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I was born and raised in southern Alberta and graduated from the department of Structural Engineering Technology at S.A.I.T. in Calgary. My background is mainly in construction management although I spent 10 years selling real estate where I gained some very valuable knowledge about how... More
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  • Hindenburg Omen Blog - December, 2011 - The HO Is Repaired 164 comments
    Nov 30, 2011 11:38 AM

    This is the continuation of a discussion on the Hindenburg Omen which was originated by our friend John Lounsbury over 2 full years ago.  Again, we offer a great big "thank you" to John for having maintained this series of instas for over a year and a half, until I finally learned how to create one by myself and take this endeavor off his hands.

    The preceding blog can be read here.  For further reference, or to read about actual Hindenburg events we have covered including the near misses which occurred in the "week before" and the "day of" the flash crash, the entire series began with John's original post which can be found here.
       
        
                                         RAVELLO, ITALY
                      
    Instead of having to look at the usual picture of the little blimp, why don't we just relax in Italy.  If you have Google Earth on your computer, you simply have to see this incredibly beautiful town to believe it.

    ============

    On Wed., Oct. 19th, the HO had finally became fully functional once again when the 50 day MA flicked ever so slightly higher.  But as you all know, that darned moving average rolled lower on November 21st and has been offline ever since.  However, with today's massive opening gap higher on the NYSE, the moving average has today suddenly turned higher after spending 9 days on the skids.  The Hindenberg Omen is once again back in operation.  This time, as evidenced by the price action of 50 days ago, it would appear that the HO should remain online for quite some time.  For quick reference, here's a 'still picture' of how we measure the all-important 50 day moving average.  You can also see clearly that the 50 day MA has rolled higher for the second time in 42 calendar days.  Feel free to click the link at the bottom of the chart for a live an updated version:

           
                                    Live and Updated Version

    We will now pick up where we left off, since the odds are very high that if/when the HO issues another signal, it will almost assuredly be something we dare not ignore.  The main thing to keep in mind is that due to its rather strict requirements, any signal from the HO will likely be issued somewhat late.  "Late" being a relative term in this case.  It may seem 'late' at the time a signal is issued but if history has any say in the matter, it could well turn out that the signal actually occurs relatively early in what has sometimes turns out to be a severe pullback.  In a perfect world, the HO would have issued a signal at some point last May.  Unfortunately, for the reasons given above... it didn't.  Not "officially".


    ==============

    I'm pleased to announce that on December 10th I published the first entry in my new blog.  For the longest time I had been very reluctant to create a blog of my own, but for so many different reasons (trolls on other sites being the main one) I finally decided that it was probably better if I do.  It's also about the only way any of you are ever going to see any of my technical work other than the HO business since SA is unfortunately so unsupportive of articles that are based on TA.  You'll also find links to blog sites that I visit often, most of which are run by like-minded friends of mine who are also analysts and technicians.  It's a work in progress so if you find it at all interesting, please bookmark it and check in every now and again as more content will be added on a semi-regular basis.  Albertarocks' TA Discussions

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Comments (164)
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  • FocalPoint Analytics
    , contributor
    Comments (6282) | Send Message
     
    Good to see it back in action. Here is what happened to markets after the last CB intervention http://tinyurl.com/c66...

     

    It will be interesting to see how the HO reacts at this time compared with how it reacted in September.
    30 Nov 2011, 12:46 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » "Good to see it back in action."

     

    You'd better believe it. I personally don't really rely upon it, but instead glean a a certain amount of valuable info just by watching its inner workings. I'm trying to share that here so that all of us might get at least a heads up. Kind of like leaked info, like that which the bankers all enjoy on an ongoing basis. My, how easy it would be to "become a billionaire in 45 short days" if we had the same illegal privileges.
    .
    30 Nov 2011, 01:37 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Thanks Mr. Mouse. Can you do me one favor? And I'm serious about this. I purposely awoke today at 11:00 Eastern (earlier where I live). I took one look at the markets and just turned my attention elsewhere. I haven't looked at a chart yet today, except the HO one. I haven't surfed the web at all, for anything. Could you tell me in a one sentence nutshell what news might be corresponding with a 4% opening gap higher? Did Sarkozy and Merkel get married?
    30 Nov 2011, 12:49 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (6282) | Send Message
     
    Two things happened, requiring two sentences.

     

    The FED, ECB, BOJ, BOE, SNB, BANK OF CANADA executed a coordinated Quantitative Easing action by lowering swap rates 50 bps. http://tinyurl.com/7kb...

     

    China also began monetary easing, lowers reserve ratio by 50 bps
    http://tinyurl.com/7md...
    30 Nov 2011, 01:06 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Thank you. Much appreciated.
    30 Nov 2011, 01:27 PM Reply Like
  • jhooper
    , contributor
    Comments (8059) | Send Message
     
    With no end dates set for these QE programs, they will have the same effect as GDP targeting. Which means a rally that could continue until commodity prices lead to more social unrest. Of course with GDP targeting you can get per month volume announcements. In this case, we are waiting to see how much the European banks will bite at this price level. The volume to which they bite will determine the stimulative effect. If they bite hard, it could cause a serious rally. If they only nibble the rally could be tepid. In this case, another rate cut could come in a few months.

     

    If they do bite hard, then at some point they will have had their fill, and the rally should stabilize. Then we will have to wait and see how commodity prices react. A rising equity market could prompt increases in oil futures and then finally input costs deliver cost push inflation or squeezed margins. When this happens the market rally should correct, and we find new trading ranges.

     

    Again, the stimulative effect should be determined by how much volume is generated on the swap lines at the new price levels.
    30 Nov 2011, 03:42 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    How much of their income are the average Iranian household paying by percentage? It would be interesting to see how hungry that population is getting. If they get hungry enough there will be repercussions.
    1 Dec 2011, 02:17 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    The martini and dice seem particularly appropriate for what the market has become!

     

    From you prior comment, "So with the new found party atmosphere on Wall Street, now that all of Europe's debt problems must have been solved forever" ... made me laugh and immediately think of what happens if that were really, really true. My conclusion is that the U.S. is the next target, and rightfully so for the time being.

     

    If you haven't caught ZeroHedge recently, check their recent articles on the global coordinated bail out now underway via reduced-cost swaps.

     

    I guess the braniacs feel insolvency can be cured with liquidity.

     

    HardToLove
    30 Nov 2011, 12:51 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » H.T. (all of you for that matter) I couldn't possibly emphasize enough how much I recommend that you watch Chris Martenson's latest offering. You may have done so already, I don't know. But this is all going to end very, very, very badly. It is not debatable:
    http://bit.ly/tdUXXb

     

    In the past, I have many times recommended that people listen to what I think is the singular greatest gift ever given to humanity by one man. And that was Chris' 3.5 hour "Crash Course." The video in the ZH link above is less than half that... a condensed version. If you haven't watched it yet, or seen the Crash Course yet, I urge (almost beg) you to do so. Nice to see you drop by, as always. Thanks :-)
    30 Nov 2011, 01:33 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    I watched the original Crash Course as soon as I was aware of it.

     

    It was a important piece of my beginning to understand some things of which I was ignorant.

     

    I'll pop over to the new link and listen.

     

    Thank you!

     

    HardToLove
    30 Nov 2011, 02:25 PM Reply Like
  • tripleblack
    , contributor
    Comments (13581) | Send Message
     
    Bookmarked this new one!

     

    I feel there is another layer to the China onion. Note that they cut reserve requirements for their banks for the first time in 3 years, too...

     

    http://seekingalpha.co...

     

    I would keep a sharp eye on this, particularly if I had plays based upon the yuan.
    30 Nov 2011, 01:11 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    Rocks: Seasons greetings. Thanks for the new blog. Obviously the EZ thingy is cured forever because the FED has made U.S. tax payer dollars into monopoly money.
    30 Nov 2011, 01:41 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Good gawd, I think the HO might have come back on stream at a rather opportune time. Let me start by saying that in no way do I want to come across as being sensationalistic or adding drama just for the sake of it. For one thing, any credibility I might have would be shot to hell if I came across as being sensationalist just for the fun of it. I'm not going there.

     

    I'm just going to submit the following because it's important and I'm fairly confident you'll see the merit in it. At the time I'd set up this insta this morning, I hadn't yet looked at the numbers. At this moment, the numbers of new highs and new lows are hovering right in the HO's wheelhouse. No reason for concern, but ample reason to stay on top of this.

     

    On Nov. 16th, Augustus made the following great observation. He said: "Look at the NH - NL data. There has been quite a long string of negative days." When I queried him about what he meant", he clarified that he was noticing that there had been a long streak of days when the number of new lows exceeded the number of new highs. Producing a "negative". That's awesome. He gets it. I'm sure all of you do, but it was gratifying to see Augustus verbalize it. And he must have been watching the data on his own, because I hadn't been providing it. By the way, all of you can find the official source for HO purposes right here:
    http://on.wsj.com/t21odK

     

    Augustus was right of course. But during those days, there were also a number of new highs being generated, right along with as many as perhaps 250 new lows. Today, with the NYSE having surged 7.9% in 5 days, we're seeing 95 new highs and 15 new lows. Only days ago we were seeing 250 new lows. In other words, there are enough stocks that are close enough to each end of the spectrum that it would not be out of line at all for an HO signal to occur at any time. Most likely we'll see the two numbers drift closer together over a series of days without causing the HO to issue a signal. That's what I'm trying to provide here, an early warning.

     

    I have to admit, this topic has just taken on a new level of 'fascinating and important' (at least for me personally). As important as it was back in the days when it came ever so close just before the flash crash. So we're going to be monitoring it much more closely than I have done over the past two weeks.

