Seeking Alpha

Technician Louise Yamada urges clients to keep stops tight as she watches equities with growing...

Technician Louise Yamada urges clients to keep stops tight as she watches equities with growing unease. "You could call it a vacuum rally," she says, characterized by short-covering, low volume, and deteriorating new highs vs. new lows. The lagging Transport Index (IYT) has her attention as well, but following this indicator kept some out of the big summer rally.
From other sites
Comments (31)
  • wyostocks
    , contributor
    Comments (8244) | Send Message
     
    IMO this woman knows her stuff. You might not believe in the charts as she does, but she is worth listening to.
    3 Sep 2012, 01:41 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9966) | Send Message
     
    wyo,
    Agreed, Yamada does know her stuff and is worth listening to. Is looking like Tuesday will be a positive market day, based on EU and Asian trading today, but that can change very quickly in early Sept.
    3 Sep 2012, 03:28 PM Reply Like
  • Brian Bobbitt
    , contributor
    Comments (1905) | Send Message
     
    Just a thought, with Labor day now behind us, and the traders returning for raw meat, it may be the vacuum may be filled with buy orders, but I too feel a storm on the horizon so sure put in those stops.
    Can't hurt. I am very wary in here.

     

    Capt. Brian
    The Lost Navigator
    3 Sep 2012, 01:43 PM Reply Like
  • Venerability
    , contributor
    Comments (3048) | Send Message
     
    Transports were skewed badly by shipping and rails. Rails for various reasons. Shipping by the lowest rates since the depths of early 2009.

     

    That's actually very Bullish, if you believe we've passed the Nadir.

     

    Some do. Some don't. That's what makes horse races.
    3 Sep 2012, 01:53 PM Reply Like
  • css1971
    , contributor
    Comments (870) | Send Message
     
    The S&P is going to ~400.
    3 Sep 2012, 02:58 PM Reply Like
  • Freedoms Truth
    , contributor
    Comments (866) | Send Message
     
    more specifically, the coal to natgas shift has influenced rails numbers. Shipping is like subprime mortgages.
    3 Sep 2012, 04:58 PM Reply Like
  • CautiousInvestor
    , contributor
    Comments (3058) | Send Message
     
    I agree with others that applaud her technical brilliance. As to why her charts may be failing her, world markets have never been subjected to more distortions arising from central bank intervention than they have over the past years. And now we sit on the edge of additional actions by the Fed and the ECB as China provides additional liquidity and Japan and the BOE proceed with further monetary accommodation.
    3 Sep 2012, 01:56 PM Reply Like
  • pullgoodman
    , contributor
    Comments (101) | Send Message
     
    If I remember correctly, this woman call sell bottom last year.
    3 Sep 2012, 02:09 PM Reply Like
  • uli35
    , contributor
    Comments (36) | Send Message
     
    could you find again the article/note she wrote at that time, and post it here?
    3 Sep 2012, 02:21 PM Reply Like
  • User 26549
    , contributor
    Comment (1) | Send Message
     
    If Romney starts pulling ahead in the polls--bet the house
    3 Sep 2012, 02:30 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5426) | Send Message
     
    Never bet the house.
    3 Sep 2012, 02:46 PM Reply Like
  • varan
    , contributor
    Comments (3904) | Send Message
     
    that will be a bet against all historical data that shows that Dem presidencies are better for the DOW.

     

    I will short in such a scenario.
    3 Sep 2012, 06:41 PM Reply Like
  • into dark shadows
    , contributor
    Comments (341) | Send Message
     
    The divergences are there for all to see.
    The one variable we are not able to quantify is the PERCIEVED notion of Bubble Blowin Ben and his Dollar debasing QE stun gun!

     

    If we were in anything even closely resembling a true "Market Economy" we would have at the very least re tested the 2009 lows at least once,(years ago) before this parabolic move, due to the massive fed intrusion!

     

    When we finally break to the downside, it will usher in the full blown depression we are mired in and is all of Bernanke's making!

     

    Deflation is all around us, the inflation the shills are spouting is nothing more than a side effect of Bubble Blowin Ben's QE stun gun!
    To argue otherwise is contemptible!

