Weekly Market Poll

I will post some charts later, but the market is overbought RSI(5)=78. Time for a correction?

I will base my contrarian play on this poll. The first week was a bit of a rough start but the strat is making money :
http://www.elitetrader.com/vb/showthread.php?s=&threadid=190863

Please don't mind me and feel free to discuss the coming week market in this thread.

 

To me the charts seem clear that we are ready for another leg down. Simply eyeballing VIX/SPY relationship over the last year one can see that SPY overbought with VIX oversold based on RSI(5) often signified the short-term tops. Of course, there were instances recently when VIX was more oversold and SPY more overbought that they are now. But we were in the most crazy bull run ever, which is over by now most most likely.

One monkey wrench I can think of is the market reaction to Fed's rate raise on Thur. Quick knee-jerk reaction overnight and then HIGHER. This does suggest that there is some strength left in the market.

 

Carl Swenlin believes this upleg is a bull trap and he gives technical analytic reasons for it.

http://www.decisionpoint.com/ChartSpotliteFiles/100219_cspot.html

 

i don't see many reasons to be long this market. last week even though we had several up days, many stocks i was looking at were very anemic as they were trudging higher. i don't know what sort of indicator could quantify the behavior i observed but this up move is very suspect.

 

To summarize our intense discussion:

Bear case: suspect charts, bull trap possible
Bull case: market shrugged off Fed move last Thur, Greek rescue is imminent

What else?

 

That's, unfortunately, precisely why you need to be long. This stupidity is going to continue for a long, long time. The government has too much invested to let it drop.

It's no longer about fundamentals (which are so bad it's absurd) or technicals, or anything else. It's just about manipulation, algorithm led bots being fed money from "unknown" sources that buy up everything in site on almost non-existent volume.

 

maybe once Fed raises the rates that counts the insanity will end.

the futures are flat. the Olympic events over the weekend have failed to move the market.

 

futures up right now. And don't count on the Fed to raise rates any time this year. As i said before, they're perfectly aware that this market is built on free money. Raising the cost of the money will pull the only air holding up the ponzi scheme.

 

U.S. Stocks to Fall This Year, Marc Faber Says (Update1)


By Masaki Kondo and Hideki Sagiike

Feb. 22 (Bloomberg) -- U.S. stocks will probably fall this year from last year, and the government and central bank will act to spur growth in case of a decline beyond 20 percent, said Marc Faber, the publisher of the Gloom, Boom & Doom report.
The Standard & Poor’s 500 Index has retreated 0.5 percent this year to 1,109.17, and the Dow Jones Industrial Average has lost 0.2 percent. Faber advised investors to buy U.S. stocks on March 9, 2009, when the S&P 500 reached its lowest level since 1996. The measure subsequently rallied as much as 70 percent. He also predicted in May 2005 that stocks would make little headway that year, with the S&P 500 gaining 3 percent.

“I would look at the market to close probably a bit lower than it started the year in 2010,” Faber said today in an interview before a speech at the CLSA Japan Forum in Tokyo. “Equally, I don’t think we have a huge downside risk. If the Dow and the S&P dropped, say 15-20 percent, in other words the S&P towards 900, I think there would be more stimulus and more quantitative easing.”

 

What did you expect the author of the Gloom, Boom & Doom report to say?