AmenRa's Corner

A place where a skillful caddy always offers cool contemplation when it comes to your "stick" selection


SPX
Bullish harami day. Could also be a high wave day. Still below 1151.86 (fibo .0557). Almost tested 1110.02 (fibo .09). Midpoint below 10 SMA. Tested the 144 SMA and passed. No daily 3LB changes (reversal is 1073.60). Still trending down on the daily 3LB. QE2infinity.



DXY
Shooting star day. Definitely rejected the high print (for now). Midpoint above 10 SMA (uptrend). The 85.11 (fibo .1459) price has been broken and is holding (91.80 is next). Still above the 76.4% retrace. Bucky is a celebrity. Everyone wants Bucky. New high on daily 3LB with reversal now 84.89.



VIX
Shooting star day. Fear is being long or short. Period. Tested the 23.6% retrace and failed. The market is afraid of being above 30. No daily 3LB changes. Still above the monthly 3LB reversal (24.51).



EURUSD
Bullish short day. Midpoint well below the 10 SMA. Currently below all MA's (again 10x). Fibo level of 1.2935 is resistance. Up next is 1.1571 (the .236 fibo level). Tested the .1855 fibo of 1.2336 and passed. Still below trendline (11/27/09-3/17/10). No daily 3LB changes.



JNK
Spinning top day. Traders thinking about risk on. Still below the 50% retrace and below the 144 SMA. Midpoint below 10 SMA (downtrend). No daily 3LB changes.



LQD
Spinning top day. Tested the 55 SMA and 21 SMA and passed. Continues to make higher lows. Inching toward safety but is not absolutely sure. No daily 3LB changes.



GS
Spinning top (or high wave) day. Midpoint below the 10 SMA. Still below the 2.058 fibo (using low) of 144.98. Still making lower lows. No daily 3LB changes.



XHB
Doji day. Tested the 55 SMA and passed. Tested the 23.6% retrace and failed. Midpoint still below 10 SMA. No daily 3LB changes.

69 comments:

DL said...

McF @ 5:51 (previous thread)


“I love this statement … … because markets never anticipate anything...., do we think, for example, in 1929, markets were anticipating that 10 years forward that the greatest depression would have hit and Japan and Germany would be bombing everyone?

What was gold anticipating at it's highs three decades ago?”

* * * * *

I do believe that markets try to anticipate; I also believe that they tend to see things much earlier than J6P. In October of 1929, the markets were seeing something pretty horrible; in September/October of 2008, the stock market was seeing something pretty bad as well. Granted, that in October of 2007 the market hadn’t yet seen all the bad things yet to unfold. But it is also true that the financial sector peaked in February of 2007.

So when one says that the stock market “looks ahead”, one has to realize that there are limits to HOW FAR in the future it can look.

* * * *

Regarding gold, this is a chart of gold from 1967-1973:

http://www.chartsrus.com/chart.php?image=http://www.sharelynx.com/chartsfixed/GC1970btm.gif


Even by the end of 1973, J6P didn’t realize how bad inflation was going to get.

Ironworker said...

DL
I was under the impression that J6P in the US wasn't allowed to own gold (excluding jewelry/numismatic?) until 1975-ish...not sure what that does to the pricing data from that era...?
IW

DL said...

Chart of gold, '73-'79:

http://tinyurl.com/2a5cfm6

DL said...

Ironworker,

We did go off the gold standard in 1973

http://useconomy.about.com/od/monetarypolicy/p/gold_history.htm

That does complicate the analysis somewhat.

Nic said...

Uh oh
CNBS has a poll up asking if the Dow could go to 5000 this year and an amazing 39% say yes it could.
http://www.cnbc.com/id/37183911

Ironworker said...

DL,
The US as a country (like central bank to central bank) went off the gold standard in 1971 under Nixon, but my point was more related to the fact that private gold ownership in the US was restricted by FDR in the 1930's and remained so until Ford in 1975:

http://en.wikipedia.org/wiki/Executive_Order_6102

I agree that the situation makes price analysis of that era difficult (if not impossible) since it was a defacto price-fixed market, at least on its face, though probably there were ways around it.
IW

McFearless said...

DL,

I find that there are 1000's of points of reference, including the examples you gave, which refute the *idea that markets are forward looking. Your entire statement all sounds much more logical if you replace the word "seeing" with the word "reacting" and for anyone that lived through that, it was quite obvious which it was, or I should say it was in my opinion. I remember like it was yesterday what it was like to talk to people involved with markets and with clients. Nobody was seeing anything, they were all in a panic, especially in the fall. To pick that one, you can't really state that markets were looking forward in Sept/Oct 2008. Many items were bottoming then as wave 3 of Primary 1 bottomed out so the argument becomes contradictory. Were they looking forward 6 months to a major bottom, or were they looking forward a year, during which many stocks rose several hundred percent?

My argument is not that the markets (people) do not TRY to anticipate the future, that's what everyone IS doing, even the buy and holders, what I am saying is that they are going about it all wrong because they operate thinking that markets adhere to the laws of physics.

There is no point debating this really though. I used to take for granted the views I've developed, that anyone would believe it if they did enough research, and then I talked to more and more people about the markets. So that was wrong. It is what it is.

The bottom line is, if this is what you truly believe:

"one has to realize that there are limits to HOW FAR in the future it can look. "

I can't see how that is defineable nor is it actionable so how do you develop any forecast as an investor, or a trader (in order to be fair to the time argument) with this idea? To me if this is part of how you develop strategy, you are always guessing in the end.

Any thoughts on that part of it?

call me ahab said...

DL-

that chart of doctors you posted- I was hoping that Dr. Lee was our Bruce-

you know-

Bruce Lee- I could of had endless fun with that

also- this statement-

"I do believe that markets . . . tend to see things much earlier than J6P"

don't go out on a limb and say such crazy bat shit stuff like that-

I mean really- better than J6P? that's hard to imagine(-:!!!

Andy T said...

Nic,

Do you notice how in those random polls it has a tendency to split 38/62....

i.e. 39% said it could go to 5000....

mcHAPPY said...

@Ben,

I took my winnings today and decided to join EWI. I made enough to pay for 20 months of subscription to Financial Forecast. I figure if I could do that after a weekend of studying a free release by them, having their real time insights might also be efficient. Don't worry though, I know they don't always have it right. But they seem to be pretty good once they have the right starting place.

Andy T said...

I like the discussion on Gold...

It made it tough to know when to start the longer term count...when the Bretton Woods agreement was going down the shitcan or when the public could buy and sell it freely....

I think you have to go with the 1970...there was a spot move in the London market that cannot be ignored....

AmenRa said...

CEO since 1967: Toll Brothers Chief Robert Toll Replaced by Yearley

May 17 (Bloomberg) -- Toll Brothers Inc. replaced Robert Toll as chief executive officer, naming Executive Vice President Douglas C. Yearley Jr. to the post after the company reported 10 consecutive quarterly losses. Toll, 69, will remain chairman.

call me ahab said...

and as an aside- markets have been around since man started trading w/ one another-

the stock market is a more recent phenomena- with shares of jointly owned companies trading hands- and now it has evolved into what we have now- computer algorithms and trading platforms from the market makers- who ARE the market-

and my feelings on this have evolved to the point that- because there so many are invested in stocks- via pensions and mutual funds- that TPTB will everything in their power to keep the market from collapsing- bias always up- optimism always being stoked by any means possible-

that's why I am starting to think that the idea of "safe" retirement funds will be pushed to the public- investing in treasuries and guaranteeing some monthly income at retirement-

that way the USG doesn't have to worry about the general populace (in theory) come crash time- and treasuries have a ready market-

regarding Fibo and Prechter and socionomics- that idea is starting to make more and more sense to me- FWIW

McFearless said...

AT,

I was just going to say that about Nic's poll. 39%, quite close to that special 38. the political polls almost always provide one of the two, or very near it.

As for Gold, I've concluded nobody will every have the very large Supercylce and above count on gold, impossible.

call me ahab said...

. . .and this may have been discussed- but did anyone catch Meredith Whitney's advice after the close-

"Investors Should Avoid Banks 'At All Costs'"

McFearless said...

@McHappy,

just be very careful with the short term update from EWI. real careful.

call me ahab said...

and so much for being paid back-

"Taxpayer losses from bailing out Chrysler and General Motors are expected to rise as high as $34 billion, congressional auditors have said.

McFearless said...

an observation on the CNBC poll,

I wonder how many people were "impulsive" when they took that poll. The comments are not an indicator of the sentiment expressed in the poll.

McFearless said...

ahab,

you know in the end you can't really push TA, fibo's etc on people, they are just gonna do what they do, but it's hard to deny it, I mean look at where this rally failed into, the 61.8. Doesn't even matter if that wasn't the top, all that matters is that it was important.

BinT said...

http://us.hadnews.com/tag/chrysler-bailout

"Last year, the Congressional Budget Office and the Treasury Department estimated that the U.S. government would likely lose $30 billion in the long term. The Detroit News reports that one year later there is a lot more optimism at the White House about the industry and our money. A five-page report released by the Obama Administration points to Chrysler's first quarter operating profit and the fact that GM paid off its government loans early shows that the auto bailout was a success. The report adds that "the contrast between where these companies, and the American auto industry, are today and the situation President Obama faced when he took office is stark." And that projected $30 billion loss? The latest projections by the Treasury Department and the DOT are for a much smaller loss of $8 billion. "

From:

White House: Auto bailout worked, but we’ll still lose money

McFearless said...

and ahab,

re: MW call on banks.

I mean, that all makes sense, b/c just a few days ago I saw that all the banks took large short positions on XLF, as I recall.

And, banks only make profitable trades.

BinT said...

They are only off by at least a factor of 4 1/2...

mcHAPPY said...

BUY! BUY! BUY!

mcHAPPY said...

Cramer likes gold. (see above)

call me ahab said...

b22-

another observation- I've made it before-

because prices are dictated by the market makers-

and they all use algos- have we gotten to the point that all the presets are in- and the action is derived by collecting information- which must be available- like stop prices? And after those are taken out- upward movement-

i.e.- unless there are no computer generated buyers- and no guaranteed profit-

the liquidity dries up and- crash?

thinking on the fly here

mcHAPPY said...

How to tie a Landry bow.

Very interesting.

call me ahab said...

mchappy-

I wonder if our man Cramer is becoming and uber-Bear like he was winter of last year-

"cash out at the lows and wait 5 years"

may have been bad advice

McFearless said...

ahab,

you know, I don't really know about the algo's, I'm sure they are doing what you are saying, collecting information, but really if they are just following what everyone else is doing then they are all just part of the market. When fear takes over OR optimism no algo is going to stop it at any large degree.

McFearless said...

I suppose this is interesting news in light of the health care bill and the immigration debate:

http://www.aolnews.com/nation/article/judge-president-obamas-kenyan-aunt-zeituni-onyango-can-stay-in-us/19480527

CV said...

@DL

I respect you and like your comments but I'm going to 'parry' a few of your ideas...

---

I do believe that markets try to anticipate; I also believe that they tend to see things much earlier than J6P.

To me it's not that "the markets try to anticipate" (that's placing too much faith in the WISDOM of the markets)... To CV...

Market = Bag of Rocks
J6P = Dumber than Bag of Rocks

Reaction times follow thusly...

In September/October of 2008, the stock market was seeing something pretty bad as well.

BS... In Sept/Oct 2008, Leveraged hedge funds (including ones fully capitalized by TBTF banks were getting MARGIN CALLS... J6P was out to lunch (as usual)...


But it is also true that the financial sector peaked in February of 2007.

Wrong - It peaked in May/June of 2007... Hell - I can tell you the EXACT DAY "The Music Died"... It was the day that BX went public and Steve Schwartzman made off with Chinese money at $30 bucks a share... Those CHINESE are 'saavy' inWestors!

Regarding gold, this is a chart of gold from 1967-1973:

Even by the end of 1973, J6P didn’t realize how bad inflation was going to get.


That entire period is misrepresented... Between:

- The DISMISSAL of Bretton Woods
- Vietnam War Debts
- Nixon's Wage & price Controls
- Union Labor Disputes (esp. 'steelworkers')
- Arab oil embargo

Nobody knew WHAT THE HELL was going on... So they bid up the only asset that "wasn't one of the other things"...

To attempt to make any 'correlative' representation of GOLD with INFLATION is erroneous IMO...

These are all just my opinions...

Feel free to beat them all down...

Andy T said...

You have to be careful about the "wording" of polls..

I.E. There's a big difference between the following questions:

"Could" the DOW go to 5,000?

"Will" the DOW go to 5,000?

I don't even know what question was asked, but there is a major difference in those two questions....

Nic said...

Andy T
I had never thought of that 38/62 thing. Wild.

AmenRa said...

Nic

You'll see it all of the time now that you know :)

call me ahab said...

speaking of how question's are worded-

how about this- a history lesson-

"do you agree with how the United States of America is conducting the Vietnam War"-

response- majority negative- and reported that way in the press- you know- American's did not support the War-

but what of those who thought that we weren't vigilant enough?

I guess in the stats- they were against the war too-

which couldn't have been further from the truth

CV said...

Remember BEFORE the Arab oil embargo, oil was ridiculously cheap in this country...

In 1977... The "other" genius Nobel Laureate POTUS Jimmy Carter started the US Department of Energy (as a cabinet level entity)...

The goal, the "mandate"?

To REDUCE our dependence on foreign oil (which was 46% at the time)...

Now, we import over 66% of our oil supply and the USDOE is a 200,000+ government employee black hole that costs taxpayers about $30 billion a year (plus interest, now that our government runs perpetual deficits)...

Anyway... There ended up being an OIL GLUT for a period in the early 80's... So, since nobody wanted "black gold"... Gold naturally caught a bid...

Helped by the fact that the "petro dollar" shieks loved the stuff...

ROCK THE CASBAH baby!

Does anybody know history? Or do you spend your time looking at 3 months of 60 minute candles and try to extrapolate trends from that?

call me ahab said...

CV-

but dude- the Dept of Education- (created 1980) has done wonders for this country's children-

smarter that they ever were- lol

CV said...

@Andy

Not YOU my friend... I realize after I read what I wrote that some may apply the argument to the fresh charts you put up...

I'm not talking about that...

I'm talking making a GOLD-INFLATION correlation (which I'm not necessarily on board with)...

CV said...

@ahab

They might as well just make Fannie & Freddie CABINET POSTS and call it a day...

CV said...

@ahab

Government solution on EDUCATION...

Spend money to buy every kid a calculator instead of teaching them the multiplication tables and you'll be advancing their studies...

Note: They'll NEED a calculator to figure out how much debt they and their heirs will be in...

McFearless said...

C,

We had inflation for 20 years during which gold trended down. I think that pretty much puts it to bed right there.

AmenRa said...

CV

I still have my slide rule around here somewhere.

Anonymous said...

CV on the DOE-

I'm going to take the other side on that one and call it a feature, not a bug.

This is based on the Treasury department, another cabinet level position, being filled with GS alumni. Not that familiar with the DOE in particular, but I would guess the same is true.

bob

CV said...

Great then...

I can now "go to bed" (with my slide rule)...

Hell, they used those things to bring back Apollo 13... The must be good for something...

McFearless said...

what's wrong with you guys?

Calculators?
Slide Rules?

It's ABACUS.

call me ahab said...

this is interesting- from ZH- Hoover said the following in 1938-

"despite every alibi, this depression is the direct result of Government actions. The torch of liberty has been dashed out by some sort of fascism in 14 nations of more than 240,000,000 people - they all undertook new deals under some title, usually planned economy. The New Deal started with a government debt of $21 billion and today finds itself with a debt either direct or guaranteed of $42 billion. It started with 12 million unemployed; it finds itself after five years with 12 million unemployed. If the 12 million unemployed are not due to [overextension in new construction or in capital equipment or speculation requiring liquidation] to what are they due? Why have a recession in the face of low interest rates, no overextension of credit, no oversized inventories, no overextension of capital equipment, no overstock of goods, no speculation. If there are none of these sins or forces in the financial world, such as did exist in previous depressions, obviously the origins cannot be blamed upon finance and business. There is only one place left to search for the causes of this depression. Despite every alibi, the depression is a direct result of governmental actions."

pretty wild- pretty much what is going on right now-

alright- need to catch up on some things-

sleep being one of them-

catch everyone in the AM

CV said...

