TurtleTrader72

Has the Market Already Hit Its High for the Year?

Interesting reply...However, historically main street does not participate in most bull runs until they are almost over. Normaly it is the instituional guys like GS that get in near the bottom. When you start to hear that main street is getting involved it is usualy time to get out. I agree that it is suspicious but what makes you think the market cannot rise on low volume? I would speculate that if volume start to show a noticable increase it would probably be a good sign the a top is near. At least in the intermediate term..
I hope this helps.

On Nov 04 12:01 PM enigmaman wrote:

> So I wonder, since main street is not participating in this rally
> there money is not in play not a factor except for cash, bonds, treasuries
> or buried in the back yard. Pessimist are non believers so they are
> either out or short, but shorts seem to be out of vogue now. Skeptics
> are either in and worried, out and worried or short and worried so
> do they really matter. Optimist, there in and loving it green shoots
> all over the place. There is no euphoria yet but still I wonder how
> this market rises without the needed volume, seems like you have
> a group of investors moving this market and doing very well like
> GS batting near 1000 quarter after quarter, doesnt that make you
> wonder, I mean we have unbelievable amounts of cash moving to safe
> havens every month, who is buying

Has the Market Already Hit Its High for the Year?

The fact that most people don't trust this market makes me believe that we have more upside to go even over the short term. This distrust was technicaly seen last week when the VIX made a relatively dramatic move to the upside (21 to 31). This shows us how quickly fear built up during a short down turn in the market. In my opinion, this is actually a good thing because fear (relatively speaking) is a healthy thing in an uptrending market. Remember the saying, a bull market loves to climb a wall of worry. With that being said, the charts may also be indicating that the VIX has topped out (at least in the short term) indicating a temporary bottom. However, I think we will have to wait to close out the week to confirm this. I feel that it is important to keep in mind that as long as people are worrying about this market and the economy, the uptrend has a better chance of continuing.

"Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria" (Sir John Templeton). I think we are far from euphoria so think this bull market has a long way to go over the longer term as well.

Now We're Really Due for a Pullback

The diamonds (DIA) look to be headed to 'fill in' the down gap created back betwen 09/29/2008 and 10/06/2008 on the weekly charts. If it does that would take the DOW to about 10300. Some chartists may have noticed a similar down gap created during the same time on many other market ETFS such as SPY and QQQQ. Both SPY and QQQQ have already retraced back to fill this gap and now it may be DIAs turn. I do believe that we will see 10300 on the DOW over the shorter term. However, these trading characteristics also show that technology stocks have the most relative strength and our leading this rally. The next major resistance level on the NASDAQ sits around 2250.

What Cramer Knew About Ceragon

DRWI (NASDAQ) and DWI.TO (TSX) are the symbols..


On Oct 15 04:18 AM mthom wrote:

> I want to buy DragonWave INC but I am confused by their symbol. I
> find DragonWave INC as DWI.TO and a symbol of DRGNF.PK. Are they
> for the same company? The stock prices are different but they go
> up and down in unison.

Gold Hits All-Time High

I am a big believer that gold in a currency investment more than anything else and is heavily based on the US dollar. However, although gold has recently made new highs, the US dollar has not made new lows. Does this divergence mean that gold is getting ahead of itself? Or is it predicting a new low for the dollar? I'm not entirely sure. I do feel that gold does have more upside potential but i am concerned that the trade is a crowded place. It is hard to find a dollar bull these days so i wondering if that is a contrarian indicator. Just something to think about...

Dow: Where to Next?

From a technical perspective, there is a major move coming into play for the overall markets over the next several weeks. The bollinger bands on the longer term weekly charts of the VIX are significantly starting to tighten up and this usually means that major move is about to happen. Although the bollinger bands do not provide any indications regarding the direction of the move, I do feel that we will experience a continuation of the current intermediate rally. Any weakness from the current levels should be viewed as be a buying opportunity in my opinion. My gut tells me we will see the DOW above 10 000 before we get a more significant correction. We'll see i guess..

Shorting the Double Dip

A good time to short the market? I can't really say for sure, but what I can say with relative certainty that there is a major move coming into play for the overall markets over the next several weeks. The bollinger bands on the longer term weekly charts of the VIX are significantly starting to tighten up and this usually means that major move is about to happen. Although the bollinger bands do not provide any indications regarding the direction of the move, I do feel that we will experience a continuation of the current intermediate rally. Any weakness from the current levels should be viewed as be a buying opportunity in my opinion. My gut tells me we will see the DOW above 10 000 before we get a more significant correction. We'll see i guess..

Recent Oil Rally: Another Crowded Trade

The weekly trading pattern of OIH (Oil service Holders) suggests that oil has more upside potential over the intermediate term. From the current perspective, OIH appears to be breaking a symetrical triangle pattern (on the weekly charts) to the upside which could take it to the $120 mark over the next several weeks. The longer term Fibonnaci retracements studies also suggest that oil prices could hit the $80 per barrel mark before the year is up. It may be a crowded trade but the technicals still suggest higher prices are to come.

Tuesday Outlook: Commodities, Global Markets

The weekly chart pattern of GLD still suggests that higher prices are ahead for gold. Despite the perceived paused in GLD, investors should notice that the weekly chart pattern has formed a 'symmetrical triangle' which tends to be a continuation pattern. Eventually, GLD will break this consolidation period and likely move to higher levels, possibly to all time highs. As this triangle pattern forms, the trading range of GLD is slowly condensing and likely setting itself up for an explosive move. Although the current trading patten remains bullish for GLD, if the ETF falls back below the $85 mark, i would consider it a very bearsih sign and would suggest investors to think twice about this sector. However, until that happens i remain bullish on GLD.

