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Latest Activity: Jan 8
Fibonnaci in Nature
Started by Terry H. Last reply by Terry H Jan 8.
Started by Terry H. Last reply by Terry H Sep 23, 2014.
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.
Long-term market trends in stocks, bonds, gold, and oil:
Posted in on December 27, 2014 - 4:30pm
The reversal off the December lows was sharp, powerful, and even record-setting. The chart of the Standard & Poors 500 Index ($SPX) has returned to a bullish status, now that new all-time intraday and closing highs have been registered.
Seasonality is playing a bullish role as well. We are now in the Santa Claus rally (last 5 trading days of one year and the first two of the next year). Plus we are headed into a year ending in '5,' and those have been extremely bullish throughout history. The only bearish indicator that we have in our arsenal right now is the equity-only put-call ratio. Both the standard and weighted ratios continue to move higher, despite the broad market rally. Thus they remain on sell signals.
Market breadth has been positive on the rally, although not overly so. Regardless, both of the breadth oscillators that we follow are on buy signals and are in modestly overbought territory.
Volatility indices have decreased substantially since the lows of mid-December. $VIX has resumed a bullish status for the stock market, and that is bullish. Stocks can advance as long as VIX is meandering around at these extremely low levels.
In summary, the indicators are nearly all bullish, and short-term buy signals remain in effect. We are officially in the seasonally bullish Santa Claus Rally period, which lasts through the second trading day of 2015 (which is Monday, January 5th). And then we'll be in the new year, with potentially other positive seasonals. This is all something of a perfect storm, and we probably won't have any true negative setups until well into the new year.
Inflation-Adjusted DJIA over the last 100 years. Macrotrends.net
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:
I'm bullish on the market into year end - Gold is looking strong again as well!
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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