What is truth?

Posts tagged ‘Market trend’

Wealthbuilder Market Brief September

The Dow Industrials, Transports and the S&P are range bound with the NASDAQ in a bullish breakout.

By  Christopher M. Quigley

The “Syrian Conflict pullback” is over and the market is back in bullish mode, particularly the NASDAQ which has just given a bullish breakout signal.

For the third time the 1480’ish level on the Dow Transports has held. With this support holding, the bull trend is back in business on the Industrials the Transports and the S&P. However, they are range bound.

Within this apparent overall strength however there is much technical weakness about when you start to drill down a bit into specific stocks, particularly consumer staples. This development is causing me to worry somewhat and indicates that all is not completely “rosy” in the economic fundamental garden.

For example of the 10 top holding in the bell-weather consumer staples ETF: XPL, 5 are trading at or below their 100 DMA (PG, PEP, CVS, CL and MO) and another 3 are trading at or below their 200 DMA (KO, PM and WMT). Apparently this technical weakness is due to bad guidance moving forward which is not a good omen for the health of the overall world economy. This may also explain why so many companies, in the broader market, are trading below recent highs. Thus caution is warranted.

Full PDF doc Here:  Wealthbuilder Market Brief September 10th

Stocks Bear Market Looms

By: Zeal_LLC

The US stock markets have enjoyed a  dazzling year, levitating to a long series of new record highs.  But this relentless advance has stalled in  August, with selling pressure mounting.   Even most of the bulls readily agree that a material selloff is overdue  after such a mighty run.  But actually  the odds are high this necessary retreat will extend well beyond normal  pullbacks or even corrections into a new cyclical bear

The mere idea of a looming stock bear is  certainly heretical these days, but this is not surprising.  By early August, the flagship S&P 500  stock index (SPX) had powered an astounding 152.7% higher since March  2009!  Being so deep into such a spectacular  cyclical bull has naturally left speculators and investors very complacent.  Most have forgotten that markets don’t move  in one direction forever, they flow and  ebb.

Still, late in mature cyclical bulls the  ever-rising chances for the birth of a new cyclical bear are the last thing  traders want to hear.  So let’s shelve  that controversial thesis for now and start at common ground.  Nearly every smart bull either expects a  material stock-market selloff or thinks one would be very healthy.  And technical and sentimental indicators are  nearly unanimous in declaring the SPX very overbought.

Discussing all of these would require a  sizable tome, but here’s an overview.  The  SPX is stretched far above its trailing 200-day moving average.   Complacency is extremely high  and fear non-existent as measured by key sentiment gauges.  2013’s SPX levitation has been on low and  dwindling volume and narrowing market breadth, with fewer and fewer individual  stocks maintaining the rally’s momentum.

Students of the markets can elaborate on  these major topping indicators in depth, and expound on dozens more.  So the bears and smart bulls alike definitely  agree that some kind of material selloff in the US stock markets is either  already underway or imminent.  The only  real questions are about its ultimate magnitude and duration.  The difference between a down day and a bear  market is simply one of degree.

This is reflected in how material  stock-market selloffs are categorized.   Anything under 4% is merely a series of down days without any formal  name.  When selloffs extend from 4% to  10% off their preceding highs, they are called pullbacks.  Once they forge  over 10%, they become known as corrections.  And if the selling continues long enough to  push them over 20%, these selloffs become cyclical  bear markets…….

full article at source: http://www.marketoracle.co.uk/Article41989.html

New Dow High as Another Stocks Bear Market Goes Up in Smoke

By: Nadeem_Walayat

Dow Jones surges to a new all time closing high of 15,460.92 as many market commentators literally never learn! And there is a reason for this.

Bull markets do one thing, and one thing only, they resolve to NEW bull market highs, as that is what ultimately defines what a bull market is, and so the market that I have traded for near 30 years, the DJIA stock index has once more resolved to a new bull market ALL Time High.

Meanwhile those that clearly have a psychological blind spot towards being on the right side of a trend, continuously repeat the same behaviour pattern of betting against the trend as evidenced by the fact that the deeper the recent correction progressed the more vocal they became in their utterances for an end of the bull market that they were never even able to recognise as a  bull market by virtue of what I deem to be ridiculous statements such as that of saying that the stock market bull run of 5 years had just been a cyclical event within a secular  BEAR market. Despite the fact that you will have heard the SAME garbage for over FIVE YEARs now!

