Dear Readers, Not a lot has changed for us to deviate from our previous forecast(s). We did have a good rally in US indices and even better rally in some other markets. The change in sentiment though is important and it is at a point where it supports the sell off in the market. Considering that Our Pressure Gages and cycles are already supporting the market move lower for a long time now, it seems to me that, there is very little that can hold this market up, except the destruction of $. Since I do not see that in near future ( even though weakness is projected into 23/5), I do not see an upside potential of any consequence right here and now. Please reread previous post for completeness. Just a reminder, 137.30 is almost a shue in for EURO and 140.0 is possible, but not very probable for 23/5.
Considering first 2 comments this morning, Please understand that in Real terms Market top of FEB 28 has not been broken. How about that Ha.....
Certainly the Market top of 2000 is only half way retraced. How about that Ha...
Having Told Dear Danno that some move on the upside would not surprise us, by no means implies that, I am bullish today. Hell no... We could just as well take a king size dive today. Be on you toes, buy pressure is close to nonexistant today.
Good Trading
8 comments:
Hello Boris.
Based on your opening commentary you see marginal gains this week or perhaps none. I would presume that a blow-off rally this week even in the face of negative sentiment and high sell pressure guages, wouldn't suprise you in the least.
yes?
Danno
Dear Danno, Nothing Will/Should surprise us the real market gains. I the US markets were to gain, while $ gained or remained stable for extended time, that would make us a convert, but We could not see it for last few years and do not see it in near future. Remember while we like this game of TOP catching, the real purpose is making( not losing ) money. In that sence we would be happy to even miss the TOP, but make sure that start shorting when it is mostly known that the top has been placed. We did not see the begining ot that kind of (ABSOLUTE)weakness. Good Trading
In general, near any top, the internal momentum of the market begins to die. One starts to see divergences with weak sectors leading on the downside. Slowly and finally, the entire market turns down.
Given the above is true, the way to catch the top that works for me is the following -
(i) Start shorting weak sectors/stocks, when you think the top is near.
(ii) As top is more and more confirmed, move from weak stocks to the general market.
(iii) Take more aggressive bets (futures, options), as the momentum rolls over.
At the end of the campaign, follow the reverse order. Take profit on futures, options at the earliest sign of turn, then the indices and finally weak stocks. The entire campaign can last from few weeks to months. So, patience and discipline are two critical factors.
Dear Greenie, thanks for you comments. Certainly agree shorting the weak industries ( even though we only concentrate on indices in our comments, we always answer questions about stocks and/or industties). The Topping environment has been going on now for a year so. Your statments about weak industris ( housing , subprime , home furnishing etc) were in place fo awhile definitely.
Good Trading
Dear Boris,
How do you get your buying/selling pressure gauge? I understand it is proprietary and do not expect you to tell me the details, but just curious what it is based on. Something like TRIN (price to volume ratio) or TICK?
Dear Greenie, Construction is on another proprietary concept. Stocks ready to go up. Ans Stocks ready to go down. Not being in a position to reveal these, the pressure itself is a simple count of these stocks that out of SPX or QQQQ for two graps. So 20 stocks ready to jump will signify the 20 reading for that measure, but it may differ, cause I adjust the numbers to make the EXCELL charts line up.
Good Traind Dear Greenie.
Thank you Boris. I understand the concept now. Best to you, Greenie
just wanted to add that I am getting a solid sell signal on QQQQ now. Let's see how it plays.
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