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I'm in from 1508. Good trading!

 

There seems no stopping to this straightforward stair-step trend. Intraday traders almost seem at a disadvantage (having to find re-entry points)...

 

So far we are up +/- 10% in one week, from 1400. NDX is again the strongest, making new YTD highs, bringing us back into October 2008 territory. I'm looking at 1555 and 1600 for potential areas of resistance.

 

Lines on the chart are the same as posted on Friday. Breakout and retest from 1519-1520 led to another bounce and continuation.

nq_monday.thumb.gif.0624018e9cf21587a7c8d8a71218fe6d.gif

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Alrighty, here's the product of today. Jon wanted to overlay TICK like Db in Ninja, which isn't supported in NT6.5 (but will be in NT7!), so I programmed something that does just that.

 

Please keep this to yourself for now. It's guaranteed to be buggy. Import the attached zip. To use it, attach the "Price" strategy to your chart (note: turn off chart trader first). Since indicators cannot access other instruments, I made a strategy that feeds the data to ChartOverlay, which displays it. You could technically use this to overlay any data stream.

 

There might be a bug when you select which instrument (default is "^TICK"). If you can't change it to something else (like "^TICKQ"), edit the source code for "Price", and under the Variables section, change it.

 

attachment.php?attachmentid=12406&stc=1&d=1248380874

 

By the way Db, I compared IB tick data to real tick data. It isn't even close :)

tickover.thumb.PNG.c764d76cea34e29284f9da06238f4ba1.PNG

ChartOverlay.zip

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What do you guys think of when you see these charts? I think they're fascinating, and may provide an important perspective on what's to come.

 

29m7fnp.gif

 

o518ur.gif

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I'll try to add to that a little, Drav. You chose S&P, so I'll go with the DOW here.

 

dowdaily.jpg

 

You must admit that there is still a bull run here. Maybe this is the big shake-out before another huge drop, but you have to play the probabilities. In this case I'm going to stay bullish with permabull, TOG. There are weak factors throughout the market though, since a few companies are not making higher highs in this latest explosion. As for the daily chart:

 

  • Broken down trend
  • Up channel seems to be perfectly in tact now
  • Choppy down.... explosion up (referring to last swing)

 

dowmonthly.jpg

 

And now the montly:

 

  • Up channel definitely in tact
  • Latest breach of support looks more like a shake-out

 

On both Charts we exist at major Resistance, so I would assume that this week will cause some slowness for the buying.

 

Truthfully, I feel there is another down move (a significant one) around the corner, but you have to stay with what the market is currently telling you... and from these charts, that is still up.

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Here is one vision for YM, too :)

 

attachment.php?attachmentid=12449&stc=1&d=1248612838

 

To wj:

I am quite surprised by your choice of trend line on daily. What rules do you have for drawing them? I generally draw a new one once price breaks a channel and fails to test the trend line again. Or if it fails to test it and then breaks the channel.

Then I mark the "Last Relevant Swing Point" which is the last swing point (a swing high, in this case) in the current trend, that is the trend I am seeking a reversal of.

YM2009.thumb.png.83b509ebb868fe519e2ae5dba60908f3.png

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I strongly suggest that those who are eager to characterize the current market action as either the beginning of a new bull market or nothing more than a bear market rally spend some time analyzing past bull and bear markets.

 

Here are some charts to play with:

1896-1899.gif.fcf20bbe8844a685337663e92478ef9b.gif

1900-1909.gif.daa6c6204358c70cbe609f325c13719b.gif

1910-1919.gif.de612ec72b5271c5452cd82551e26e25.gif

1920-1929.gif.a7301a8e282a1ddf831f373449c092b3.gif

1930-1939.gif.f73a006162f6b5af42e1e1afabe7ed39.gif

1940-1949.gif.56b7f47ee2f643c68e7751e458e652a7.gif

1950-1959.gif.e7247be54a468ee86c093c8c9caa619f.gif

1960-1969.gif.62d2ab8e76d410d8950062a9cb93e92e.gif

1970-1979.gif.93d0b187b93203ca4b9f46b1575c6308.gif

1980-1989.gif.ed535575b672e70aace031a243d651eb.gif

1990-1999.gif.bf14118e12d4f5e816f03739443b6ece.gif

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Here is one vision for YM, too :)

To wj:

I am quite surprised by your choice of trend line on daily. What rules do you have for drawing them?

