Poll: SPY,long or short?

[Daring]

Quote from cactiman:

Quite right. And after a 41 month Bull Market it won't turn on a dime either. It will take a while to roll over.
There should be a clear topping pattern (Head & Shoulders perhaps?) which will take many weeks to develop.
A lot of people have to be convinced it's over before a full scale long term Bear Market can get established.

Correct, not too hard

 

[cactiman]

Quote from cdcaveman:

]

so your making the assumption that there hasn't been three stimulus driven bear market rallys since the 08-09 crash?

Just looked at monthly chart from 03/01/09 to 08/31/12.
SPY went from a low of 67.10 to a high of 143.09 in those 41 months.

And yes, there are 3 distinct waves up to higher highs, followed by pullbacks to higher lows clearly evident on the chart.
We're now in the beginning of the 4th wave higher.

At the top of each upleg SPY "stalls" from 1-3 months before the drawdowns, which lasted from 2-5 months each.
This "pause at the top" is what I was referring too.

When did the "zero interest rate policy" begin, and what were the dates of QE1 and QE2?
It would be interesting to line them up with the moves on the chart.

 

[kjones5159]

Hmm...you may very well have a point there.

 

[cdcaveman]

Quote from cactiman:

Just looked at monthly chart from 03/01/09 to 08/31/12.
SPY went from a low of 67.10 to a high of 143.09 in those 41 months.

And yes, there are 3 distinct waves up to higher highs, followed by pullbacks to higher lows clearly evident on the chart.
We're now in the beginning of the 4th wave higher.

At the top of each upleg SPY "stalls" from 1-3 months before the drawdowns, which lasted from 2-5 months each.
This "pause at the top" is what I was referring too.

When did the "zero interest rate policy" begin, and what were the dates of QE1 and QE2?
It would be interesting to line them up with the moves on the chart.

Not by coincidence the QEs are aligned exactly with those waves your talking about

 

[kjones5159]

Quote from nocloud:

Precisely, this is why for the sake of politics, the Fed has to ease again in September to fuel a short term rally to the run up of the election.

You think the election will do it, and not the central bank ordeals on either side of the Atlantic? Anybody else want to weigh in?

Can't really say if Bernanke would rather ease to potentially keep his job and bet on Obama winning or wait until after the election. I'd think it a little desperate, tooth and nail for a central banker to do something like that, he's not a politician after all. In the interest of keeping the image of the Bank itself clean, I think it would definitively show political alliance to do anything that unorthodox this close to an election.

Not but a couple weeks before the mid September meeting he left the door open, not leaning towards another round of QE or not. Watch Draghi, Bernanke is dancing to his tune on this one.

But then again he is human, so you never really know.

 

[cactiman]

Quote from cdcaveman:

Not by coincidence the QEs are aligned exactly with those waves your talking about

Fine by me. Makes total sense.
So do you think the odds favor this 4th up-wave continuing then, with QE3 just around the corner?

I lost a ton of money in '09 because I kept contra-trend shorting a rally "that shouldn't be happening".
A very painful lesson. Never again.
"The Trend is Your Friend" (or worst enemy!)

 

[kivd]

If you look at the retracement volume then we haven't completed the retracement after the third leg. The other two retracements had HUGE volume, and the one you claim to be the third had barely anything, all it was was the stall on top, like the japan thing.

 

[cactiman]

Quote from kivd:

If you look at the retracement volume then we haven't completed the retracement after the third leg. The other two retracements had HUGE volume, and the one you claim to be the third had barely anything, all it was was the stall on top, like the japan thing.

I see your point.
The move from 141.48 to 126.48 wasn't nearly as deep as the corrections in 2011 and 2010.
I've been counting 126.48 as a Higher Low, figuring if it was taken out it would be the end of this Cyclical Bull Market.
So you're saying SPY could fall below 126.48 without ending the Bull Market?

 

[cdcaveman]

Quote from cactiman:

Fine by me. Makes total sense.
So do you think the odds favor this 4th up-wave continuing then, with QE3 just around the corner?

I lost a ton of money in '09 because I kept contra-trend shorting a rally "that shouldn't be happening".
A very painful lesson. Never again.
"The Trend is Your Friend" (or worst enemy!)

yeah... i guess its a matter of trading the market your in.. and realizing quickly when it changes aye! still quiet as of this minute

 

[kivd]

Quote from cactiman:

I see your point.
The move from 141.48 to 126.48 wasn't nearly as deep as the corrections in 2011 and 2010.
I've been counting 126.48 as a Higher Low, figuring if it was taken out it would be the end of this Cyclical Bull Market.
So you're saying SPY could fall below 126.48 without ending the Bull Market?

Yes its possible to fall below 126.48 without ending the bull market.
(But once its broken that theres a good chance it'll break the bigger trend.)
Heres what Im looking at, notice the strong trend line coming out of 2009 bottom. Hitting that would make it a third bottom.