Dow TOP call - 10yr top formation done

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More DEATH CROSSES


London Footsie (June 14)

Deutschland ( N O N E )

France (May 18) .... but dig this, France also has a GALACTIC CROSS on July 13. Bad, bad news as this will pull europe down harder.

Switzerland, the home of the gnomes of Zurich, the turncoats who sold out my buddies to the IRS (June 10)

Holland (July 1)

Belgium, Austria (May 25)

Norway (July 1)

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Iceland has already changed its Capital to TEN BUCKS
 
iShares S&P Europe 350 Index ETF: IEV ... GALACTIC DEATH cross on June 1.

And dig this, .... just completed a rally to a downsloping 144 m.a.

and dig this too .... T R E N D basics .... IEV now has lower high and lower low = minm. requirement for a new TREND

But the band keeps playing Lalaland music.

Fck if I care. The HERD can never move in advance of an event so its a waste of time to warn anyway.
 
Brazil

DEATH CROSS on June 2

GALACTIC DEATH cross .... Today!!!!!!

Trendline broken quite a while back anyway, so the exit was months ago.

CALL: Brazil will be a toilet.

Yeah, all the sweet talk about Brazil's economy, about how so many companies are moving there, bla, bla bla. THEY all got there at the TOP.

When a latin country starts to collapse, it moves quick. I'd stay away from Latin America. Mexico is already a disaster zone. When I lived there it was paradise back in 1998-99. Oaxaca, San Cristobal, Guadalajara, Puerto Escondido etc., all low, low crime zones. Today you wouldn't even be able to go to the can in peace without getting your colon shot off.
 
Death Death death. Lots of crosses. I don't think any of those are very useful in a paralyzing sideways market, that's been shown. What's more interesting is this numerical set up of 8-3 thing that is happening. Forget five waves it seems like the market wants to rally for 8 days and rest for 3. Since Mid May one could argue we have been acting this way- with the pattern only becoming more obvious when we tossed in some back to back triple digits to the upside just recently. The recent high I think was on the 26th a few days ago- that followed 8 days of upside on the 9th day we set an interday high and turned south. The 100 point back to back days could argue for a buying climax. Except for the fact that the 8-3 ratio of up to down days also argues for a STAIRCASE PATTERN that slowly forces people to the table. That second camp is the one I am in. DEFLATION is the new Black Swan however- this is the new fear de jour. It would be nice to poo poo it but unfortuately it comes from within the federal reserve.

Volume will be scrutinized as we drift up.

FACT- Since 1970, death crosses in the stock index preceded an average decline of 0.4 percent in the next month and three- and six-month gains of 2.5 percent and 4.8 percent, respectively. Hummmmm. So there is no doubt the cross stops stocks in their tracks for a bit but....

“The technical analysis world is abuzz again,” Pierre Lapointe, Brockhouse & Cooper’s global strategist, wrote in a report today. Technical analysts use patterns in price charts to make investment decisions. “But the truth of the matter is that death crosses have little predictive value,” he added.

Back in 2007 the death cross played out with stocks diving 7.7% so most folks remember that but they tend to forget a year earlier (July 14, 2006) the S&P returned 15 % in the six months after a cross signal was flashed.

1980 was the best we had a scary scary death cross and stocks zoomed 31% ahhh those were the days, more recently 2002 the cross played out with stocks dropping 18% that was the largest drop.

Still what of so many Death Crosses is so many countries? What of a study DB of that? If the number of countries having a Death Cross is say over 7 then are we destined to a global free fall of stocks? Or does the sideways stagnant market just allow for a lot of false reads?

Boy it's sad on page 36 this thread starts heating up but we are getting at some good questions.

I should ring up Arch Crawford and see if we can get him a handle here at ET, I know he's all apocalyptic about last Monday-- I think we already had that full moon eclipse not sure. You could only spot it from Easter Island and apparently that was the only stock market affected. Still can you imagine the 2012 madness? That's really going to tank the market; apparently up in the heavens a aligning of planets will happen that hasn't happened basically since the last time the earth's axis was changed. You would think North Dekota South Dekota switch em up what's the big deal... but alas mother nature will have the last word. Imagine the FEAR then...

Well as to today's trading I've gone with CTFO, a last screen I employ is OBV and GAME did not look good there. REFR looked ok in that regard so.... ya I BOUGHT SOME REFR Just 1000 and 1700 CTFO (I really like that chart it has UPSIDE POTENTIAL out the ying yang) and now my work is done (PPO RALLY HARD OFF $24 WHO LISTENED???) We have our horses lets let em ride for two weeks....

