Odds Czar: Simple Biases in the Futures Markets 2007

Art's futures biases for Aug 10.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.

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For Friday, it's interesting how the cups and caps are starting to be prevalent across the field. The indexes have formed cap tops, in tandem with other near-unanimous bearish indicators. The bonds have formed cup bottoms. Could we be seeing a setup for a further market melt with a corresponding flight to quality? Maybe, but don't expect any move to not be accompanied by hairy, scary counter-trending reactions.
 

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One might ask why the Russell 2000 exhibited the best relative strength today. Granted, heavily oversold....but there appears to be some nibbling at these low levels.
 
Art's futures biases for Aug 13.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.

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I think this whole week might be one in which the short side of the bond market might be dangerous in the way it's dicey to sell coffee during the Brazilian summer. There are different scenarios that could jack bonds it up, perhaps violently if the Fed intervenes on behalf of an ailing stock market. Even forgetting that, the market is oversold, particularly in the 30-year. For Monday at least, the CzarCharts are agreeing with the long argument.
 

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syswizard wrote
One might ask why the Russell 2000 exhibited the best relative strength today. Granted, heavily oversold....but there appears to be some nibbling at these low levels.
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well--one could resort to the old standby that the market is simply schizo and emotion-driven now. which explains everything and nothing. (I am however reading strength in the russell relative to the other indexes--we shall see)
 
Art's futures biases for Aug 14.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.
 

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Art's futures biases for Aug 13.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.

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There is no disputing the unanimous urgings of the bond Czar signals. They're solidly bearish. I would add one caveat, however. As long as the stock market is vulnerable, you can't ignore the potential of Fed intervention. Obviously, anything Bernanke and company do is not going to be bear-friendly. While we can't treat every day like it's a going to be the day of the Big Dropping Shoe, it would be advisable to trade lightly and maintain reasonably placed stops at all times.
 

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Art - I don't quite "get it"....Bonds are holding-up superbly here. However, we appear to be making history whereby wholesale interest rates and retail interest rates are going in separate directions. IOW, the Fed is pushing on a string.....lenders are not lending much....and if they are, there is quite a risk premium in their rates....and this will continue no matter how low Fed Funds goes.....maybe to zero. (Hello, this is what happened in Japan !)
This includes mortgages, small business loans, construction loans, etc.
Get ready for a wild ride if there is an announcement.
Most importantly: If there is an equity rally, DON'T BLINK !
 
syswizard wrote
Art - I don't quite "get it"....Bonds are holding-up superbly here. However, we appear to be making history whereby wholesale interest rates and retail interest rates are going in separate directions. IOW, the Fed is pushing on a string.....lenders are not lending much....and if they are, there is quite a risk premium in their rates....and this will continue no matter how low Fed Funds goes.....maybe to zero. (Hello, this is what happened in Japan !)
This includes mortgages, small business loans, construction loans, etc.
Get ready for a wild ride if there is an announcement.
Most importantly: If there is an equity rally, DON'T BLINK !

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i don't know what to add other than those are pretty astute observations mr. wizard. particularly the "don't blink during rally" part as today demonstrated. that may not be true for tomorrow though--see my next entry--for whatever it's worth.
 
Art's futures biases for Aug 16.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.

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This might be the time to go with "majority rules" in the indexes. The calendar box is the only signal group that is urging sells. The other two are long-biased. As has been the case for the last couple weeks, the most prudent move might be to go out and play golf or get some Christmas shopping started. If you're bound to trade though, I would imagine it will be tough for investors to push the Dow down a sixth day in a row unless the belt is truly coming off the boiler. That has never been the case since I started trading indexes in the mid-80's. On the other hand, as my late partner used to say, things will continue to happen as they have been...until they don't.
 

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Art's futures biases for Aug 17.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.

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Even smoke-and-mirrors moves can persist more than one would think possible; therefore I'm predicting the CNBC champagne cork poppers will probably continue to have their way for at least one more day. The CzarCharts don't bear that out--they're pretty much neutral, so I won't be playing with them on Friday. The bonds may be another story. If stocks rally again, the bonds could fall, a prediction that is in line with most of the Czar readings.
 

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