To reiterate once more, there is no cyclical or secular ONLY BULL or BEAR, only LONG or SHORT, either that or as is more probably the case those that are most vocal commentators NEVER actually TRADE or INVEST with their OWN money! That is self evident in the fact that had they traded with their own money, then by now they would have gone bust several times over!

full article :http://www.marketoracle.co.uk/Article41365.html

Stock Market Extreme Euphoria Tops

By: Zeal_LLC

The levitating stock markets continue to  seductively entrance traders, powering to new nominal record highs day after  day after day.  No one believes a  meaningful selloff is even possible anymore, thanks to the vast deluge of  central-bank monetary inflation.  Sheer  euphoria has set in as all perception of risk has vanished.  This makes these stock markets  extraordinarily dangerous, they are truly at topping extremes.

As of Wednesday, the flagship S&P 500 stock index (SPX) had rallied to new nominal record highs in 11 of the past 13 trading days. It blasted 4.8% higher over this short span. If sustained for an entire year, this blistering rate of ascent would nearly double the stock markets! This latest euphoric surge extended the cyclical stock bull that was born way back in March 2009 to a massive 145.2% gain over 50.2 months.

This move, particularly the one-sided 22.6%  melt-up in the last 6 months, has bred unmistakable euphoria.  Wall Street  vehemently tries to deny this truth, but the definition of euphoria is “a  feeling of great happiness or well-being, a feeling of great elation”.  Does that not describe the outlook for the  stock markets today?  There are no bears  left, everyone is incredibly bullish  and expects no material selloffs.

Normal healthy bull markets climb a literal  “wall of worry”, traders are always anxious about some catalyst arising that  will spark a sharp selloff.  But not  today.  The markets have run up for so  long with nary a hiccup that traders no longer believe significant selloffs are  even possible.  They expect any selling  to be met with immediate buying, effectively backstopped by the Fed’s  unprecedented QE3 debt monetization.

All news is being interpreted as bullish today, thanks to the Fed manipulating the markets. If it ramps up QE3, then there will be more freshly conjured money pouring into stocks. If it instead tapers QE3, then the underlying US economy must be improving so cash on the sidelines will return. And of course any poor economic news is seen as forcing the Fed to keep aggressively monetizing debt, again bullish for stocks.

But all markets flow and ebb.  Prices rising and falling is the natural order of  things.  This is because nearly all  short-term price action is driven by the perpetually warring emotions of greed  and fear.  These are mutually exclusive,  so prevailing market sentiment swings back and forth between them like a great  pendulum.  Excessive greed is followed by  excessive fear, as the markets always ultimately balance out.

Euphoria, which is built on rampant greed,  is the most tell-tale sign of a major topping underway.  Traders no longer worry about anything, so their  greed drives them to buy every trivial dip.   This pushes markets higher and higher regardless of newsflow until  everyone interested in buying in anytime soon has already bought in.  That leaves only sellers, so the great  sentiment pendulum starts swinging back.

I suspect that very peak-euphoria moment is  here, when the SPX’s anomalous uptrend suddenly reverses.  Contrary to popular belief, this doesn’t  require a news catalyst.  Once all  available near-term buyers are sucked in, sellers assume control by  default.  Most bull markets top without  any crisis or even bad news to spark  the initial selling!  And that quickly  feeds on itself as late buyers rush to cut their losses.

Pretty much every technical or sentimental  indicator you want to look at these days confirms the euphoria blinding stock  traders.  Last week I focused on the  excessive valuations, stocks are very expensive so the  foolish traders chasing this topping are buying high.  This week I’m examining psychology, the extraordinary  greed and complacency driven by a one-sided melt-up.  And its resulting overboughtness.

This first chart looks at the benchmark  S&P 500 in blue and its definitive sentiment gauge, the VIX  implied-volatility index, in red.  The  span encompasses the SPX’s entire mighty cyclical bull market since March  2009

full article at source: http://www.marketoracle.co.uk/Article40502.html

Stock Market S&P Bear Calls Have ALL Missed

Salivating Bears have been calling for a market top for over 4 years, now, and none have been right. The sentiment is understood but misplaced. This goes to show how markets are not predictable, but people are. So many want to exercise the FILO inventory premise: First In Last Out. It is so difficult to check egos at the door for there is a huge difference in being right and being profitable.

