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Fibonnaci in Nature
Started by Terry H. Last reply by Terry H Sep 25.
Started by Terry H. Last reply by Terry H Sep 23.
Started by Terry H. Last reply by Terry H Nov 5, 2013.
Started by Terry H. Last reply by Terry H May 7, 2013.
Started by Terry H. Last reply by Terry H Apr 18, 2013.
Posted in on December 12, 2014 - 11:06am
Various indicators have been turning bearish since mid- November. But until this week, $SPX itself had not broken down, and since price is "king," that was quite important. However, now $SPX has broken down, as it has fallen below support at 2050. This completes a bearish pattern, and a full-fledged correction is underway. This could be sharp and short-lived, and since it is taking place late in the calendar year (when seasonal bullishness occurs), that is probably the case. However, it should be respected until buy signals actually occur.
Equity-only put-call ratios rolled over to sell signals about 10 days ago, and those signals remain strongly in place.
Market breadth has been weakening for several weeks, as the breadth oscillators gave several sell signals which were subsequently aborted. But this time, the sell signals took hold, and they remain in force.
CBOE volatility indices have exploded to the upside. $VIX closed above last week's highs, and that established an uptrend in $VIX, which is a sell signal for stocks.
In summary, the indicators are negative, and with $SPX falling below support, it has released selling like the breaking of a dam. It is likely that the correction will be short-lived, but we are not going to trade the long side until buy signals are confirmed.
Posted in on August 4, 2014 - 11:31am
I want to spend just a moment pointing out how these market tops can unfold. One good example was in 2007. The market had just made new all-time highs in July and everything seemed wonderful. Volatility had been low (except for one hiccup back in February, 2007), but no one seemed worried. Then, $SPX broke down sharply with a 30-point down day (yesterday was a 40-point down day for $SPX), and that unleashed the bears. The accompanying chart (Figure 5) shows the severity of the decline. Figure 6 shows how volatility ($VIX) behaved, and shows the power of volatility protection, for when the market declines that quickly, the volatility of volatility increases dramatically. Also, note that no two markets ever are exactly the same, but this type of scenario could be unfolding now, since it has happened before.
Figure 1 shows the devastation that took place between July 24th and August 16th, 2007. $SPX dropped from 1541 to 1370 at its capitulation low. There were eight severe down days for $SPX in that stretch. Figure 2 shows how $VIX did over the same period. It rose from 16 to 37 (during the capitulation day).
Read more: http://www.optionstrategist.com/blog/2014/08/stock-market-tops-hist...
Here's a log chart of the DJIA from 1918 to 1932.
If you want to understand why the Fed's monetary policy has not been working, read this paper read last year at the San Francisco Fed:
DJIA Inflation Adjusted Chart since 1982 to Oct 23, 2013.
I'm bullish on the market into year end - Gold is looking strong again as well!
A thorough talk on EWI's interpretation of where we are in all markets and the economy and why from a historical perspective with charts, and an explanation of why they didn't think the US stock market would go this high.http://www.elliottwave.com/club/analyst-videos/ewi/steve-hochberg-1...
Same guy who said "The subprime mortgage crisis is contained."
"Bernanke reportedly told a group of bond dealers and investors that, unlike some other Fed officials, he doesn’t see current bond purchases as creating an asset bubble."http://www.marketwatch.com/story/bernanke-may-push-back-against-haw...
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