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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 October 31, 2014 - 12:42pm
The rally has been a straight-up affair, leaving a "V" bottom in its wake. Fortunately, our indicators have generated a strong series of buy signals along the way.
Since $SPX has sliced through virtually every conceivable resistance area, it makes it difficult to identify either support and resistance at this point. However, the overbought conditions that now exist have -- in the past -- caused the market to stop rising.
Equity-only put-call ratios continue to remain on buy signals, as they are now dropping steadily on a daily basis.
Market breadth oscillators were negative all summer, but they were the first to turn positive in this current rally. Now they are overbought, but sell signals are NOT imminent here.
Volatility indices have collapsed during the rally. They are now in downtrends, which is bullish.
In summary, all of the indicators are positive. The only negative is that $SPX has risen so far so fast. So the intermediate-term picture is bullish, but the short-term action could be subject to overbought corrections.
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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