Posted on Apr 19, 2014 by WHC Bassetti.
As is clear to everyone now the market has hit a roadblock. Whether this is a consolidation roadblock or a reversal roadblock is not known at this time. Over the next several letters we will examine the facts and see what action conclusions may be drawn from them. First, the INDU has essentially been in a sidewave since December 1 when it closed at 16008. A few days ago the low was 16028. You could make a case that the pattern might be a double top.
Posted on Apr 12, 2014 by WHC Bassetti.
The market is sliding along the razor’s edge. The SPX is only 9 points from the important trendline of nov12. The formation has certain aspects of an alpha-beta-gamma pattern (or ABC) with the present wavelet in the gamma (C) phase. Penetration of the nov12 trendline would be serious and might be the precursor (if that has not already happened) of a painful downwave. We are presently somewhat hedged and certainly would fully hedge if that happened. And perhaps even go net short.
Posted on Apr 08, 2014 by WHC Bassetti.
Dennis Gartman, a prominent analyst, is reported by Marketwatch to be fleeing the market, provoked in part by the unsettling market action Friday. He described his observation as like watching someone flip a switch. Ourselves, watching Friday, felt like we were watching a snow avalanche. While it did not feel exactly like 1987 (in which we made a killing) it was disquieting. The continuation Monday also caused some equity pain, and some analytical discomfort.
Posted on Apr 05, 2014 by WHC Bassetti.
First let us be clear. Giving inordinate priority to one day’s action militates against our long term intentions. But — oy vey — what a day. Yesterday the sky fell on chicken little. A 1.26% day in the S&P should be commented on for freak value if nothing else, and when your portfolio was hit by falling chickens (as ours was) you at least like to commiserate with fellow victims.
Posted on Apr 03, 2014 by WHC Bassetti.
SPX prices finally got it together to escape from the rectangle. The breakout bars were nothing impressive, but who are we to look new highs in the mouth. If this is progress (it is) it comes at the expense of many hen’s teeth and in the teeth of warnings about the 1929 chart, the 1987 chart, the probable 30% downtrend, the erectile dysfunction of Congress, the belligerence of Czar Putin…and, oh, lots of stuff.