Friday, August 28, 2015

Still Own Equities? It's Not too Late.

This morning the SP 500 is roughly 7% under it's highs. An excellent exit opportunity. Just for comparisons sake at 7% under the highs WTI crude was at $137.64,  Natural Gas $14.58, and Gold $1785
Global Markets have unanimously signaled either trend breakdowns or dug deeper into their bear markets See Bovespa -35% from it's highs. International fundamental metrics are generally very negative or deteriorating; from unemployment to trade to GDP to Capital flows. A very different environment from 2014.
The bounce since the dramatic sell off  into Monday lows is nominally significant, but it is merely to be expected when a market moves that fast, and relatively no big deal in percent terms.

Note that the INDU and RUS 2000 have a .62 retrace and 50% respectively. Exactly what one would expect.

 Pls see previous 2 posts. From Global Markets Trap Beachgoers
" the 2007 bear mkt lasted 474 days, the 2000 bear lasted 930 days, the 1973 selloff lasted 639 days."

Tuesday, August 25, 2015

Last 2 Yr.s of SP 500 Gains Lost

The very rapid move through long standing support has trapped the market with the old support now the so very solid resistance. Additionally the last year of sideways ranging reduced average performance and weights the cost basis of the last year nearer what is now the high.

ES Nearby Weekly
click to enlarge

If you are a regular monthly investor you are now losing money on the last 2 years of your investing.
$1 invested monthly SP 500 since Aug 2013 = $25 cost basis.
As of last settle final value of portfolio = $23.16
 SP 500 level required to break even = 2021

Presumably that goes for corporate stock buyback programs too.

Monday, August 24, 2015

Global Markets Trap Beachgoers

Oh Shit! Lets face it when you come off the beach to discover ALL your positions are like negativo and that bonus is now not only looking tiiiney but the actual assets might be called, only one thing to do: CALL UBER (at least somebody is going to benefit).

                                       Actually, that s my neighbor getting me off island.

But here s the thing; are there any shorts to step in and buy, or after being systematically destroyed over the last  6 years by the algos and the fed, the short side is really just a minimal hedge position and actually will get added to. I think the latter. Spec Put longs may do some profit taking on the vol blow out, but how much of that is out there?

I m not even going to put up a chart. But please see my Aug 12 post OH OH Equities.

Just a little reminder; We are now 4 days into this; the 2007 bear mkt lasted 474 days, the 2000 bear lasted 930 days, the 1973 selloff lasted 639 days.


Wednesday, August 19, 2015

Shanghai Comp Update

Checking in from Vinalhaven Me. this morning to find China once again in the news.

Their style of market intervention is so transparent it is more honest really than our western version of same. However all equally in vain unfortunately for most.

Pls see

"The "C" wave down measured targets are;
C=A at 718
C=.78 of A at 170
C=.618 of A at 2422"

And from here the recent consolidation   (or if you prefer goverment intervention) of the Shanghai Composite looks about done.
New lows under 3530 ought to confirm it.

Wednesday, August 12, 2015

OH OH Equities

August.  Spending some well deserved time with the family out on the Island? After all we've been range trading for 9 months, and everything suggests it will continue  at least for a couple more weeks right? I'm heading to Maine myself Friday.
Sept SP
as of yesterday
click to enlarge
Looking good right? Maybe it IS a consolidation pattern and breaks high, after all there's the Fed Put.

Of course things can sneak up on you. Here's this mornings look at the nearby INDU;

click to enlarge
Thank you China for giving the market the excuse it needed to finally roll over. A Head and shoulders neckline break, last night's " death cross" of the 50/200 dmv, and continued turmoil in the overnight markets should result in downside acceleration today trapping all the longs since Feb.

From an Elliott Wave perspective, the pattern above has been an ongoing (if slow) exercise in open mindedness. The SP high on the nearby contract was achieved May 19, while the Sep contract hit highs July 20, 2 months later! Not an easy market to sell. 

The move down from July 20 has a very back and forth pattern that may actually turn out to be better counted as abc's than impulse waves of 5. Would that be unusual for long term bear market of historical Grand Super Cycle Degree? Maybe unusual not impossible. 
If that is the case, anybody waiting for an obvious blow off top followed by a clear accelerating impulse wave gap down type pivot, is now pretty uncomfortable.

I suppose if you were a Junior trader at the PPT you would try to defend the lows at 2034/2040.

Tuesday, August 4, 2015

Crude: Catch the Knife

I love it when the senior executives of  the Majors declare bear markets for ever. WTI is oversold both intrinsically and relatively.

click to enlarge
Some charting packages have the RSI reading positive divergence.

take a look at the                                          3:2:1 Crack
click to enlarge

I can clearly find 5 waves down in the first chart . Even if you think its going to 40 or even  32 
a retrace here is easy to imagine and 50% would bring it up yo the 4th wave of lesser degree around 53.