Archive for February, 2013

Knocking at the door… and speculating about what’s on the other side of it…

Posted on Feb 28, 2013 by .

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0228spx

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p16768279576&a=214966864

 

After a paroxysm of fright occasioned by the emergence of the zombie Berlusconi from the political grave the market promptly recovered its senses and took back lost ground.  As we approach all time highs we naturally encounter resistance.  That is the nature of the market.  Highs and lows represent psychological barriers.  We often see prices back and fill at these points.  So maybe it wasn’t all Berlusconi that spooked the market Monday.  It may have been partly fear of heights.

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Cacaphony of the commentators, calm of the chart

Posted on Feb 22, 2013 by .

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0222spx

 

As opposed to the market which has been dozing peacefully for two or three weeks, the commentariat (especially at marketwatch) has been baying at the moon like bloodhounds on a scent.  Howling for reasons that the crash will begin any day, that if not a crash, a “correction”.  In this context it is worth reminding readers that over the past month of so we have ventured based on our back of the envelope technical tools that 1525 was a feasible target for prices.  In fact that has happened.  In fact we don’t feel like that is the best picture of the past weeks –that picture is the Dow.

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Bondage and lack of discipline…

Posted on Feb 15, 2013 by .

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30-year-bondIn bondage to bomds.  Above thirty years (m/l) of interest rates.  The inscrutable march of history dictates that the end is near — but doesn’t give any dependable date.  What do you do about that?  Well you start not sleeping too soundly if your portfolio is heavy into bonds, and you probably start lightening up in that asset.  For our part we shorted the TLT a few weeks ago and the trade is making money.

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Measured move…

Posted on Feb 09, 2013 by .

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http://stockcharts.com/h-sc/ui?s=$INDU&p=W&yr=4&mn=0&dy=0&id=p95004260755&a=268628424

 

Our esteemed colleague Jack Schannep (thedowtheory.com) has reminded us of an old technical analysis method — that of taking a wave finished by an (effective) bear market, measuring it, and calculating the possible second wave.  Since Mar 09 the market made a 25.4 month wave of 95.7%, interrupted by a downwave, and then resumed in a second wave.  If we accept the posit that the second wave can be predicted based on the first wave we are presented with a target of 16000+ in November of 2013.

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