Hi Ho Silver Away! Silver tequila that is, I'm going to get so messed up it's not going to be funny. People always look at you strange in the big city if you drink by midday and lay about half naked in the sun... THANK GOD FOR THE BEACH!! :) ~si
 
Quote from deadbroke:

continuing ... TRENDLINE defines trend.


draw a tendline up from the March 2009 low thru' July 8 low. That would cause an early Long exit in early or late October 2009. Healthy profit though.

Then you sit and watch with your thumb up your ass while the market drops, then recovers and goes higher. So you enter LONG again. Then as if by sheer magic you get your 2nd trendline point on the decline ending Feb 5, 2010.

Easy. Just connect the 2 points, March 2009 and Feb 2010. Extend the line and when it breaks, Exit = TP on May 5, 2010.

One more trendline option ... Just connect July 8, 2009 and Feb 5, 2010 and extend the trendline. Exit = TP on May 7, 2010

either trendline gives you your exit from the UPTREND!!!!

The UPTREND by virtue of the simplest definition is OVER, esp. considering that the latter, shallower uptrendline is so shallow that if the uptrend cannot even handle that climb, its a dying trend!!!

Bonus:

Notice that nowhere during the entire rise from March 2009 was a significant LOW ever taken out until the Feb 2010 low was breached on June 7.

My proprietary exit was april 27, 2010. See earlier in thread.

It all boils down to probabilities. Only the HERD is always certain and cocksure. We, the lions are always plagued by doubts. But you act when the probs are in your favor. That's the best anyone can ever do. Certainty never comes, waiting for it is a waste of time.

You guys are the dumbest bounty hunters in existence. Its as if a broad rubs her pussy on your face, but you still need a 2nd opinion whether sh's fuckable right there and then. God help you!!!! :D:D

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Baron, where do you find these people? :D :D
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I ought to get my head examined. I'm explaining bigger timeframe moves to 3-5 min. timeframe people who've long ago abandoned the forest for the trees and who've clearly demonstrated to this newbie since October 2009 that the farthest they can see is 10 minutes and even that they can't do right!!! :) :D :D

Here's the chart that goes along with the BABY TA talked about in the quote ... enjoy amigos. :) :)




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Good Morning!

DB I'm going to miss these important updates from you! In fact a little side of me wants to bring the computer to the beach but I have a very old one that can't be jiggled too much and who's battery likes to start small fires. I know you are talking to others but I specialize in long term big thinking so you have certainly met your match in me.

Now Cramer was on TV espousing a big move because companies are going to be able to project out to 2011 and earnings growth will look so much better! What a lark, any market player knows the more important value number is the Trailing Twelve Months (TTM) earnings.

Since the 1870's the PE ratio has averaged about 15 but during the period YOU highlighted at as a low on your chart the PE ratio was... almost 120! How is that possible? Well real earnings was THAT bad that even at those SUPER low prices-- we still had no value. That was the culmination of a true and vicious bear market.
That HUGE PE was actually a sign to buy! Who would of thunk it?

In terms of spotting tops back in 1999, just a few months before the peak of the Internet mania/ tech bubble the markets PE hovered in the low 30's it ultimately topped out at 47 a few years after the stocks topped.

When earnings fall so much faster than prices you can get these strange readings. In Q4 of 2008 we had an reading of NEGATIVE earnings of $23.25! In the long history of the S&P 500 we never had such a bad earnings reading.

Ok so what is the Trailing Twelve Months earnings now? Well it's tough to figure out using free information as close as I can get it is right around $64 extrapolating a PE from that would put us at the 17 area. Plotting an graph on the back of an envelope shows us the extremes-- Starting in the 1920's you can see the TTM PE ratio hitting 25 and 22 and up peaks and sinking as low as 5 in troughs . Skipping ahead to the 1960's one sees 22 top and 6 low... then in 2000 things begin to go loopy in the market- tops are 34 & 46 and lows are 7 and 8 area.

Now this is fuly smoothed out and taken back as far as 1870!!!! And these are the norms, even in the go go internet days the brackets are somewhat normal... what happened during this GREAT PANIC HOUSING AND EVERYTHING COLLAPSE???

