Where is the Dow & others heading in 2005?

[SOCRATES]

You keep going on about your 10520 area...

You stated that area on Thursday during the day and at the close on Thursday 10520 was dealt with as the market closed at 10546.3. Yes the market was lower on Friday and yes it couldn't move higher then 10520 for a while before closing lower. But 10520 is not a significant level.

Your saying the market closed at 10508.10? No it closed at 10507.97. If your suggesting the market has closed under 10520 due to 10520 being a problem area than I'm affraid I don't agree. Unless you haven't noticed the Dow moved higher by 150 odd points from the lows in two hours. That was powerfull enough in all honesty. How much more could it do? The fact that it ended above 10500 was good enough.

It is patently obvious to me that you are grappling with a series of complex superimposed scenarios you do not understand, and I accept your difficulties, but I am not here to teach you. I simply make statements and point out facts.
Whether you agree or not does not matter to me one jot. The object ot the excercise is to get it right and not to nit pick whether your data shows 10507.97 against 10508.10 which is a pathetic argument.
Insofar as your last three sentences above are concerned you ought to go back on this thread to my posts1523 and 1524 and you will find out who is on the ball and who is not.
I am going to give you a word of advice: I can percieve that you are doing two things:~

1. You are developing opinions ~ wrong, when you insist on developing opinions you become prisoner of your own opinion and cannot respond correctly to what subsequently unfolds in reality, in actuality.

2. You are trying to force ~ wrong, you cannot force. You have to be open minded and available and impartial. This arrives eventually with trading maturity, which takes a long time and a lot of experience. Some people never acquire it.

From the gist of what you say I would be very surprised if you are one day over the ager of 21.

Kind Regards.

 

[SOCRATES]

You called a 10500 - 520 cap 4 trading days ago. So you disagree with some peoples short term bullish sentiment toward 10700 and above.
If you're wrong it could see 10700 if it breaks 10570 this week. If you're right and it falls below 10400 it will test support at 10365 once again and if it breaches it this time it could go all the way down to 10200.
My crystal ball got fogged up at 7.05pm today but I'm still bearish in the longer term.

I am not interested in these silly arguments of who is right and who is wrong. I am far above and beyond that kind of childish obstinate behaviour.But I do assure you that I am open minded and impartial and ready to pounce correctly whichever way it goes, like greased lightning, and equally to get out with the same response when it shows me it is ending. I do not disagree with anyone, I just present the facts as they are and not as a result of wishful thinking or hoping or other nonsense. But how it is that I arrive at pinning tops and bottoms consistently and accurately both in present time and future time is my intellectual property, and very far from guesswork.


Kind Regards As Usual.

 

[User]

Thanks for the charts TS.

Much appreciated.............

 

[peterpr]

ps - rather ironic that it was the statement from the Fed meeting a couple of weeks ago that tanked the market, and now the minutes of the same meeting inspire a major rebound........fickle or what....?

That's am astute observation TS
And it's that fickleness that is signalling problems ahead IMHO. A record trade gap - well above consensus causes the market to re-test what everyone and his dog are watching as major support then, whilst on support, release of the minutes of an FOMC meeting which tanked the market 10 days ago causes a 140 point bullish reversal. The key is tipping points - where bull/bear is finely balanced (almost the definition of major support/resistance) and a determined move confirms matters one way or the other. Yesterday was another of those days The interesting intellectual question is who/what was responsible for the determined bull move? Not that 'interesting intellectual questions' have much to do with profitable trading of course, but they do help to fill those long hours of screen watching. shades of 'The Invisible Hand of the US Government' discussed in another thread if you ask me http://www.financialsense.com/editorials/reality/2005/0403.html

Anyway, those two days have produced my two most profitable trading days y-t-d (although I have to confess to missing the last 40 points of upside yesterday). So frankly the more of that kind of volatility, the better as far as I'm concerned. It's even promted a change to my Sig strapline :!:

 

[macbonzo]

I am not interested in these silly arguments of who is right and who is wrong. I am far above and beyond that kind of childish obstinate behaviour.But I do assure you that I am open minded and impartial and ready to pounce correctly whichever way it goes, like greased lightning, and equally to get out with the same response when it shows me it is ending. I do not disagree with anyone, I just present the facts as they are and not as a result of wishful thinking or hoping or other nonsense. But how it is that I arrive at pinning tops and bottoms consistently and accurately both in present time and future time is my intellectual property, and very far from guesswork.


Kind Regards As Usual.