     

    You would need the VELOCITY of idle money to go as parabolic as this "American Taxpayer Funded" bogus rally!

     

    The struggling working man / woman has paid for this mirage with their standard of living being gutted,
    and the final payment is for the children and their children who will never attain our once mighty standard of living!

     

    What profligate pigs we have devolved into!

     

    God save the republic
    3 Sep 2012, 02:39 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2061) | Send Message
     
    From the March 2009 low, and the three ensuing mini-bullish rising cycles until now, we are actually in a period of remission amid an ailment, sustained by stimulus on life support.

     

    We are like the Chinese saying, at the end of the full-strung bow. With little more room to pulling the string of the bow, a collapse is imminent, and a major correction, ripe.
    3 Sep 2012, 05:07 PM Reply Like
  • rpgpa
    , contributor
    Comments (65) | Send Message
     
    well done. now theres someone that "gets it"
    3 Sep 2012, 08:20 PM Reply Like
  • daro
    , contributor
    Comments (1607) | Send Message
     
    sort of a gratuitous non-call. dont sell but get out if it goes to where?
    3 Sep 2012, 03:23 PM Reply Like
  • wyostocks
    , contributor
    Comments (8244) | Send Message
     
    daro
    "get out if it goes to where? "

     

    That is the question every investor answer for themselves.
    3 Sep 2012, 03:40 PM Reply Like
  • greg@gregschubert.com
    , contributor
    Comments (4) | Send Message
     
    Louise Yamada has earned "her strips" and her opinions are noteworthy ... its always good to have a sell strategy, but, also realize that noted market pundits are very good at recognizing tops long before a bear market decline starts.

     

    Technical analysis has taught me that human nature is the relative constant ... and today's human psychology and investor reactions aren't consistent with a market top ... and, therefore, today's psychology likely trumps deteriorating new highs and new lows and a non-confirmation of the DJ Trans average for the time being.

     

    My expectation is a September first-half consolidation, perhaps a dip to around 12,700 on the DJIA, that will set the market up for a strong finish to the year.

     

    2013 ... well, that may be a whole different setup.
    3 Sep 2012, 03:41 PM Reply Like
  • vireoman
    , contributor
    Comments (1010) | Send Message
     
    I'll google Louise so as to form an opinion on "her strips."
    3 Sep 2012, 07:42 PM Reply Like
  • Ted Bear
    , contributor
    Comments (607) | Send Message
     
    An ancient mariner to most of you, Marty Zweig had a saying: Don't fight the Fed.

     

    Louise is a good technician, and she has been negative on equities for quite some time.

     

    As long as the Fed is giving away the house, whatever the technicals, and i agree that they are awful and will, in retrospect, be cited as to the preponderance of evidence that this WAS a horrible rally , you have to stand there and grab the free money.

     

    The lesson you might learn from Louise' work, and prepare for, is that this rally has taken place on no volume. Worse than no volume. And no, it is not different this time. When the selling starts from events which we cannot predict, but can know only that they are out there based on the lousy technicals, it is going to look like cartoon capers as many, many unhedged (look at the volatility, it is close to zero) investors try to get out, or get hedged.

     

    Can you say down 10% before the US markets open when that day gets here....? People laugh, and have short memories, about things like circuit breakers. "I'll get out, or i'll get hedged." Sure you will, but how are you going to do that when the US market never opens for several days because it is limit down? Call Goldman, they'll make you a price assuming that when things open they will be down 20%.

     

    Those are going to be some very unsightly dog and pony show hearings in DC as they try to rewrite the rules, yet again, to outlaw risk in the equity markets.

     

    Bwahhhhhhaaaaaaaaaaaaa...
    3 Sep 2012, 03:41 PM Reply Like
  • Amadon
    , contributor
    Comments (163) | Send Message
     
    I am going to have to take a rain check on this wonderful new rally the central banks are promoting using their "communication strategy" to levitate markets.