     

    Having said all this, when I look at a daily chart, I see nothing but bullish signals. When I look at a 60 minute chart, I see nothing but bearish signals. It's so darned difficult to interpret signals sometimes, but right now the signals are leading me to believe that there is going to be a pullback, but that it's most likely a buying opportunity. Something that I find extremely difficult to swallow. It just goes against my very instincts to trust the world not to fall right apart at the seams and for the markets to head higher. But that's my interpretation... at least for today. We'll see what happens going forward.
    .
    30 Nov 2011, 02:20 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    AR, using the SPX, it's bumped right against falling resistance, short-term, from top of 10/27 and touching tops of 11/11-11/16. Using SPY as a volume proxy, volume has been running below the 25-day average (non-standard, but what I prefer) for seven straight days.

     

    Gap up open from 11/28 needs filling and the move up is ~50% Fibonacci re-trace. Add in a little news in the EZ, globally coordinated bail-out, ... and we can see the usual computer-driven headline analysis bounce displayed, IMO.

     

    I don't believe it will hold as we have another .... WEEKEND (GASP!) approaching wherein everybody and his brother wants to go home "flat" because of the EZ fear. Yes, the headlines (like a thousand times before?) lift the market ... *until* folks realize that "hot air is cheap" and means nothing, based on past performance.

     

    The TA indicators suggest bullish, as they must, but I feel they can't be relied upon in isolation anymore.

     

    MHO,
    HardToLove
    30 Nov 2011, 02:50 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » I agree with all you say H.T. I'm so torn. Earlier this week I was posting this chart on a different website that gave strong evidence that the volume metrics were just screaming "distribution". http://bit.ly/sYiNrO

     

    The theory is that when these type of volumecandles show up as big and fat and red, there is immense downside volume. When they show up as big fat green ones, but with price going nowhere, they betray "dumping". Ideally, in a healthy market we see big fat green candles which accompany strongly higher prices. We are not seeing that thanks to the effect of overnight ramp jobs. That practice is absolutely deliberate, helped along by the 'convenient timing' of news releases. Time after time after time. But with today's reaction to the 'cure all', I was made to look like a buffoon. What's a person going to do when the market swallows the bait hook, line and sinker?
    .
    30 Nov 2011, 03:19 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    AR, I've recently started following the S&P e-mini futures on the CPOE and Sgxnifty site. I've noticed the effect they have overnight and have concluded that the futures are, to a great extent, driving the S&P. Today is a good example of their effect: opened and stayed absolutely flat as the futures have stayed also flat.

     

    Another interesting thing has been the recent narrowing spread between the futures and the market price. Went from $5-$6 to !$1 right now over the last week or so. Since the December contract doesn't expire until 12/16, I find this reducing "backwardation" significant.

     

    But I'm not sophisticated enough to no why - I just think it must be saying something. Mostly I interpret it as reducing the demand for "now" versus bullishness (maybe) much further out. If contango appears, ...

     

    Volume has been steadily tailing lower since the opening iof the front-month in September. It's down substantially now, but that may be just an effect of the contract nearing expiration.

     

    HardToLove
    30 Nov 2011, 03:46 PM Reply Like
  • John Lounsbury
    , contributor
    Comments (4048) | Send Message
     
    AR - - -

     

    Signing in to the new Insta. I check everyday.
    1 Dec 2011, 02:24 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Thanks John. I was certain you'd keep your eye on these instas. After all, it's kind of your baby. At least you birthed it, lol.

     

    By all means, please stay tuned because things are developing in such a way that a signal is definitely within reach without too much problem. For example:

     

    At this very moment there are 85 new 52 week highs and 11 lows. Of course it's so early in the day that we have no idea where they will end up. We already have enough highs today to satisfy the HO's requirements. But I ran a scan at StockCharts only moments ago, to find out how many stocks are within striking distance of a new 52 week low. And the numbers came out to be quite revealing:

     

    Within 1% of new 52 week low (and not included in today's lows)= 18
    Within 2% of new 52 week low (and not included in today's lows)= 47
    Within 3% of new 52 week low (and not included in today's lows)= 86
    Within 4% of new 52 week low (and not included in today's lows)= 137
    Within 5% of new 52 week low (and not included in today's lows)= 200

     

    So as you can see, there are so many stocks hovering just above their lows of a year ago that the odds of getting the required 80 or so are reasonable if the market were to head too far south. In fact the market doesn't really even have to head south, as long as the right stocks do.

     

    I also quickly ran a similar scan but for stocks within striking distance of new 52 week highs. There are many. 266 issues within 2% of a new high, for example. So all I'm saying here is that an initial HO signal is within reach. That is not to imply that there is any particular pressure or expectation for it to happen. It's simply reasonably possible. Thanks for dropping in :-)
    1 Dec 2011, 12:04 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » If there existed such a thing as an HO for the Nasdaq, it would be closer to issuing an initial signal than the NYSE is.

     

    But there are questions that would first need to be answered. Since the NAS does not include all the ETF's and bond funds (or does it?), would the rule change regarding the minimum number of new highs and new lows be in effect? I don't know. By the new rules, 70 of each would be required. By the old rules, 55 would be required. In any case, what we have at this moment is:

     

    New lows on the NAS = 41
    New lows on the NAS = 49

     

    I only submit this as further evidence that we are in the area where an HO signal can be issued.
    1 Dec 2011, 02:39 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Yesterday the NYSE produced 80 new 52 week highs and 13 new lows. 85 of each were required to trigger the HO. It's valuable to know that there are also plenty of stocks that are still hovering just above the price required to establish their own new 52 week lows. The numbers of those stocks are still very similar to those I posted 2 comments above.

     

    This is just a reminder that the HO is rumbling... but 'only rumbling' for now. We'll see how this day ends but I suspect that although the HO wasn't close to triggering yesterday, it will probably be a little bit closer at the end of today. Still, no reason for concern (from the perspective of the HO), but close monitoring is warranted.

     

    At the moment, with 3/4 of the trading remaining, we're seeing 43 new highs and 9 new lows. I'll post the final results no matter what they are.
    7 Dec 2011, 11:21 AM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    Thanks AR.
    7 Dec 2011, 02:57 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Well here we are... once again not having a clue what the monsters have planned for the markets. What a day.

     

    The number of new 52 week highs required for the HO today is 84.
    Number attained..... 87
    New lows only clocked in at 13.

     

    So from the HO perspective, there is nothing alarming on the radar other than that the market is quite polarized. Not polarized enough to shake up the HO though. We're simply on alert and that's about it.

     

    Happy trading amigos :-)

     

    And you're welcome Bobby Fergy.
    7 Dec 2011, 04:07 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » As suspected, the HO is getting somewhat closer to issuing a signal as time wears on. At the present time, the NYSE has generated 75 new highs with 85 required.

     

    The number of new lows is only at 17 but with a much larger number of issues now within striking distance than there were last week. For example, there are now 131 stocks within 3%, when a week ago that number was just 86. There have been increases across the board in the list I posted 4 or 5 comments above.

     

    Just a heads up to let you know that internal stresses are building.
    8 Dec 2011, 02:42 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    AR: Just an FYI, there was typical talking head all bullish yesterday on CNBC because the Dow Theory, relating to transports, were telling him everything was going up.

     

    Of course, you can guess how much credence I give *that* in this environment.

     

    HardToLove

     

    P.S. Nice pic!
    8 Dec 2011, 03:22 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Haha. The fact that transports are going up and the DOW isn't, is a divergence which tells the story quite differently. Don't worry you'll get much more honesty here than on CNBC. It's more than just a bit aggravating too, that that shill will get paid more for that appearance than the average Joe will make in a year.

     

    Just for your interest, the new highs did reach 84 with 85 required and the lows reached 19 with 143 more hiding just around the corner. Have a great night. :- )
    8 Dec 2011, 04:49 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Just a quick late Friday night update. Today finished almost identical to yesterday with 86 new highs and 18 new lows. Also, when I mentioned to H.T.Love that there were "143 more hiding just around the corner", I was referring to the number of stocks that are within 3% of hitting a new 52 week low. Today, in spite of an incredible rally that number has increased by one issue and now stands at 144. We are absolutely primed for an HO signal.
    10 Dec 2011, 12:12 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » With the trading day now half over the numbers of new highs and lows are as follows:

     

    New 52 week highs - 42
    New 52 week lows - 41

     

    84 of each would be required in order for the HO to issue a signal.
    12 Dec 2011, 12:42 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (6282) | Send Message
     
    It's going to be interesting to see what kind of market movement is required to trigger it.
    12 Dec 2011, 12:54 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » We're seeing it, lol. It happens when there are high amplitude swings in both directions... the more the merrier. It doesn't have to trigger at all of course, but if it's going to, we're witnessing the ultimate atmosphere for it. The market is undecided and very polarized. At the moment there are as many horses trying to pull the wagon downhill as there are pulling it uphill. So we really wouldn't have to see anything that's much different than what we're witnessing at this very moment. In fact, if the market makes a decision and takes off in one direction or the other with conviction, the HO is less likely to trigger at all.
    12 Dec 2011, 01:06 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (6282) | Send Message
     
    Slapping my head... of course. It will trigger on a maximum level of tension, not the release of the tension.
    12 Dec 2011, 01:11 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Go easy there FPA. You don't want to give yourself a high tension headache ;-) For release of tension, may I suggest you stare at the picture at the very top of this page for 2 minutes... and think "BEAUTIFUL ITALY". This beautiful little town of Ravello will remain beautiful no matter what happens in the world. I'd love to buy you a beer there some day.
    12 Dec 2011, 01:26 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (6282) | Send Message
     
    Thanks, I needed that. What a lovely picture.
    12 Dec 2011, 01:32 PM Reply Like
  • tripleblack
    , contributor
    Comments (13581) | Send Message
     
    LOL, the way things are going for Italy, and if we have just a little bit of luck, we could probably look forward to BUYING Ravello (plus the beer as well, of course).
    12 Dec 2011, 01:58 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » That's the plan. lol
    12 Dec 2011, 02:22 PM Reply Like
  • Energy-Trader
    , contributor
    Comments (1051) | Send Message
     
    Alberta, are you using the usual NYSE New High and New Low data for your HO indicator?