Those who choose to be right often find themselves on the loosing end. Those who choose to be profitable always have a game plan. Game plans rarely pick tops or bottoms, the most unprofitable areas for trading. The best source for market information comes from the market itself, and from what we can see, there has been no indication that a top has formed. It is possible the market is getting there, but getting there and being there are not the same. Always to stick to a proven game plan.

The message of the market is best viewed from the charts, and we are using the E-Mini.

An associate of ours has observed that market rallies tend to last 15-20 weeks, and the current rally is in week 20. A correction, of some sort, is now due, this week, next week, it cannot be known until it happens, but the Time factor is ever-present.

Last week was an OKR, [Outside Key Reversal], defined by a higher high and lower low from the preceding week, and in this one, a lower close, [the close can higher, lower or unchanged]. The word “Reversal” provides a clue as to near term expectations. Not ours, necessarily, but as in the acronym, OKR.

The one factor outweighing the rest is the trend, and the trend for stocks is up. Trends tend to persist, and it takes time to turn one around. Time equates to patience, and it is patience that is the undoing of a great many traders. There have been so many calling for a top, as we have observed from comments and expectations over the last 4 years.

In an up trend, demand is already a proven factor. It is supply, or sellers who bear the burden of proof for making a change, and that has not yet happened. The groundwork already exists for a correction, but it is impossible to know, in advance, if it will be a normal correction, and lately, they have been 9-10 days in duration, or if it will signal the potential of a topping formation.

Identifying the trend as up does not mean one should not be cautious or unprepared for a market turn, but the caution would be in the form of taking profits and/or using close stops. It does not mean going short. Even the 2008 market top took a few months to develop…………………

full article at source : http://www.marketoracle.co.uk/Article39842.html

Dow Stock Market New All Time High, Exponential Inflation and Multiple Technological Revolutions

By: Nadeem_Walayat

The stock market has continued to confound the academic proponents of the the debt deflation mantra who have in perfect perma bear style been banging their heads continuously against a four year stealth bull market that has marched all the way to an new NEW All Time Closing High of DJIA 14,253.77

Many academic economists and journalists who think they are economists and salesmen will be commentating at length over the next few days by looking in their rear view mirrors to explain why the stock market has risen, despite the fact that these same people can be quickly googled be found to have repeatedly claimed over many times that the rally in the stock market was unsustainable and would imminently end.

Virtually all of the reasons put forward will be wrong as especially academic economists will find themselves floundering all over the place to explain why the stock market can trade at new all time highs whilst their economic statistics say that a triple dip recession suggests the exact opposite should be true, because the actual key drivers of the unfolding stealth bull stocks market as covered in depth in the recent Stocks Stealth Bull Market 2013 and Beyond ebook (FREE DOWNLOAD), are that general stock market indices as the Dow are geared towards oscillating around an exponential inflation mega-trend towards which stocks are leveraged, which is why they will ALWAYS converge towards and BREAK to New All Time Highs, including that the Dow level of 14,200 was the forecast conclusion of 2 years ago in the preceding Stocks Stealth Bull Market ebook of March 2011……………………….

full article at source: http://www.marketoracle.co.uk/Article39342.html

Wealthbuilder Market Brief 1st March 2013 (Christopher Quigley)

By: Christopher Quigley

What a market. Even the most experienced traders  that I know are having a difficult time getting a handle on what is happening.  Wednesday’s market action caught a lot of folk napping. Monday’s 216 point drop in the Dow Industrials  convinced many that finally the much anticipated market “correction” had  arrived.

The slight “uptick” on Tuesday was a classic VIX buy  signal but it turned out to be a trap. Those traders who shorted the market on  the 26th were pulverized by the bullish 175 Dow point move on the 27th.

What can we make of such whiplash moves?

For me, regardless of the economy, the movement of  the market is understandable when you assess it through the paradigm of Dow  Theory. The market is powering forward because technically it is very strong.  This strength was first indicated by the 128 point breakout in the Dow  Transports on the second of January. Prior to this the Dow 20 had traded within  a trading line for nearly a year. It was perfectly clear to Dow Theory  aficionados that the momentum and the direction of any breakout from this “range  line” would be highly significant. The 307 point follow through move on the Dow  Industrials on the same day as the Trannies breakout confirmed the trend. With  Dow Theory  “ a trend once in place  continues until both indices confirm otherwise”. Nothing has happened in the  last few days to alter this January bull move. Thus the correct trading  strategy at the moment is to go long on pullbacks not short “potential” tops.

full report Wealthbuilder Market Brief 1st March 2013

Tag Cloud