Well, I have to say, yesterday, did really prove exactly why you must be opened minded.
Fortunately, got short early on, covered, and got long at 7.03, but I was really taken aback by the magnitude of the rally.

At 18.00 the NYSE Advancers numbered 714, while decliners numbered 2001. By 20.00 those figures had been reversed. The Tick Trin was moving so fast it almost made me faint.

It seemed that Nymex crude dropped and bond yields dropped simultaneously, and we got a sharp rally up to 10428. Thereafter, I suspect that we got a huge amount of short covering. It was almost sheeplike. When the Fed minutes came out the market actually dropped 11 points, before the rally came.

I am in no way dismissing TA, but some days you really have to trade what you see, rather than analysing it.

 

[vocalist]

Just wondering,although i'm not into fundementals and please correct me if im wrong, if Sir Alan was really going to allow the markets(bonds as well) to tank right before his and everyone else's eyes in his final year.I would have thought he would be doing everything in his power to talk the markets up and that is precisely what happened yesterday.

The truth of the matter is that how many times can he do this? It just smells of fed manipulation.

The nasdaq chart looks bear ugly with the SPX-Nas difference getting larger and larger.Just take a look.Techs lead the way up and i'm pretty positive that eventually they will lead the way down.The Semiconductor index still ended down yesterday and is still producing lower lows.I would really hate to bet against that market.

 

[macbonzo]

I only trade on a daily basis, but I think what happened yesterday was, the market perceived, that the Fed comments on inflation could have been worse. They still said that they could raise interest rates by 0.5% at any meeting and it would still be "measured". It just happened that the Dow was sitting on year lows and it rallied strongly on the statement.

I agree with you Greenspan is between a rock and a hard place, but with markets, sentiment can change on a near daily basis. We are now looking at a Goldilocks scenario. If Non Farms come in at say 250K+ then market more than likely will sell off because of fears of wage inflation. However, if they come in at 175K, then the market perceives that employers are not recruiting, thus have little confidence in getting future orders.

My own concerns are more oil related. With NYMEX crude, at $52 (having retreated from $58), to what extent will this be inflationary? I will be looking very closely at Q1 results, to see if there is any impact. Already WMT has disappointed as has F and GM. Another problem is the trade deficit. Last month it was $61bn, and it seems to be growing. Finally, one can never rule out some sort of exogenous "shock". Most people think in terms of terrorism, but what would happen if an earthquake flattened Tokyo? Or we got another LTCM?

Regarding Greenspan, he represents continuity. The market likes that. He says very little, but is pretty good at outlining his strategy well in advance. Most of the time his comments are nothing other than "constructive obsfucation". This, after all, is the man who, when proposing to his current wife ( a former NBC business reporter), had to do so twice, because she did not understand him the first time.

 

[peterpr]

..... I am in no way dismissing TA, but some days you really have to trade what you see, rather than analysing it.

That's a fair point but it does rather depend on the timeframes you have in mind for your 'TA' & 'analysing'.

One (of many ) keys to successful daytrading is disciplined realtime use of TA which largely equates to 'trading what you see'.

There may be the odd autistic mind that can see all there is to see in price/volume charts presented real-time. But TA indicators, properly understood, add a lot of potentially useful and otherwise hidden information for most observers. Granted they are all price/time/volume related but they 'do the maths' so-to-speak, and provide a complementary visual perspective. They can also be used to trigger trading signals (as can price patterns of course). That is how I understand and use TA - realtime and in a framework of rigid rules.

I certainly would not have caught the bulk of yesterdays moves by watching the price action alone.

Talk of where things will go next can be interesting but it's largely a diversion and no substitute for clearing the decks - and your mind - and operating your system with no distractions. All IMHO of course

 

[tradesmart]

Brilliant and useful article Peter.......

Of the over 8000 all-stock mutual funds, a mere 497 hold roughly three-fourths of the stock. This is easily a small enough number to pump the market, whether through coordinated buying disguised as programmed trading, or simply a follow-the-leader mechanism. All the other thousands of funds and the millions of individuals around the globe putting their money into these markets can do little more than follow the momentum. No major U.S. stock market writer, advisor or player seems to publicly acknowledge this, as far as I know.

Plunge Protection

Programmed trading in an utterly concentrated stock market pretty much guarantees the possibility of systematic and continual market rigging. But to accomplish this, and coordinate it with the currency and Treasury markets, some sort of orchestrating mechanism would need to exist. It does; it is known as the President’s Working Group on Financial Markets, occasionally referred to in the business press as the Plunge Protection Team. Then President Ronald Reagan signed it into existence on 18 March 1988, with the specific intension to avoid another stock market crash such as that of 19 October 1987.