     

    The reason why I bring that up is because this data parallels the bias that the NYSE Advance / Decline line has inherent in it, in that it is full of closed end bond funds, utilities, ETF's, preferrereds, and (in general) other interest rate sensitive names on the NYSE. As a result, there is a terrible BIAS associated with it.
    12 Dec 2011, 02:22 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » The HO is not 'my' indicator but was invented by Jim Meikka about 32 years ago derived from a method used by the well known TA icon Gerald Appel. Meikka laid out very specific and strict rules that are required for it to trigger. That would be why it has only triggered about 26 times in that many years.

     

    To account for the bias you correctly describe, Mr. Meikka changed those rules a couple of years ago in two key ways. The one that addresses the issue you bring up demands that the number of new highs and new lows be considerably higher these days. 27% higher to be exact. I have no option but to go with the rules as dictated by the inventor. It is what it is... and the vast majority of investors think it's a load of hogwash anyway.

     

    I hope that explanation helps a bit. At least we know that the HO is much more difficult to trigger these days. We witnessed the HO "miss" triggering by only a few issues (2 or 4, I forget) one week before the flash crash and on the morning of the flash crash. By the old rules it would have triggered on at least one of those occasions. Personally, that's all *I* need to know.
    12 Dec 2011, 02:43 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » At the close of trading the numbers ended up at 66 new highs and 48 new lows. These numbers will likely be adjusted by one or two issues as late as 15 minutes or so after the close. In any event, it's been getting closer each day for several days in a row now.

     

    Interestingly, a dozen of the new highs were in Blackrock muni bond funds. That's not a positive for the equities side of things. But the new lows were pretty much across the board, ranging from China Ming Yang Wind Power Group to energy stocks, communications, India Fund, financial stocks, Maui Land and Pineapple, Pandora Media, Startek, WuXi Pharmatech, etc.

     

    Have a great night.
    12 Dec 2011, 04:03 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (6282) | Send Message
     
    I think it clearly has worth, but I think interpreting it in terms of a binary signal unnecessarily limits it.

     

    For example, as of the numbers you reported this morning, the HO is at the 50% tension level. The highs and lows are balanced, so there is a lot of movement, but no trend. Looking at it that we, we have more of a continuous score as opposed to a binary score.

     

    If the ratio between highs and lows is not even, than a trend is present.

     

    If we have 84 lows and 0 highs we have a 100% score saturation on the low end. I would consider that a trigger event with an attitude.

     

    Looking at it that way seems to provide a richer interpretative framework. For example, I would think it should trigger if it hits 80% of the maximum positive or negative number. Of course if it triggers on the positive side, the Hindenburg is perhaps not an appropriate name. We could call it the "Rocks" Ratio. :)
    12 Dec 2011, 04:23 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » The market internals are still right where they would need to be if an HO signal is forthcoming. But there's one market internals metric that I guarantee you're not going to find *anywhere else* on the interweb (or whatever it's called). You'll only find this here, and I'm going to publish it because from where I sit, this info is extremely revealing.

     

    If you scroll up to my comment of Dec. 1, you can see that I posted the number of stocks that were within striking distance of hitting a new 52 week low. In retrospect, I'm sure glad I documented those records here because ... WOW... what a difference 2 weeks make. Those numbers have shot up in a way that I don't think anybody is aware of or expecting. Here's where they stand as of this moment:

     

    Within 1% of new 52 week low (and not included in today's lows) - has risen from 18 to 38
    Within 2% of new 52 week low (and not included in today's lows) - has risen from 47 to 91
    Within 3% of new 52 week low (and not included in today's lows) - has risen from 86 to 155
    Within 4% of new 52 week low (and not included in today's lows) - has risen from 137 to 233
    Within 5% of new 52 week low (and not included in today's lows) - has risen from 200 to 301

     

    And all the while, the markets just seem to be doing a simple 'churning' while they make up their minds. Nope... minds are being made up behind the scenes. I think this is extremely valuable information that we should give serious consideration to.

     

    As far as the HO is concerned, at the moment, with the trading day about 40% complete, we're seeing 44 new highs and 18 new lows. That *18%* is all too deceiving wouldn't you say? ;-)
    13 Dec 2011, 12:13 PM Reply Like
  • Mercy Jimenez
    , contributor
    Comments (2710) | Send Message
     
    AR,
    This spot comparison over the past two weeks is very good insight. Other HO analytics I have seen has not been as practical in suggesting the immediate "so what" of the analysis. From my end -- it adds support to my continued caution and cash heavy market position. Many thanks for starting this Instablog.
    13 Dec 2011, 12:50 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » You're welcome Mercy. You're a new face on this blog... which I find very rewarding. I'm glad there are still a few people following this insta who I am not aware of.

     

    My personal opinion is that your cautionary heavy cash position is very much warranted. In a nutshell, I think a person would be nuts to be heavily long this market, even if 'hedged' to the small degree that normal hedging covers. The potential downdraft here is enormous. It doesn't have to happen of course and there could indeed be some sort of rally into Santa day. But time is running out quick for that glorious event to amount to much. I suppose it's also possible that the powerful dark lords who run (I forgot the 'i', I meant "ruin") this world have tricks up their dirty sleeves that we haven't even imagined yet. Although I'm a bit torn about that, I'm quite convinced they're trapped and losing control. The amount of exposure they have in the derivatives markets is absolutely mind-boggling.

     

    I'm convinced that the deflationary argument overwhelms any amount of money printing that the world's central banks would dare invoke. I think we're going to see deflation in US dollar terms while the rest see their currencies tumble. So inflation for Euro users and a sharply rising dollar. I also think the rise in the American currency is going to last a lot longer than most imagine. And not for any 'good' reasons unfortunately.

     

    One word of advice though... you should always completely ignore what I think, lol.
    .
    13 Dec 2011, 01:21 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    AR, I believe it's just a matter of time. The S&P volumes and price suggest to me weakness all around.

     

    DJT has also not been able to maintain it's foray above the 200-day SMA with one early oscillator suggesting money is leaving. Lagging ones haven't rolled over yet, but I think those will likely follow shortly.

     

    And volume has come back down, so I think "consolidation" at *best* is in the cards. But I suspect a fall back to $453x area is in the cards and, at *best* a sideways trading channel.

     

    HardToLove
    13 Dec 2011, 12:30 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » H.T., there is a great debate going on in the world of Elliott Wave followers and as usual, about half of those practitioners think the market should be heading higher, half think we're on the verge of a meltdown, half think a little washout over the next day or two before turning higher in a Santa rally, and the other half are confused.

     

    But the notion of the 'sure thing' Santa rally is something I'm just not buying into. It could happen of course but I don't think it's as much of a 'sure thing' as many commenters do. Unfortunately I don't know anything for sure other than that there's a lot of snow on the ground where I live. And that I don't like winter. I like you though.
    13 Dec 2011, 12:53 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    AR: Season's greetings. I think any Santa rally if one occurs will be small and short lived. Iran is conducting military exercises practicing closing the Straight of Hormuz. Initially there were reports that they had actually closed the straight but that was quickly debunked. That being said the Middle East, indeed all of SWA, remains a powder keg. Mr. Market was not impressed with the new deal reached in the EZ or with Spain's successful bond sale. Perhaps investors are onto the manipulation of that sale by the ECB and others propping it up. Until we see some resolution to these issues, especially the EZ debt crises, cash is king.
    13 Dec 2011, 01:53 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    Well, the Fed made up the market's mind. S & P went from around +0.5% to down 0.32% ATM.

     

    I bet the lows on the DOW are looking juicier ATM too.

     

    HardToLove
    13 Dec 2011, 02:45 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » With the late day sell-off we suddenly find ourselves in the position where we should probably be 'expecting' an HO signal any time now (meaning tomorrow or any day thereafter).

     

    When the markets still had two hours to go, the number of new 52 week lows was still stalled at 18. Then all of a sudden, with the sell-off of the past 2 hours, that number 'mysteriously' shot up to 62. "Mysteriously" to all but us, because with the data I supplied a few comments back, we knew this was coming with almost any kind of sell-off.

     

    At the moment, with 10 minutes left in the trading day, the numbers of new highs and new lows are tied at 62. Since 84 of each are required, obviously we won't get a signal today. But what else can I say except that we've all seen this before. Those of you who have kindly followed this blog for 26 months now know what I'm talking about. I'll publish the final numbers after the close, but really they're almost a moot point since we 'won't' be seeing a signal today, yet we know what's going on.

     

    UPDATED: Final numbers were 64 highs and 61 lows. By the old rules this could conceivably be considered a very near miss. For what it's worth.
    13 Dec 2011, 03:50 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    AR, options expiration week, the Fed disappoints by not promising more trillion$, quad withtching this Friday.

     

    I expect we'll be whipsawed pretty good going forward, especially if the EZ has more surprises for us.

     

    HardToLove
    13 Dec 2011, 04:03 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    H.T.Love: Season's greetings. I doubt there will be much in the way of surprises next week from the EZ. They will continue to bicker and present plans that will only buy a little time at best until the whole thing unravels. We may not see the required number of new highs this year either as I expect lower highs and lower lows going into the 1Q 2012.
    13 Dec 2011, 05:12 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Sounds to me like you're anticipating that we might get a signal over the next day or two or three? You're not alone, lol.
    13 Dec 2011, 05:12 PM Reply Like
  • mds5375
    , contributor
    Comments (176) | Send Message
     
    Remember, 84/84 just means the measurable odds are at 100% *based on past performance*. It's not to say that 64/61 does NOT signal a collapse. It almost certainly still correlates - just that the odds are much less.

     

    Personally, I don't see any nice way out of the current worldwide debt situation. This is not the 'interesting times' I would have necessarily chosen to live in. :-)
    13 Dec 2011, 10:48 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » With almost two hours gone in the trading day, the number of new 52 week lows required to satisfy the HO has been reached.

