There may be an attempt to go higher on Monday and Tuesday (5th/6th) but i can not seeing it lasting. We should be going down major starting Tues evening and Wednesday and lasting for about 1 to 10 days. I would be looking to watch on tuesday evening and getting my shorts ready, Although i have to admit i already have a couple on, Kept my stops away, after all you have to be in the game to play the game. Good look to all
Let's get back to basic TA. The trend starts to change on a lower high AND a lower low. Today's close has seen a lower high, possibly, on the 10 min chart. I would say we need a lower low below 10,320 before getting excited about shorting. IF the top of this trend was to be 10,455 and you got your short in about there, then you made a lucky guess. IF we rally above 440 tomorrow, then I guess you'll have to wait a bit longer for confirmation of a short. Guessing the market is good fun and great for the ego when you get it right but no laughing matter when it starts to hurt your bank account. There is a big difference between a guess and a decision based on judgement, be it an experienced judgement, or an inexperienced one. We were all beginners once and only learnt through self analysis and posting those thoughts for others to comment on......
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There's still no top formed.
This trend isn't going to just roll over and drop - it's going to form a top formation first, and there's no sign of that yet.
And as this is one mighty bull run, then the top will have to form over at least a week, possibly more. No top, more up.
This trend isn't going to just roll over and drop - it's going to form a top formation first, and there's no sign of that yet.
And as this is one mighty bull run, then the top will have to form over at least a week, possibly more. No top, more up.
The General
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All,
For what it's worth - with all you boys wanting to short, the smart money will be buying big time.
The General.
For what it's worth - with all you boys wanting to short, the smart money will be buying big time.
The General.
Something just isn't right though. The smart money may well be buying but what is this based on? TA is fascinating and offers lots of clues to the 'immediate future' direction of the market, but it doesn't tell you if the 'numbers' don't add up.
I know this is a bit 'chicken or egg' but surely the 'numbers' have to make sense before the TA can hold value.
The 'numbers' I refer to is summarised by the following extract, taken from a site that I found in my quest to figure out exactly what is really behind this rally...
I think that we are at an important point and that we are going to see a down turn.
Now let's talk about some strange things that are going on. I have spoken about the twin deficits for a long time. The text books say that when there is this kind of deficit situation we should expect inflation. And, inflation equals higher interest rates. Well the 90 day T Bill continues to fall in rate. And that is the part of the market that the FED really does control. So may be that the FED is expecting that the economy is really weak and we are not really getting 8+% growth. That may be the number is wrong.
Does it make any sense that we are not getting job growth when there is 8+% GDP growth.
Sitting tight for now!
Victor Weintraub
I know nothing of the above person but he has, in my opinion, hit the nail on the head.
I know this is a bit 'chicken or egg' but surely the 'numbers' have to make sense before the TA can hold value.
The 'numbers' I refer to is summarised by the following extract, taken from a site that I found in my quest to figure out exactly what is really behind this rally...
I think that we are at an important point and that we are going to see a down turn.
Now let's talk about some strange things that are going on. I have spoken about the twin deficits for a long time. The text books say that when there is this kind of deficit situation we should expect inflation. And, inflation equals higher interest rates. Well the 90 day T Bill continues to fall in rate. And that is the part of the market that the FED really does control. So may be that the FED is expecting that the economy is really weak and we are not really getting 8+% growth. That may be the number is wrong.
Does it make any sense that we are not getting job growth when there is 8+% GDP growth.
Sitting tight for now!
Victor Weintraub
I know nothing of the above person but he has, in my opinion, hit the nail on the head.
fist of all i'd like to say that this is coming from a very new trader using the very basic TA tools.
I think that it will form a support at about 10370 maybe tmro or the day after and then go back up. I dont know what it will do after that and quite frankly my TA isn't good enough yet to give me an idea.
What do you guys think? This analysis is based on basic support/resistance. The support being the high reached on the 23/12/03.
