Tuesday, September 16, 2008
Volume
Volume yesterday and today has been at record setting levels. The significant thing about this is that the markets have not made much if any progress below the July lows despite all this activity. In my experience this sort of thing is associated with lows that stand up for quite a long time. This high volume coupled with little net downside progress and very bearish headlines is a very bullish combination.
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QQQQ volume yesterday was mammoth. Plenty of weak hands want out and transferred ownership to stronger players right near multi-month lows
This post speaks VOLUMEs about where we are headed!
Please look deeper into the volume. AIG alone traded over a billion shares. May be the market has put in a low today at 1170, but the vol gauge is skewed. More tell tale sign is the # of 52 wk lows - again reached 1100, close to the July 15 low, but did so with VIX too spiking, giving it more credence of a bottom and possibly a 90 pt rally to 1260.
Carl,
I have been reading your blog for a while and have a great deal of respect for your analysis/passion. That said, I disagree with your conclusion that high volume in the last couple of days without significant downside penetration in major indices is bullish. We saw a dead-cat bounce today and the market should drop between 750 - 1500 points on the Dow in a single day in the next three days! The daily new lows on the NYSE will exceed 1250, the new highs will dip into the single digits, the market will make an intraday reversal and that will be the capitulation bottom that will hold for a long time. Just my two cents' worth. :)
Hi Carl,
Junk bond funds slid a pretty good amount today, ending at new lows. This could be a non-confirmation with stocks, but it could also be a hint that stocks haven't quite hit bottom. Junk reversed in sync with stocks at the July low.
Why don't you put your money where your mouth is and leave your spx contract till spx reaches 1500 lol
hi carl
1st id like to thank you for your clarification on your thoughts today, i have been one that has felt you have left lindsay so your clarification was helpful . 2ndly today we entered the window for a short term low in whhich the cycles now point UP into oct 3rd
technically we should go above 1313 into oct 3rd if these cycles remain accurate . todate they are 81 percent if today market the low
yet the cycle ends tomorrow to be presice and the window is ( sept 16th 19th ) i want to add something else that happend yesterday , i had open orders out all day yesterday to buy spx call options
i did the usual math i use to project price and yet despite a 500 point down day i was never filled
which was very weird . i took initially as there was no liquitity and then realised the reason was there was no intrest in the call options hence the world was so bearish that they dont have any call options and are universaly bearish only . on todays open however i was filled at a price $ 1.60 below my order
and closed the day up 70 percent .
i bring this up because like you i see many bullish divergences and yet the typical indicators i have used for the past 10 years are not working this year .i intend to hold the calls into oct 3rd unless
i see a stronger move up in which
ill exit accordingly . lastly i heard some interesting news tonight that i have been told is in the news yet i have not read it
jp morgan leant lehman 136 billion a few days ago and the gov paid them back and they are now lending them around 50 billion . there is many back door dealings going on that is not in the news and yet the major fininancial institutions do know about . the recent aig news about a possible 85 billion bridge loan spiked the futures after hours , all my longer term cycles and the shorter term cycles
are now pointing up and gaining strength . weather this market proves me correct or not remains to be seen . ther eis 1 indicator i want to touch on that has some validity right now . it is a monthly chart of the oex /(vxo + vix ) while we have not ended the month yet monthly closes below 8.00 are very rare over the past 14 years today it closed 8.82 weekly closes below 6 are also rare
the january 22 2008 low was 8.09
march 17 low was 8.21 todays low
was 7.83 . to sum this up
while this indicator can go lower
historically we are very close to a low , when i look at my own short term cycles that have been noted above . so my bias is now bullish and im long from this mornings open and looking higher into oct 3rd . ill let the market
prove me right or wrong
joe
Joe-Joe, enjoyed your analysis. Mr. Carl, kudos to you..I think your analysis today is spot on. I think with this AIG rescue, this market has turned the bend from doom and gloom to hope and repair. I don't think it will be a straight shot up from here but I definitely think we have turned the bend. Thank you Carl for all your insights. Kind regards, Janet
i to agree that today was the bottom. I bet it will be tested either in a few days or 1-2 weeks and maybe undercut by a few s$p points but i would expect a good rally off these levels on a more intermediate time frame
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