetration rate so far anyway. the west its 80% plus. apparently they like the internet very much.

housing and mortgages is the only effective way of population control. policy makers know this, and this my hunch why sub prime was allowed, why it is being bailed out and why it will continue.

its an interesting time I think. may be wrong of course.

[KnowNuttin2]

All the following thoughts have nothing to do with what the market will do in the next few hours or days. The market remains in a very whippy zone ST.

I spent a few hours looking at various e-wave possibilities (IT and LT), wave channelling, weekly and monthly momentum, the A/D line etc. The massive intermediate term congestion pattern will resolve to the upside. I am not saying "may" here. I am saying "will". 11/26 was the IT bottom and i posted about my IT buy signal here.

http://nav-ta.blogsp...-it-bottom.html





My bull market momentum indicator is also reaching a level that has marked major IT bottoms in the past. What is most interesting here on that indicator is that SPX is making a series of higher bottoms since August, while the momentum is rolling down in a series lower lows. That's a classic reverse divergence setup. We acheived the trip to zero line on that indicator without causing any technical damage on the LT charts. What a beauty !. You gotta love TA.

The amount of time consumed by this consolidation attests to the magnitude of ugliness to come on the upside. During the last 4 years, there has never been a period during which the market has been pounded with so much of bad news. This time the bad news have been real and not perceived. The market's resilience in absorbing all this bad news and yet going sideways and not breaking down, also attests to the strength of the bull market and is saying in subtle terms that the bull market ain't complete yet !.

This time ain't gonna be different. The bull is not going to end without Euphoria. Last year, we saw huge number of bear sites and blogs which were closed down after the upside blast. 2008 will be worse. There will be massive capitulation, by the time this is all said and done. Bear market seems the most easy and obvious choice here. When was the last time the entire planet predicted a recession ? When was the last time the entire planet predicted a bear market ? When was the last time the barbers and the dentists got defensive at the bull market tops ? Before the bear hits, there's fours years of inventory to be unloaded on the mass. They will accomplish it, as they always do, with a near vertical rally. The market is lulling everyone into a state of beleif that this volatility is perpetual. One of these days, the market will take off and never look back. It's comiiiiing !!


As for the housing problems and the wall of worry, i wrote this in my blog, in 2006

Bull markets do not begin when the economy is in a state of utopia. It needs that constant wall of worry, to keep the majority from participating. I think the housing market decline over the next few years from the mania top of 2005 will provide fresh fodder for the bears to worry and the wall of worry for the bull market to climb.

http://nav-ta.blogsp...24_archive.html


The subprime news has been digested, assimilated and excreted by the market. If anything, it will be a great wall of worry to climb going forward.TWT.

I know a lot of folks hate me here for being a bull. But it's the grand irony of our times that bulls are hated in a bull market. Feel free to disagree with me. But no hate mails please !

Happy holidays to all. Will see you folks in 2008.

Nav...Excellent work and greatly appreciate your cogent arguement. Why should anyone hate you for being a bull. I come here to vent both sides and exchange ideas. That is the essence of this thread. Thanks for your contribution and always have thick skin...best trading. I'll post my ideas later.

[KnowNuttin2]

NAV, as much as i would like to agree with you when youy say "they will achieve to unload... etc" fact is that banks have not. as for the euphoria, this was a housing, finance and energy led bull mkt and i can report:
1) housing: crazy euphoria in the US, UK, Spain, Ireland, Greece, the whole of Eastern Europe and plenty more. As we know, everyone and their mum wanted to "get on the ladder".
2) finance: originate & distribute, structured products galore, derivatives derivatives and more derivatives and in the end everyone is "insured" with everyone. this can be called northing else but euphoria. only in germany EUR 200bn of structured products sold to RETAIL!! check on the BIS report and u will see that this is actually still going on. although rumour has it that suddenly banks, of which u wudn't expect it, have stopped making mkts in very much standard first generation vanilla options... we will see who that is about in the future...
3) energy: dunno how many "oil $100" books have been written recently but there are many...

to sum it up, the banks took a larger bite than they cud swallow and they have at this moment, excl the SIV related stuff, around 550bn $ worth of unsold deals in their books. congrats! of course they are still trying to sell the BRIC story, the decoupling story, the commodities story etc...every trick in the book is good enuf in order to lure people in. wasn't it the same in 2000-2001 where a lot of people bought into a falling mkt just to find themselves holding the bag?

Agree...And Jan 2001 interest rates were cut and cut again and the analysis was we're up 20% a year later based on history.... Cnbs hammered this home everyday to keep people bullish. Lies, darn lies and statistics!

[KnowNuttin2]

Just a tidbit of information as an example.. Mortgages in Russia were provided by the US banks, with Russian banks only serving as intermediaries. There is no social security numbers sytem or ability to track borrowers and their creditworthiness information in any reliable way in Russia at all. And yet the US banks were handing out mortgages, car loans, etc left and right. I bet the same with India, etc....