     

    New lows stand at 88 with 82 required (that number changes slightly depending on how many shares have traded at that time).

     

    And the number of new highs stands at 33, with a minimum of 82 required. Considering that there are still over 200 stocks within 2% of attaining a new high, it's not a stretch at all to reach that level if the market were to put in a decent bounce from here.

     

    So she's definitely rumbling. Big time. I think the odds of getting a signal today are pretty high. All it's going to take is a reasonable bounce.
    14 Dec 2011, 11:34 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    I've been wondering if the author of the algorithm should consider highs and lows inter-day, rather than just intra-day.

     

    Since it is "tension" which is being ascertained, ISTM that tension could stretch across the arbitrary human-imposed boundaries.

     

    This might lead to more "signals" with a small(?) loss in reliability?

     

    A reasonable amount of back-testing would determine if this had any utility.

     

    HardToLove
    14 Dec 2011, 11:59 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » I don't know H.T. To be honest I don't think it really matters all that much if the HO misses by two or three issues or conversely if the number of required new highs were to hit 87 instead of the min. 84. For me personally, the HO has already shown what I need to know. For me personally, it has already gone off, insofar as that it has revealed that a horrible degree of polarity exists right now. So I welcome the next bounce and depending on how it evolves, I'll be looking to short the market. In fact, I just bailed out of some short positions as we speak, in anticipation of that bounce which I think is coming. I don't expect it to amount to much but it might last a few days.

     

    In case you're interested, I started my own blog more or less out of necessity (I hate trolls with a passion) and made my first entry concerning the HO only yesterday. In it, I give a brief overview of who Jim Meikka really is. I have no doubt you'd find those few sentences to be quite enlightening. You can see it here:
    http://bit.ly/vsmAFG

     

    But no worries H.T. This space right here is still the headquarters of my HO discussions. There will be nothing posted at the new blog that you don't already know and nothing posted there of big importance that would be omitted here. My loyalty is to you folks right here.
    14 Dec 2011, 12:17 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    Thanks AR. This is an important tool in our box. We have few enough of them left that haven't been marginalized by manipulation and corruption.
    14 Dec 2011, 01:04 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » You got that right. Just think about the corruption behind the recent revelation that the NAR has been reporting home sales over the past few years much higher than they really were. This was no accident.
    http://bit.ly/rNW2CP

     

    The reach of the fascist oligarchy is simply frightening. Congress are a bunch of sell-outs and 90% of them should be tried for treason in my opinion. The big pharma group is evil to the core. On and on it goes.

     

    But studying the market internals data is very revealing, at all times. I use it a lot to try to get a feel for where things are headed. I still haven't mastered it though, lol.

     

    While I'm here... the number of lows seems to be stalling out a bit and sits at 96. The number of new highs is climbing slowly and now sits at 46 with 84 req'd.
    14 Dec 2011, 01:18 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    AR: Serason's greetings. There was an interesting discussion of this with FPA asking why would they be releasing this data now? It's been effectively buried and not really covered by LSM news. I had speculated it was in response to efforts by politicians to use Fannie and Freddie to fund the payroll tax holiday and for other purposes. http://bit.ly/ukjXwM Others suggested that DEC is normally a bad month for RE and the release was timed to be cushioned by the expectation of bad news. I would have thought that if they wanted to bury it they would have released the information late on a Friday to be swamped in the week end news cycle. Doing pre releases that call attention to it indicates that they wanted this to be actionable with a couple of days staying power. What are your thoughts?
    14 Dec 2011, 06:15 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » New highs currently sitting at 69 with lows at 103.

     

    I don't think we'll see the 'initial' signal today but this might be a good time to remind you that when the HO does trigger for the first time, nothing spectacular should be expected. It's simply a threshold being crossed in a very polarized market. But we've known it's been getting polarizeder and polarizeder with each passing day, right?

     

    So with that in mind, I put together a page that answers the question "what next?". It was not written with you folks in mind because by now you're so far ahead of the crowd when it comes to knowledge about the HO that it ain't even funnee. Nonetheless, I think y'all will find it helpful.
    http://bit.ly/vUjrop
    14 Dec 2011, 03:34 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Just for your interest, the day ended up producing 61 new highs (with 86 required after all was said and done) and 107 new lows. That's pretty telling stuff, lol.

     

    Best wishes to all of you. You're some of the greatest people out there on the interweb or whatever it's called :-)
    14 Dec 2011, 04:06 PM Reply Like
  • Kingsdyke
    , contributor
    Comments (21) | Send Message
     
    Rocks
    As you know, I have been monitoring your posts on this topic for some considerable time.
    It seems to me that the HO is about to make another show and quite frankly you are the only one that I trust with the technical analysis for this important indicator. Perhaps in the past I have been too flippant with my replies. No more. You tell it like it is and I respect that. What do you think , John?
    14 Dec 2011, 05:58 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Haha... KD, if you hadn't told me that some of your past comments might have been a bit flippant I never would have known. I actually don't have a clue what you mean by that because all your past comments have been delightful. Seriously... I don't know what you mean. Like I say, your comments are just fine.

     

    In any event, thanks for the vote of confidence. And yes, I'm reporting the actual numbers as they develop, so there's not going to be any doubt about whether the HO issues a signal or not.
    14 Dec 2011, 06:19 PM Reply Like
  • DigDeep
    , contributor
    Comments (4339) | Send Message
     
    I knew I lost this insta -- a 2 week void that I'm glad to be hooked back up...thanks for the insta and your Dr Copper analysis - agreed that deflation has the upper hand for now - despite the efforts of the CB's to flood liquidity.

     

    This mornings futures pop from a current oversold position, IMO is just that - a pop. Lower claims this AM further hamstrings the Fed -- tougher to issue more QE if there's actual (headline)employment improvement...regardless of the quality of new jobs/income or the quality of jobs at the margin not lost.

     

    Mr. Market wants more QE - good news/bad news for positive headline prints.....

     

    HO readings sure seem to suggest a polarized market as you say.

     

    Thanks for keeping us in the loop AR. Fantastic viewpoint(s) and your writing quality is better than you give yourself credit for -- your honesty and objectivity trumps the know-it-alls.

     

    Interesting to hear the EW folks are divided...or polarized.
    Thanks again
    15 Dec 2011, 09:23 AM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (7354) | Send Message
     
    AR - I like the new photo at the top and before I saw where it was I was expecting you to tell us that it was the view from your back veranda overlooking the sound.
    15 Dec 2011, 10:06 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Hey there MB. That's a nice little spot where you, me and every other reader here are going to hook up for a month of relaxation, great food, a lot of drinks and a whole lot of just good vibes some day... and you'll be picking up the tab. Sound good? You bet it does. I'll let you know when we'll be heading there, so load up your wallet, ok? I look forward to meeting you and your wallet..

     

    This reply to you affords me the perfect segue into the real topic of the day. The market has been open for 1.5 hours and already we're seeing very strong signs that we're going to be getting a signal today. Currently the numbers are as follows:

     

    New highs - 29
    New lows - 37

     

    At this rate it sure looks like we're going to get the big orange flag today. I say "orange" because it's so important to understand what this first signal really means. Oh man... the media is going to have a heyday with this. In any event, even though I'm so incredibly reluctant to sound like I'm pimping my own blog, I did prepare a page there yesterday that I really hope you'll read (if you haven't already). It talks about "So the HO has issued a signal. What next?". You can find it here... and please forgive me for looking like a self-promoting a-hole but I'm dead serious.... it's important to grasp this. And it's better to know 'before' the HO goes off:
    http://bit.ly/vUjrop

     

    Stay tuned :-)
    15 Dec 2011, 10:57 AM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    This nascent rally based on U.S. data is likely to be short lived. I'm thinking the EZ and Euro problems will overwhelm the "Good news." and the market will start trending down shortly.
    15 Dec 2011, 11:49 AM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    AR: Season's greetings. I couldn't access that site as my handlers have blocked it. Fortunately I have been following you and the HO for some time and am cognizant of the events following the first signal. Thanks for keeping this front and center.
    15 Dec 2011, 11:51 AM Reply Like
  • John Lounsbury
    , contributor
    Comments (4048) | Send Message
     
    AR - - -

     

    Nice site. You are doing okay for a person who told me 2-3 years ago you didn't think you had the skill to have your own Instablog.

     

    Everyone now knows it wasn't skill that was lacking, but confidence.
    15 Dec 2011, 12:02 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Thanks so much John. Those are very, very kind words.

     

    Yes, I had no confidence that anybody would be interested in what I had to say. I also had absolutely no idea that I had any writing talents at all. But I also had no desire to run a blog nor did I know how to do it anyway.

     

    So yeah, I admit it's been a very steep learning curve but I'm quite pleased with how I've picked it up fairly fast once I got off my arse and tried it. I'm still simply stunned by the success my pieces have had on your site. I still can't believe it. Maybe that's still a remnant of the confidence issue? Which reminds me to let you know that the follow-up to the $CRX thingy is coming soon. It's going to be a great deal of fun to show how it has evolved more or less as predicted. The implications are definitely pointing to a deflationary outcome, most likely for years to come.

     

    By the way, last night I tried to add your site to my shiny new blogroll but got a message that there was no feed detected from your site. But I also had itermittent (can't spel that wird and don't have the time to google it) internet issues so that might have been the problem. I'll try it again before the day is done. Multi-tasking at the moment.

