TODAY'S TRADING SIGNALS
What is everyone waiting for? Is Apple Computer ready to be plucked on the inverted tree, the Buyer's Delight Tree, the upside-down Tree?
Not yet. I am watching also, with a high-salivation rate. This might be a good time to advertise one of our more interesting trading systems, T11D Sunmarry #2A. Why not?
Find the black line in the second pane from the top. When this line rises and touches +10, we buy. We sell when it falls to zero. We shortsell when it falls to -10. We cover when it rises to zero. Very simple. (Also, the long-term trend must be positive in the direction of the signal. To go short, we need the long-term trend to be negative when T11D Sunmarry hits -10.)
Looking at Apple Computer today we see it is still in a shortsell signal position. The Green MACD line in the same pane tells us Apple is trying to rally. But there are apparently still a lot of potential sellers who are using such rallies to unload the stock.
How does the VIX look, using this system? Well, first of all, the VIX is a maniacal instrument, very hard to trade using any system, from my experience. But it looks like we are at the beginning of a VIX ATTEMPT TO RALLY. The VIX measures the bearish emotion (volatility) in the market and bearish sentiment (put option buying) -- so when the VIX rallies, stocks usually fall. Of course, the VIX is under, from what I read, 24/7 massive selling from the Fed. This is one of the Fed's problems. They are attacking the symptoms and ignoring the illness. Selling the VIX probably does help to punish short-sellers. Buying of Index Futures does also, driving stock prices up at key junctures (often at opening and near closing) -- by the same token, focusing on GDP makes spending a virtue -- even spending of debt -- which, overspending of debt, eventually destroys an economy. GDP is a bad map of the Economy. The VIX is NOT connected to the underlying economy. Punishing shortsellers does not help the economy. Maybe the Fed needs a lesson in semantics. Pushing on a string is not the same as preparing the economy for its next season of growth.
The fact that our indicator is at +10 means that stock selling should come in to the market here. But a well-armed Fed has shown it is prepared to poison the ground we are standing on in order to keep that from happening. Be warned. In ordinary times, this would be a sell signal on stocks. But we are not living in ordinary times.
Each Day we run a report for this trading system. We ask the report to show us any new positions (in or out, long or short) that have happened in the last week. Today our report looked like this:
It is not enough for us to get a sign to buy. For instance we will look at NTE below; it does not look a stock ready to rally. YGE and DWSN, on the other hand, look fairly interesting. The sell signals on FaceBook, SAN, VPRT, and YOKU tell us that this rally could be ending, at least for the time being.
FB - Facebook. Nice rally. Time to take profits.
SAN - Banco Santander: Take Profits. Get ready to short. Spanish banks are not fixed.
YOKU - YouKu China. Sell. Nice rally.
VPRT - Vistaprint NV. Take profits. Note the black line in the bottom-most pane (M4 21) is also showing a sell signal. This could certainly be a nice shortsell in a few days, as it was back in September.
ESI - International Educational Services. This stocks (along with Apollo), education for profit worldwide, has been a disaster. The good news is the last shortsell signal was short and unproductive. This does not mean we're buying this one -- the long-term trend is still negative. But a lot of the selling in this stock has been expressed. Of course, this does not mean it will recover. Companies do go bankrupt. And with the picture we are getting of global debt still increasing and global growth dwindling, we think there will be A LOT of bankrupt companies before we get through this. ESI is 'trying to bottom'.
DWSN - Dawson Geophysical. We like this buy signal, but we are concerned that it may be coming at the end of a rally. Note the MACD green line is positive and is poised to rally.
I have to admit I am not very trusting of Chinese companies, because I feel there is a LOT of deceit being played in reporting Chinese fundamentals. I feel the same about American companies also, a lot of tricks, a lot of 'creative accounting'. This stock seems set to rally. T11D Sunmarry buy signal; MACD ready to rise. The Telegraph ran with an IMF report this week indicating the age of Chinese workers is heading for a disaster, mainly because of government one-child only policies -- the report speculates that China will be 120 million workers short by 2020. It is worth looking at, especially for those who think "China will save us" from the ravages of Debt Bloat and subsequent deflationary rigor.
SRPT - Sarepta Therapeutics. I think this buy signal could give a trader a nice profit. MACD is not where we like it, seeming to be topping. But our CGTS Pre-Basic indicator (red line, top pane) is in good shape.
NTE - Nam Thai Electronics. This is a buy signal that we will not follow. M4 21 (black, bottom pane) is negative. T11 (red line, second pane down) is negative at the moment: making lower lows and lower highs. If buying forces this Intermediate Trend to flip back up, then NTE could make a nice rally here. And CGTS Pre Basic (red line, top pane) is collapsing. This is a company that makes components for Apple Computer. One wonders if this stock is being punished by the over-punishment currently being inflicted on Apple?
Best wishes for all you traders, and for all you non-traders also.
Michael J. Clark, Hanoi
The markets have never been so manipulated as they are being today.