3SOF

new year quotations:

(from old fool)
Happy New Year To All!  Monday was not a very good day but I am guessing much of it was tax loss selling.  (The rule was changed a couple of years ago – sell date is what counts now, not settlement date.)  Volume was still low at 1.5 billion with a ratio of 2.5 to 1.  Not bad efficiency.  Tomorrow should be very interesting. The bears captured the daily channel with 3 straight down days.  The indicators still look OK but the bulls need to come alive.  Right now the door is open all the way down to about 2610 and the bulls need to slam that door.  It could get ugly if they don't. The hourly charts look pretty nasty.  About the only thing positive is that the bulls did put up some fight and managed to save 2650.  That last 30 minutes was very ugly.
The ratio chart was up about 3000 when the bulls were doing a bit of buying but the option boys threw in the towel when we rolled over.  We are, however, still in positive crossover.  Keep an eye on this Wed – it will give you some insight into the option guys though process.
The weekly chart still looks OK but needs a kick in the butt.  We REALLY need an up week.
The Wilshire took a small hit but not as much as the NAZ – that's good.  I would not mind seeing the small fry take the lead up – that would be very positive.
The P&F chart dropped another 2 Os but has not issued a signal.  This chart is totally neutral.
No trades for me on Monday.  I swore off drugs (the market) for the last few days of the year.  100% cash in the TP.  I did make a strategic decision to take a BIG tax loss on WM and swap it for XLF in the LT taxable port.  (Fidelity says that's not a wash trade.)  It has been a very good year over in the LT port and I can use that loss.  I don't have a freaking clue what will happen tomorrow.  The market will be news driven and we have plenty due Wed-Fri.  Next support area is at 2635-2640 followed by 2625.  Resistance is at 2670.  Watch those levels and follow the ball.

Charts link below – first of the month – please throw me some votes so I can find the chart list.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2071209

and additionally two chart quotations:

question to the gang:
Is this Old Fool update (from IV) usefull for you?
Should I continue with the posting?

thanks for your feedback!
Oliver

Old Fool Notes - 01/02/08
The first trading day of 08 did not look very optimistic and extended our losing streak to 4 consecutive days.  The bulls were totally on the side line and just refused to buy anything except a few select stocks.  Basically everything that could go wrong did.  Dollar dropped, gold and oil went up, ISM went down, etc.  So in the end we had increased volume of 2.0-2.1 billion (depending on whose number you like) with a ratio of 3.5 to 1 - a hell of an efficient day for the bears.

The daily chart looks like hell.  It is firmly in the bear camp.  The bulls managed to put on a small push and save 2600.  But I would not put 2575 out of reach.

The hourly charts clearly show that 2600 is about the last stop down to 2560.  The chart indicators are actually neutral, suggesting a move in either direction.

The ratio chart is on last stand.  The option boys did not even try today but went with the flow.  Still in positive crossover but with a negative chart pattern.

The weekly chart is just hanging on.  Positive action needed very soon.

The Wilshire chart suffered from another drop but, yet again, did not drop as bad as the Naz.  Sooner or later this will mean something - but not today.

The P&F chart set a high pole warning - not good.  The bulls have 10-20 points to play with on this chart but surely don't want more than that.

I had no trades today - much too busy to fool with it.  I will also note that today was a classic example of why you should stay on the bench until after 10am.  I have a number of internals charts that suggest that we are very close to the bottom of this move.  Nothing is lost, however, in waiting for some confirmation.  The dip could certainly go on for another day or two.  No need to rush facing up to a train - patience required.  Friday's job report will dictate the move so I plan to sit on the side until then.  Now, if I wake up in the morning and see futures up 20, I may change my mind.  But I doubt that happens.

Charts link below - Thanks for the votes last month.  I got a note from Stockcharts that I was awarded another month of service for the number of votes I received.  Shot - that's worth about $25 and I'll take all the help I can get.  Seriously - appreciate the support.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2071209

This member of the gang finds them useful, applaud!  Its nice when we all pitch in info, I try sometimes to add the IBD Big Picture, etc.  So if you dont mind, please keep posting, at least on these crazy days when we need all the perspective we can get!

Quote from: la-onda on January 02, 2008, 11:33:42 PM
question to the gang:
Is this Old Fool update (from IV) usefull for you?
Should I continue with the posting?

thanks for your feedback!
Oliver

Old Fool Notes - 01/02/08
The first trading day of 08 did not look very optimistic and extended our losing streak to 4 consecutive days.  The bulls were totally on the side line and just refused to buy anything except a few select stocks.  Basically everything that could go wrong did.  Dollar dropped, gold and oil went up, ISM went down, etc.  So in the end we had increased volume of 2.0-2.1 billion (depending on whose number you like) with a ratio of 3.5 to 1 - a hell of an efficient day for the bears.

The daily chart looks like hell.  It is firmly in the bear camp.  The bulls managed to put on a small push and save 2600.  But I would not put 2575 out of reach.

The hourly charts clearly show that 2600 is about the last stop down to 2560.  The chart indicators are actually neutral, suggesting a move in either direction.

The ratio chart is on last stand.  The option boys did not even try today but went with the flow.  Still in positive crossover but with a negative chart pattern.

The weekly chart is just hanging on.  Positive action needed very soon.

The Wilshire chart suffered from another drop but, yet again, did not drop as bad as the Naz.  Sooner or later this will mean something - but not today.

The P&F chart set a high pole warning - not good.  The bulls have 10-20 points to play with on this chart but surely don't want more than that.

I had no trades today - much too busy to fool with it.  I will also note that today was a classic example of why you should stay on the bench until after 10am.  I have a number of internals charts that suggest that we are very close to the bottom of this move.  Nothing is lost, however, in waiting for some confirmation.  The dip could certainly go on for another day or two.  No need to rush facing up to a train - patience required.  Friday's job report will dictate the move so I plan to sit on the side until then.  Now, if I wake up in the morning and see futures up 20, I may change my mind.  But I doubt that happens.

Charts link below - Thanks for the votes last month.  I got a note from Stockcharts that I was awarded another month of service for the number of votes I received.  Shot - that's worth about $25 and I'll take all the help I can get.  Seriously - appreciate the support.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2071209

You have my vote for continuance, La-onda.

IBD Big Picture:  Market rally back under pressure:

----------------------------------------

Stocks fell hard Wednesday, starting the new year with losses on a weak manufacturing report and surging oil prices.

The Nasdaq tumbled 1.6%. The NYSE composite sank 1%, the S&P 500 1.4%, and the Dow industrials 1.7%.Volume surged across the board, as traders returned to Wall Street after the New Year's holiday. NYSE trading rose 26% compared with Monday's pre-holiday levels. Nasdaq turnover swelled 44%.

Wednesday's session marked a distribution day for the major indexes. That brings the total to six for the Nasdaq and five for the broad NYSE indexes over the past few weeks.


It also netted a fourth straight down day for the Nasdaq, including back-to-back distribution days. The technology-laden composite has now dropped 4.2% over the past four sessions. That's the worst four-day streak since Nov. 7 to Nov. 12.

The market's November rough patch prompted a change in IBD's Market Pulse, to acknowledge the market coming under pressure. We've made the same change today.

January is often an uncertain time for the market. Given that history, along with stocks' recent jitters, it's a good idea to switch to a conservative approach.

Avoid new buys. Cut losses short. If you own a leading stock that's starting to waver, consider taking partial profits.

A manufacturing report dealt the day's first blow. The Institute for Supply Management's index for December sank to 47.7 from 50.8 in November.

That was the first contraction in manufacturing activity since January 2007. It was also the weakest reading since April 2003.

Elsewhere, oil and gold prices spiked to record highs. February crude soared above $100 a barrel intraday. It pulled back a bit but still closed up $3.64 at $99.62.

February gold jumped $23.20, closing at $861.20 an ounce.

Stocks showed a little life in the afternoon, as the Federal Reserve released the minutes from its Dec. 11 policy meeting.

But the market's bounceback didn't last, as the major gauges closed near their intraday lows.

Several top-rated stocks took a hit, as the IBD 100 gave up 0.8%.

Fossil (FOSL) gapped down at the opening bell, closing down 2.19 at 39.79 in twice its normal trade.

The maker of watches, handbags and other accessories fell after a Piper Jaffray analyst downgraded the stock to neutral from a buy rating, citing valuation concerns.

Amphenol (APH) slid 2.17 to 44.20 in brisk turnover. The maker of fiber-optic connectors dropped all the way to its 50-day moving average after a downgrade by Stifel Nicolaus.

The news wasn't all bad among leading stocks. China Medical (CMED) Technologies picked up 2.47 to close at 46.86, breaking out of a two-month base.

Amazon.com, (AMZN) Southwestern Energy (SWN) and a few other highly rated issues also fared well.

------------------------------------------------

Things just arent looking good...

Jobs number was ugly. 

Nasdaq hitting that trend-line...

Brutal   

Trend-line broken.

Next trendline (which I can't get on Stockcharts) going back 5 years brings us to around 2230 on the Nasdaq.

just great entry points for us!

stay tuned ;-)

Quote from: kslifka on January 04, 2008, 02:46:44 PM
Brutal   

Trend-line broken.

Next trendline (which I can't get on Stockcharts) going back 5 years brings us to around 2230 on the Nasdaq.

Agreed, brutal.  The broken trend line made me reconsider some things. 

I sold all US holdings except for GSB, the rest remaining are my Chinese or Israeli holdings.  And for those remaining that I havent held long, I will consider dropping for now and looking for better entries. 

CIMT for example though I know I wont sell no matter what, I have almost held that a year and it is doing well despite the market downturn.

Looking at the chart you posted, would you agree that the three labeled peaks on the right side now look like a head and shoulders pattern which just broke to the downside (and through a major trend line a that)?

Quote from: tokyopua on January 04, 2008, 04:39:05 PM

Quote from: kslifka on January 04, 2008, 02:46:44 PM
Brutal   

Trend-line broken.

Next trendline (which I can't get on Stockcharts) going back 5 years brings us to around 2230 on the Nasdaq.

Agreed, brutal.  The broken trend line made me reconsider some things. 

I sold all US holdings except for GSB, the rest remaining are my Chinese or Israeli holdings.  And for those remaining that I havent held long, I will consider dropping for now and looking for better entries. 

CIMT for example though I know I wont sell no matter what, I have almost held that a year and it is doing well despite the market downturn.

Looking at the chart you posted, would you agree that the three labeled peaks on the right side now look like a head and shoulders pattern which just broke to the downside (and through a major trend line a that)?

Looks more like a "bearish" "M" shape. 

The double top in a short period of time in December was the warning signal.

Quote from: kslifka on January 04, 2008, 05:24:29 PM

Quote from: tokyopua on January 04, 2008, 04:39:05 PM

Quote from: kslifka on January 04, 2008, 02:46:44 PM
Brutal   

Trend-line broken.

Next trendline (which I can't get on Stockcharts) going back 5 years brings us to around 2230 on the Nasdaq.

Agreed, brutal.  The broken trend line made me reconsider some things. 

I sold all US holdings except for GSB, the rest remaining are my Chinese or Israeli holdings.  And for those remaining that I havent held long, I will consider dropping for now and looking for better entries. 

CIMT for example though I know I wont sell no matter what, I have almost held that a year and it is doing well despite the market downturn.

Looking at the chart you posted, would you agree that the three labeled peaks on the right side now look like a head and shoulders pattern which just broke to the downside (and through a major trend line a that)?

Looks more like a "bearish" "M" shape. 

The double top in a short period of time in December was the warning signal.

I was looking at the longer term chart you posted of the $COMPQ, so starting in mid July last year it looks like a left shoulder at 2724 peak, the head at 2861 peak, the right shoulder is that M shape with a peak around 2734.

Well, anyway you slice it this isnt looking good. 

Quote from: tokyopua on January 04, 2008, 04:39:05 PM

Quote from: kslifka on January 04, 2008, 02:46:44 PM
Brutal   

Trend-line broken.

Next trendline (which I can't get on Stockcharts) going back 5 years brings us to around 2230 on the Nasdaq.

Agreed, brutal.  The broken trend line made me reconsider some things. 

I sold all US holdings except for GSB, the rest remaining are my Chinese or Israeli holdings.  And for those remaining that I havent held long, I will consider dropping for now and looking for better entries. 

CIMT for example though I know I wont sell no matter what, I have almost held that a year and it is doing well despite the market downturn.

Looking at the chart you posted, would you agree that the three labeled peaks on the right side now look like a head and shoulders pattern which just broke to the downside (and through a major trend line a that)?

I think you did the right thing Tokyo. I'm pretty sure IBD will now take a corrective mode posture from their "rally under pressure" one. They have already been saying for some time that you shouldn't be fully invested, to be careful entering into new positions and be quick to cut losses.

I've cut only a few holdings, but instead have gone on margin to hedge with ultrashorts late last year. That is the only time I ever use margin and feel safe doing so for that purpose. But It may be time to consider selling more longs and becoming "net short"

I think the only thing that can probably turn this around now would be a surprise early interest rate cut of .5 BEFORE the end of month. I think it might be a possibility.

[/quote]

Quote from: BigSully1 on January 04, 2008, 05:59:03 PM

Quote from: tokyopua on January 04, 2008, 04:39:05 PM

Quote from: kslifka on January 04, 2008, 02:46:44 PM
Brutal   

Trend-line broken.

Next trendline (which I can't get on Stockcharts) going back 5 years brings us to around 2230 on the Nasdaq.

Agreed, brutal.  The broken trend line made me reconsider some things. 

I sold all US holdings except for GSB, the rest remaining are my Chinese or Israeli holdings.  And for those remaining that I havent held long, I will consider dropping for now and looking for better entries. 

CIMT for example though I know I wont sell no matter what, I have almost held that a year and it is doing well despite the market downturn.

Looking at the chart you posted, would you agree that the three labeled peaks on the right side now look like a head and shoulders pattern which just broke to the downside (and through a major trend line a that)?

I think you did the right thing Tokyo. I'm pretty sure IBD will now take a corrective mode posture from their "rally under pressure" one. They have already been saying for some time that you shouldn't be fully invested, to be careful entering into new positions and be quick to cut losses.

I've cut only a few holdings, but instead have gone on margin to hedge with ultrashorts late last year. That is the only time I ever use margin and feel safe doing so for that purpose. But It may be time to consider selling more longs and becoming "net short"

I think the only thing that can probably turn this around now would be a surprise early interest rate cut of .5 BEFORE the end of month. I think it might be a possibility.

[/quote]

I agree with you BigSully...a sell into any rally would be advisable here.  There is that possibility that we do get a surprise early rate cut...which you just never know with Bernanke

I sold all US holdings except for GSB, the rest remaining are my Chinese or Israeli holdings.  


[/quote]

Tokyo what you said brought a funny, or very sad (depending on how you look at it) thought to mind. It used to be when there was trouble with the U.S. economy, the first thing we did was pull out of emerging markets as they were considered very risky and were severely effected by our economy. Nowadays we tend to seek safe haven in the emergings markets when trouble brews here. Geez, how times have changed.

just fyi:

Charts That Suggest a Bounce
(from Tim Knight)
This is one of the days that must be handled adroitly. Being ham-handed on a day like this can cause huge damage (or at least blow big opportunities).

I'm out of my index puts. I've bought S&P calls (yep, calls). I've still got a bushel of equity puts, but I'm trimming here and there. As I look at the index charts, I see mounting evidence for a bounce here. The big picture looks better than ever for a bear market. But I'm profoundly nervous about a bounce at this point and feel compelled to hedge against that possibility. Here are the charts, without commentary:

(UPDATE: Well, that was a profound waste of money on my part. I bought SPX and RUT calls. Saw things weaken. And thus generated my only multi-thousand dollar losses for the day. Stick to the bearish plays, dickhead.....)
I just wanted to make sure my last post about a possible bounce wasn't at the top!

Clearly it's an awesome day for the bears. I think all of us are expecting dumbshit Bernanke to show up and get on his knees for the bulls like he always does with a 300 basis point cut this weekend or something.