     

    Stay tuned, we're 40% through the trading day and half way there with the numbers required. So it's all systems go at the moment. I'm getting the feeling we're going to get a sell-off though, rather than much of a surge from here. If so, that might prevent a signal for today. We'll just have to see.
    15 Dec 2011, 12:26 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » I have little doubt any rally is going to be short lived. In fact I just shorted the Russell moments ago, with a small starter position.
    15 Dec 2011, 12:27 PM Reply Like
  • John Lounsbury
    , contributor
    Comments (4048) | Send Message
     
    AR - - -

     

    The blogroll thing should work - we have full Google RSS feeds from all our blogs. If you continue to have a problem let me know and i'll get someone with more technical skill than I have to look into it.
    17 Dec 2011, 01:36 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » The numbers of new highs and lows has stalled somewhat which I guess is logical since the market has done the same. They currently sit at:

     

    41 new 52 week highs and
    49 new 52 week lows

     

    One commenter on one site the other day (I'm sorry I forget who it was but it was on Seeking Alpha although I can't spot it) suggested that attaining the required number of new highs might be a tough nut to crack. I agree with him. In fact I've got a hunch the market is going to sell off before the day is done and that might be the key to "not getting" a signal today. If it doesn't sell off, then the odds of seeing the signal are probably a bit higher. We'll see, but so far we're on track.
    15 Dec 2011, 01:40 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (7354) | Send Message
     
    Rocks - Thanks so much for reporting the internals of the market as that tells us all a lot about its health. Its like the market has walking pneumonia and is in denial. It shivers itself to sleep each night, wakes up aching, takes a hot shower and decides it can get through another day. I can't tell you how many times I've felt that way and just trudged forward. But, will the symptoms eventually subside or will they consume the patient? The internals will tell us more than the outside skin (the daily overall movements). If the congestion worsens we'll see the polarization and dysfunctionality expressed inside before the averages diagnose the severity of the illness from the outer view. Or something like that.

     

    Anyway, thanks!
    15 Dec 2011, 02:38 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » YW MB. Lol... communication is being reduced to shorthand.

     

    "I can't tell you how many times I've felt that way and just trudged forward. But, will the symptoms eventually subside or will they consume the patient?"

     

    In the market's case, I believe the deflationary signals are just too severe. Fully diseased the market is (get out of here Yoda).

     

    In your case, the symptoms will surely subside if they haven't already. Colloidal silver will cure all your woes man. It's incredible. And that's exactly why the FDA is trying to get it banned from human usage by getting it reclassified as a pesticide. Can you believe that? You bet it's a pesticide because it is already 100% proven to kill 650 different kinds of bacteria and viruses. It makes "their" vaccines redundant. So the dirty bastards (big pharma) want it's use banned. Incredible. That's why our grandparents used to keep a silver dollar in the milk bucket.

     

    While I'm here, things are stalling out a bit. New highs are stalled at 43 but the new lows are still climbing slowly. Now at 58.
    15 Dec 2011, 02:53 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Well at the end of the day the numbers are not all that far off what the market generated yesterday.

     

    Yesterday the market provided:
    61 new highs and
    107 new lows

     

    Today it generated
    52 new highs and
    64 new lows

     

    In both cases the numbers are obviously a bit too small with 85 of each being the required minimum, simply meaning that the very strict requirements are demanding an even greater degree of stress that we're seeing right now. Normally I'd wait for a half hour after the market closes to publish these numbers because there is usually an adjustment of 2 or 3 issues. But really it's a moot point today. I gotta run, that's the problem, lol.

     

    Just before the flash crash we saw many days like this where the ratio between the two were approximately the same as what we see today. Some days there were more lows than highs and then the next day, the opposite. This went on throughout most of April of 2010.

     

    Just for interest sake, and remember this has nothing to do with the HO, on the NASDAQ those numbers are 25 new highs and 114 new lows. 71 of each would be required if there were such a thing as an HO for the NAS. But there isn't. And believe me, one isn't required.

     

    Same time, same station tomorrow. Have a great night :-)
    .
    15 Dec 2011, 04:02 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Well the market sure got off to a different start on this OPEX day. 250 million shares traded in the first minute, lol. Goldman must have got a raise from somewhere.

     

    In any event, the result is that the number of new highs has already matched yesterday's total and currently sits at 50, with 23 new lows recorded so far. So once again, the market is floating right around the area where the HO is lurking. We'll follow it again and see how the day developes.
    16 Dec 2011, 10:36 AM Reply Like
  • SS76
    , contributor
    Comments (9) | Send Message
     
    I am new to your blog, and appreciating the updates throught the day. Also like how strict this HO is before we get a confirmation which helps me to be patient.
    16 Dec 2011, 11:22 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Welcome to SA. It sounds to me like you're waiting for a signal from the HO before you do something? If that's the case, I strongly urge you to visit my new blog and read "So The HO Issues A Signal. What Happens Next"? You'll find it in a tab right at the top of this page:
    http://bit.ly/soHADT

     

    With two hours to go in the day, the numbers are as follows:

     

    New 52 week highs - 66
    New 52 week lows - 54

     

    With each passing day we are getting closer and closer to seeing that initial signal. Doesn't mean it has to happen but we're probably never going to see more perfect conditions for it.
    16 Dec 2011, 02:03 PM Reply Like
  • Energy-Trader
    , contributor
    Comments (1051) | Send Message
     
    Nice to see you start up your own blog!

     

    The idiotic comments over at Daneric's by the resident clowns have become a huge distraction on what is really relevant regarding the technical picture of the markets. It seems like veteran traders such as you and "Mike Wagner" get run-off by all of the Trolls (and college kids) that don't even trade... but seek validation thru posting.

     

    Keep up the good work Alberta!
    16 Dec 2011, 01:58 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Those are pretty shallow and disgusting words considering that you "are" Mike Wagner. How phony can a guy get? Get lost troll and go seek some help. Here, this will get you started in the right direction:
    http://1.usa.gov/xwhimz
    29 Feb 2012, 07:32 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Well with less than an hour to go in the day it looks like we might end up with yet another squeaker, one that's going to end up being even closer than yesterday. At the present time we would need to see 84 new highs and 84 new lows at the minimum. Currently there are:

     

    71 new highs and
    58 new lows

     

    In case anybody out there is of the impression that the required number of new lows is too far away to attain, just keep in mind that on top of the 58 already established today, there are another 145 hiding just around the corner. Every single one of them is less than 2% away from their own new 52 week low.

     

    With Goldman Sachs down 2% for the day and at the low of the day, and down more than 11% for the week, it's pretty hard to argue for the bullish case.
    16 Dec 2011, 03:12 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Well folks, I gotta run. Like right now, lickety split now that the market has closed. It ended up generating highs and lows as follows, with 85 of each required:

     

    75 new 52 week highs and
    62 new 52 week lows

     

    This is very similar to what happened throughout the month of April, 2010 until finally, one week before the flash crash and on the morning of the flash crash, we saw the HO miss by 2 or 4 issues. That was plenty close enough for me.

     

    Trader, please don't be offended but I deleted your short comment where you declared the number of new highs and lows. Your numbers were way off and there's no point in confusing all the readers here. Please keep in mind that there is only one official source for the data and it is an absolute must that we quote from that source, which is the WSJ... not your source. With all due respect.

     

    Have a great weekend everyone and I'll see you on Monday when we'll pick up where this story left off.
    16 Dec 2011, 04:04 PM Reply Like
  • Energy-Trader
    , contributor
    Comments (1051) | Send Message
     
    Sorry for the bad data AR.

     

    I show 77 new highs and 64 new lows on the WSJ website at 4:30PM And 2.5 times the usual daily volume today on the NYSE at 5.02 Billion shares. Have a great Weekend!
    16 Dec 2011, 04:35 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » No problem ET. You must have gotten them from a charting service like I was doing at the beginning. It is common for the numbers as supplied by the WSJ to be adjusted by 1-3 issues up to as late as 15 minutes after the close. However, today there was no adjustment and the final numbers are 75 and 64:
    http://on.wsj.com/t21odK

     

    Have a great weekend. Be good... Santa is coming soon.
    16 Dec 2011, 08:52 PM Reply Like
  • doubleguns
    , contributor
    Comments (9693) | Send Message
     
    AR somehow missed this move to the new blog. Just got signed up but I am leaving tomorrow. Hopefully I will not miss the move to the next one by being signed up.

     

    I was tracking you down since I did not see any updates for a while.

     

    Best for the holidays,

     

    DG
    16 Dec 2011, 04:40 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Hey buddy! Each time we move to a new blog I provide a link at the tail end of the old blog to the new insta. I don't think I made it as obvious as I could have last time, since I kind of buried it in the final comment. I'll be more clear next time.

     

    Same to you bud... happy holidays.
    16 Dec 2011, 08:54 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Stay tuned today friends. The HO is once again off to a fast start... insofar as that we're already seeing more than half the number of required new highs with new lows just chomping at the bit to join the party. In the first 25 minutes we're looking at:

     

    49 new highs
    25 new lows
    19 Dec 2011, 09:55 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » At the moment we're looking at 57 new highs and 41 new lows. It's as primed as it's ever going to be.
    19 Dec 2011, 10:43 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » The required number of new 52 week lows has been attained and we're close to getting the same with the new highs. If the market generates 17-18 more new highs, the HO will go off. The only thing I'd need to confirm is that the McClellan Oscillator is negative on the day. If breadth is negative, the odds of that are very high. So this could be the day.
    19 Dec 2011, 12:21 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Geez... as we saw so many times during the run-up in April, 2010, we so often see either the new highs or the new lows stalling out just short of what is required to satisfy the HO's strict requirements. Of course that's also what makes it a seriously good indicator, it doesn't mess around with false signals.

     

    Today, the number of new highs is the culprit. The market just can't quite generate 'em. We're still stuck at 68 with 83 required. But I think all of you get the picture. The market is very polarized... very dangerous. That alone is a nice benefit of watching the HO like we do. It makes one focus on this particular area of the market internals matrix. We're just playing wait and see.
    19 Dec 2011, 01:09 PM Reply Like
  • SS76
    , contributor
    Comments (9) | Send Message
     
    AR, getting closer to our first signal......
    19 Dec 2011, 01:17 PM Reply Like
  • SS76
    , contributor
    Comments (9) | Send Message
     
    The VIX is suggesting the market is going to reverse today, so I'm thinking we'll get those additional highs, and hence our first signal.
    19 Dec 2011, 01:23 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    With capital flowing out of the EZ http://on.wsj.com/w23671 and China http://bloom.bg/vV5vlF I would expect to see U.S. Treasuries and dollar denominated commodities to benefit. Investors are seeing that the cures being bandied about are no better than the maladies they are pretending to address. Highs for U.S. equities especially value and blue chips will remain above where normal market dynamics would place them.
    19 Dec 2011, 01:27 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Yeah, I think the US dollar should be a beneficiary for quite some time to come. Bonds should hold up very well but I don't think equities will, nor commodities (except oil... I think that one is on a planet of its own). Nice to see you as always Mr. Fergy :-)
    19 Dec 2011, 01:35 PM Reply Like
  • SS76
    , contributor
    Comments (9) | Send Message
     
    Any near term market rally will coincide with a weakening dollar and commoditties will go for the ride up. However this will be short lived. The additional complacency with in the VIX given all the craziness in Europe is also telling.......once we get both signal confirmations, I plan on playing it with the VIX.
    19 Dec 2011, 03:16 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    It's a Weekly Standard story about the EPA attempting to make farmers treat milk as if it's toxic waste or crude oil to be more specific. It looks as though the SA reformat of the URL gave it a problem. Here is the same story reprinted in the Washington Examiner. http://bit.ly/txbmVQ
    19 Dec 2011, 02:33 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Thanks RBT. Would you mind if I delete the comment with the link that issues that warning? Stilldazed, I'd have to delete your comment too. I just don't like those warnings if you guys don't mind.
    19 Dec 2011, 03:12 PM Reply Like
  • Stilldazed
    , contributor
    Comments (3704) | Send Message
     
    No problem.
    19 Dec 2011, 03:14 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    AR: Season's greetings. No problem. Thanks for keeping an eye on this and keeping it on our radar.
    19 Dec 2011, 03:18 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Thanks for the cooperation.
    19 Dec 2011, 04:07 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Thanks for giving your blessing to delete that comment. And you're welcome about the other thing, lol.

     

    Season's greetings to you as well Robert. Give your family a hug for me, especially your kids if you have some :-)
    19 Dec 2011, 04:09 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » With the little breakdown we've seen in the last hour and with new highs stuck at 72, the HO may refuse to issue an official signal. It's too bad because by the old rules the HO would have issued a signal a few moments ago.

     

    No doubt we're going to be seeing all kinds of sites now declaring that an HO signal has gone off, and every single one of them would be dead wrong. With the correct rules, it's still possible that a signal will be issued today but I highly doubt it now. That would be so unfortunate because this is the exact reason why there are so many who scoff at the HO (and at me for even reporting about it - not on this site but any other).
    19 Dec 2011, 03:23 PM Reply Like
  • lower98th
    , contributor
    Comments (1411) | Send Message
     
    How many highs are needed?
    19 Dec 2011, 03:41 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » 85 today. That number changes within 2 or 3 issues at all times, depending on how many issues were traded AND changed price. IOW, we ignore issues that were unchanged.
    19 Dec 2011, 04:00 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » AFTER THE CLOSE:

     

    The NYSE ended the day having generated 77 new 52 week highs with 85 required. By the old rules, the HO would have triggered since all other conditions have been fulfilled. But the old rules are just that... old, in the garbage. We HAVE TO use the new rules in order to declare a legitimate signal. I simply refuse to contribute to the plethora of false signals out there by declaring that a signal has been issued. IT ABSOLUTELY HAS NOT.

     

    Nevertheless, all of us can plainly see what the HO is telling us, that the market is at a rarely seen level of polarity. Do with that information as you see fit. And to ignore it completely is absolutely your right. I'm just your friendly reporter... I'm not here to preach any gospel to anybody. Emphasis on the word 'friendly', lol.
    19 Dec 2011, 04:11 PM Reply Like
  • Stilldazed
    , contributor
    Comments (3704) | Send Message
     
    Hi AR,
    I am fairly new to financials (about a year). I spend a lot of time on SA trying to learn about the full scope. I want to thank you for the time and effort you put into this blog. I understand the importance of knowing about the polarization of the markets (just not sure how it should be played). There are a lot of great and knowledgeable people here on the SA site and most are friendly (stress most). I think the hardest time I have is filtering out the dis/misinformation that is out there. Anyway, thanks again and Happy Holidays to you and yours.
    19 Dec 2011, 04:38 PM Reply Like
  • Kingsdyke
    , contributor
    Comments (21) | Send Message
     
    Well , the old rules are good enough for me and I will be acting accordingly. Thank you , my friendly reporter.
    19 Dec 2011, 06:35 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » You're welcome. Well it's Tuesday morning now and the market has opened with a gap so much higher we could drive a bus through it. Who knows why, other than that the overnight orcs were clearly at work.

     

    Yesterday the market had a difficult time producing enough highs to set off the HO. Today it will probably be the number of new lows. This same phenomenon happened time and again back in April of 2010. Or perhaps the market is just going to head for new highs in which case the HO would settle down and just go back on watch duty. From the HO perspective though, nothing has changed with today's glorious opening gap. The market is still very fractured. We'll see how today progresses and I'll start to post the numbers in a new comment below.
    20 Dec 2011, 10:20 AM Reply Like
  • SS76
    , contributor
    Comments (9) | Send Message
     
    Why are the old rules no longer applicable? Who changed them?
    19 Dec 2011, 09:16 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » The addition of a large number of ETFs and bond funds over the past few years have simply changed the makeup of the NYSE enough that an adjustment in the number of new highs and new lows became necessary. Those changes were made by the inventor of the HO. Some of that story is covered here:
    http://bit.ly/s9ortW
    20 Dec 2011, 10:13 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Well what a glorious opening gap the markets put in today. We'll be able to see throughout the day how much of an effect it will have on the market internals. Yesterday the market had a difficult time attaining the required number of new 52 week highs. Today it might be the new lows that don't quite make the minimum requirement. We saw this flip-flopping happen on a regular basis back in April of 2010 just before the flash crash.

     

    So far this morning, the NYSE has generated:

     

    74 new highs and
    17 new lows

     

    Approximately 85 of each will be required. At this very moment, there are plenty more stocks within 2% of attaining a new high and yet there are still 130 that are within 2% of attaining a new low, in spite of today's wild ride higher. So it's certainly a dynamic situation.
    20 Dec 2011, 10:54 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Ok, the minimum number of required new 52 week highs has been attained having hit 91. It could climb much higher as well with a ton of stocks within 2% of reaching that level themselves.

     

    There are also 130 stocks within 2% of attaining a new 52 week low on top of the 18 that have hit a new low this morning so far. It's certainly a dynamic situation so we'll continue to keep our eye on it. But the odds of seeing a signal today appear to be very low.
    20 Dec 2011, 11:27 AM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (7354) | Send Message
     
    It probably won't happen today, but an opening rise that helps us attain the new highs number needed followed by a reversal down that gives us the needed new lows seems to be the more likely scenario if I read the market action correctly. All that would take is an announced major downgrade in Europe combined with weak data from China or just about anything else. The market is moving up or down with little impetus required these days.
    20 Dec 2011, 02:22 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » I think you've got it right MB. It would almost assuredly be a situation similar to what you've described that would set off the HO's first signal. I'm sure you're right about it not happening today too. The number of new highs has stalled right out at 115 with only 21 lows in place. There are 130 more stocks within 2% of a new low of their own, so we're still right in the HO's ballpark in spite of this Tuesday magic.
    20 Dec 2011, 02:53 PM Reply Like
  • thaihawaii
    , contributor
    Comments (6) | Send Message
     
    First post here. A little background info: I am a retired Surgeon and have been trading stocks and commodities since I retired in 1979 in Hawaii. Presently living in thailand with my Philippine wife and our twins, boy and girl 18 months.

     

    I believe in the HO and am looking forward to the next signal. This indicator is like the Zweig Thrust ...... don't happen often, but when it does, LOOK OUT. They all pooh poohed the Zweig in Oct.

     

    Thanks for the great site AR
    20 Dec 2011, 11:43 AM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    Season's greetings and congrats on the new twins. Welcome to the circus.
    20 Dec 2011, 12:18 PM Reply Like
  • doubleguns
    , contributor
    Comments (9693) | Send Message
     
    Bullshit, retired in 79 and twins 18 months old to a phillipine wife.

     

    Your a child molester living in thailand. Just how old is that philippine wife? I have been around asia a few years, something does not smell right.
    24 Dec 2011, 01:54 PM Reply Like
  • thaihawaii
    , contributor
    Comments (6) | Send Message
     
    Thanks Robert. They are a delight!!
    20 Dec 2011, 12:50 PM Reply Like
  • Energy-Trader
    , contributor
    Comments (1051) | Send Message
     
    Seasons Greetings AR!
    20 Dec 2011, 03:12 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Seasons greetings Mike.
    20 Dec 2011, 03:28 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » For those of you who got my private messages this morning... what did I tell ya?
    20 Dec 2011, 03:32 PM Reply Like
  • Jon Springer
    , contributor
    Comments (4073) | Send Message
     
    What did you tell them?

     

    By the way I love this blog... but it does keep me on edge every time I click to see a new message.
    20 Dec 2011, 04:06 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Thanks for the kind words Jon. I haven't seen you comment on this one before so I wasn't aware you were watching it. Glad you are!

     

    Haha... I'll shoot the PM to you too then. Hang on.

     

    "Keeps you on edge"? It shouldn't really have that effect on you Jon. I recently prepared a page called "So The HO Issues A Signal. What Happens Next?" The main purpose for my putting that page together was to define exactly what it is that we might expect when the HO goes off. If you don't mind, I'll advise that you read it. It might put your mind a bit more at ease.

