Keystone's algorithm, Keybot the Quant, flipped long at 3:51 PM EST at SPX 1409. A whipsaw occurs after a wild day of erratic and unstable market action. Semi's, financials and volatility created the buoyancy from the technical standpoint. Keep watching these three amigo's tomorrow. The bulls are driving the bus again. Stay alert for a whipsaw back to the short side either tomorrow or Friday. Further details are at Keybot's site;
http://www.keybotthequant.blogspot.com
Jim Cramer just turned bearish (says we're going over the Cliff). Never was a J.C. fan, but there's about ten million sheep who trade in tandem with him.
ReplyDeleteI am sticking with the bet this is a headfake as per KS's forecast a few days ago. I have never seen spikes outside the BBs in NYMO and CPC mark near-term bottoms.
ReplyDeleteI look at stocks with split vision: half technical, half fundamental, which is a bit nuts. If I'm unable to locate any kind of factor driving growth in earnings, then I'm skeptical. Even if we don't go over the cliff, there's nothing driving earnings any higher. I don't know that I'm as dire as some of the bears. I've heard talk of a 200 point drop in the S&P (though I can't rule it out).
ReplyDeleteOn the other hand, previous slips from short to long in KeyBot have been followed by substantial rallies....
ReplyDeleteWhat Cliff? Don't you understand this is last years Greece. What actually is the "CLIFF"? Jimmy Cliff? smoke a dubbie and relax. OBAMA AND BOHNER are playing with us. It will never happen just like Summer 2011, same crap. And they will save us all, and all will be heroes. Such a joke. Just play the market day to day, hold the lines as KS points out and hope to get lucky on your positions and swings. NOISE NOISE NOISE. Like I said before if you keep thinking that life is the sitcom you will go batty.
ReplyDeleteHy KS !
ReplyDeleteSo... my idiot vision with the ''pop goes the weasel" was right yesterday :).
http://www.youtube.com/watch?v=sfYoNPJcN30
Today's and Friday's shifty predictions (from the unknown eastern european country called Romania - that country with Nadia Comaneci and Dracula's nest and Ceausescu and other archetypal stuff for knowledge-limited persons - cause time and energy is limited for humans, isn't it? we have to be efficient....) :
Thursday: today the ''weasel'' might pop up a little more up to spx 1419-1424.56/1424.65 (after a potential decline first, after european econ-data, but clearely breaking the 1411 ex-S/turned R level)
In the second part of Thursday (last 3-4 american market hours after Geithner's meetings)or Friday (after Chicago PMI for Nov'12):
Damn! The happy bullish weasel will be fully blown away, will explode and be turned to pure trash by some uncivilized deeply-perverted bears in the area 1423/1425 - 1432.80 ....
What's next for the next 9-12 trading days?
I'm afraid to name it ... it's something called ''3'rd wave'' and can be described like ... spx 12xx .... something like that ...
Have a great trading time!
V.
p.s. It's directly assumed the fact that the Keybot the Quant's status will again turn to bearish side ...
'' That's the way the money goes / Pop! Goes the weasel!"
:D!
Hope you didn't mind on my familiar tone, KS.
DeleteIt's a sign that i like your blog - it's one of the best technical trader sites i've ever seen .
So, this familiar tone it's something good, not a bad thing :).
V.
Interesting article by John Hussman on Mish’s global economic analysis blog:
ReplyDelete‘Our estimates of prospective stock market return/risk, on a blended horizon from 2-weeks to 18-months, remains among the most negative that we’ve observed in a century of market data.
‘On the valuation front, Wall Street has been lulled into complacency by record profit margins born of extreme fiscal deficits and depressed savings rates. Profits as a share of GDP are presently about 70% above their historical norm, and profit margins have historically been highly sensitive to cyclical fluctuations. So the seemingly benign ratio of “price to forward operating earnings” is benign only because those forward operating earnings are far out of line with what could reasonably expected on a sustained long-term basis.
‘On the basis of smooth fundamentals such as revenues, book values, dividends and cyclically-adjusted earnings, the S&P 500 is somewhere between 40-70% above pre-bubble valuation norms, depending on the measure. That’s about the same point they reached at the beginning of the 1965-1982 secular bear period, as well as the 1987 peak.’
‘We remain convinced that stocks are richly valued here. A fairly run-of-the-mill normalization of valuations in the course of the present market cycle would imply bear market losses of about one-third of the market’s value, without even establishing significant undervaluation. Then again, there’s no assurance that valuations will normalize, or that stocks will experience a bear market here. Maybe Wall Street is correct that profit margins will remain forever elevated and The New Global Economy™ will never again witness “normal” valuations on these measures at all. There’s no shortage of analysts who effectively embrace that view by focusing only on forward-operating earnings.’
Very interesting thoughts. To boil it down in simple terms, it may be best, as the markets move up, to exit longs and build up cash, and/or bring on shorts, scaling in as the SPX rises. The wild market move shook out lots of traders yesterday on both sides, so that may continue along. On days like that, it is typically best to sit and watch.
ReplyDeleteThe S&P's are up overnight so the bulls will run and test SPX 1413 at the open, if that fails, next is 1419, then 1429, then 1433, breaking thru 1413 puts 1433 on the plate. This means that XLF and SOX wills tay elevated, and volatility, VIX, will remain low today, thus, copper is the key.
Copper, JJC, is up 0.7% today, this places JJC exactly at the critical 44.83-44.88 bull-bear line in the sand. If JJC hits 44.90 and moves higher, SPX 1433 will be coming in the days ahead. If the bears put up a fight today, and keep the JJC 44.85-ish as a ceiling, markets will flatten and roll over again.