Wednesday, June 30, 2010

Update

Today's range has been much narrower than I had expected. What does this mean?

I think it is a sign of exhaustion, especially since it has happened the day after the market broke two obvious low points. The rally off of yesterday's low was feeble, so I think we shall see the ES trade near 1020 before a rally of 25-35 points develops. My advancing issues oscillators are showing bullish divergences and are all at low (oversold) levels (check out my chart page for these). So I think this market is scraping bottom.

21 comments:

Adsense said...

Hi Carl
The 3 peaks domed house pattern on the dow 60 minute chart from the may lows has now completed at point 28. what ever transpires from here will be a different pattern. the cycle lows for me are not changed the time frame runs from july 2nd into july 12th .
so we can certainly consolidate now for a few days and then run higher into late july early august
yet that time frame corresponds with other long term cycle peaks .
to add to this the year 2010 is a benner bussiness cycle high and 2011 a benner business cycle low
12 yrs 3 months to 12 years 8 months from jan-march 2000 will start to fit into this as we get into mid 2011. i mentioned the 1994
low and lindsey's 15 yr 3 month? 16yr 3 month time span before . it all correlates and should not be taken lightly at this juncture
joe

Rajeev Bharol said...

I think SnP is going to 800ish before a big bounce....What happened to perma bears since march 2009 will happen to permabulls for next few months.

yrichter said...

Thank, Isaac.

BullandBearWise said...

Where's the selling climax? Bear corrections in bull markets always end in selling climaxes. True bear market bottoms are dish-shaped. This sort of drip-drip exhaustion is further evidence we are in a bear market.

Kishore said...

Carl, once we are below the 1216-1040 box, where is the bottom of the next box? Is it at 956 or is it at 870?

Michelle B said...

Carl, rather than scraping out a bottom, a more appropriate image would be that it is being gouged out.

I would like to see the historical evidence that bear corrections in bull markets always end in selling climaxes (that's for BullandBearWise).

With such overextended-to-the-downside market internals, why do you think that we aren't nearing the end of a selling climax? Don't count your bears before they are born. A bull market does not give up easily, and this price action battle could just be that.

As for dish-shaped bottoms (if you are correct in this regard historically), the very fact that there isn't one being made should keep you on your toes.

Rather a drip-drip exhaustion, what I am seeing is a violently choppy range roughly between 1120 and 1020 on the SPX (a mere 100 pt range, and you think this violent chop is drip drip exhaustion?), and it still has not been broken decisively to the downside.

Naveedah said...

K county,for you!
stocks are doing their best to bounce today, helped higher by the
3-month tender results early this morning in Europe (where demand was a lot less than feared), although there isn’t a whole lot of “real” money stepping into the market here. There was some small short covering that occurred at the open but this is drying up as we head into mid-day. A lot of the optimism engendered by the ECB 3-month tender was erased by the sluggish ADP labor report (sparking worries of another sluggish BLS release on Fri) and talk that tomorrow’s 6-day tender from the ECB will see heightened demand. The massive performance differential between Treasuries (10yr TSYs up just under 7% QTD) and stocks (SP500 off more than 10% QTD) sparking talk of a rotation/rebalancing into the end of the day that could provide a bid to equities. We are starting to see the start of the Jul 4 holidays as attendance and volumes pick up; investors are increasingly turning their sights to the week of Jul 12 (when earnings start, Congress returns to session and may pass fin reg reform, and more news on the European bank stress tests could hit).
Bulls gain above Tues 1071- 1074 bear gap. Next supports are 1021/1008, then 986 2008 H+S neckline
To watch: China’s June PMIs tonight; Spain debt auction Thurs; 6-day tender from ECB Thurs; auto sales Thurs; BLS on Fri. The consensus right now is for a gain of 110K private payrolls (the total nonfarm payrolls seen falling 125K) although this ADP release is causing estimates to fell.
My start to this day in day trading was all with Carl's help,I would like to mention that My 15yrs old friend is among few top world traders and you guys can't imagine how much he liked Carl's book and blogs.I respect his anonymity otherwise...
I am angry with you saddest guys who post nasty criticsm.
I have sent this message to my son who will post it.
We Respect Carl from our hearts!

Kishore said...

The "black Thursday" in May was the beginning of the end. It was a massive "supply shock" and we ignored it. We ignored it because we suddenly abandoned the technical approach and found a unfounded "explanation" somewhere else.

Box theory works beautifully for strong trends and we are now in a strong downtrend.

If we have broken the 1216 - 1040 box, almost 180 points, where is the bottom of the next box?

We need to apply our guiding principals consistently, or do you abandon the guiding principals to "explain" what our bias makes us want to see?

pej said...

Carl, with all due respect:
I remember early May I posted several comments saying the drop would be a lot bigger than what you were forecasting, that you were with the heard on the bull camp and that we were reaching the top, and then that we were going down.

it's been several weeks that you expect the market to rebound, and reach new highs while it's actually sliding lower and lower. I think it's time to reconsider your stance.

