Wednesday, December 02, 2009

Still up

Here is an hourly chart showing 24 hour e-mini trading. The trend is still upward as indicated by the rising trend in the market's trading ranges (blue ovals). This morning the market tried to break out over the last top at 1111.75 but couldn't hold its gains. The selling that materialized subsequently doesn't look terribly aggressive to me. The reaction so far has not even matched the size of the previous reaction (purple rectangles).

I think the market will continue to trade in its current range (second blue oval) for the rest of the day and then make a second upside break out attempt tomorrow.


me said...

I agree. The trend is up now according to my charts. It's hard to believe what I'm seeing though. But charts don't lie.

Urban said...

Last time the S&P hit a 1yr high then closed lower, with <25% bears in the I.I. survey, was 10/11/07.

The contrarian should take note!

Kishore said...

Urban, I have also seen elsewhere that there are very few bears left but Carl had pointed to the following article which shows that the very few people are optimistic about business. They are probabily not part of the stock market bear crowd.

If business conditions are bad, you are broke, you have no job, you will not be i the market. But among those who are in the market, there are not many bears left.

Maybe, Carl, like the rest of us, sees the world with colored glasses. His are rose, mine are a sickening yellow.

Once again, Urban, I agree that bears are almost extinct or in hibernation, i.e. not trading, like me. Waiting for the big fall!

me said...

I thought it would make a complete cycle down and then up again, but my charts are showing an uptrend for at least 8 more days. Of course, the price may dip down 1 to 2 days out of those 8 days as expected.

Kishore said...

me, there are many other people whose charts show a forthcoming decline of major proportions.

Incidentally, what charts are you looking at? And how do you determine that the uptrend will continue for at least for 8 more days? How do your charts show that? Why would the price dip down for only 1 or 2 days? Why is that expected? Just curious.

We already have two islands at the top. Each island had a duration of only 3 days. If this pattern is to be repeated for the third time, we should see a large gap down at the open on Friday. But then, there is no guarantee.

Incidentally, islands at the top normally mean trend reversal but this market is not normal. It is manipulated by the US government.

jeff said...

To add.

There is rumor that Goldman execs were found to be buying guns. I find this amusing as there was news that Goldman execs were bound to be installing electronic gates in front of their homes just 2 months before last year's market crash. To add, two Vice Chairman of the firm have been selling substantial amounts of stock in the last month. J. Michael Evans sold 140,000 shares and fellow Vice Chair Michael Sherwood unloaded 182,000 shares. The combined total for the two transactions was in excess of %55 million. That's a lot of selling in a company that rarely sees any insider selling. The two become just the second and third insider to sell as the stock has soared in the past year. Given Goldman is the darling of Wall Street and know what's going on before everyone else, It makes me think twice that staying too long is the wrong move.

greg said...

carl, can you comment on prechter's view that march is not a generational low. thanks

Kishore said...

Jeff, Goldman is another Enron on a much "grander" scale. Zerohedge has nailed it quite well:

Moreover, Dubai is a merely a precursor to major forthcoming debtor defaults, sovereign, many US states, and corporate, on a "grander" scale.

TA is being abused as a tool by the US government in an attempt a sucker out of us all. That's why we have huge overnight gaps in trading.

As honest Abe once said, "You cannot fool all the people all the time." Eventually, it will all come home to roost.

Continuing with failed policies, the US government is, in fact, riding the tiger. Unfortunately, they can't get off because as soon they get off, the tiger will eat them up!