 

I believe my rules should be very similar to yours: I do create a new supply/demand line once the higher highs or lower lows are formed. Many times, though, I leave that original lines there (as seen in my picture and I also believe that is the same trend line as your purple channel) and notice that price still gets a reaction at those areas. This is clearly seen on my daily chart. I would never use the "late" trend lines for an entry, but it is interesting to notice what happens at them.

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As of today, I am taking a hiatus from chat to step back and figure some things out. Chat has been a good help to me over the year and half, but it's time for me to move on and put together the stuff I have learned. To all those in the chat thanks for all the help.

 

P.s. I am considering a blog to keep a running journal of trade ideas.

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As of today, I am taking a hiatus from chat to step back and figure some things out. Chat has been a good help to me over the year and half, but it's time for me to move on and put together the stuff I have learned.

 

Well, it's about time. Jesus Christ.

 

:)

 

About the blog. You may want to open up a thread if you want comments. If you don't, the blog will more likely be up your alley.

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We'll miss you. About damn time :). And yes, great call on the blog. You doing it here or elsewhere? The blog format (with comments enabled) would probably suit you better than a thread, but either works.

 

Now go write that plan.

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As of today, I am taking a hiatus from chat to step back and figure some things out. Chat has been a good help to me over the year and half, but it's time for me to move on and put together the stuff I have learned. To all those in the chat thanks for all the help.

 

P.s. I am considering a blog to keep a running journal of trade ideas.

 

Now who will be left to take a piss at? :)

 

I hope all the pieces will fall into place sooner rather than later. In the meantime, good luck!

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As of today, I am taking a hiatus from chat to step back and figure some things out. Chat has been a good help to me over the year and half, but it's time for me to move on and put together the stuff I have learned. To all those in the chat thanks for all the help.

 

P.s. I am considering a blog to keep a running journal of trade ideas.

 

Awesome, best of luck!

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For those who didn't catch it, someone posted Traders the Documentary, which follows Paul Tudor Jones in 1986-1987, on YouTube. It's fairly interesting, and is very hard to find (because he got it off the air, and bought all the remaining copies). I've combined the parts into one video, and reuploaded it.

 

Keep these to yourself (it's not a copyright issue, it was on PBS, but it'll die quick if it gets posted publicly). Same thing, uploaded to two sites.

 

MEGAUPLOAD - The leading online storage and file delivery service

zSHARE - TRADER The Documentary.wmv

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Yet again the same zone mentioned in chat yesterday (originating from last Thursday, 1600-1602) provided resistance early this morning (morning in Europe that is :))

 

Price drifted downwards and although it took 4 hours, we are back at 1590 now, which is where I'm closing the short and calling it a day.

 

1590 will most likely be of interest to the traders of the US session. Should we turn upwards again (which seems rather unlikely imo but one most keep an open mind), price will most likely start its reversal here.

nq_premarket.thumb.GIF.de96ca6dc465ef4b5a0fea0c8f740e22.GIF

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Hah, not only was the YouTube copy pulled, Paul Tudor Jones himself was the one who got the filmmaker to pull it. I wonder why he's so **** about it.. besides it showing him yelling into phones to get an order in :).

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Hah, not only was the YouTube copy pulled, Paul Tudor Jones himself was the one who got the filmmaker to pull it. I wonder why he's so **** about it.. besides it showing him yelling into phones to get an order in :).

 

Good thing I downloaded it to my hard drive, right?

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“DAVE ROSENBERG IS AMONG the vanishing breed of die-hards (we confess, in case you haven’t guessed, to being another) who still cling to the notion that stocks’ explosive rise since March is perhaps the mother of all bear-market rallies, but nonetheless still a bear-market rally. The essence of his skepticism — which we happily second — is simply that the economy, contrary to Wall Street’s jubilant insistence, has yet to turn the corner.

