Archive for January, 2014

Long Poles and the long view…

Posted on Jan 31, 2014 by .

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Recently we referenced the PnF chart for the S&P which advertised a high price objective for the index.  We noted that  the chart pattern also included a “long pole (or high pole)  warning”.  A long pole warning is a pattern which occurs in PnF charts which warns of  near term weakness.  Briefly, in the chart a series of higher prices causes a string of advancing Xs.  This advance is revealed as an overbought move when the column is followed immediately by a series of Os which takes back the price advance.  The reader can easily relate this chart pattern to recent events in the market — prices advance to 1800 stall there (which, note, causes no entries on the chart) and then fall out of bed over the last several days.  And indeed this high pole warning  is now borne out by the breaking of the short term trendline and the threatening of the long term trendline from Nov ’12.

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It ain’t over till it’s over: Yogi Berra

Posted on Jan 28, 2014 by .

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0128spx

 

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p83257770514&a=266398464

Monday showed some constructive activity (and true to our speculative nature we bought a little (very little) and lifted part of our hedge).  But as Yogi said, or it’s little known that he said, beware the bouncing cat.  As in the famous dead cat bounce.  Whether Monday and Tuesday represent that cat bouncing is unknowable at the moment.  Maybe Rumsfeld knows.  We don’t know, and we don’t know whether Rumsfeld knows.  At the very least it seems a 1987 waterfall appears not to be in the cards.

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Plane plunges 2000 feet…just a mild bump, folks

Posted on Jan 26, 2014 by .

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0124spx

 

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p83257770514&a=266398464

You’re flying along at 30,000 feet and the next thing you know you’re flying along at 28,000 feet and you have coffee in your lap and the captain says, just a mild bump folks, keep your seat belts fastened.  May be some more turbulence ahead.

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Interesting interest rates…

Posted on Jan 16, 2014 by .

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The galaxy of interest rates appears to be entering a new phase in a galaxy far far away…  We have closed our shorts on the long terms, TLT. and now it appears that the issue is headed upwards.    Against all economic reality, we might add.  Is there in this cosmos a being who believes that lower interest rates are possible?  Perhaps if we suffer  a deflationary implosion, but otherwise we  still believe (or adhere to, since belief is something which doesn’t occur in our religious system) the analysis we have published several times here that a massive 24 month top has formed and the devil (or Pat Roberts) is to pay.  Here’s the chart again:

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