Trading the SPX

[ammo]

As I said - 2 consecutive down days: that's the washout. This proves the strength of this market.

Good trades,
Andre

I see this on this site a lot.rather than admit our mistakes when the mrkt so tactfully ...corrects us,this one actually was correct to begin with,we go back to a post and correct it,the mrkt constantly reminds us who's right and if we were able to predict that we wouldn't be searching for hours nightly, looking for the keys to the puzzle...i often tell another trader when he gets a brainstorm ,it goes against him and everyone else is wrong,YOU'VE GOT 3 HOLES IN YOUR HEAD AND YOU'RE ONLY USING 1,this rally that caught you short was bouncing off a support line but a weak rally,low volume.short squeeze,may become real after bernankes jibberish,its all a game of poker between the big players,we are just the wait staff and serve them drinks for tips,pick up some tip here and there,never assume after a few profitable months that you have a handle on it,you are just the best waiter.

 

[Mr_Stochastyk]

We may see another pull back to the 1440-1445 area next week. I'll be watching them. The weakness of these pull backs and the lack of fear and volatility has been the strength of this market recently. If this does not change we may easily reach 1500-1550 levels by June.
Good luck
Andre

 

[ajaskey]

We may see another pull back to the 1440-1445 area next week. I'll be watching them. The weakness of these pull backs and the lack of fear and volatility has been the strength of this market recently. If this does not change we may easily reach 1500-1550 levels by June.
Good luck
Andre

I don't think there is a lack of fear. Any time we go down 1% the shorts come out. The only buyers of this market are companies through buybacks and mergers. Everyone else is either on the sideline or short. When anyone does go long they sell it on the first whiff of downside - often going short after closing the long positions.

Because companies with huge cash balances which increase each quarter are buying the stock, volatility is down. There is a huge bid under the market but it isn't from anyone but insiders.

 

[ammo]

there is a lot of money in india and china,looking for a safe return,china said they were gonna buy fewer us bonds,they are reinvesting in their own countries,but itching to invest here,that might have this market staying up.connect the may and nov his and you get our resistance lines,aug los and last week in nov los and you see where we broke support,and now nibbling at the resistance line,feb 7 and feb 9 his are our present support ,should get a big move early this week ,i think andy is right about basing here,this mrkt isn,t pulling back,and stoch your right about 1440 the next lo 1444 and 1436.I met a guy last night who does advertising for the big car dealers in chicago and he said china is poised to flood our U.S. with cheap luxury cars,don't know if thats true but their is just so much cash out their they can't invest it all

 

[Mr_Stochastyk]

...
Because companies with huge cash balances which increase each quarter are buying the stock, volatility is down. There is a huge bid under the market but it isn't from anyone but insiders.

And that's exactly how it works, I am afraid. There is no fear and the insiders: funds, companies, pension funds - you name it, are not selling during the down moves. On the contrary, they hold huge long positions, for example, they are long over 5 bil in March options contracts. They do not participate fully in down moves either - that's why the pull backs are so shallow. One has to be crazy to hold a short position here... but, of course, this may change in a matter of days. Today, my guess is that they will continue to move higher
good trades,
Andre

 

[ajaskey]

From what I am seeing in the data, there has been a huge net outflow from US equities since May06. All money is going outside the US. Free AMG data (http://www.amgdata.com) shows this and other other for-pay services I read show it better. The only bid is insiders who are historically correct when they move as one. If the insiders thought the economy and business was bad (and would be bad next year) they would not be buying. If they thought a recession was coming then they would be selling. Sure, there are always individual companies that are wrong. But when they all move together they will be correct eventually.

Since there is little speculation in the market, I assume it is valued near the low end (of whatever value is). As long as the world's board of directors is collectively right, then the upside move will be quick and violent when speculation begins. It will move far beyond the top end of "value" for some period of time. All it will take is a catalyst - such as the Fed cutting to save the sub-prime lending market. Democrats are in control now and Barney Frank was all over Bernanke about needing a cut to help the "peeps"...

 

[Mr_Stochastyk]

From what I am seeing in the data, there has been a huge net outflow from US equities since May06. All money is going outside the US. Free AMG data (http://www.amgdata.com) shows this and other other for-pay services I read show it better. [...]

Yes, I agree, AMG data shows a flattening cumulative equities inflows curve since May06. On the other hand, the ETFs cum. inflows are growing steadily. The same for money mkt. funds. This is a mixed picture and it doesn't help much if somebody wants to predict the top..
Andre

 

[Pat494]

I dont know if anyone pays much attention to candlesticks but there was an engulfing bull yesterday and a hammer on Tuesday. Strong UP indicators !!!!!!!!!!!

