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Fibonnaci in Nature
Started by Terry H. Last reply by Terry H on Tuesday.
Started by Terry H. Last reply by Terry H Nov 5, 2013.
Started by Terry H. Last reply by Brian Augustine 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 September 19, 2014 - 11:29am
Early this week, $SPX closed at a new relative low, and many of the indicators appeared to be turning bearish (for example, $VIX closed above 14). However, prices have rallied since then, and $SPX made a marginal new all-time high today -- both intraday and closing. Is this probe upwards more effective than the probe downwards was a few days ago? It's hard to say, but a further close at new highs would solidify an upside breakout.
Equity-only put-call ratios have turned negative. The standard ratio (Figure 2) has clearly begun to rise, and that is definitely a sell signal. However, the weighted ratio's sell signal is questionable.
Market breadth have reversed direction, and are on buy signals now.
Volatility indices ($VXST, $VIX, $VXV, and $VXMT) probed above 14 a few times, even as recently as Wednesday. Since then, volatility indices have retreated and thus are in neutral-to-bullish territory.
In summary, another close Friday at a new high would constitute a bullish upside breakout, despite the fact that there are sell signals from the put-call ratios. Should that bullish breakout fail to materialize, we would remain neutral unless $SPX broke down below 1980.
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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...
Rhee, for a noobie like me, I was wondering if you could possibly post a current stock chart that shows the sweet spot you are talking about. I feel like I have a good number of tools at my disposal to make an informed decision but I'm not quite there in terms of using them correctly. I understand that "the trend is your friend" and not to "catch a falling knife" but I'm still having some trouble making wise decisions. Any insight would be appreciated. Thank you!
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