Real Time e-mini S&P Trading, plus contrarian commentary on all the markets, all the time
Thursday, April 29, 2010
Does this look like the chart of a bear market rally?
Here is 10 point per box, three box reversal point and figure chart of the cash S&P index. The low point on the chart is the March 2009 low at 666. Does this chart look like the chart of a bear market rally?
Because I have almost no experience with P&F charts, I have no way to answer your question. But I'll pose another question: How would a P&F chart of the bear market rallies that followed the 1929 crash compare to this one?
(I'm not saying that this is a bear market rally, just saying that I don't know what a P&F chart of a bear market rally should look like.)
Dont you think, they are focusing more on BIDU than GOOG. Price hit 700+ on BIDU today. Car sales are more in China than US, is it the reason BIDU is jumping more
Nota bear rally,genuine buying which is accompanied by short covering @1177.Correction is likely to start from tomorrow@1220 for 20 points based on fears and out of Friday closing positions factor. Thanks for immense learnings !
Clearly from the start of the uptrend an unbroken upswing does not look like a bear market rally. However, on a 3, 5, or 10 year PF chart that opens up a larger perspective, the conversation could be more interesting. and when the music ends its hard to know...just like in oct/nov 2007. everything was great until it wasnt.
No one doubts anymore that has been a bear market rally. But all bull markets end eventually especially those like this one that is purely a result of Fed and Treasury pumping. Well this pumping is about to end and will this bull market, abruptly.
yes actually, it looks just like the rally after the 1929 crash, only steeper due to the more severe nature of the collapse. This is how every bear market rally looks. As a matter of fact, the volume alone will tell you this is not a bull market. Price sans Volume = wrong price. A lot of people thought they were in a housing bull market as well. Same suckers different time. Sure, this rally can go further, there is no real money behind it, the last two morons left can exchange a DOW share at 36,000. The market will resume trading when price discovery returns and where the market went exit stage left, 666. I find it funny that fools fall for the same higher price trap they always do. We are in the largest ponzi bubble of all time, the final bubble. You bet it will look like a bull market as it hoodwinks the masses that don't understand what money is and how it functions, to most it will look like a bull market, to a few it will look like a sad play in it's final act.
It will be difficult to derail this rally until the Fed raises the discount rate. The Fed likely won't raise rates any time soon. Ergo, I agree; the rally won't end any time soon.
Your question seems to imply this can't possibly be a bear market rally. Why not? Bear market rallies are notoriously explosive and often retrace half or more of the previous decline. I don't see anything in this rally that is out of keeping with prior major bear market rallies.
Is there something about the chart that tells you it can't be a bear market rally?
Carl the same question could have been asked in 2006-2007 . i do get your point though , the trend has been up for a while now and in your opinion is still up . your chart shows the trend is up and there is no compelling evidance to prove the trend is down . im with you on that point . my main mistake this year has not been a failure to except the trend as up , my mistake has been when i attempted to trade for a short term decline my cycles still point towards a low into mid may and the market is definately not turning down . my cycle high is due today so a decline into mid may is expected that said im not going to attempt to trade it at this juncture the price of silver as well as gold are attempting to break to the upside and my feelings are that they have not turned down but have gone into a consolidation my bias is the metals will run with the market and may for a time diverge yet overall my bias is up for the market as well as the metals along with oil into early august . from there i will re asses the market and if the market is showing plenty of divergences i will look to take a bearish position at that time . yoru work is good and thanks again for your posts joe
I still say this is a bear rally. Transfer payments are making up for the GDP loss.
That said, I was wrong about a correction. I now think they'll gun the market until the dollar breaks. The IMF's junior subordinated bailout of Greece is evidence they will do every crazy thing they can to keep the system afloat. But when the buck breaks, there's a good chance they'll abandon the 'reflate or die' strategy and stocks will break with it (no point of keeping the charade going).
Of course, commodities will shoot up as producers demand more fiat for their stuff, and PMs will take a moon shot.
Just be ready to take a drubbing if you hold overnight unhedged (as the crash could begin overnight in the futures), and then the discipline to stay in cash, and/or the good sense to buy PMs, and/or the hardened titanium balls to go full on short.
Wouldn't including the period prior, say from oct/2007 to March show a different story?
Yes we've had an amazing run, and will likely continue and you have called each and every step of the way amazingly on point. However, starting a chart at the low point distorts the picture a bit.
No bear rally gentlemen, it's the strongest bull run recorded in history. Of course all bull runs end one day and we could possibly see another bear market this or next year. But even then this current run will not be called bear rally.
What is the definition of a bear market rally? thats the question that needs to be answered! And quite plainly, the answer is, a rally that fails at a lower price high than the prior bull market top! Now if you want to quantify this further, you could say a bear market rally is one that fails before a 100% price retrace (which is what I wrote above) AND fails before a 100% time retrace. But in any case, this is highly subjective and at the end of the day, does it matter if its a bear market rally or not? The message to 'traders' is the same as ever, dont fight the tape! -MK
Here is 10 point per box, three box reversal point and figure chart of the cash S&P index. The low point on the chart is the March 2009 low at 666. Does this chart look like the chart of a bear market rally?
26 comments:
No. Sir! -:))
At what point does the market have its pullback of 10% or more? Thanks!
Because I have almost no experience with P&F charts, I have no way to answer your question. But I'll pose another question: How would a P&F chart of the bear market rallies that followed the 1929 crash compare to this one?
(I'm not saying that this is a bear market rally, just saying that I don't know what a P&F chart of a bear market rally should look like.)
Carl,
Dont you think, they are focusing more on BIDU than GOOG. Price hit 700+ on BIDU today. Car sales are more in China than US, is it the reason BIDU is jumping more
Yes, it does look like a bear rally. I am standing on my head right now.
