S&P 500 - Analysis and Trading

[CanOz]

I don't know...maybe its just the macro bear in me but i think this thing is setting up for a low liquidity manipulated bull trap.

[lenny]

Tend to agree con oz.

Vix back on solid support & gold looks like its ready for a run also.

I've been watching the divergence between the DJIA & DJT also.

[Joules MM1]

conferring your point

Meaning of weakness in Dow transports
Transports have been lagging market for over a year
Mark Hulbert Aug. 10, 2012, 12:02 a.m. EDT
http://www.marketwatch.com/story/mea...rts-2012-08-10

I don't know...maybe its just the macro bear in me but i think this thing is setting up for a low liquidity manipulated bull trap.

try looking further back at the SPX v DJTA......trans made a new altime high, the indecies didnt, so, whom is lagging who?

does the trans side need to always be confirming the indecies? can't the transports be in its own levels of participation without implying either way?

have you noticed no one ever mentions when the trans are neutral yet just as strong a signal......what exactly does the trans sector need to show (of itself) to confirm weakness and over what period?

in this chart, i've chosen to skew the odds in favour that the trans are leading the way higher for equities by saying that the trans sector is leading the way higher, so, divergence is to the upside.....the lagging is equities

http://bigcharts.marketwatch.com/kaa...045&mocktick=1

[Joules MM1]

i guess the main point is that the trans sector has, by orthodox interpretation, already said that equities should be much lower, so, as a trigger function even Russell Rhoads and Richard Russell agree that the divergence, or appearance of divergence, is a loose diving board to jump from......

[CanOz]

So exactly what then Joules, is driving the market higher?

The SPX chart just looks strange to me. Most bull markets don't consist of of impulsive drives higher and higher. Usually bull markets are just a consistent grind higher, if you know what i mean. I'm not trying to be right or wrong here, i just think that it doesn't look typical...but then what does these days.

CanOz

[Joules MM1]

So exactly what then Joules, is driving the market higher?

The SPX chart just looks strange to me. Most bull markets don't consist of of impulsive drives higher and higher. Usually bull markets are just a consistent grind higher, if you know what i mean. I'm not trying to be right or wrong here, i just think that it doesn't look typical...but then what does these days.

CanOz

it's fair to say volumes are mute at this time of the year in the us.....mutual funds monday should see buying into the open......it would also be fair to say that the distrust that resides with the retail crowd is probably going to stay that way for a long time and funds managers are lowest holdings at bear market lows and highest at bull highs so all the input and energy off the march 09 low based in value purchases + short covering is going to sag somewhere along the rout as we get closer to making the altime highs, the values are getting outside of ratios considered and fair and many mid-tier money managers dont want to risk being caught short......clearly, i dont know the reason for price rising the way it has, empirically, what i do know is that strength remains upward in presidential year and i've learned to focus my attention much closer-in, focus on inside prices rather than the daily wash and i suspect i'll need to do that for a while, too

[CanOz]

Yeah, its just interesting banter to me really as i hold no stake in it either way at the moment. I still feel we need a decent correction in the autumn if my rally to year hypothesis end can play out...

CanOz

[Joules MM1]

The Charms of a Hated Rally
By Lawrence G. McMillan
Posted in on August 13, 2012 - 1:14pm

http://www.optionstrategist.com/blog...ms-hated-rally

excerpt

Yet option and futures trading suggested in early June that stocks would rally because investors were overly negative. Even now, this negativity persists—though not at the same extreme—which indicates the rally has at least several more months of life.

The equity-only put-call ratio—the daily sum of all puts traded on all stocks divided by the sum of the all calls traded on all stocks on the same day—is a reliable indicator.

THE TOTAL PUT-CALL RATIO also helps investors analyze investor sentiment. The ratio's 21-day moving average rarely rises above 0.90. Mostly, far more calls trade than puts. But when puts exceeds calls, and then peaks, it sends a buy signal for stocks.

Such a buy signal was telegraphed in the second week of June—and it remains in force. In fact, it was only this week that the 21-day moving average of the total put-call ratio fell below 0.90. In other words, total put buying remains rampant despite the rally. It only now has moved out of what is considered "oversold" territory for stocks.

Everyone talks about spot VIX, recently around 16, but VIX futures tell the real story. VIX futures, compared with spot VIX, are extremely expensive, even though it is common to hear people say the VIX is so low that it indicates investors are complacent and perhaps suggests a short-term market correction is imminent.

To understand what traders think about volatility, you must examine the prices of VIX derivatives. Now, traders are paying far in excess of spot VIX levels for VIX futures that expire in coming months. For example, spot VIX is near 15, but February 2013 VIX futures are at 26. It's further evidence that this stock market rally has few believers.

Much of this VIX futures buying is a direct result of the heavy demand for VIX exchange-traded notes, primarily the iPath S&P 500 VIX Short Term Futures, or VXX. Exchange-traded note managers buy VIX futures when new VXX shares are created, and then those VIX futures are rolled forward each day.

Heavy investor demand for VXX creates heavy demand for VIX futures. This, in turn, sharply boosts VIX future prices, telegraphing another contrary indicator. When fund managers decide that they need massive volatility protection for their stock portfolios, it is, by contrary analysis, bullish.

When the investing and trading public start believing in this rally, the put-call ratios will start to reverse and the term structure of the VIX futures will flatten. Only then will it be time to sell stocks. Until then, the market—hated as it may be—can continue to march upward against this tide of negativity.

