Owner: Zens Market Insights URL:http://zentrader13.blogspot.com/ Join Date: Fri, 24 Nov 2006 21:03:28 -0600 Rating:0 Site Description: Using stock market sentiment to gain a trading edge. Stock market forecasts and market timing for Nasdaq and QQQQ based on proprietary sentiment analysis. Site statistics:Click here
Curb Your Enthusiasm 1970-01-01 00:59:59 The above chart shows the Rydex Ratio action versus the OEX over the past month. The red lines point out a bearish divergence, where the the closing price of the OEX is essentially flat versus it's 12/19 close, while the NAV adjusted Rydex Ratio has exploded higher during that time. Whenever sentiment gets more bullish while prices churn sideways that is a bearish divergence. Let's see how this Read more:Enthusiasm
HNSI Rises 1970-01-01 00:59:59 The Hulbert Newsletter Sentiment Index is climbing again, which suggests the wall of worry is pretty close to crumbling.
Market Update for 12/29/06 1970-01-01 00:59:59 As of the market close on 12/28/06:
IT Market
Barometer = 0 (scale of -10 to +10)
IT Model Portfolio = CASH
Another snoozer of a trading day Thursday, and no changes to the Model which remains neutral. Seasonality says higher for Friday and possibly into the first few days of January, but I wouldn't bank on it, as Seasonality has been quite the hook this year. I am content to ride this one out Read more:Update
More 2007 Predictions 1970-01-01 00:59:59 Here are a few more new articles with 2007 Market Predictions
. Can you say 3rd year of Presidential Cycle?...
After a Solid 2006, Stock Strategists Are Bullish on 2007
"...Stovall adds that 2007 will mark the third year of President Bush's second term, and "history shows us that the third year of a president's term has provided the best annual returns for any in the four-year presidential cycle.
A Little Frothy? 1970-01-01 00:59:59 From Today's Rasmussen Poll:
" The Investor Index increased slightly over six points today to 143.0. This is the highest level the investor index has been in the month of December."
The all-time high for the Investor Index was 150.9 on 1/7/04, a couple weeks before the market topped en route to a 7 month correction. We're getting pretty close to that sentiment peak. And, while I don't expect
Front Running Seasonality 1970-01-01 00:59:59 An excellent look at Seasonality over at Tickersense, and how it appears to be shifting forward due to traders/investors front running these well known patterns. Based on this recent forward shift the next 3 month period (Jan-Mar) averages a flat return. Sounds about right to me, as this market definitely needs some time to digest the hefty gains of the last 5-6 months. Read more:Front
Options Sentiment in Danger Zone 1970-01-01 00:59:59 The chart above shows an indicator I use based on the CBOE Equity Put/Call Ratio. Sentiment
is overly bearish when the Blue Line is Below the Lower Red Band like it was from late July through early October. The chart shows that Bears capitulated around mid-October and by late November has reached overly Bullish status as the Blue Line moved above the upper Red Band, where it currently remains. Read more:Options
, Danger
Santa in January? 1970-01-01 00:59:59 Readers who have been following this Blog for a while will know that I am not a big fan of seasonality based trading. And a good thing at that, since ignoring seasonality is what kept me aggressively long from the August through October period when the majority were bearish and waiting for that elusive 4-year cycle low and October massacre that never came.
But, that said, I'm going to Read more:January
, Santa
Check Out What's New! 1970-01-01 00:59:59 I have some new additions to my Blog page for the new year. Scroll down the right hand side bar and check out some of the Blogs that I have added to my Blogroll. For a unique insight on the markets be sure to check out the Kingsland Report the new Blog from a veteran Wall St. journalist Jim Kingsland. For top notch Technical Analysis take a look at Kevin's Market Blog. And for an irreverent and Read more:Check
A New Trading Year 1970-01-01 00:59:59 Well, the 4 day weekend is over, and the new trading year gets underway tomorrow. And I would like to wish all my readers a prosperous new year.As noted on my updates over the weekend, the NDX has demonstrated a tendency for a very strong rally in the first few days of the new year following down Decembers. However, in each of these instances, the short spike rallies have also marked the Read more:Trading
Right On Cue. 1970-01-01 00:59:59 As I noted several times this weekend, the NDX had shown a consistent tendency in this decade to stage a huge rally (averaging nearly 6%) in the first 3 trading days of the new year following down Decembers. It appears that pattern is repeating again this year. Read more:Right
Cycles 1970-01-01 00:59:59 The study of cycles and using them to forecast market action is not a major component of my trading, but I do keep track of them in a somewhat cursory manner. So, with that disclaimer, I will tell you that my cycle work tells me that the 10/30 week cycle low bottomed at the end of December. So, that would suggest that after this current short-term rally phase runs it's course, the market should Read more:Cycles
Fuel for the Fire 1970-01-01 00:59:59 Based on today's Lowrisk Poll, it appears that there was plentry of "fuel", in the form of early short sellers to squeeze, and that is probably aiding today's seasonal rally. The poll today showed 33% Bulls and 57% Bears.
