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Erik McCurdy

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  • Double Dip Is Virtually Guaranteed [View article]
    No relation (of which I am aware), but I did earn my undergraduate degree at UVA. I wasn't even aware there was a McCurdy on the faculty. Which department?
    Jun 29 04:32 PM | Likes Like |Link to Comment
  • 18 Reasons to Assume Near Term Market Direction Is Down [View article]
    Our Cyclical Trend Score (which analyzes a large basket of fundamental, technical and psychological indicators) also issued a confirmed long-term sell signal last week, and it has correctly predicted over 90% of the turning points during the past 80 years, so we can add that to the list as well. ;)
    Jun 29 01:34 PM | 2 Likes Like |Link to Comment
  • Getting That 2002 Feel All Over Again... [View article]
    Ricardo, there are plenty of other data reinforcing the double dip thesis:

    At this point, it is looking unavoidable. Should be an interesting second half of 2010.
    Jun 29 01:26 PM | 2 Likes Like |Link to Comment
  • Dow-Gold Ration - Big Picture [View instapost]
    I spend a great deal of time analyzing those ratio charts myself. Have you seen our Gold Currency Index?

    It has done an excellent job of forecasting the long-term trend of gold as an international currency over the past five years.
    Jun 29 01:22 PM | Likes Like |Link to Comment
  • The S&P 500 Chart to Watch [View article]
    I would absolutely agree that no "holy grail" is all-seeing, but nothing is ever certain in the financial markets. The best we can do is identify the most likely scenarios and estimate their associated probabilities. I have in fact tested my algorithms using historical data going back to the market crash in 1929, and they have correctly identified long-term inflection points (both secular and cyclical) over 90% of the time with a relatively low spurious signal rate of about 12%, and I would never hope or expect to do any better than that from a long-term forecasting perspective. I never take alpha risk, choosing to spend my time on analyzing the big picture rather than individual companies; but that is simply a matter of personal preference, of course.

    You sound like you have a sound strategy that has afforded you success as well. Thanks for the stimulating discussion!
    Jun 28 01:46 PM | Likes Like |Link to Comment
  • The S&P 500 Chart to Watch [View article]
    Agreed, Bildar. John Bollinger said it best: "In investing, there is no holy grail other than the one you fashion for yourself." I believe the key to long-term success is developing your own philosophy and system. When I began analyzing the stock market in the mid 1990s, I came from an engineering background, so I used statistical modeling and developed software to apply my techniques. I also studied pretty much every investing and trading philosophy I could find and synthesized the ideas that I felt had merit into an amalgam that formed the foundation for everything I do.
    Jun 26 06:18 PM | 1 Like Like |Link to Comment
  • The S&P 500 Chart to Watch [View article]
    "Most people who examine this data, being superstitiously human, will go with perceived odds based on the majority of the patterns having worked."

    That's the problem with simply memorizing patterns and then applying them without any further consideration. The key is to understand the fundamental and psychological drivers that cause them to form. Once you know why patterns mean what they mean, you can apply that understanding to any chart, even the ones without any conventional formations. It also enables you to decide when a given pattern is the most likely to resolve as expected and when it is not.
    Jun 25 12:44 PM | 1 Like Like |Link to Comment
  • Long-term Sell Signal in Stocks has been Confirmed [View instapost]
    We don't believe it is possible to predict with any useful amount of statistical confidence where cyclical trends are likely to end before they even start. However, there are some relatively strong congestion support levels that can serve as intermediate-term and long-term objectives.

    Obviously, a weekly close well below congestion support at the head and shoulders neckline (1,060 area) will be required to confirm the start of the cyclical downtrend. Once the head and shoulders pattern has broken down, there is no meaningful support until that congestion area near 950 (see the weekly chart above), so the S&P 500 could move down to that level rather quickly. The 950 support area is relatively strong, so the downtrend will likely consolidate there for a while. After 950 is taken out, the next support levels are at 875, 800 and finally the 2009 bottom near 680. If you go all the way back to the end of the previous secular bull market, there is also a relatively strong congestion support level near 650.