 

[Atilla]

I dont know if anyone pays much attention to candlesticks but there was an engulfing bull yesterday and a hammer on Tuesday. Strong UP indicators !!!!!!!!!!!

I have it at it's upper band ranges around 1460s and expecting a fall to 1440 regions. I'm bearish.

On my hourly charts the S&P has broken downwards out of BolBands at 1457.3 and so after the news I'm expecting a repeat of yesterday or worse without the bounce.

 

[Hook Shot]

I often find when shorting is tempting the market goes higher .... and pullbacks are small. Sod's Law!
We need more than 4 down days to start thinking bearish me thinks either that or a couple of wide range downs....

 

[FetteredChinos]

I dont know if anyone pays much attention to candlesticks but there was an engulfing bull yesterday and a hammer on Tuesday. Strong UP indicators !!!!!!!!!!!

says who.. have you actually tested this?

if you look at some data, you may find it to be the other way around.. certainly with engulfing candles..

i did some research a while back, and found that on the ftse 100, bearish engulfing candles indicated outperformance the next couple of days, and that bullish engulfing candles broken even (roughly) which is not bad over a 25 year bull market.

FC

 

[Atilla]

says who.. have you actually tested this?

if you look at some data, you may find it to be the other way around.. certainly with engulfing candles..

i did some research a while back, and found that on the ftse 100, bearish engulfing candles indicated outperformance the next couple of days, and that bullish engulfing candles broken even (roughly) which is not bad over a 25 year bull market.

FC

Well S&P down but now wondering if it'll bounce as it did yesterday. Looks like it is. On cue at SARs.

I'm still bearish but have no idea how it can keep bouncing off all this bad news...

I think it may touch 1457 - 1460 and collapse back down again or go up through the chimney...

 

[Pat494]

says who.. have you actually tested this?

if you look at some data, you may find it to be the other way around.. certainly with engulfing candles..

i did some research a while back, and found that on the ftse 100, bearish engulfing candles indicated outperformance the next couple of days, and that bullish engulfing candles broken even (roughly) which is not bad over a 25 year bull market.

FC

Interesting point. But this is how my charting prog shows it :-

engulfing bulls
10/1/07 :arrowu:
13/12/06 :arrowu:
21/11/06 :arrowu:
6/11/06 :arrowu:
23/10/06 :arrowu:
16/10/06 :arrowu:
1/9/06 :arrowu:
2/8/06 :arrowu:
3/7/06 :arrowu:


Inverted hammer
15/12/06 :arrowd:
14/08/06 :arrowu:


Engulfing Bear
29/09/06 :arrowu:
27/07/06 :arrowu:


Hammer
24/10/06 :arrowu:
08/06/06 :arrowu:

As one can see from the above results not perfect but still better than a guess

 

[Bez]

Doesn't Nison imply that hammers and engulfing patterns work far better during a down trend phase.

The same pattern at the latter part of a bull phase has a bearish implication...

:?:

 

[Pat494]

Bez
Maybe I should dig out his book sometime. Its so long since I read it
I am hoping that this is just a bit of drawdown before it pushes North again

 

[ajaskey]

I'm still bearish but have no idea how it can keep bouncing off all this bad news...
.

What "bad news" is that? Even if it was "bad newz", you do know that the market trades today on newz for this summer -- and traded on today's newz several months ago, no?

 

[ammo]

Doesn't Nison imply that hammers and engulfing patterns work far better during a down trend phase.

The same pattern at the latter part of a bull phase has a bearish implication...

:?:

we need a catalyst for blaming a selloff on.
,do you know how to find mondays economic calendar anyone,that's the 26th ,i think that was near your and ajasky's projected date.

 

[Atilla]

What "bad news" is that? Even if it was "bad newz", you do know that the market trades today on newz for this summer -- and traded on today's newz several months ago, no?

Ok so you are a pure TA.

Rising CPI and oil price not news for Fed or BoE or interest rates or prices.

But no ofcourse you already knew this as it was already in the price on Tuesday and you made a mint yesterday - just as you traded on todays news last year.

Good for you... What a clever boy you are.

And what does your newz tell us about the markets 6 months from now. Don't be shy or bashful - do tell old boy...

 

[Atilla]

If history repeats it self I'm expecting another drop as in the last couple of days to 1455 regions before pickup.

Last two have been around 3:00 - 3:30 so based on averages I'd guess 3:15 GMT.

So I'll be shorting S&P for starters.

 

[Mr_Stochastyk]

The futures indicate that a first hour spike to 1465-1470 is possible. I also see a lot of activity in pre open SPY trading.

This may be a good opportunity to close our longs..
Andre