     

    Communication strategy is cheap and as Mr. Bernanke sent a smoke signal on Friday to the ECB "QE Works!". It does to. I caught on to that in high school Econ. 101. Has something to do with supply and demand as I remember. If you increase the supply of something, like $$$ and the demand remains the same then the price/value of $$$ goes down causing inflation which in turn concentrates wealth even more at the top 5% because only the first few people to get their mitts on this new money get to invest it in commodities (like food, energy, and shelter) which the 95% of the people behind them will have to pay inflated prices for using the 'new' devalued and debased script.

     

    I can see why the 5% are jumping up and down with joy but I can't for the life of me see why the other 95% are so happy. They're the ones who are about to get hammered.
    3 Sep 2012, 04:06 PM Reply Like
  • vireoman
    , contributor
    Comments (1010) | Send Message
     
    Oh, no. Did you just say that "only the first few people get their MITTS on this new money?!" Here we go again. Another thread ruined!
    3 Sep 2012, 07:49 PM Reply Like
  • Andres Rueda
    , contributor
    Comments (174) | Send Message
     
    Technical analysis is a form of withcraft, in my humble opinion.
    3 Sep 2012, 04:31 PM Reply Like
  • rpgpa
    , contributor
    Comments (65) | Send Message
     
    tech would matter if this were a market of true price discover not a stealth short ban instituted by the fed. until then TA is meaningless
    3 Sep 2012, 08:23 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    With a barrage of technology names holding new product releases (many major) and conference road maps, one wonders what these might offer as a counterbalance to any market downside in the coming weeks, or whether the news, or rumors of news, has been priced in and will lead to a selloff in the names.
    3 Sep 2012, 05:25 PM Reply Like
  • Clayton Rulli
    , contributor
    Comments (2656) | Send Message
     
    Perhaps she read my article!
    .http://seekingalpha.co...
    3 Sep 2012, 05:35 PM Reply Like
  • nutech
    , contributor
    Comments (5) | Send Message
     
    Fortunately the internet is an excellent resource to find previous calls, whether good or bad. Here Ms Yamada has a perfect opportunity to call a bottom, "if" she, or anyone for that matter, truly knew. But no-one knows the future no matter what charts they study. If they did, they would be multi-trillionaires. Listen for yourself to this interview from March 2009 when the DJIA was bottoming in the 6500 range:

     

    http://bit.ly/NIu54y
    3 Sep 2012, 05:40 PM Reply Like
  • Tack
    , contributor
    Comments (13579) | Send Message
     
    Every time a previous negative prognosticator fails (hello? ECRI?), they get quietly shuffled aside, a new personage is elevated to "genius" status.

     

    The reason that the "technicals" haven't produced the expected results and that apparent softness, too, in some economic indicators has been equally ineffectual is because we've finally reached the point where the outflows from equities and equity funds have persisted for so long (and into Treasuries, cash, gold, etc.) that the remaining prospective sellers are not easily dislodged from their positions. Conversely, there are increasing numbers of nervous holders of "safe" investments, many with sizable unrealized gains, wondering when all those gains could evaporate. And, it's hard to keep wondering about that when one is getting paid a miserly 1.5% in yield, or even nothing, for the trouble.

     

    The present capital imbalance will prove a very formidable obstacle for a major down move in markets unless some major unexpected negative development ensues. Everyday worries aren't going to do the trick, anymore.
    3 Sep 2012, 07:08 PM Reply Like
  • tikigod18
    , contributor
    Comments (898) | Send Message
     
    10/29/2011
    "Technician Louise Yamada: Stay Defensive for Now; New Bear Market in Bonds Coming"

     

    'Louise advises to stay defensive"

     

    http://bit.ly/OJfjqB
    3 Sep 2012, 08:25 PM Reply Like
  • User 120713
    , contributor
    Comments (2) | Send Message
     
    If the market smells out a Romney victory you better hope your in this market .If your short and Romney wins,give up!
    4 Sep 2012, 02:37 AM Reply Like
  • tikigod18
    , contributor
    Comments (898) | Send Message
     
    User,

     

    I don't know the statistics other than what I have heard on the financial news, but isn't it usually true that markets do better under a democratic administration?
    4 Sep 2012, 08:30 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector