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I've been trading part time for 20 years working to develop a strategy that allows me to focus on my day job while investing for today and my retirement. I've been heavily influenced by Mebane Faber's book The Ivy Portfolio. I do not follow Faber's technique directly, but have developed my own... More
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  • Weekly Market Trend Commentary 1 comment
    Jul 17, 2010 8:09 AM | about stocks: SPY, SPY

    Status: Market Bearish - Cash, Government Bonds, or Short Positions

    The general market trading filter I use (SP-500 53 day CCI) continues to indicate Market Down. My composite SP-500 indicator on the daily chart swiftly changed to negative on Friday with the market sell-off on high volume, so overall the market is bearish. The SP-500 met resistance at the confluence of the 200 day moving average (solid red line), and  50 day moving average (dotted red line) both now at ~1090 (see charts below).

    Rankings: The Rankings still show bond and short funds ranked at the top. Ranking scores are color coded to indicate positive ranking scores (rate of change / volatility) in green, and negative ranking scores in red. Overall the list is sorted by overall rank but the score that makes up the rank can be positive or negative depending on the recent rate of change. The full list of the funds that are ranked can be found under the Funds tab. Current Rankings of the Funds can be found under the Rankings tab.

    Actions/Disclosure: No actions this week. Currently in cash and some SDS.

    What others are saying (all free sites): Overall Bearish
    (see www.mybestfunds.com for full listing)


    Click on Charts to Enlarge

    SP-500 Daily Chart  July 17, 2010
    SP-500 Daily Chart July 17, 2010
    SP-500 Daily Guppy Chart  July 17, 2010
    SP-500 Daily Guppy Chart July 17, 2010
    SP-500 Weekly chart  July 17, 2010
    SP-500 Weekly chart July 17, 2010


    Disclosure: Short position with SDS.
    Themes: Mutual Funds, ETF, Sector, Rotation Stocks: SPY, SPY
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  • theyenguy
    , contributor
    Comments (160) | Send Message
     
    Thank you for your charts .... the charts clearly, repeat clearly signal sell.

     

    i appreciate the top chart the most ... it is one that should be kept in the investment scrap book becuase it shows the April 26, 2010 fall of the S&P -- It was the currency traders who sold the world’s currencies against the Yen, FXY, beginning on April 26, 2010, that caused the dramatic rise in gold, and a strong sell off in the S&P, SPY, which fell from 121.23 on April 23, 2010 to 120.78 on April 26, 2010.

     

    The sell off of the world currencies by the currency traders against the Yen, commenced an Elliott Wave 3 Of 3 Down …. and the entrance into Kondratieff Winter. The 3 of 3 Waves are the most sweeping and dramatic of all economic waves; they create wealth on the way up and destroy wealth on the way down.

     

    We have entered into a period where all fiat wealth will be extinguished, leaving only gold as a source of personal wealth and oil as a form of world wealth.

     

    The big red down, that is the last action shown here on your topmost chart, comes as Stephen Bernard of the Associated Press reports that the major banks are seeing lower trading revenues because of the stock market’s plunge this spring: Banks, KBE, sold off sharply on Friday July 16, 2010.

     

    The euro-yen carry trade rally that began in early June is likely now over. Google Finance chart shows that since early June the Euro has been rising faster than the Yen; I believe that now the Euro will fall faster than the Yen.

     

    I believe the Euro, FXE will likely fall from its rally high of 128.81. And I believe the Yen, FXY, will fall from its rally high of 114.29. I see the US Dollar, $USD, traded by the Dollar Bull ETF, UUP, rising. Thus the overall picture here is that currencies are tumbling together at varying rates into the pit of investment abandon together, in a wave of debt deflation sell off that will be taking stocks lower; will be taking sovereign debt lower as well. Institutional investors should now be short the EUR/JPY and the EUR/USD in their currency trading accounts.

     

    Yes, currencies, stocks, and bonds are all going to experience debt deflation. Debt deflation is the contraction and crisis that follows credit expansion. One of the most famous quotations of Austrian economist Ludwig von Mises is from page 572 of Human Action: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency involved.” The investment application for the individual investor is to take safe haven shelter in gold. Personally, I am invested in gold coins. May God help us all!

     

    The Google Finance chart of the S&P, SPY, together with the small cap value shares, RZV, and the small cap growth shares, RZG, shows that during the June 7th, 2010, to July 16, rally, the value shares rose more quickly than the small cap growth shares; but now that debt deflation, that commenced April 26, 2010 has recommenced, the small cap value shares are falling more rapidly than the growth shares. Institutional investors take take advantage of this principle by investing in the Direxion 300% inverse of the Russell 2000 shares TZA.
    18 Jul 2010, 09:02 PM Reply Like
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