Presto–change-o…

Posted on Apr 23, 2014 by .

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Barely had we sympathized with Dennis Gartman that the  market was going irrational when prices turned around and made it safe to go back in the water — with some caveats.  Whew.  What was that?  Oh, just a passing squall.  Yesterday PnF charts registered breakouts as shown here.

0423spxpnf

(no link — go to stockcharts.com)

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Gathering facts…

Posted on Apr 19, 2014 by .

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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.

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The razor’s edge…

Posted on Apr 12, 2014 by .

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0411spx

 

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=3&dy=0&id=p96206718625&a=214966864

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.

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Straws in the wind?

Posted on Apr 08, 2014 by .

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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.

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The contrarian empire strikes back…

Posted on Apr 05, 2014 by .

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0404spx

 

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=3&dy=0&id=p96206718625&a=214966864

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.

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