The bull was so long and so exuberant, that we had some form of July 2007 syndrome.

We are now pretty close to ending the denial phase, and should start the fear phase. I know you don't like to read other people's blogs, but I'd suggest you read some of my posts - apologies for the self promotion...

Carl Futia said...

Raven:

I post plenty of comments from people who disagree with me and are very bearish. But I won't post comments that are insulting to me or to other commenters.

So if I didn't post your comments it was probably because they were insulting, just like the last one which I deleted.

This is my blog and if all you want to do is brag about your own genius while putting down others you can go somewhere else.

Jack said...

Carl,

I give you credit for sticking to your guns. You put it out there whether you're right or wrong.

I do still appreciate your candor and honest opinion.

Let's see if we can find some support this 2nd half of the yr.

Successful trading,

Jack

raven said...

It is clearly evident that something extraordinary is happening in the markets.

I am not a genius by any way shape or form but like I said before we are going much lower perhaps to 860before any traction will be found.

Thank You for being a Bull ;)..

dcatlowpj said...

Carl, I would like to see you post everything that comes here, hard to read, nasty, or plainly offensive.

We are all adults and can handle it. I personally would like to see a more free-flowing forum that allows for posts quickly and timely...I would visit more often and post more data from my perspective. But, I do not like to post information, thought out completely with references only to have a possibility that you will not post it and it would be a waste of my time.

There seem to be some pretty sharp people here and I wonder what might pop out of the "woodwork" should you change your policy..

Or, why not set up a board, if it is free and we can post charts, comments on the fly and so on.

I have been trading for 20 years, and my partner, who is younger than myself, for 16 years (options).

We have taught one another to trade and study each evening using our computers as I recently sold my home in Cal and live in a Diesel RV with a workstation and a broadband Verizon Modem.

Let me know what you think:

djohnsonhot@yahoo.com

Dave Johnson

Kishore said...

Naveedah, you are so emotional!

But, if did make all that money with your trades, you must be a good trader.

Unquestionably, emotions and blind faith, i.e. the path of devotion, (though it is not the path for everyone, especially for stock market trading) can also lead us to enlightenment and salvation.

I wish you continued good luck!

David said...

I agree with Carl. I think we will go to 1300 and even up to 1450. I have a market top in Feb 2011 (cycle analysis). I don't really know much about Carl's methods, but from an Elliott Wave perspective, this is what I am seeing. A final 3 wave move higher with a significant correction in late August 2010.

sandy allred said...

Carl, well done once again. ES trades @ 1016/2100HRS...

mtgrizz said...

Hi Carl,

I have read your blog for awhile and not sure if you are bullish just because it feels contrarian. Simply put here is the major problem and why we will see a market much much lower than today. Overall global liabilities stand at 222 Trillion. Global GDP is at 64 Trillion. Debt to GDP is at 362%. Just to service this debt will be at 12T at the least. I won't even address the pension liabilities. This is not sustainable. I get the fact that this is your blog and you have the right to post what ever you believe in, but just realize you are going to lead a lot of people down a destructive path if you don't recognize the seriousness of this problem. Good luck with your trading.

C said...

Is the market discounted enough for the fear of a double dip recession? Maybe, maybe not, however such fear seems to make the market overshoot. So I'm open to the idea that we will see 900 before 1300. Off course if there is no double dip then we may very well see 1300 before 900. I suppose time will tell & in the meantime it appears that the path of least resistance is down maybe until we have retraced 50% of the up leg from March 2009.

BullandBearWise said...

Michelle B:
Bear market saucer bottoms: 1937-1945, 1976-1982, 2002-2004
Bull market bottoms: 1987, 1997, 1998

pej said...

@MTGrizz

I wouldn't agree with you on the main facts:
first of all, Caveat Emptor. Anyone who wants to follow what he/she reads on the web (or anywhere else) should do so at their own risk and after enough consideration. Otherwise, they are acting plain silly and look for trouble.

second, economic realities and markets are two completely uncorrelated matters. If you confuse the two, you are headed for serious trouble trading the markets.

@Carl:
I've re-read my previous comment, and feel like i've been a bit harsh for no particular reason.

Long live Carl and his blog — that why I'd like to see him make money rather than lose :-)

Good luck and thanks again.

mtgrizz said...

To Pej: But then again the market will discount the correct economic reality. The problem right now is that the market is forecasting 3% growth going forward. How are you going to set your trading style if you are not aware of economics? Sure right now we are a little over sold, maybe try to play a bounce, but if you think that the market will magically move up to 1300 plus because why? Debt will be eradicated with no pain? How can the economy grow at 3% while the focus will be on being more frugal? How can treasuries move to 5% with our GDP to debt levels being at 400%? Why can't the s&p move to 500-600 levels? The government will have move to an aggressive QE program just to relieve extreme dollar strength. You can't ignore the root of the problem which is that we are at extreme debt levels relative to our economic output.