Well the TTM PE ratio as discussed reached 123!! Talk about an OUTSIDE the norm number, REAL earnings have never crashed so much ever. It's hard to grasp the idea that a buy signal loomed in there but the greater point is perhaps this time period is not a fair graphing ground for the market, it was a great disconnect and in a hundred years we never had such numbers. It makes you think-- what is real and what isn't.

Knowing this, drawing a trend line from an 09 low seems to me not the right tactic.
Where are we now? The TTM P/E ratio is near 17.0

Value investor Benjamin Graham collaborated with David Dodd to devise a more accurate way to calculate the market's value- a smoothed over 5 or 7 years average. They attributed the illogical P/E ratios to temporary and sometimes extreme fluctuations in the business cycle.

Yale professor Robert Shiller has reintroduced the concept to a wider audience of investors and has selected 10 years as the earnings denominator. Either way I would suggest you do the same with your graphs and not use 09 as your low as it was a false and misleading low skewed as bad as the TTM PE! Using Shiller's method we get an Cyclically Adjusted PE ratio or CAPE ratio-- the historic from the very beginning of the stock market and fully smoothed out through this panic period is 16 area.

As close as I can figure the CAPE PE ratio now is around 20.
The reading during your low period was 13.(remember - $23 S&P earn)

Back to PE's using the rosy future of earnings that's around 17.

I would argue that these numbers are grouping and NOT THAT FAR apart... a real proven number of 20 and a hopeful number of 17 these are not PE extremes, we are entering a period of regularity after the CRASH is smoothed over on the charts.

If 15-16 is an average of the Forward looking PE since time immortal it is safe to say coming out of a great recession we can take the PE up past 20 quite easily and not reach bubble heights. Let's agree on 22. That would place us 2 points above Schiller's real and proven earnings driven number and 5 points of price up from here.

In other words there is room for EXPANSION on every front.
When the difference between the CAPE PE and the given PE is EXTREME (more than 10) that would be a WARNING SIGNAL to move to the sidelines and ironically watch the PE of the market go UP... while stocks go down.

Now is not the time.~ stoney
 
A market professional who is occasionally on TV and who enjoys snooping at ET but never posting and who shall remain nameless has reminded me of an unpleasant fact.

The rapid drop of the smoothed over 10 year PE (although I still contend based off a false read on earnings when we had a complete seizure of lending) brings a whole different theory into play. Some quants will divide the market into 4or 5 value sections with the top section being overvalued and the bottom undervalued-- when the 10 year PE drops quickly from high to low you go from overvalued to under valued. So we went from top to bottom bounced and are now somewhere in the middle or the very lowest end of the top value section (indicating fairly valued to over valued)

If earnings were to remain here we could say the market is fairly valued down here. Or even slightly over valued.

Since rapid growth is expected after this hiccup in GDP one doesn't get too panicked about that but the disturbing fact as pointed out to me this morning is every time we have had a rapid drop of 10 year PE from top box to bottom-- there
has ultimately been a lower section printed-- one with a PE in the single digits. If we were to extrapolate a 10 year PE of 10 for the market, the S&P would be around
550! (DB's face & hookah just lit up). Earnings then had better kick into overdrive 2nd half! A sustained period of Earnings growth would prevent such a huge S&P decline.

Whatever the level is and however we get there (stocks collapsing or earnings soaring) the real question is when will we have that lower low in the 10 year smoothed over PE? These type of secular declines have historically ranged from 3 years to almost 20.

As we struggle with DOW 10,000 for now our tenth year this is all starting to make sense isn't it? Is the time now? Or could it be another 9 years...

2012 would fall within that time frame ~stoney
 
Quote from stonedinvestor:

DOW FUTURES DOWN NEAR 90!!!! ALERT* ALERT* NAZ DOWN 1%!!!!!!

yet how do we know we will finish positive today?






(hint* 8-3)~si
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What is going to happen on 8/3/2010?
 
I lost some respect for Carl Swenlin when he gave the sell signal at the point where the 50 day EMA of the SPX crossed under the 200 day EMA, at which point the market rallied hard. I realize however, that no expert is correct all the time. Hence, I'm willing to forgive him.

Today, Carl Swenlin announced that his timing model is bullish due to "positive divergences in [his] medium-term indicators" - whatever that means. He also identified a rising wedge and he states, "Rising wedges can sometimes resolve upward."

http://blogs.decisionpoint.com/chart_spotlight/2010/07/another-fakeout-coming.html
 
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