This is a global credit system and its in trouble.

Even if Ben manages to unclog it a little, the ability to create massive credit going forward is severely crippled, so global growth theory is shot even now. But we have only seen the top of the iceberg of the bad loans. Subrime is nothing comparing to the stuff that is still left out there.

Monthly charts are roilling over.

OMG...Thats great info...where can i confirm and read this. If it's true OH MY G_D. We can forget about the wwgrowth story.

This time ain't gonna be different. The bull is not going to end without Euphoria.

i think the euphoria was the peak of the housing market two years ago.

That was the euphoria of a sector called "Housing", not the stock market.

were you using different indicators in 2000?

My system was still in development in 2000.

My FF is welcome to the bear market.

Here's a link to your other thread: http://www.traders-t...?...81091&st=10

IT

Be always late in calling a bear market. BTW, what's your definition of a bear market ?

Indexs below the 200 day. Not 20% loss that others believe. ie Rut and Sml.

[KnowNuttin2]

All the following thoughts have nothing to do with what the market will do in the next few hours or days. The market remains in a very whippy zone ST.

I spent a few hours looking at various e-wave possibilities (IT and LT), wave channelling, weekly and monthly momentum, the A/D line etc. The massive intermediate term congestion pattern will resolve to the upside. I am not saying "may" here. I am saying "will". 11/26 was the IT bottom and i posted about my IT buy signal here.

http://nav-ta.blogsp...-it-bottom.html





My bull market momentum indicator is also reaching a level that has marked major IT bottoms in the past. What is most interesting here on that indicator is that SPX is making a series of higher bottoms since August, while the momentum is rolling down in a series lower lows. That's a classic reverse divergence setup. We acheived the trip to zero line on that indicator without causing any technical damage on the LT charts. What a beauty !. You gotta love TA.

The amount of time consumed by this consolidation attests to the magnitude of ugliness to come on the upside. During the last 4 years, there has never been a period during which the market has been pounded with so much of bad news. This time the bad news have been real and not perceived. The market's resilience in absorbing all this bad news and yet going sideways and not breaking down, also attests to the strength of the bull market and is saying in subtle terms that the bull market ain't complete yet !.

This time ain't gonna be different. The bull is not going to end without Euphoria. Last year, we saw huge number of bear sites and blogs which were closed down after the upside blast. 2008 will be worse. There will be massive capitulation, by the time this is all said and done. Bear market seems the most easy and obvious choice here. When was the last time the entire planet predicted a recession ? When was the last time the entire planet predicted a bear market ? When was the last time the barbers and the dentists got defensive at the bull market tops ? Before the bear hits, there's fours years of inventory to be unloaded on the mass. They will accomplish it, as they always do, with a near vertical rally. The market is lulling everyone into a state of beleif that this volatility is perpetual. One of these days, the market will take off and never look back. It's comiiiiing !!


As for the housing problems and the wall of worry, i wrote this in my blog, in 2006

Bull markets do not begin when the economy is in a state of utopia. It needs that constant wall of worry, to keep the majority from participating. I think the housing market decline over the next few years from the mania top of 2005 will provide fresh fodder for the bears to worry and the wall of worry for the bull market to climb.

http://nav-ta.blogsp...24_archive.html


The subprime news has been digested, assimilated and excreted by the market. If anything, it will be a great wall of worry to climb going forward.TWT.

I know a lot of folks hate me here for being a bull. But it's the grand irony of our times that bulls are hated in a bull market. Feel free to disagree with me. But no hate mails please !

Happy holidays to all. Will see you folks in 2008.

Nav...There was tremendous Euphoria from Sept to early Nov. Please look at GOOG, Bidu, AAPL,SRGL,SPWR,GS,etc. 40% to 100% up moves. Plus a vertical move for India and China. All this while the A/D lines were very weak. We might not break down until we see first qtr earning in Jan. BUT, the forward looks are going to be very weak 2nd qtr numbers and we'll most likely go down. Please remember that this bull mkt is 4 1/2 years long in the tooth.

If COMPQ goes back to 2100 support area. We'd reset and trade the upside. RUT looks like 675-700 as a great buy area. WLSH at 12500-13000. INDU at 11700-12000. I don't know if we grind down to these levels or crash to them....but if we do, good gains for the rally after with low risk profile.

[kc135a]

All the following thoughts have nothing to do with what the market will do in the next few hours or days.

Hi Nav

I don't use any of your stated methods but have been coming up with the same answer for the last 2-3 years.

The low in 2008 will be mid August followed by a moon shot up topping as early as April 2009, more likely September 2009, and least likely October 2010. Then and only then will the bears have their day and it will be quite the day.

The next President will be the Hoover of our time. Until then, party with da_chief.

KC