Volatility 1970-01-01 00:59:59 Days like today are good days to be sitting in CASH instead of getting whipsawed. And thanks to my intermediate-term model's signal that is exactly what I am doing. First the early shorts got burned this morning then the late to the party bulls got burned this afternoon. This kind of volatilty is typical of trend changes, as the market is transitioning from an intermediate-term bull phase to an Read more:Volatility
Where's the Fear? 1970-01-01 00:59:59 With today's violent intraday reversal I expected to see plenty of top calls, bears coming out of the woodwork, and most of all some fearful bulls over on the various trader message boards that I frequent. But what I saw was mostly complacent bulls. The thing about market tops is that they aren't an event, they are a process. It takes some time and a few false breakdowns to reverse a powerful
Uh-Oh... 1970-01-01 00:59:59 An ominous sign for bulls from the Kingsland Report .
What Me Worry? 1970-01-01 00:59:59 I guess the last hour comeback got a few folks all bulled up. The nightly poll at Traders-Talk tonight shows 59% Bulls and only 18% Bears. Yee haw!
Panic Buying? 1970-01-01 00:59:59 I am seeing a +1152 closing TICK reading on the NYSE. That reeks of panic buying at the close. I find it interesting that so many would be desperate to buy today given the ugly rejection from today's highs. Read more:Panic
, Buying
Market Update for 1/4/07 1970-01-01 00:59:59 Today's market action was kind of like the Boise State vs. Oklahoma game. If you didn't watch the game and only saw the final score then you would have no idea how exciting of a game you missed. Same goes for today if you only saw the closing prices you would have thought it was a yawner of a day. But that was far from the reality as we got a big short squeeze at the open followed by a complete Read more:Market
, Update
Manic Market 1970-01-01 00:59:59 Wow this has been a heck of a wild ride so far in this first week of 2007. As noted previously, thus far this decade, the first 3 trading days following a down December has seen the NDX gain 6% on average. So, today's rally in the NDX was not a complete surprise. But, I will say that yesterday's nasty downside reversal fooled me into thinking that maybe the early January NDX golf ball bounce Read more:Manic
, Market
Volatility 1970-01-01 00:59:59 Days like today are good days to be sitting in CASH instead of getting whipsawed. And thanks to my intermediate-term model's signal that is exactly what I am doing. First the early shorts got burned this morning then the late to the party bulls got burned this afternoon. This kind of volatilty is typical of trend changes, as the market is transitioning from an intermediate-term bull phase to an Read more:Volatility
Cycles 1970-01-01 00:59:59 The study of cycles and using them to forecast market action is not a major component of my trading, but I do keep track of them in a somewhat cursory manner. So, with that disclaimer, I will tell you that my cycle work tells me that the 10/30 week cycle low bottomed at the end of December. So, that would suggest that after this current short-term rally phase runs it's course, the market should Read more:Cycles
Unwinding 1970-01-01 00:59:59 Over at the Kingsland Report, Jim shares some thoughts about the carnage in commodity prices this week. For what it's worth I think that many hedge funds have been playing the long "inflation hedges" and "short growth" pair trade. And in this new year we are likely witnessing the unwinding of that pair trade. That is why commodities are tanking while the NDX was the best performing major market
Complacency Reigns Sumpreme 1970-01-01 00:59:59 Over at the Kirk Report they have a nice summary chart of indicators at bullish sentiment extremes versus those at bearish sentiment extremes, courtesy of Sentimentrader. Needless to say this chart supports the same thing that my sentiment indicators are showing, which is that fear is in short supply and complacency reigns supreme.
Along these same lines, the Rasmussen Investor Index dropped 7
Options Sentiment Update 1970-01-01 00:59:59 In my post last week title "OptionsSentiment
In Danger Zone", I shared an indicator based on CBOE Equity Put/Call Ratio that I use as a tool for identifying market sentiment extremes. The indicator was already in the "Danger Zone" last week, and after this week's action it has stretched to an even more extreme reading of excessive complacency on the part of options traders. As noted before this Read more:Update
Sound Advice 1970-01-01 00:59:59 So you want to learn the secret of how to be a better trader? I would suggest you take a look at Kevin's thoughts about trading, some really sound advice from an obviously seasoned pro. Read more:Sound
Get Them Some Prozac. 1970-01-01 00:59:59 To say that investor sentiment has been ephemeral lately is the understatement of the century.
After being just a hair away from an all-time high reading just 3 days ago, today according to the Rasmussen Poll, "The Investor Index was down another five points... and is now at 130.8. The investor index has now dropped sixteen points in the past three days and is at its lowest point since the end Read more:Prozac
The Bull Case 1970-01-01 00:59:59 OK, I think I've been a little guilty of only presenting the bearish market developments lately, and giving less credence to some of the bullish factors underlying this market. This is because, based on all my analysis, the most likely scenario seems to be that the market is in the process forming an intermediate-term top. However, my intermediate-term predictive Model is at a neutral reading
Market Update for 1/8/07 1970-01-01 00:59:59 As of the market close on 1/5/07:
IT Market
Barometer = +1 (scale of -10 to +10)IT Model Portfolio = CASHThe Market Barometer actually improved to +1 Friday, due primarily to the relative strength shown by the NDX and big cap growth leadership stocks such as GOOG and RIMM. But the current +1 reading is still shy of the +3 threshold for a new signal to go long. So the Model Portfolio remains in a Read more:Update
Key Reversals? 1970-01-01 00:59:59 Just a quick heads-up... With oil bouncing back from early lows and the NDX fading from early highs, today could mark a significant turning point for the market. Clearly the drubbing in oil thus far in the new year has aided the NDX and growth stocks in general. If this trend were to reverse, (ie. oil bottoming and then trending higher) that would likely be the catalyst for the intermediate-term
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