I think that it will form a support at about 10370 maybe tmro or the day after and then go back up. I dont know what it will do after that and quite frankly my TA isn't good enough yet to give me an idea.
What do you guys think? This analysis is based on basic support/resistance. The support being the high reached on the 23/12/03.
joffliver,
agree with your points that something smells dodgy,but ultimately the market is right.It's no good being short at 9500 believing this is the case.
The Fed is pumping in so much liquidity that needs to find a home,in turn pushing up values.I agree that none of the fundamentals really support this,and at present the US is a case of 2+2=5,but with so many $ flying around looking for a home none of this is being considered.At present logic has left the building.
Incidently,now if US investors who appear euphoric with the Dows return to 10450 were to cash in say $ 100,000 of stock,they'd have a nasty surprise if they wanted to buy that retirement home abroad. They'd have lost 30-40% purchasing power since last time Dow was at 10450 in 2002.
Of course this works in the favour of oversea investors who are looking at a Dow after currency moves of 8500.This will only have a temporary effect,for if the $ was to fall another 30% from here,the Dow would need to reach 14000 just to stand still.
Interesting times indeed...in fact we may be about to see and live through what future generations will be reading and studying in history books.
cheers
agree with your points that something smells dodgy,but ultimately the market is right.It's no good being short at 9500 believing this is the case.
The Fed is pumping in so much liquidity that needs to find a home,in turn pushing up values.I agree that none of the fundamentals really support this,and at present the US is a case of 2+2=5,but with so many $ flying around looking for a home none of this is being considered.At present logic has left the building.
Incidently,now if US investors who appear euphoric with the Dows return to 10450 were to cash in say $ 100,000 of stock,they'd have a nasty surprise if they wanted to buy that retirement home abroad. They'd have lost 30-40% purchasing power since last time Dow was at 10450 in 2002.
Of course this works in the favour of oversea investors who are looking at a Dow after currency moves of 8500.This will only have a temporary effect,for if the $ was to fall another 30% from here,the Dow would need to reach 14000 just to stand still.
Interesting times indeed...in fact we may be about to see and live through what future generations will be reading and studying in history books.
cheers
Interesting points, 2468steve.
Does this mean that there could be a sell-off should the $ regain some strength or further buying if the $ sinks some more?
It would put the fed in an interesting position if this were the basis of stock trading. Its just that point made in my last reply about inflation that's niggling
Does this mean that there could be a sell-off should the $ regain some strength or further buying if the $ sinks some more?
It would put the fed in an interesting position if this were the basis of stock trading. Its just that point made in my last reply about inflation that's niggling
But remember most Americans like to stay in the usa and not venture out, I guess they like their own meat, There is a high percentage of them who don`t even have passports let alone buying property abroad, I go to america alot and have spoken to many and i mean many americans and they seem to like it there. So i guess a dollar will buy you errrrr a DOLLAR.
Cricket,
agree,even George Dubya had to be shown where Kosovo was on a map.
Joffliver,this would also apply to imports,with the US decreasing it's manufacturing base.The US is importing more than it exports and those imported goods will all become more expensive to US consumers.Many US companies are now relocating overseas to cut costs to compete.Can they see whats coming??
If the Fed wants to protect the $ they'll have to raise interest rates at some point,but at present it appears they want to inflate the debt away by passing it overseas by letting the $ fall.This is contrary to the so called "strong dolar policy" hyped by US politicians.
The market at present appears not to care either way.A $ sell off is greeted with" oh great,more profits for our exporters,lets buy stock" and $ strength is received with"oh great,the economy is booming,lets buy stock"
Sentiment and money supply is driving this market up.When either changes or is cut off...????
M2 money supply is contracting and business loans are not picking up,this is not what the Fed wants.If business do not think they can expand and make profits by taking out loans at a meagre 1% things may be more dire they many are led to believe IMO..
cheers
cheers
agree,even George Dubya had to be shown where Kosovo was on a map.