He wonders, moreover, whether the March 6 lows in the stock market were the real McCoy. Although, in contrast to us, Dave persists in keeping an open mind, he’s doubtful that they were. On March 6, he recounts, the market was trading at two times book, with a 13 times multiple on forward earnings and a P/E of 18 on trailing earnings, and a 3% dividend yield. Pretty rich valuations by all three measures of earnings, but pretty skimpy on yield, to rate as a true market low.

And today, after a 45% rise, the metrics, to dip into the Street cliché, are positively mind-boggling. The dividend yield on the S&P 500, Dave notes, is a meager 2¾%, and payouts so far this year have lagged some 32% behind last year’s not-exactly-torrid pace.

In a like astounding vein, he observes, the trailing P/E on operating earnings (adjusted, he explains, “to take out everything that is bad”) is now at 24 times, while — and if you have a queasy stomach you can skip this number — on trailing reported earnings, the multiple is a mere 760-plus!

“Something tells us,” Dave sighs, “that the marginal buyer of equities today at that price may well be the same person who was loading up on real estate during the summer of ‘06.”

Fascinating stuff . . .

>

Source:

 

ALAN ABELSON

Barron’s, August 3, 2009

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Interesting, I've heard that elsewhere too. I keep finding internal after internal that doesn't quite buy this rally yet. When people get to their senses is another matter.

 

During Friday's chat, I posted something for NinjaTrader that plots Volume at Price OR Price at price (TPO style) better than anything else I've seen, so I thought I'd post it here as well. If finding value / balance by staring at price seems challenging, this may help. The price at price was Jw's idea, and behaves differently depending on your chart style. For time charts, it produces a TPO style histogram, based on time at different prices. For range bars, it shows a histogram of the number of times price traded to/from different prices.

 

A sample picture is in order.

attachment.php?attachmentid=12615&stc=1&d=1249151599

 

Play around with it. If you think of anything else that would make it better, let me know.

TL! File Share - Traders 1-Click Webhoster

5aa70f0b994f3_NQ09-097_31_2009(5000Volume).jpg.c64d8a24d008ab6fa798fa8f1cd66adf.jpg

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Then there's this. Both Hulbert and Davis have been around for a long while.

Secular bear, cyclical bull

 

Commentary: Adviser says that we're in a secular bear market

 

By Mark Hulbert, MarketWatch

 

ANNANDALE, Va. (MarketWatch) -- Secular or cyclical?

 

I'm referring, of course, to the debate over what kind of bull market began on March 9.

 

If that day represented a once-in-a-generation stock market low -- such as the kind seen in December 1974, for example -- then we're in a secular bull market that can be expected to last for many years and which will eventually take the stock market averages to a final top that is several times current levels.

 

Or did it mark a mere "cyclical" low, in which our expectations, both in terms of time as well as price, need to be far more modest?

 

For guidance I turn to Ned Davis, the eponymous head of institutional research firm Ned Davis Research. In my daily readings of what's being posted in the investment arena, including emails from the nearly 200 newsletters monitored by the Hulbert Financial Digest, I consistently find Davis' comments to be among the best-reasoned, based on a cool and unsentimental assessment of hard data.

 

I disagree with Davis at my peril, such as earlier this year when I -- but not he -- concluded that the sentiment data did not support a powerful rally.

 

Now is a particularly good time to check in with Davis, since earlier this week he finished a seven-part series in which he compared the March 9 low with the famous secular lows of decades past. Davis was able to identify seven dimensions that he could use to compare the March 9 low to those past secular lows:

 

