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Zedpher
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Director of Research & Owner at Ivancic Associates. Creator of the IMTS which uses multiple variables and signals to create a heatmap of market health and momentum.
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Ivancic & Associates Market Analysis and Reports
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  • U.S. & Global Stock Indices Update 0 comments
    Dec 9, 2013 8:12 AM | about stocks: DIA, SPY, QQQX, NTETF, ISXIF, HGSFF, IWM

    ** This is a preview of what members get in the regular report **

    Unites States

    Dow Jones Industrial Average

    Type of market: BULL

    Investors should be: LONG

    Exit longs and go to cash: 15,275 (or less)

    Go short: 14,972 (or less)

    The Dow Jones Industrial Average is far from a bubble. It is actually rising steadily and slowly and is still at a warm to medium temperature. As we have said in the past, the DJIA is at a similar level to 2007:

    This does not mean that there is a crash coming. In 2007, all of the other indices were also showing signs of weakness and strain, as well. Right now, the Dow looks fine and unless it drops down to Neutral territory (15,275 or less), members should be long. If it does drop down to Neutral territory, then you should go to cash and wait to see if it rebounds back into Bull territory or if it drops down into a bear market.

    S&P 500

    Type of market: BULL

    Investors should be: LONG

    Exit longs and go to cash: 1678 (or less)

    Go short: 1644 (or less)

    The S&P 500 is running hotter than the DJIA, but is is not quite yet in bubble territory. It would have to get above 2100 for it to reach that level. Even then, when a stock or index gets into bubble territory, it usually stays there a while before dropping back down. For now, at least, all signs point to further gains and caution should only be warranted if it drops down to Neutral territory (1678).

    NASDAQ

    Type of market: BULL (BUBBLE)

    Investors should be: LONG

    Exit longs and go to cash: 3648 (or less)

    Go short: 3576 (or less)

    The NASDAQ entered bubble territory on November 26th and, according to the NASDAQ's past performances in bubble territory (not including the crazy Dot Com Bubble), it could still be early in its run. Back in 1978 when it was in a bubble, its Extremes Indicator (the 4th column) hit 0.108. And in 1983 and 1986 it was 0.174 and 0.127, respectively. Currently it is only at 0.103.

    Russell 2000

    Type of market: BULL (BUBBLE)

    Investors should be: LONG

    Exit longs and go to cash: 1032 (or less)

    Go short: 1012 (or less)

    The Russell 2000 is in bubble territory for the first time since 1998. As you can see below, it is running near its peak temperature and is still going strong. This index should be watched as it approaches a range where it has only been once before since the 1990s.

    If the Russell begins to weaken and drops out of bubble territory, it could be a sign of weakness for the greater market and the Russell could become a good shorting opportunity.

    Canada

    TSX Composite Index

    (click to enlarge)

    Type of market: WEAK BULL

    Investors should be: CAUTIOUSLY LONG

    Exit longs and go to cash: 13,020 (or less)

    Go short: 12,762 (or less)

    The TSX has been acting weak for a while. It currently sits at a low level ... A level that is usually associated with regular bear market bottoms and the foundations for bull markets. This would normally be an encouraging sign, but the way the TSX has been lingering in this area is actually a worrisome sign. The TSX, in fact, hasn't been in a good bull market run (according to the IMTS) since early 2011. We will be keeping a close eye on the TSX to see what happens to the price action and if any signals are produced each day.

    Europe

    FTSE

    (click to enlarge)

    Type of market: NEUTRAL

    Investors should be: IN CASH

    Go Long: 6568 (or more)

    Go short: 6437 (or less)

    The FTSE has dropped out of Bull territory and sits in a Neutral range. The secondary indicators has also weakened and show signs of the price dropping further. We will be keeping an eye on this index as the days go by as it could swing either in Bull or Bear territory quickly.

    DAX

    (click to enlarge)

    Type of market: BULL

    Investors should be: LONG

    Exit Longs & go into cash: 8497 (or less)

    Go short: 8329 (or less)

    The German DAX is running very strong and but has shown some weakness recently. There is a ways to go before it could drop out of Bull territory, so the current signal is to be long. Those who wish to initiate new longs should wait for the last indicator to the right to drop down to around 0.001, since it currently looks like the price will drop down to that area soon.

    CAC

    Type of market: BULL

    Investors should be: LONG

    Exit Longs & go into cash: 4056 (or less)

    Go short: 3976 (or less)

    Much like the FTSE, the French CAC 40 index has been weakening. While it is still in Bull territory, it is getting close to dropping into the Neutral Zone. The last indicator is also dropping into the deeper negatives, which is a sign of more price weakness to come. We will be monitoring this for members this week.

    Nikkei

    (click to enlarge)

    Type of market: BULL (BUBBLE)

    Investors should be: LONG

    Exit Longs & go into cash: 13,651 (or less)

    Go short: 13,381 (or less)

    The Nikkei 225 is back in bubble territory, the first time since it last left there on July 13, 2006. It has shown some weakness recently (last column to the right) and could drop further before it rebounds.

    Hang Seng

    Type of market: BULL

    Investors should be: LONG

    Exit Longs & go into cash: 22,881 (or less)

    Go short: 22,428 (or less)

    The Hang Seng looks to be at the beginning of a new Bull market run. It is starting at a very low base (0.028) and last bottomed at a very good area, indicative (historically) of a solid bottom and price base. I will keep an eye on the price action since this index is close to Neutral territory, but so far everything looks positive for further gains.

    Straits Times

    (click to enlarge)

    Type of market: BEAR

    Investors should be: SHORT

    Exit Shorts & go into cash: 3183 (or more)

    Go long: 3247 (or more)

    The Signapore Straits Times Index currently sits in Bear (short) territory. It has alternated between Bear and Neutral territory for a while, since it left its last Bull run on June 4th of this year.

    Sensex

    Type of market: BULL

    Investors should be: LONG

    Exit Longs & go into cash: 19,987 (or more)

    Go short: 19,590 (or more)

    The Indian Sensex is going strong and in a good Bull market. The Sensex has had its ups and downs the past few years and a solid bull market would be very welcome to weary Indian investors.

    CNX Nifty 50

    Type of market: BULL

    Investors should be: LONG

    Exit Longs & go into cash: 5975 (or more)

    Go short: 5857 (or more)

    The Nifty is starting its Bull market at a lower level than the Sensex, but its primary and secondary indicators are all going strong. Starting at a low level, 0.023, this could be a good sign as many Bull markets begin healthy runs from such a level.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: DIA, SPY, QQQX, NTETF, ISXIF, HGSFF, IWM
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