     

    Thanks for dropping in... here's the link:
    http://bit.ly/vUjrop
    20 Dec 2011, 04:11 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    Don't feel bad Jon. I'm not on the mailing list either. LOL.
    20 Dec 2011, 05:22 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » What you talkin' about Willis? I thought you were the first, because your name was the first one to comment this morning. Let me check...

     

    ... nope, I didn't send it. Sorry Robert... it's on the way.

     

    I know what happened. In the "compose" section there's a list of contacts. I mistook that list for the list of people I'm following but instead it's a list of people I've PM'd with before. So your name wasn't on that list and I missed sending it to you. Don't be offended... it was your comment this morning that inspired me to send the PM and you were intended to get the first one. It's on the way. Jon has one now too, lol.
    20 Dec 2011, 05:34 PM Reply Like
  • RMF - Rethinking Modern Fin...
    , contributor
    Comments (165) | Send Message
     
    How does one get on your Private Message List.
    21 Dec 2011, 12:03 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » My apologies RMF, I didn't see this comment until I saw your question much lower and then checked out your comments history. The only reason I did that was because I'm having some seriously ugly troll problems on another site from an individual who is just incredibly ugly inside. He's hated right to his very core yet he just has an intense hatred for Canadians, lol. He has followed me to this blog. So unfortunately I'm now suspicious of every single new name I come across in here. You seem like a good person though.

     

    I apologize that I must have given the impression that I'm giving special news or insider information to my "best" friends by sending them private messages. I assure you that is not the case. Those private messages were pertaining to the troll problem I'm having. You didn't miss a thing about the HO... I'd never, NEVER do that to the loyal followers here.
    21 Dec 2011, 05:35 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    Indeed! The secret inside information is only transmitted via smoke signals and homing pigeons.
    22 Dec 2011, 11:04 AM Reply Like
  • tripleblack
    , contributor
    Comments (13581) | Send Message
     
    More like homing signals and smoking pigeons...
    22 Dec 2011, 11:37 AM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    Smoked squib! Ummmmm...... Where's that homing signal when you need it?
    22 Dec 2011, 11:42 AM Reply Like
  • RMF - Rethinking Modern Fin...
    , contributor
    Comments (165) | Send Message
     
    Thank you so much. You are a wise man!!
    22 Dec 2011, 11:46 PM Reply Like
  • SS76
    , contributor
    Comments (9) | Send Message
     
    What private message?
    20 Dec 2011, 04:21 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Didn't you get one? It was just an invitation to my long time friends here on SA to see if they'd be interested in flying to Italy this weekend to join me for a few Christmas drinks at the plaza shown in the picture at the top of the page. Based on the replies so far it looks like I've got a rip snortin' good party started.
    20 Dec 2011, 04:44 PM Reply Like
  • doubleguns
    , contributor
    Comments (9693) | Send Message
     
    Yes its been a hoot. hic*
    24 Dec 2011, 01:58 PM Reply Like
  • tripleblack
    , contributor
    Comments (13581) | Send Message
     
    'Rocks, are you familiar with the Vergulde Draeck Omen?
    20 Dec 2011, 04:34 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Negative Trip. I haven't heard of it. The name reminds me of Vlad the Impaler for some reason, lol.
    20 Dec 2011, 04:40 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (7354) | Send Message
     
    Whatever it is, it sounds ominous enough.
    20 Dec 2011, 05:46 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Yeah, that's what I was thinking. Do you know why they called Vlad "the Impaler"? According to Wiki, Vlad, just like most of his predecessors and successors, had as a primary goal to keep Wallachia as independent as possible. Vlad had the Turkish envoys killed on the pretext that they had refused to raise their "hats" to him, by nailing their turbans to their heads. That was pretty rude I'd say.
    20 Dec 2011, 06:04 PM Reply Like
  • tripleblack
    , contributor
    Comments (13581) | Send Message
     
    It means "Gilt Dragon" (historic ref. is a East India ship which wrecked off the coast of Australia at the end of the 17th century). Its a reference to a theory that tracking the A$, Z$, SwissF and C$ together can indicate a US$ crash (and presumably world chaos). Frankly, I find it less than convincing...

     

    LOL, the only reason I ever ran across it was because I was looking for information about art references for dragons (an occupational danger for a fantasy and science fiction illustrator).
    20 Dec 2011, 06:27 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    It's been said that Vlad perfected a technique of impaling a human on a pig pole without damaging any vital organs. He did this to Turkish warriors captured in battle and lined both sides of the road leading into his fortress. He would have dinner among the dead and dying. When the advancing Turks reached the point where the impaled lined the road they concluded he was a monster and better left alone. It was also said that when the beggars and homeless population got out of hand he invited them to a free banquet in a large hall. When all of the "Guests." had started eating he closed and barred the doors then set the place on fire. Nice guy huh?
    20 Dec 2011, 06:15 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Oh my he was one nasty piece of work. He brought "rudeness" to a whole new level. Ruling by instilling fear is an old art and he was one of the best. Unfortunately, those methods are still in use today. Don't forget to take your flu shot the next time a killer pandemic is set loose upon the world and kills 6 more people. Or I suppose a person could just go down to the local health food store and pick up a bottle of colloidal silver that would kill any virus known to man, including those inside the syringe itself that they shoot into our veins in the name of "good health". That's what I do.
    20 Dec 2011, 06:30 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » G'day folks. Well today it appears we're going to see the market perform the exact opposite of what it did yesterday. Here's a huge difference though:

     

    Yesterday the markets gapped way higher at the open, giving little chance for the new 52 week lows to develop. Then the market just continued higher from there. Today, the market clearly appears destined to finish lower *but the required number of new highs has already been attained*. And with 115 stocks within 2% of a new low, the odds of seeing that signal today are FAR greater than they were yesterday.

     

    New highs currently at 104 (and that's enough)
    New lows currently at 23 (with 84-85 required)
    21 Dec 2011, 11:24 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    AR: I entered two small (SPXU) positions today. We'll see ho I fare.

     

    Right now, I'm a winner on one out of four - part of try something out and see if it works.

     

    Today I've been up, but I waited a bit late to enter. Might still work out.

     

    If the HO triggers, I'll have to run and read the "What Next" thing again though.

     

    Thanks for tracking and keeping us up to date.

     

    Hm, I'm in profit again. Ain't this just so much fun! I think I'd rather invest and then go fishing.

     

    HardToLove
    21 Dec 2011, 01:49 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » First off, just for your instant gratification, if the HO were to signal today or tomorrow or whenever, nothing at all should happen immediately. It's almost the same as getting an email from a friend telling you that the market has entered a relatively rarely seen high degree of polarity. Well essentially, that's exactly what we're doing here I guess. It doesn't imply anything abrupt is going to happen imminently.

     

    The only caveat to that is that if the media comes out with horns 'ablaring it 'might' trigger a certain amount of panic selling. But more likely than not, the media will pooh-pooh the whole thing thanks to the aggravatingly large number of false calls of a signal such as the one trumpeted on Monday *in bold caps* by Dr. Robert McHugh, considered as one of the top authorities on the HO. The only problem is that he is totally unaware that he's using rules that are over two years old. I'm not kidding, every single website belonging to technical analysts that I've visited this week shows that they haven't got a clue. They've very good in all other aspects, but when it comes to the HO.... out to lunch. Ironically, it is they themselves who are the reason for the HO's bad (and worsening) reputation. In all cases though, they're still seeing the same things we're seeing and drawing the correct conclusions... that the markets are indeed badly polarized whether the HO issues a signal or not.

     

    Oh man, for sure this is an aggravating market to trade. I got some signals to go short on Monday and I did just that. What happens overnight, but a moonshot right out of nowhere, based on absolutely nothing. That is the face of manipulation beyond the shadow of a doubt. Illusion painting. Santa's on his way although he's drunk, naked, brandishing a shotgun with his sleigh full of ammo. No gifts this year, but hey... Santa's on his way. It's barely possible to be profitable as a swing trader ever since the banks got back into the theft business.

     

    Same here, I'd much rather invest and go fishing with you. How is it even remotely possible to trust the market anymore? We literally can't. You're welcome about the updates. On that topic, things have stalled right out here. New highs and lows sit at 115 and 27 respectively.

     

    I might as well tell you a little joke here. As we say in Canada, having sex in a canoe is very similar to drinking an American beer... they're both fxxking close to water. Hahaha. I like that one :-)

     

    Best of success my friend.
    21 Dec 2011, 02:12 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    AR: "What happens overnight, but a moonshot right out of nowhere, based on absolutely nothing. That is the face of manipulation beyond the shadow of a doubt. Illusion painting."

     

    You can see the manipulation via the futures overnight. And during the day, (SPY) moves in lock-step with them. (SPX) lags a few seconds, usually.

     

    A dollar index also ha effect.

     

    Here's a pretty decent place to watch the action - delayed 30 minutes for the dollar and real-time for the futures.

     

    http://bit.ly/nXGqkT

     

    http://bit.ly/rrjY6t

     

    HardToLove
    21 Dec 2011, 02:26 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Dayum, those are two of the best links anybody has offered me in ages. They look just like Finviz except in real time. Absolutely top notch. Straight into my favorite links they go. I've been wanting those forever. Thanks a bunch.
    21 Dec 2011, 02:41 PM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    Small return for all you've offered.

     

    I'm glad they are useful.

     

    HardToLove
    21 Dec 2011, 02:46 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » There IS a Santa Clause. There IS a Santa Clause.
    21 Dec 2011, 02:53 PM Reply Like
  • RMF - Rethinking Modern Fin...
    , contributor
    Comments (165) | Send Message
     
    where is SANTA.???
    AR: So is it time to get out of stocks as soon as HO hits? In today's speedy communication systems, HO warnings will go out as soon as it hits. If not MSM, then by stock talkers will announce it. Where do you recommend funds go when warning hits? Short term cash I presume.
    21 Dec 2011, 03:20 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Hi RMF. My apologies for missing your question above. It's answered now.