    How far this next cyclical downtrend goes and how fast it gets there will depend upon a lot of factors and future developments that are currently unknowable. If the global economy enters another deflationary spiral, it could be relatively fast and furious. It could also be a more well-defined grind lower (e.g. the 2000 to 2002 cyclical downtrend). Our computer models are currently tracking a number of different scenarios, but none of them are much more likely than any of the others at the moment, which is what we would expect at this early juncture.

    All qualifications aside, I would expect the developing cyclical downtrend to bottom somewhere in the 650 to 800 range on the S&P 500 sometime over the next 16 to 24 months. Nothing more than a best guess based upon years of chart study and current economic data trends. We are currently in the middle of a massive conflict between unprecedented deflationary and inflationary forces, so it's very hard to predict what type of structural shifts to expect or when to expect them. The only thing that is certain about the next five to seven years is that it is going to be an incredibly wild ride!
    Jun 25 11:15 AM | 5 Likes Like |Link to Comment
  • The S&P 500 Chart to Watch [View article]
    A head and shoulders formation doesn't need to be symmetrical in order to carry predictive weight. It can be distorted in any number of ways and still reflect the same underlying fundamental and psychological message. The fact that the short-term rally from early June was only able to return to 1,130 before breaking down is a warning sign that suggests the downtrend from late April may be strengthening even further. A break well below 1,050 would be extremely bearish, and that development has become more likely.
    Jun 24 08:13 PM | 2 Likes Like |Link to Comment
  • Fed Looks Powerless as Current Environment Resembles Japan [View article]
    I agree. Our excessive debt levels will likely continue to constrain economic growth until they are addressed. Today's breakdown in the stock market confirmed a long-term sell signal that we have been monitoring since earlier this month, so it would seem the markets are poised for a resumption of their own deflationary trend. The second half of 2010 could get quite ugly. Inflation should become the bigger threat at some point, but that point is likely years away yet.
    Jun 24 08:04 PM | 3 Likes Like |Link to Comment
  • The S&P 500 Chart to Watch [View article]
    I would respectfully submit that last summer was a very different situation. In addition to the developing head and shoulders formation, our Cyclical Trend Score--which analyzes a broad set of fundamental, technical and psychological indicators--has generated a confirmed long-term sell signal for the first time since late 2007:

    Nothing is certain, but sometimes the odds strongly favor a given scenario, and I believe now is one of those times. We will see.
    Jun 24 07:57 PM | 2 Likes Like |Link to Comment
  • Bear Market Recommences As Stocks Fall On Federal Reserve's Statement That Financial Conditions Are Less Supportive Of Growth And Downgrade Of BNP Bank [View instapost]
    Our Cyclical Trend Score generated a confirmed long-term sell signal today, so we would agree with your thesis.
    Jun 24 07:53 PM | Likes Like |Link to Comment
  • Stocks Struggle to Advance as Head and Shoulders Top Develops [View article]
    The CTS long-term sell signal was indeed confirmed by today's breakdown of the short-term uptrend from early June.
    Jun 24 06:30 PM | 1 Like Like |Link to Comment
  • The Hindenberg Omen Blog - June 2010 [View instapost]
    Yes, barring a miraculous recovery during the last half hour of trading, our cyclical trend sell signal will be confirmed.
    Jun 24 03:28 PM | 3 Likes Like |Link to Comment
  • The Hindenberg Omen Blog - June 2010 [View instapost]
    From my perspective, 1,090 really needs to hold on the S&P 500. If it does not and we head back down to cyclical congestion support in the 1,050 to 1,067 range, my CTS long-term sell signal will be confirmed. The next few sessions could be very important with respect to the long-term trend.
    Jun 24 09:28 AM | 4 Likes Like |Link to Comment