[Joules MM1]

tweetterocity

Walter Murphy ‏@waltergmurphy

Weekly Coppock for #SP500/$JNJ is o/s & bottoming. That's usually a good sign for the market.

dunnobout thiswunnbutduzzsoundgood

[Timmy]

Big funds still very much underweight apparently.

http://money.msn.com/business-news/a..._BANKING&isub=

Still, 1410-20 going to be a tough nut to crack (admittedly a consensus view)

[Joules MM1]

the head and shoulders target (a few posts back) has been reached in overlapping view........not a bullish signal.......if we close below 1403 cash i ssupect we'll see a few days of lower lows......i'm short right nonw

[Joules MM1]

on the upside, george (hoozyadaddy) soros is getting hitched to a woman half his age......

[Timmy]

on the upside, george (hoozyadaddy) soros is getting hitched to a woman half his age......

Long pre-nups

[Joules MM1]

Long pre-nups

i heard that about you........

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some interesting things found on the way to the open......

http://forex-strategies-revealed.com...rom_Demark.pdf

http://twitpic.com/ajd0li/full

[Joules MM1]

some interesting things found on the way to the open......

update on that demark

http://s1-05.twitpicproxy.com/photos...pg?key=1422764

[sinner]

does the trans side need to always be confirming the indecies? can't the transports be in its own levels of participation without implying either way?

have you noticed no one ever mentions when the trans are neutral yet just as strong a signal......what exactly does the trans sector need to show (of itself) to confirm weakness and over what period?

Hey Joules,

I saw you guys discussing Trans the other day, and just now while looking at some white papers I came across this old list of Richard Donchians market "rules". I thought you might find this one interesting, as the interpretation might help answer your question



i.e. similar to many strategies seen on the blogosphere to invest in SPY when QQQ is outperforming SPY.

So Richard D didn't see it as a "divergence", e.g. be worried if transports don't confirm but rather don't participate if they aren't participating.

[Joules MM1]

Hey Joules,

I saw you guys discussing Trans the other day, and just now while looking at some white papers I came across this old list of Richard Donchians market "rules". I thought you might find this one interesting, as the interpretation might help answer your question



i.e. similar to many strategies seen on the blogosphere to invest in SPY when QQQ is outperforming SPY.

So Richard D didn't see it as a "divergence", e.g. be worried if transports don't confirm but rather don't participate if they aren't participating.

thanks, sinner ...... that's the 'who is lagging who?' question i posed earlier to open thinking about how to read the divergence and is it a - or + one......seems there's been a morph of the original idea into a text book translation from most talking heads.....

[sinner]

thanks, sinner ...... that's the 'who is lagging who?' question i posed earlier to open thinking about how to read the divergence and is it a - or + one......seems there's been a morph of the original idea into a text book translation from most talking heads.....

A recent blog I came across which is really f*** amazing for long term portfolio ideas posted this a little while back, took me a little digging to find it again as I thought you might like to see what a combination of:

* Simple linear regressions (just substitute with 200DMA if it's too confusing)
* Simple relative strength (cyclicals: Trans/whatever, non-cyclicals: Utilities/whatever)

http://timelyportfolio.blogspot.com....-and-will.html

looks like, going all the way back to 1920s.

[Joules MM1]

Peter Slaga on Thu, Aug 16, 2012 @ 06:23 PM

NFA's Board of Directors approves rule to enhance the customer segregated funds protection regimeNFA Customer Seg Funds

August 16, Chicago - The Board of Directors of National Futures Association (NFA) today approved amendments to NFA Financial Requirements that will require each futures commission merchant (FCM) to provide its Designated Self-Regulatory Organization (DSRO) with view-only access via the Internet to account information for each of the FCM's customer segregated funds account(s) maintained and held at a bank or trust company. The same requirement would apply to the FCM's customer secured account(s) held for customers trading on foreign futures exchanges.

In addition, the rule states that if a bank or trust company is unable to allow the FCM to provide its DSRO with view-only full access via the Internet, the bank or trust company will not be deemed an acceptable depository to hold customer segregated and secured accounts.

"Under this rule, DSROs will be able to check any customer segregated and secured bank account balance for any FCM any time, without asking the firm or the bank, and compare those balances to the firm's daily segregation report," said NFA President Dan Roth. "This is one step in a series of initiatives the Board is working on."

NFA intends to expand this approach, once it is implemented, to receive daily reports from all depositories for customer segregated and secured accounts, including clearing FCMs. NFA plans to develop a program to compare these balances with those reported by the firms in their daily segregation reports. The system will then generate an immediate alert for any material discrepancies.

The rule was developed by the SRO Committee formed shortly after the demise of MF Global. The committee, comprised of representatives from NFA, CME Group, the InterContinental Exchange, the Minneapolis Grain Exchange and the Kansas City Board of Trade, has made several recommendations for rule changes that have already been approved by NFA's Board in May and by the CFTC in July.

"Early on in its deliberations, the committee recognized that we need to make better use of technology to monitor firms for compliance with segregation requirements," said Roth.

The newly approved requirements will now be sent to the CFTC for approval.

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speaking of which; i hear a new hedge fund to be mantled by Jon (i-dunno-where-tha-munny-iz) Corzine

more of this: ??

[Joules MM1]

Final Earnings and Revenue Beat Rates

Friday, August 17, 2012 at 09:58AM

http://www.bespokeinvest.com/thinkbi...eat-rates.html

excerpt

The second quarter earnings season is now completed, so below we highlight the final earnings and revenue beat rates. Of the 2,278 companies that reported between July 9th and August 16th (Alcoa's report date through Wal-Mart's report date), 58.7% beat earnings estimates, while 48.4% beat revenue estimates. The 58.7% earnings beat rate is the lowest reading seen since the bull market began in March 2009. The 48.4% revenue beat rate was also the lowest reading seen since the bull market began, and it's well below the average revenue beat rate of 61.7% that we've seen since 1998