     

    I wouldn't worry one iota about whether or not the message that the HO has gone off hits the media, nor how fast it does so. The immediate effect on equities will almost assuredly be zero. The odds of a signal somehow suddenly triggering a lot of panic selling in the markets are pretty much non-existent because the vast majority of investors, especially the media, totally buy into the theory that it's a bunch of bunk. I assure you, they're wrong. So we are at an advantage insofar as that the vast majority will slough it off and we'll at least be on the sidelines (if not positioned more aggressively for some downside).

     

    Unfortunately I'm not a financial adviser so I don't really know what a person should do with their funds. Besides, the situation for each person is different than the next. But I personally will short the market but only when I get the usual signals from other TA methods that I need to see. You know, support and resistance, trend line breaks, etc.

     

    I'll be honest, the signals are so mixed right now that I'm darned near lost at the moment. I don't know where this little piggy is going. Wish I could be more helpful. Wait... to answer your question about "what next", if you haven't read the page I put together to help make sure investors don't panic, maybe you'd like to check it out. My guess is that you haven't read this yet. It also explains 'why' investors have been led to believe that it's a bunch of malarkey when it is in fact a very solid indicator:
    http://bit.ly/vUjrop

     

    It's message is that there is absolutely no need to panic but definitely to get ready for the possibility of something big... to the downside.
    21 Dec 2011, 05:49 PM Reply Like
  • RMF - Rethinking Modern Fin...
    , contributor
    Comments (165) | Send Message
     
    Thank you. This clarifies it. Wonderful work that you are doing here. I agree that we are looking at a downward spiral the question is when. With the US entering an election year, if possible, there will be goosing up of the markets. Else, if the Dems and Reps chose to show their fight in the markets then the spiral will come early. Else, it will come a bit later. At least, that is my expectation.
    21 Dec 2011, 10:55 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Thanks RMF... I'm trying.

     

    But something new popped up just tonight. God, is this another game changer? http://lat.ms/voIutf

     

    The ECB just loaned out $640 billion worth of cheap loans *in one day*. Is that the European equivalent of QE which took Bernanke half a year or so to do? I'm wondering if all that money will end up being filtered through the equities markets just like QE was. Holy smokes! If that's the case, we're going to see the markets take off on another moon-shot. Oh the agony... it's all so damned convoluted these days.
    21 Dec 2011, 11:48 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (7354) | Send Message
     
    AR - You may be right about the potential use of those funds, but it also seems that those same financial institutions need to prepare for the coming write-downs on sovereign debt that seems just around the corner. Without the loans (new assets) they would be insolvent as soon as they wrote down Greek loans by 50%. They may have their hands tied in terms of what they can do with the money for it to count in the capitalization models required of them. I don't know for sure. But if they can borrow at 1% for three years and then turn around and invest it in U.S. 3-yr treasuries paying more than 1% that may be the route they take. It all depends on the capital requirements I think. Or they may buy German or Swiss debt with a higher yield also. Who knows? All I know is that it ends up being money out of taxpayer pockets and into bankster pockets, much in the form of bonuses. I believe European banks have to pay big bonuses to attract and retain "talent" also. Give me a break!
    22 Dec 2011, 12:04 AM Reply Like
  • jhooper
    , contributor
    Comments (8059) | Send Message
     
    This is EU QE. The stimulus impact will depend on how much they grow the ECBs balance sheet, and how long the advances are offered. Rember QE1 didn't do much to keep the market up, but it did slow the decline. QE2 made an impact, but it was also helped by fiscal stimulus. Monetary and fiscal stimulus are the same thing, but their impact is different because they take different routes. Overall, there was probably north of $2 trillion in stimulus over a two year period. The impact from this could be much smaller if this is all they do.

     

    Ultimately this is just a bank extending credit to govs. Now it is up to those govs to come up with a business plan to pay off these advances. If they don't, and defaults happen, then the ECB's capital will go negative and the sovereigns will have to tax their populaces to recapitalize it. Overall, the basic EU plan seems to be predicated on reducing expenses rather than improving revenues. In this case the expenses are the level of consumption of its populace, and their revenue would be the level of productivity of their populace. They are unwilling to deregulate their markets, and as a result they must face austerity. Based on this the stimulus effect from the ECB's effort would seem to be mild and short lived. I'd be more inclined to keep on eye on the Fed rather than the ECB. Never-the-less, is anyone tracking the size of the ECB's balance sheet?

     

    http://bloom.bg/sY2cyv
    22 Dec 2011, 07:03 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Thanks for the input Mr. Hooper. If there's anything I need right now it's a little light being shed on what exactly is happening with the European emergency funding that is being conjured right out of nothingness. I think your opinion probably makes more sense than the thoughts that originally crossed my mind. Talk about a money bomb. But as you say... Europe is not the USA. The individual countries can not fire up their own printing presses just as the individual states in the USA can't (I think that day is in the future though). And as a result they're in far, far more dire circumstances than the ISA is at present. I believe the disasters are going to be rotating and no matter how the sequence is lined up, I think the USA will be last to see it's currency collapse. Thanks again for the calm thoughts.
    23 Dec 2011, 01:17 AM Reply Like
  • H. T. Love
    , contributor
    Comments (19491) | Send Message
     
    AR: Mercy Jimenez http://bit.ly/rDqEoo

     

    Posted this REAL-TIME link for all sorts of stuff. And it has a Dollar index as well.

     

    http://bit.ly/uMwi4n

     

    Mercy's a good one to follow ... OOPS! I just noticed I hadn't been. Well, that's fixed now!).

     

    HardToLove
    22 Dec 2011, 09:28 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Thanks H.T. Yeah, Mercy dropped in here and left a great comment on Dec. 13th. I checked her out and was smitten :-) I'm a follower now.

     

    And thanks for the link to Forex Pros. That's the one I've been using but I liked the general look of Finviz. The trouble with Finviz was that it was badly delayed. The two links you gave me yesterday solved that issue. Thanks again.
    22 Dec 2011, 03:31 PM Reply Like
  • Mercy Jimenez
    , contributor
    Comments (2710) | Send Message
     
    Well as OG would say "I'm blushing -- now back to business!"

     

    AR -- I had a question for you: Do you ever use Real-Time Advance Decline Intraday Charts to detect short-term market signals? http://bit.ly/taGqnO

     

    I have just started reading some thoughtful POV on the topic but don't know anyone who has found sustained practical applications. I am not a technician and my TA guide has often been HTL, but since this tool relies on gainers/decliners I thought you or others might have an opinion as to its utility.

     

    Many thanks.
    22 Dec 2011, 04:03 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Haha... It didn't cross my mind you might see that. I still like you and there's nothing you do about it :-)

     

    No, I hadn't seen that Mercy. Thanks for the link. I have to head out now but I will indeed revisit that site and see what it's all about when I return this evening. My mind is always open.

     

    Many 'you're welcomes' If I don't see you again in the next few days, I'll take this opportunity to sincerely wish you a very Merry Christmas. Or would Feliz Navidad be better :-)
    22 Dec 2011, 04:18 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » Ok Mercy I've had a chance to look at that site and have some time to focus on your question. Yes, I watch those ratios throughout the day, everyday. But no, I have never even thought of them as being valuable for making intraday decisions. Here's an example of the chart I open every day (along with dozens more, lol)
    http://bit.ly/sMBCfi

     

    If it's a day when advancers are outpacing decliners the chart looks like the one in the link above. When it's a down day and decliners are outpacing advancers, I open the same chart but with the ratio reversed. The charts also have the S&P overlaid so I can see how the advance/decline situation is relating to the price action. But no, I haven't tried using it for issuing signals.

     

    In truth, I think the ratios are a bit too flaky to trust, just like the market itself. Believe it or not, I find that a simple moving average system is most helpful since it takes so much of the noise out of the equation. These darned gaps higher and lower every morning are about enough to drive a person nuts, drive a person nuts, drive a person nuts, drive a per.........
    23 Dec 2011, 01:33 AM Reply Like
  • Mercy Jimenez
    , contributor
    Comments (2710) | Send Message
     
    AR,
    Appreciate your thoughts and the link very much.
    Feliz Navidad to you, too!

     

    mj
    23 Dec 2011, 03:29 AM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10491) | Send Message
     
    She also posted this on the stability of the Euro thread. http://bit.ly/tmNMbC
    22 Dec 2011, 11:24 AM Reply Like
  • SS76
    , contributor
    Comments (9) | Send Message
     
    No sign looking likely AR?
    23 Dec 2011, 10:10 AM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » No, nothing of note at all over the past few days. Generally, I don't comment on this insta 'in between times'. IOW, I generally say nothing here unless the markets begins to show internal data that provides the proper atmosphere for the HO to hum a little bit. That way when my friends see that I've commented on this blog they at least know that it's probably worth looking at.

     

    For example, right now there are 143 new 52 week highs and only 8 lows. There would be no chance of the HO issuing a signal today. unless the market suddenly fell about 4% and *no more* new highs were attained. It would be a nuisance if I bothered people with data like that.

     

    I will add this though, now that I'm here. If the market were to remain right where it is or at least doesn't surge quite a bit higher, within 7-10 trading days from now it's going to switch off due to a violation of the rule regarding the 50 day moving average. Let's hope that doesn't happen, otherwise even though we'll be able to monitor the data just as we always do, the HO will not be allowed to issue a legitimate signal. However, that doesn't stop us from seeing what's happening deep inside the market.

     

    But don't worry, I'm watching it. I'll let you know well ahead of time.
    23 Dec 2011, 12:09 PM Reply Like
  • SS76
    , contributor
    Comments (9) | Send Message
     
    Makes sense. Thanks AR.
    23 Dec 2011, 12:18 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2216) | Send Message
     
    Author’s reply » With 162 comments already on record here, I thought this would be a good time between Christmas and the new year to prepare a new insta dedicated to following the inner components of the Hindenburg Omen. The next insta in this series can be found here:
    http://seekingalpha.co...
    26 Dec 2011, 02:22 PM Reply Like
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