@McF

Abacus - LOL

Did you see the comment I made earlier today about the guy that's going to attempt a world record setting skydive later this year?

From 120,000 feet? (practically OUTER SPACE)...

Socioeconomics...

CV said...

120,000...

1200...

CV said...

2010

CV said...

20P20

call me ahab said...

last post for the night-

"Oil drops again, now down 20 pct in just 2 weeks'

I wonder if this is a precursor of the next leg down- a sign of further economic contraction?

catch you all in the morning

AmenRa said...

SPX couldn't break through the monthly 3LB mid again. Sentiment is growing weaker. Weekly candle looks like an inverted hammer (or bullish harami). Both are bullish reversal signals. If either of these are not confirmed with a higher weekly close (or better yet a lower close) then the monthly 3LB reversal is next. A few closes below that and the month may not have enough time to stop a reversal.

prosciutto gristle said...

Dunno about you fellas, but I find myself listening to the Big Band/Oldies station in my car, to block out the constant hyper-reality/"monkey news".

Is it just me, or were sound recordings much more heartfelt before 1940?

Maybe I'm just going bat crazy. (I do drive a Vanagon, after all.) But thank heaven the Fed's got our back! Creature comforts are the enemy of authentic living...so let's have some more creature comforts! Yes indeed, I'd like to take delivery on an overstuffed elephantine flatus couch with no payments until 2012, Warren. Fabulous!

DL said...

McFearless @ 6:50


“I can't see how that is defineable nor is it actionable so how do you develop any forecast as an investor, or a trader (in order to be fair to the time argument) with this idea?”

* * * * * * * *

My point is not that it is “actionable” as an investor. Nor am I arguing that markets are infallible. What I am arguing is that, for people (investors, business owners, government policymakers, etc) who are trying to predict the future, I think there is considerable value in looking at what the markets are saying. Yes, sometimes markets get it wrong. But for those who want to question the value of (the message of) markets, I would only say, do such people have an indicator, or a set of indicators that are better? Is there an economist that you can name who has an infallible forecasting record?

I think that gold is sending a message. I
I think that, in general, the treasury
yield curve tends to send a message about the future course of the economy.

I don’t know of any infallible indicators. If you know of one, I’m prepared to pay big bucks to get it.

DL said...

CV @ 8:09

Regarding your point about when the financials peaked... you are correct. What happened is that I wrote that based on what I had remembered, and didn’t bother to double check. What is true is that in February 2007 (or thereabouts), XLF began to underperform SPX.

I also agree with your comments regarding gold in the 70’s... a lot of crosscurrents there. One really has to look at several commodities, and economic indicators. But even so, I think the commodity markets were seeing inflation well before the average J6P did (though he may be dumber than a bag of rocks, as you say). And I would add that quite a few professional economists aren’t much better at predicting than the average J6P is.


And again, for those trying to predict the future, all that they have is fallible indicators.

Wes said...

gold correlation is more with fear, uncertainty, etc...with the financial system, much less so than about inflation...

DL said...

Wes @ 10:30

Only time will tell.

I think we'll start to see food and energy prices pick up in the next couple of years.

Clearly we had inflation back in the first half of 2008.

AmenRa said...

Saw this over at BR's. Related to behavioral economics: Cognitive Biases: A Visual Study Guide

ex: Semmelweis Reflex
The tendency to reject new evidence that contradicts an established paradigm.

karen said...

I have no clue how I will ever catch up with tonight's thread.. fortunately, i already believe what i believe and can't be swayed, much.. but Wes, you are you are so, so, so wrong about gold.. listen to DL.

karen said...

AR, I did not like your wrap!! btw.

Anonymous said...

Gold, by the way just hovering around that 1226 level. Hovering, hovering and then some more.

Prashant

Anonymous said...