Joffliver,this would also apply to imports,with the US decreasing it's manufacturing base.The US is importing more than it exports and those imported goods will all become more expensive to US consumers.Many US companies are now relocating overseas to cut costs to compete.Can they see whats coming??
If the Fed wants to protect the $ they'll have to raise interest rates at some point,but at present it appears they want to inflate the debt away by passing it overseas by letting the $ fall.This is contrary to the so called "strong dolar policy" hyped by US politicians.
The market at present appears not to care either way.A $ sell off is greeted with" oh great,more profits for our exporters,lets buy stock" and $ strength is received with"oh great,the economy is booming,lets buy stock"
Sentiment and money supply is driving this market up.When either changes or is cut off...????
M2 money supply is contracting and business loans are not picking up,this is not what the Fed wants.If business do not think they can expand and make profits by taking out loans at a meagre 1% things may be more dire they many are led to believe IMO..
cheers
cheers
Airthrey Capital
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I have to admit that I too have found the recent surge in the Dow a little perplexing given the underlying fundamentals. However I do think (IMHO) that there is a possible reason for the recent movements.
I suspect that some of the major financial institutions, particularly pension funds and mutuals, have been buying March futures towards the end of this year purely for asset allocation purposes.
In other words, institutions are expecting to buy cash equities at the beginning of 2004, and are allocating a percentage of those funds into the futures markets until then (thus pushing the Mar futures prices higher)
I suspect that the institutions will start to sell the shit out of the March future early in the year, thus pushing down both the futures and cash price. They will then buy cash equities cheaper. By doing this, they can improve their chances of making their investment performance look better for 2004.
Just a thought!
P.S Isn't it also interesting to see how confidence in the markets has changed. Not so long ago the Enron affair caused jitters across global markets. Now we have Parmalat, and the situation is simply shrugged off.
Its a Mad World (to quote the Christmas no1 single)
I suspect that some of the major financial institutions, particularly pension funds and mutuals, have been buying March futures towards the end of this year purely for asset allocation purposes.
In other words, institutions are expecting to buy cash equities at the beginning of 2004, and are allocating a percentage of those funds into the futures markets until then (thus pushing the Mar futures prices higher)
I suspect that the institutions will start to sell the shit out of the March future early in the year, thus pushing down both the futures and cash price. They will then buy cash equities cheaper. By doing this, they can improve their chances of making their investment performance look better for 2004.
Just a thought!
P.S Isn't it also interesting to see how confidence in the markets has changed. Not so long ago the Enron affair caused jitters across global markets. Now we have Parmalat, and the situation is simply shrugged off.
Its a Mad World (to quote the Christmas no1 single)
BL,
I think you may have just described the reason for the santa claus rally of past years........
one add on to my previous post...the various markets,gold,currency,bonds,stocks...are all giving out opposing signals at present...with the FOREX market being the biggest and trashing the $,this is where i'd take my view from...it's not impossible to see the $ fall another 30/40% in 2004....ultimately this is not good news for US stocks whichever way the authorities would like to spin it...
cheers
I think you may have just described the reason for the santa claus rally of past years........
one add on to my previous post...the various markets,gold,currency,bonds,stocks...are all giving out opposing signals at present...with the FOREX market being the biggest and trashing the $,this is where i'd take my view from...it's not impossible to see the $ fall another 30/40% in 2004....ultimately this is not good news for US stocks whichever way the authorities would like to spin it...
cheers
Only 20% of Americans have travelled abroad!!
IMHO, the recent rise has been purely speculative and unsustainable forming a BARR (Bump and Run Reversal).....possible 2.....one from October and one from Nov 22.
Info on BARR @ http://stockcharts.com/education/ChartAnalysis/barr.html
IMHO, the recent rise has been purely speculative and unsustainable forming a BARR (Bump and Run Reversal).....possible 2.....one from October and one from Nov 22.
Info on BARR @ http://stockcharts.com/education/ChartAnalysis/barr.html
