Baffled

Discussion in 'Trading' started by mattjclark, Aug 22, 2002.



  1. Some other drain on the economy, hmmm...how about the financial implosion of middle America and the bursting of a major real estate bubble that destroys another few trillion in global equity as falling housing prices and rising mortgage defaults feed each other in a vicious cycle? The fed's attempts to reliquify the seized up corporate debt market have only ended up pumping the real estate bubble further instead, and lenders and appraisers are making things even worse by giving artificially high values to housing prices due to perverse cash incentives to get loans pushed through. Sound familiar? Not to mention that consumer spending is falling sharply as evidenced by retailer results or that savings rates are still at an all time negative or that consumer debt is still at an all time high. Piper ain't been paid yet, and the piper is a bad bad man.

    When will the next round of real pain happen? Dunno. Could be a few months, could be a few years. This window of optimism we are enjoying might last for quite a while or it could fall apart next week. But there is another bubble on the horizon and it could be uglier than the first.

    Back to stocks, look at MSFT as an example. Is that a healthy chart? No way- that's a 'here ya go guys, have fun while it lasts' chart. The only firm market opinion I have right now is 'skeptical,' and until this temporarily happy market successfully weathers a healthy correction I must ponder whether the current bull is a tough guy with a glass chin. If we look good on a pullback- and that's a big if- then sure why not go long. But the bear ain't done.
     
    #21     Aug 22, 2002
  2. About the only thing certain in this market is that when it finally corrects, it will likely correct hard.

    Call buying remains relentless, unlike anything seen in last September's rally, with the equity-only put-call ratio hitting a very bearish .30 today before rising to close the day at a still-low .417, the longest streak below .50 since August 2000.

    The S&P and Wilshire 5000 are pushing through the necklines of multi-year head and shoulders tops; those breakouts are not likely to hold unless volume picks up substantially.

    In the intraday charts, the Dow and S&P seem to be wedging higher in Elliott wedges, a pattern that usually predicts a significant correction. One more pop to the upper trendlines would make those patterns seem just about complete; potential targets are 968 S&P and 9100 on the Dow.

    Do not expect the S&P to close much above 970; if it does so with volume, 1050 is within the realm of possibility. But it must be on VOLUME.

    A move below 9000 on the Dow and 950 on the S&P would likely signal the start of a correction, and 925 on the S&P and 8800 on the Dow are critical support .
     
    #22     Aug 22, 2002
  3. I think a lot of you are missing the point. If you are predicting what the market will do X time period from now, you are already doing something that will kill you eventually.

    I will say this again -- you need to live in the moment. I know that the market is trending up. I don't care if it goes to 2,000 or 500 (S&P) next month.

    I just use the long-term charts to point out a major trend, shorter term charts for minor trends and very short term charts (daily) for micro-trends.

    Other than that, I don't know where the market will go tomorrow -- but you know what's the best part about it? I don't have to! I don't care where it goes. I don't predict -- predictions are for academics, analysts and underpaid anchors on CNBC.

    aphie
     
    #23     Aug 22, 2002
  4. who knows
     
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    #24     Aug 22, 2002
  5. I agree with you for intraday trading, but I like to predict market direction for my swing trade account (which has almost every trade getting stopped out lately).
     
    #25     Aug 22, 2002

  6. u left one out: hedge fund managers who make 100 mil a year
     
    #26     Aug 22, 2002
  7. LOL!!
     
    #27     Aug 22, 2002
  8. savage

    savage

    Uptik,

    I do have to point out to you, however, that volume has actually been rather strong considering it's August and if you take out July, the volume is higher than in the selloff up until July. Also, the largest volume in July was following "capitulation" on a huge reversal day. I would not put too much stock in the volume theory at this point. I do think the market needs a significant breather and would benefit from trading in a range for awhile.

    Savage
     
    #28     Aug 22, 2002
  9. it's pretty simple..
    there's all kinds of support trendlines between 905 - 925. if the spoos break a few of those.. time to short!

    personally i think it could be time to short tomorrow afternoon (into a rally), or it could be as late as the end of the month. but probably no later.
     
    #29     Aug 22, 2002
  10. yeah, I'm in there each and every day trading it..so I know the volume does seem a bit much for August. we're still in a downtrend..and although the rally has been impressive, this really only brings us back to early July levels, or sept 01 levels.....so we'll see what happens......right now I'm more concerned about the Traver's Stakes on Saturday.....just praying for no rain.
    :cool:
     
    #30     Aug 22, 2002