we had some nice fear.... My theisis is thatthis will give us a bounce... But we don't have enough bearishness to get a good run....
So bank earnings arn't that bad, we get 2 days of short covering... then in anticipation of the other bank earnings next monday/tuesday. we decline again into next friday..
this fits a nice Bull flag.
then we can have some Super bearishness, and that can give us a turn.
Except when I look at this, as an entire pattern... Like from november through Jan as a high...
I hate the look of it.... 'it would "feel" better' if we either made a new high... soon... or tested the lows.....
and if we are range bound carter worth is right, and I can't deal with that....
Friday, January 9, 2009
how about this
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Higher highs and higher lows, so far, so good.
Carter Worth notwithstanding, nothing stays range bound forever.
I guess I should have held onto TWM another day, but can't get greedy.
I was out of pocket all day and did not trade, but listened to NPR in the car: really bearish sentiment among the educated elite...
quotes:
"unemployment is accelerating"
"consumers are not buying anything, no end in sight"
"worse than the depression because it's global"
"deficit could be $2 trillion next year"
From a sentiment standpoint, it's Armageddon, yet the market trudges onward and upward.
This will not be a quick recovery, but will it get worse? I'm not sure Michigan could get worse without street riots.
You should have hung onto twm for about 30 minutes this morning.
"Hopefully"(I hate that word) Just like every other time the banks will catch a bounce as they release earnings on Monday and Tuesday.. One would think that will drive the market up... but then it will get grim again as the rest of the banks report next week... Normally it's the "big banks" followed by the regionals.... I guess there just arn't any more big banks... and some of them reported in december.
You should probably pay attention to trader sentiment more than NPR sentiment. A buddy of mine was like "how can you think the market will go up as nasty as stuff is" and I just replied for the same reason I though the market would go down when it Topped... The market tops when the birds are out, and Bambie's mother is still alive, and thumper is running through the Forrest... and the opposite is true for the end of the bear.... But I Very much doubt we will get a new low... but if every body gets complacent and depressed as the market goes down... be careful that is yet another emotion.
If we can get a nice "Hopeful" 2 day bear flag, then another leg down... which will build a 2 week Bull flag... When we leg down, people will get Uber short, and we will run out of sellers.
I have never seen the "Fast money" guys say "Sell the market tomorrow", and seen it go down. What I was saying is that at both of the recent bottoms in the short term trend, Mackey has been screaming about how fucked everything is... and we just don't have that yet... I need the dopes on fast money to start screaming and that should give us a "Possible reversal"
Another interesting thing is that the Materials and financials have been trading together over the past few days.... that is creepy.. may just be a coincidence.
I'll hopefully show a chart, but earnings weeks the banks bounce and sort of retest twice.. when the two sets of earnings happen. Tends to look like a double bottom. So we will get 2 days of short covering after each.
We should Muddle over the next "While".. and the easy thing to say is that the real retest will come next october... So it's figuring out what happens between now and then.
Funny how some people say "Traders are predicting a recovery in the second half of 2009", But in october november.. I didn't hear anybody saying that.. it's that the market bounced, and that there is that "economy recovers in 6-9 months after the bottom thing.. which is just a bunch of crap. All that has realy happened is that we have discounted some real nastyness. If things get worse we will just discount it again... 6-8 months is a fairly large "margin of error" 6-8 months +/- 3 months for the earnings cycles... That is a Tollerance of 6 months... which means the market just has to bottom within a year of the end.. and we get excited.
About street riots... be careful "socio-Economics" are important, people will be very miserable.. and it should be at it's worst when employment bottoms out... which is probably in the next 6 months or so, we will have max unemployment in that 9-11% range. That will be when we will have maximum unrest.
Hopefully obama will get the psychology to a manageable level. He can start talking about "Recovery".. He is good about choosing his words.. so we shouldn't see much Asshatery.
I was going to add a comment about "Prime vintage" Carter Worth but I didn't want to get you off on a tangent.
Your point about trader vs NPR sentiment is well taken. Likewise social unrest. Five kids were shot in Chicago this weekend and the local bank was robbed two blocks from our house. All anecdotal but smacks of "blood in the streets" here in the depressed Midwest. It's bad, dude.
Not sure how to interpret this graph:
http://stockcharts.com/h-sc/ui?s=$nya50r
80% of NYSE stocks are above their 50dma; only 10% are above their 200dma. Naz is similar.
It seems that this is a positive or bullish indicator since more people would trade with the 50dma as support/ resistance and now it is acting as support for 80% of stocks.
Yet, I would not call the market grossly overbought [except maybe in the very short term] with so many stocks below their 200dma. Also the stochastic looks likes movement is in the right direction on the 200dma.
http://stockcharts.com/h-sc/ui?s=$NYA200R&p=D&b=5&g=0&id=0
I'm not sure how to interpret this stuff. Barry has used this in the past and especially Oct 2007 I remember using this tool to predict the market was overbought. Your thoughts?
The bottom was roghly 2 months ago(50 days), that all just puts the 50dma in play... beyond that.... hmm
I think that what we will do is build another bear trap under the 50dma thursday friday.
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