Confirms what many traders have long suspected; the magnitude and timing of some of these moves/reactions can only be achieved by coordination by the big players - the Wall Street 'bush telegraph' plainly works very efficiently.........no emails.......no phone calls........no trace...

But our only concern is to be on the right side of these sudden changes of direction; not to question them....

Content in the knowledge that the market can stay irrational for longer than we can stay solvent........

 

[SOCRATES]

Yes, correct, the intent behind these sudden outcomes is announced by invisible semaphore in advance of the event, and nearly everyone is desperate to get hold of the signal code book....
Ha ! Ha ! Ha !
Very shrewd, Tradesmart, very droll indeed.

 

[TWI]

Strange how the day the trade deficit hits and all time high and ford motor company debt slips closer towards junk with a negative rating from fitch with US inflation outpacing salaries for the first time in 14 years and with crude that used to be a "problem" above $40 now in the mid 50's the dow can still muster a rally.
Almost makes you believe in all those FED conspiracy theories. Actually if you have a look at how they calculate the CPI (currently known as the "constant Price Index") it reinforces the idea too.

If in any doubt about the state of the US then it may be worth listening to a former FED chairman.
"what can be left to later, usually is -- and then, alas, it's too late."
http://www.washingtonpost.com/wp-dyn/articles/A38725-2005Apr8.html

I have been short for a while now after getting hit hard with a 10900 stop early in Mar on a previous short . I will be amazed, totally amazed, if the dow can put in a significant rally from here.

 

[SOCRATES]

Well, the Hershey Bar has appeared in the window., and greetings from lil' old England again.

Kind Regards As Usual.

 

[User]

Futures are sitting in a very tight range since last nights close. Not much of a reaction to the figures which came out at 1.30 GMT. So lets see what happens in todays session. 10500 will be the play area today. I don't think todays session will be as much fun as yesterday's.....

 

[Peter 1]

How about posting Dow daily charts

Would it be possible for Dow traders to post charts as well as comments as this would be very helpful for new members ?

Thanks

 

[kriesau]

It's bumped up against 10510 three times in 30 minutes and is now trying again. At the moment it seems to be in a narrow trading range of 10495 - 10510. It's at varience with the Nasdaq and S & P who are both down 0.4% and 0.3% respectively. I'm begining to suspect yesterdays rally was overdone and it could be ready to head south again.

 

[TheBramble]

Well, the Hershey Bar has appeared in the window.

Rumour has it, he doesn't know Jack....

 

[tradesmart]

Posted by Joules MM1:-
Elliott wave analysis is voided when missing counts

Impressive lookin enough those charts. Are there counts? Degrees of trend? Is the arc an internal concept of left/right shoulder anticipation (reference to a cycle) or an arbitrary vision?

Feel free to post your EW charts for the Dow with the features you refer to or expect to see – I’m sure everyone will be interested……

And if you want to ask Charlie Miller about his EW analysis, his email address is [email protected] and anyone who wants to get on his free indices newletter distribution list can request an email copy from the same address – Charlie makes some great calls, predicting the ’04 10750 top when it was in the 8000’s...!

 

[SOCRATES]

Rumour has it, he doesn't know Jack....

It has nothing to do with Jack Hershey, Bramble.

It was a coded indication for friends in the know on the other side of the pond, that the Dow would flitter sideways at the opening, which it has done.

There is no need for you to know these things, but now that it is over, I can tell you.

Kind Regards As Usual.

 

[SOCRATES]

And now tea time, because in 'lil Old England, everything stops for tea, today at the half past precisely.

 

[TheBramble]

It has nothing to do with Jack Hershey, Bramble.

It was a coded indication for friends in the know on the other side of the pond, that the Dow would flitter sideways at the opening, which it has done.

There is no need for you to know these things, but now that it is over, I can tell you.

Kind Regards As Usual.

It was an unmissable opportunity for levity Bertie, knowing your fondness for Jack...nothing more.

As for coded messages - if all you've got is t2w for your coded semaphores - I'll be less amazed than I thought I was going to be...

...And if they're 'in the know' - why do they need to be alerted anyway??? Life! It's full of puzzles....

And before you dive too deeply into the condecension, you'll recall (I hope) that the sideways drift was exactly my position when I posted late last night...

If you're a good lad, I'll let you know how I do it.