It says, the comment was published, but I don't see it.
Gold taking its time at 1225.

Prashant

DL said...

Karen @ 11:51

Smart cat.

Anonymous said...

@karen, what's wrong w/ the wrap??

-- Whammer

Andy T said...

@Wes.

"gold correlation is more with fear, uncertainty, etc...with the financial system, much less so than about inflation.."

I agree with you 100% on that one.

Wes said...

..i actually think the precious metals react to both inflation and fear...

gold had been rising since early 2000's along with a steady rise in the drum beat of real inflation (increasing supply of money and credit)...~10%/yr in all currencies...remember oil at $147?

since the financial crack up, gold has traded on fear, not inflation...

call me ahab said...

speaking of gold-

"Both Sears and Kmart are now helping their customers exchange their jewelry for cash as gold prices soar."

now that's what I call customer service- the bling just doesn't pay for the pampers and staples a family needs- well at least in bling form-

Where are Nordtrom? and Bloomingdales?

McFearless said...

DL,

Lets not fall back on the old "do you know of the perfect system" argument because it's lame and it was never the point of the conversation nor did I ever once claim anywhere that I or anybody else had a perfect system, there is no such thing. All systems have shortcomings, some less than others, for the record.

This started out with a statement that the markets are "forward looking" but that we just don't know how far forward they are looking, I argue markets are simply a real time recording of social mood, they aren't looking forward to anything, they are recording what's happening right now. If we had proper data we could measure it a million different ways, clothing sales, movies, tv programs, music, etc.

We seem to have evolved now to this argument:

"I think there is considerable value in looking at what the markets are saying."

This isn't the same as saying the market is looking forward. Nobody is questioning the value of the markets. What do you think I'm doing all day? I'm simply saying most people interpret them incorrectly, they think markets are efficient, adhere to physics, and are rational, and therefore I believe the majority always end up drawing the wrong conclusions. This is why they draw conclusions like inflation up = gold up, which refutes the very market data they are supposed to be looking at. Data on market/investment performance of the vast majority of people would support my statements here. Most people (the net) do terrible in markets.

It's fine that you think gold is sending a message, I'm not even sure I disagree with that, but again, this started out with this idea that markets, or in this case gold, can forecast the future, so I'm curious, how far into the future is gold forecasting the dollar to rise? Is the dollar rising inflationary or deflationary, and for how long?

This was the point of me saying the idea that markets are forward looking is of no use to an investor, if you are going to put money on something you better have a lot more than the idea that what you are investing in is looking forward. I can provide a big player in the gold space example of "reacting", rather than "seeing", the ABX exec that removed all gold hedges at the peak last year, killed shareholders, and NOW, ....AFTER gold has gone up, he's back out on the wires telling everyone the direction is much higher. He's certain this time, and his rationale....well gold is going up.

Perhaps he is correct, but is he truly "listening to the market" as you imply. Looks to me like twice now in about six months he is just watching the chart go from bottom left to upper right and that he expects that trend to continue,..again.

As for economists, I don't really follow any economists, I follow socionomics and the Socionomics Institute. I've been reading socionomic predictions for nearly 7 years now, while the timing is rarely spot on, their forecasts, rather than predictions of the past, have been extremely reliable, especially when it comes to politics.

In the end, its no big deal we are on the other side of this, as I stated earlier, I've become used to having the minority view on these types of things.

In the meantime, I'd rather stick to our trading talk and time will ultimately allow us to discuss what happened, inflation, or deflation.

good luck trading man.

mcHAPPY said...

IMO, the DOW to GOLD ratio is most important when speaking of gold. This is where gold will soar during deflation but in terms of nominal value it will fall. When gold gets in the ball park of 1000 I will start adding.

As for our current environment, I would think oil is the best baraometer. 20% gone in 2 weeks AFTER the worse spill in history (not yet, but it will be when all said and done). OIl and I do not get along (as I have said before I will never trade it again, and I could be 100% incorrect) however it looks very ominous that in a supposed inflationary environment oil and other commodities are tanking.

I wish you all good luck trading today. It has the makings to be fantastic.

CV said...

NEW THREAD UP

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