Tuesday Outlook: Commodities, Global Markets

There has been alot of talk about the VIX lately, and in my opinion, for good reason. Many traders have noticed that the VIX has leveled off over the last several weeks despite the markets moving higher. This trading pattern indicates a sustained level of distrust that investors are experiencing as this market rally continues. To me, this reveals a resilent (or maybe stubborn) attitude of the bears not to accept or believe in this rally. This type of investor distrust usually supports higher prices as bull markets just love to climb the walls of worry. So until we witness a capitualation of these bears, this market rally will likely continue. From a technical perspective, investors should watch the VIX as this capitulation should show up through a dramatic (or at least noticable) sell off in this indicator. If this was to happen, i think that would signal capitulation of the bears and thus a temporary market top.

The Market Bubble Is About to Pop

The markets may have come a fair distance since March, but I would not be be to quick to call it a bubble. Maybe if we look only from March 2009, things may seem excessive. But if we go back further (from the high a couple of years ago) we get a much diffrent picture. The longer term Fibonocci retracement levels indicate the 1014 on the S&P is a likely point for a overall market retracement from the longer term high. Not to say that we could not get some sort of pullback here, but i would not go as far as to call this a bubble. The term 'bubble' itself is being used way to much these days.. Go back to the year 2000 on the NASDAQ, that was a bubble.

Precious Metals Rally: Running Out of Steam or Going Higher?

Good article...

I believe that the future of precious metals depends (to a certain degree) on the future value of the US dollar. Despite much discussion on increasing demand for metals, I feel that much of the recent price appreciation has a good deal to do with the decreasing buy power of the US dollar. The dollar has been in relatively long term down trend and it has yet to so any real signs of turning around. This has had a positive effect on precious metals and commodities in general. However, I have noticed that the dollar is slowly but surely reaching oversold levels which could be a sign of potential reversal, at least over the short term. This seems to coincide with the author's assumption that a pull back is likely to happen in precious metals over the shorter term but could lead to a buying opportunity over the longer term. Again, this all depends on the future value of the US dollar so keep your eye on the dollar..

S&P 500 Up Big; VIX Down

Thanks for your comments:

The VIX has historically been better at spotting market bottoms that it has been at spotting tops. The reason for this goes back to investor pyschology. Strictly from a psycological perspective, fear as an emotion, tends to be more intense and short lived lived than greed. Greed is something that can build gradually and can last for a very long time, sometimes years. Intense fear on other hand, may only last days and sometimes even only hours. By overlaying the S&P 500 weekly chart with the VIX , you will be able to see the a dramatic (and relatively short lived) spike in the VIX during market bottoms. This is not the case with market tops. So when using the VIX as a timing tool it is important to undersatnd these emotional characteristics. The VIX may be at relatively lower levels these days but it can certainly stay there for a very long time and go much lower as well. In the end, VIX may be better used at timing bottoms than tops.

Furthermore, I agree that the VIX does measure expected volatility. However, the way I see it is that volatility equates to risk as it involves uncertainty and this uncertainty ultimately translates into fear. My interpetation of the VIX is strictly from a pychological perspective, so yes it does measure fear (and to a lesser degree greed) without getting into the financial details behind the numbers.



On Jul 23 02:28 PM Alex Trias wrote:

> Interesting analysis. The VIX could well be a leading indicator of
> capitulation among bearish traders, but if you chart the VIX compared
> to the S&P 500 for the last ten years, you see that there are
> stretches when they can actually rise in tandem - look at 2007, for
> instance. I'm pretty curious about the causes of this, but my sense
> is that whatever they may be, it could be relevant to your thesis.
>
> I will just throw this out there - could the VIX be more useful as
> an indicator not of fear, but of how well defined a technical trend
> is? The theory is that whenever bulls or bears are firmly in control
> of an equities market, the VIX should be high since a bull/ bear
> imbalance of power produces higher volatility. If this theory is
> correct, a higher VIX is not bullish or bearish, per se.
> Continuing this thought, we may be seeing a higher VIX today, and
> earlier this week, simply because the global equities markets are
> confirming technical upwards trends. Traders tend to bet with trends,
> and at the front end fo a new trend, betting tends to be explosive.
> We're certainly seeing plenty of that today.
>
> On Jul 23 01:12 PM TurtleTrader72 wrote:

Stocks Are Overvalued and Overbought

Stock may be overvalued and overbought, but the problem is that they can remain that way for along time. We have seen this happen time and time again, so sticking to a thought that does not comply with the market can cost you alot of money. Regardless, I do agree with the author..

VIX / Futures: A Rare Situation

From a psychological perspective, the VIX is indicating that investors are not trusting the current rally. As the market keep moving upward, investors are protecting themselves by purchasing additional put options instead of calls. However, since the VIX tends to be an inverse indicator, this positive correlation can mean good things for the bulls. In the same way a decline in the VIX during a declining market usually means further downside, an increasing VIX during a increasing market could mean further upside. Remember the saying, " A bull market likes to climb a wall of worry".
However, if the market keeps moving in this upward direction the VIX will ultimately reverse its upward direction (and turn downward) which could indicate capitulation by the bears. In my opion, a sharp move in the VIX to the downside could be a good sign of capitulation by the bears and a short term market top.
By the way, great article !