Market Discussion

[David Randolph]

An interesting chart and idea:

[berloga]

David, your chart corroborates the statement that Tokiopua quoted right above, underlining, "stay out in wrong time and you lose big". This further supports the idea of long-term investing in sound companies. Remember, the old Jew I told you about that works at Raytheon (the large defense company), who's become a millionaire from his stock investments? He told me he searches for "good" companies, buys their stock and holds for a long time. He only sells when the company no longer qualifies for his definition of "good".

[soxguy]

OK. Lot of buying today. What makes the mood change? Good news from Walmart and Goldman Saks? Oil down? Stocks you couldn't give away yesterday are rising. One day event? Back down tommorow? Points to ponder.

[realcoolhead]

Good point with a slight correction: I am pretty sure the statistics is done for major US indices, which does not include .OB stocks 

Talking about statistics, statistically most .OB stocks are bad investments, so even though I wish you good luck with holding CHME.OB and UTVG.OB, you are against long odds --- although I can not argue with you based on company specific news.

For the record, I didn't buy any of those .OBs and so far so good. 

An interesting chart and idea:

[capricho]

I knew the market would pop, but jeeze...not like this. I took most of what people had stated on here at heart and I did get back in at the opening, so far recovering nearly all my losses yesterday. Thanks David and others...

It seems the market behaves irrationally on its own terms in spite of what I see as serious threats to the long term global economy.

[kslifka]

I knew the market would pop, but jeeze...not like this. I took most of what people had stated on here at heart and I did get back in at the opening, so far recovering nearly all my losses yesterday. Thanks David and others...

It seems the market behaves irrationally on its own terms in spite of what I see as serious threats to the long term global economy.

Nice day...probably some short covering.  I don't sense a (bottom) quite yet...so we'll probably have some more downward movement....and I would love to see a capitulation day to confirm a bottom.

Gotta love the move in GIGM before earnings.  (even though I don't own it )

[hyhl]

David. I still think avoiding (big) loss is more important. We always have chance to earn money in the stock market.

An interesting chart and idea:

[tokyopua]

I knew the market would pop, but jeeze...not like this. I took most of what people had stated on here at heart and I did get back in at the opening, so far recovering nearly all my losses yesterday. Thanks David and others...

It seems the market behaves irrationally on its own terms in spite of what I see as serious threats to the long term global economy.

Nice day...probably some short covering.  I don't sense a (bottom) quite yet...so we'll probably have some more downward movement....and I would love to see a capitulation day to confirm a bottom.

Gotta love the move in GIGM before earnings.  (even though I don't own it )

Yep, we are not out of the woods yet.  Today didnt have high volume, which it should have given yesterday was a holiday.  But it was a good sign nonetheless that there can still be a lot of strong catalysts to move the market forward.

[terainvestment]

No one comment on PFSW and GIGM results?

[setravis]

The fifth try was the charm. The DJIA rocketed up through its 13,200 ceiling yesterday as all the indicators turned up. The near-term rally has begun. However, yesterday's run-up caused the market indices to get momentarily overbought and this should be corrected by a pause that refreshes this morning before the near-term uptrend resumes.

This enabled the intermediate-term trend to halt its downward move and reverse the path of the indicators.

The DJIA will need to stay above 13,200 and continue rising. There are about 400 points between yesterday's close and the next ceiling at 13,700. The DJIA appears to be gathering momentum to traverse this gap over the next week.

The trade-term trend is not without some say in this process. It may be catalyzed today by the inflation report due out this morning. However, yesterday's intraday rally gave the indicators little chance to do other than become overbought by day end. That is most likely to result in a corrective move by the market indices, depending on the news- induced mood this morning. The correction could be no more than a sideways move as the buoying effect of the near-term rally is expected to cause the trade-term trend to progressively find higher intraday highs and higher intraday lows over the next few days.

[AussieTrader]

A few days ago I opened hedge positions on the SPX and a few weakened companies within the S&P500. I say hedged because I was still holding long positions (such as some 3SoF) and was not looking to sell those at this stage. Hedging just gives a bit of insurance if you see short term downwards action within an otherwise longer term upwards market or vice versa.

That said I haven't yet closed my hedge positions, I don't think we are 'out of correction' just yet. Indeed who knows it may be just the start of bearish period.

Regardless of market direction, there are many trading vehicles / strategies to enable you to profit / hedge or remain even available to you. 3SoF mostly plays the long side, that means you are guaranteed to get into periods of 'drawdown' on your equity when the market is not in your favour, that is a fact you can take to the bank.

Cheers

I am still 'hedged'

[berloga]

Nasdaq is trading between its SMA50 and SMA200 lines right now. It very decisevely pierced through the SMA200 in August and then swiftly shot up. It could touch SMA200 again, which on QQQQ is about 3% down and then continue on. It looks undecided at the moment.

Your hedging the positions comes quite useful during big sudden market moves, Aussie. Thanks.

[kslifka]

I think were getting close...it appears the market mentality has lost the fear and has turned a little negatively apathetic.  But...I'm waiting for the day where the market "throws in the towel"...and all stocks and sectors puke(capitulate).  Of course this may not happen in the near future...in that case...I will patiently wait.

[setravis]

To correct a momentary overbought status, brought on by the sharp run-up on Tuesday, the market indices moved mainly sideways yesterday until late in the day when a brief sell-off ensued. The DJIA dropped down close to its 13,200 level from which the near-term uptrend began. It is expected to continue although this morning will provide the opportunity for the intraday decline to bottom out before the market indices will move on up.

While still preliminary to a full-blown establishment of a new intermediate-term uptrend, the signs are unmistakable.
Uptrends to downtrends flipped from negative to positive.

After a continuation this morning of yesterday's sell-off, the market indices are expected to resume the rally begun on Tuesday. This is supported by the movement of the near-term trend indicators.

There is some potentially catalytic news coming today, which could influence how far the market indices will dip today before resumption of the near-term uptrend. However, by day's end yesterday the trade-term indicators had already become oversold. Therefore, whatever dip happens this morning, it is not expected to last long or be very deep.
Provided, of course, that one of the economic measures is not such a surprise that fear of the worst turns into a selling frenzy. The late day sell-off yesterday appears to have been mainly trade-term pessimism, so the dissipation of that pessimism this morning is expected to provide an opportunity for long stock bargain hunters to establish positions to ride the wave of the evolving near-term uptrend.

[mbaugh]

David, what's your take on the charts of SPY and the QQQQ's?  The reason I'm asking is the last time we had a major down trend you were correct on your analysis in calling the bottom.  My take is that we are at a bottom and way oversold.  However with the credit situation not going away anytime soon, these too indexes can take the good fundamental stocks down with them.  Just looking for some peace of mind from the master!