  • "Monetarily, money should be cheap and amply available:" Neutral. You might think that this factor should be rated as "bullish," given how accommodative the Federal Reserve is currently. But Davis notes that banks are also significantly tightening their lending standards. Given the heavy load of debt under which both consumers as well as corporations suffer (see next criterion), banks are finding it "increasingly hard to find 'credit-worthy' borrowers."
  • "Economically, the debt structure should be deflated." Bearish. This is the most negative of any of Davis' seven dimensions, since by no means is the debt structure deflated. On the contrary, Davis calculates that the total credit-market debt load right now is nearly four times the size of gross domestic product, and that it takes more than $6 of new debt for our country to produce just $1 of GDP growth. That's almost double the amount of debt required in the 1990s.
  • "There should be a large pent-up demand for goods and services." Bearish. Davis acknowledges that there has been improvement along this dimension from where things stood at the beginning of the bear market. But he is particularly worried by the ratio of total Personal Consumption Expenditures to Non-Residential Fixed Investment, which currently stands at a record high. At the secular bear market low in 1982, in contrast, this ratio was at a record low.
  • "Fundamentally, stocks should be clearly cheap based upon time-tested, absolute valuation measures." Neutral. Though the stock market "got undervalued at the March lows," it never became "dirt cheap."
  • "Psychologically, investors should be deeply pessimistic, both in terms of the stock market and the economy." Bullish. Davis says that past secular market lows were accompanied by an extreme amount of pessimism, and his indicators show a similar extreme existed earlier this year.
  • "Technically, major investor groups should have below-average stock holdings and large cash reserves." Neutral. While foreign investors have record-low stock holdings, according to Davis, household holdings -- while low -- are not nearly as low as they were at prior secular bear market lows. And institutional investors' stock holdings "are only down to an average weighting historically."
  • "A fully oversold longer-term market condition in terms of normal trend growth and in terms of time." Neutral. Davis believes that, though many of the excesses of the real-estate bubble have been worked off, some still exist. That's particularly a problem, he says, given that the stock market bubble of the late 1990s never completely deflated either. "As we saw in Japan after 1990, a double-bubble in stocks and real estate leaves it difficult to put 'humpty dumpty' together again."

The bottom line? Only one of the seven foundations of a secular bull market is in place. Three more are neutral, and the remaining three are bearish.

 

Davis therefore concludes that we are more likely to be in a cyclical rather than secular bull market.

 

This doesn't have to mean that the stock market will immediately go down from here, by the way. Davis believes that the cyclical bull market that began on March 9 still has more upside potential.

 

But he doesn't foresee that upside potential being anything like what existed at past major bear-market lows, such as in December 1974.

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Stephanie Pomboy of MacroMavens observes:

“Judging by the giddy delight investors have taken in ‘better’ earnings news over the last two weeks, we expect they will positively wet themselves when they get a load of the new saving stats. I mean the prospect that dis-saving was never as bad… and that current saving is even better … surely ranks as more compelling than having a handful of companies beat beaten-down expectations by a penny. Particularly when those beats were accompanied by NO…or uniformly grim…guidance and, in the case of financials, were achieved by dint of increased risk-taking.

 

Label me “prudish”, but beefing up prop trading and reducing loan loss provisions (precisely as the Alt-A/Option ARM reset wave begins and the Commercial Real Estate losses mount) doesn’t exactly blow my skirt up.”

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FOMC Statements Becoming a Non-event?

 

Later today the Federal Reserve board meets, and as is the ritual, the FOMC statement will be scrutinized word by word, comma by comma.

 

However, as we noted after the last FOMC meeting, the Federal Reserve has been known to withhold some information from the statement, opting instead to release details of new programs or tweaks to old programs a day or two after the FOMC meeting.

 

This last occurred on June 25 (one day after the June statement) when the Federal Reserve announced extensions and modifications to various liquidity programs. At the time we asked:

 

Could it be…that the Federal Reserve was afraid that the “teenagers” would misinterpret its meaning? If so, does this mean that the FOMC statement is now devoid of real information?

 

Are we now all reduced to watching the “What’s New” page on the Federal Reserve’s website in the days following the FOMC meeting to find out what they really discussed?

 

To be sure, this is not a unique occurrence. Below is a quick laundry list of similar announcements which came on the heels of an FOMC statement:

 

Between January 29, 2008 and the December 16, 2008 FOMC meeting, the Federal Reserve held nine meetings, changing rates and making extraordinary moves many times in between meetings. During this period, changes to monetary policy were a regular event even outside of FOMC statements.

 

Our fear is that the Federal Reserve has purposely rendered the FOMC statement a non-event. They will tell the market what it wants to hear for fear that anything less will be misinterpreted.

 

More often than not over the past year, the juicy details of the FOMC meeting are released a day or two after the statement. We’ll be watching over the next few days to see if the same happens after this meeting.

 

-Jim Bianco, Bianco Research

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