Never! sir!:-)
Nota bear rally,genuine buying which is accompanied by short covering @1177.Correction is likely to start from tomorrow@1220 for 20 points based on fears and out of Friday closing positions factor.
Thanks for immense learnings !
Clearly from the start of the uptrend an unbroken upswing does not look like a bear market rally. However, on a 3, 5, or 10 year PF chart that opens up a larger perspective, the conversation could be more interesting. and when the music ends its hard to know...just like in oct/nov 2007. everything was great until it wasnt.
No one doubts anymore that has been a bear market rally. But all bull markets end eventually especially those like this one that is purely a result of Fed and Treasury pumping. Well this pumping is about to end and will this bull market, abruptly.
Forgot to say, I really hope your gold target is as spot on as your SPX calls !
yes actually, it looks just like the rally after the 1929 crash, only steeper due to the more severe nature of the collapse. This is how every bear market rally looks. As a matter of fact, the volume alone will tell you this is not a bull market. Price sans Volume = wrong price. A lot of people thought they were in a housing bull market as well. Same suckers different time. Sure, this rally can go further, there is no real money behind it, the last two morons left can exchange a DOW share at 36,000. The market will resume trading when price discovery returns and where the market went exit stage left, 666. I find it funny that fools fall for the same higher price trap they always do. We are in the largest ponzi bubble of all time, the final bubble. You bet it will look like a bull market as it hoodwinks the masses that don't understand what money is and how it functions, to most it will look like a bull market, to a few it will look like a sad play in it's final act.
Carl,
It will be difficult to derail this rally until the Fed raises the discount rate. The Fed likely won't raise rates any time soon. Ergo, I agree; the rally won't end any time soon.
Carl,
Your question seems to imply this can't possibly be a bear market rally. Why not? Bear market rallies are notoriously explosive and often retrace half or more of the previous decline. I don't see anything in this rally that is out of keeping with prior major bear market rallies.
Is there something about the chart that tells you it can't be a bear market rally?
Fed will be doing a surprise rate hike pretty soon... the only reason he did not change the tone of his speech was because of Greece!
Well, Jim, for starters I would observe that the S&P has rallied 83% from its low and has gone up for more than a year.
Fools rush where angels dread to tread!
The rally from March 2009 does look like a market in a hurry or a rush.
Moreover, balloons do burst. And this won't be the first.
It is a bear-fed rally.
Carl, sounds like you are holding the position overnight?
I think this is a Boil Market.
I am not sure if anyone can recall that the market went down on may 27
over 213 points ?
I guess we have to see if dow 11,205 acts as resistence for todays move up.
Again,my indicators suggest that this could offer some interesting trading for two weeks and then off to the races to 270 and possible much more.
Carl
Just reading your book regarding Media Diary and saw this and similar emotive 'ebola' commentary on the Greece debt crisis
http://www.guardian.co.uk/world/2010/apr/28/greece-euro
Do you think this might be a good time to go long the Euro?
Thanks
Carl
the same question could have been asked in 2006-2007 . i do get your point though , the trend has been up for a while now and in your opinion is still up . your chart shows the trend is up and there is no compelling evidance to prove the trend is down . im with you on that point . my main mistake this year has not been a failure to except the trend as up , my mistake has been when i attempted to trade for a short term decline
my cycles still point towards a low into mid may and the market is definately not turning down . my cycle high is due today so a decline into mid may is expected
that said im not going to attempt to trade it at this juncture
the price of silver as well as gold are attempting to break to the upside and my feelings are that they have not turned down but have gone into a consolidation
my bias is the metals will run with the market and may for a time diverge yet overall my bias is up for the market as well as the metals along with oil into early august . from there i will re asses the market and if the market is showing plenty of divergences i will look to take a bearish position at that time .
yoru work is good and thanks again
for your posts
joe
I still say this is a bear rally. Transfer payments are making up for the GDP loss.
That said, I was wrong about a correction. I now think they'll gun the market until the dollar breaks. The IMF's junior subordinated bailout of Greece is evidence they will do every crazy thing they can to keep the system afloat. But when the buck breaks, there's a good chance they'll abandon the 'reflate or die' strategy and stocks will break with it (no point of keeping the charade going).
Of course, commodities will shoot up as producers demand more fiat for their stuff, and PMs will take a moon shot.
Just be ready to take a drubbing if you hold overnight unhedged (as the crash could begin overnight in the futures), and then the discipline to stay in cash, and/or the good sense to buy PMs, and/or the hardened titanium balls to go full on short.
...Oh, and have a bug-out plan.
Wouldn't including the period prior, say from oct/2007 to March show a different story?
Yes we've had an amazing run, and will likely continue and you have called each and every step of the way amazingly on point. However, starting a chart at the low point distorts the picture a bit.
No bear rally gentlemen, it's the strongest bull run recorded in history. Of course all bull runs end one day and we could possibly see another bear market this or next year. But even then this current run will not be called bear rally.
What is the definition of a bear market rally? thats the question that needs to be answered! And quite plainly, the answer is, a rally that fails at a lower price high than the prior bull market top! Now if you want to quantify this further, you could say a bear market rally is one that fails before a 100% price retrace (which is what I wrote above) AND fails before a 100% time retrace. But in any case, this is highly subjective and at the end of the day, does it matter if its a bear market rally or not? The message to 'traders' is the same as ever, dont fight the tape! -MK
Carl,
Why you need to worry whether it is a bear rally or not? You are an excellent trader and your short term calls are on the money most often.
Bear rally or bull market. Does not matter!
Post a Comment