Bund, Tbond e la matrixiana allo yen vm18 (1 Viewer)
- Creatore Discussione gipa69
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gipa69
collegio dei patafisici
Friday Morning 08/10
The Importance of The Process
While the stock market very rarely repeats itself, in many instances it rhymes. What I mean is that while one can never tell exactly what the stock market is about to do, it can be beneficial to look back at previous periods to observe how the market acted and try to see if there is some correlation to the current period.
That being the context of this report, and without spending the time describing in detail how (breadth and volume non-confirmations and waning momentum) the stock market got into its current condition, I want to state upfront how critical it is that the market indices successfully complete what is known as a “low-rally-retest” sequence; or a bottoming process, or simply, The Process.
In the midst of the 2000 – 2002 Bear market, my former colleague and friend and I, correctly identified two separate trading lows in 2001. But we were wrong in our belief, at the time, that those particular sell-offs were part of the ultimate Bear market bottom. This was especially true after the climactic selling that occurred post “9-11”, as that low was eventually violated in July 2002. It was at that time (July 2002) when I did a study of all the “Bear-market bottoming formations” that had developed over the previous 50 years. I was hoping to identify similar characteristics of “The Process.”
What I discovered was that most (NOT all) bear markets ended following a “low-rally-retest” sequence. However, it was first necessary to distinguish between a “low” and a “bottom.” A “low” is a function of price only, a starting point for a rally and the beginning of the bottom-building process. A “bottom” is a function of price and time, meaning it isn’t a single-day event but one that develops over time.
Besides this, why is it so critical, in my opinion, to see this process develop and get successfully completed?
Here are two real-time observations:
In July, the S&P 500 (SPX) rallied right to, but failed to break above, its intraday peak (resistance) from 2000. In the process, the SPX recorded what is known as an “Outside Reversal” pattern, which has negative implications. This pattern is evident when the current months (July) intraday high is above the previous months (June) intraday high; the current month’s intraday low is beneath the previous month’s intraday low and the index closes down for the month and below the previous month’s intraday low. Following is a chart of the SPX, showing this development.
Click to enlarge
From both a technical and fundamental perspective, conditions similar to 1998 currently exist. In 1998 there were a string of giant corporate unions, beginning with Traveler’s and Citigroup ($46.90). In today’s environment this can be likened to “Private Equity.” Also in 1998, Mr. Greenspan warned of interest rate increases. Following the Fed meeting Tuesday, Raymond James’ Senior Economist, Dr. Scott Brown wrote “the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected.” Finally, in 1998 there was major credit anxiety, tied to Russia’s default on its domestic debt and ultimately the Long Term Capital Management hedge fund debacle. Today, you can liken this to the subprime mortgage, credit crunch, hedge fund issues.
Additionally, even the charts, then and now, look similar. The following first chart is from 1998. The second chart is from 2007.
Click to enlarge
Click to enlarge
In summary, consistent with the observations above, I will look to see which of the following scenarios develops:
1) The market shakes off both the current fundamental concerns mentioned above and overhanging selling pressure, and powers towards its old highs. Based on how the advance - decline figures currently stand, the odds would favor another “non-confirmation” between the markets breadth and the major indices. If a second “non-confirmation” occurs (don’t anticipate), it would be very bearish.
2) Over the next week(s) - months (“time” is a critical element in this process as retest historically doesn’t occur over a few days, but weeks - months) market indices retest their initial low, support levels. Please remember, a retest can occur slightly above or ideally, slightly below, the initial low point. If this occurs on less selling pressure than what developed during the initial low it would play a major role in completing the bottoming sequence. This would be bullish.
3) The market shakes off bad news, ignores the overhanging selling pressure and moves laterally for another few days - weeks, never retesting support. If this is accompanied by good “internal” readings it would be bullish.
4) Support levels are violated, on a closing basis, accompanied by greater selling pressure than what occurred when the initial support lows were recorded. This would imply lower prices and the need for the “low-rally-retest” process to start all over again, but from lower levels.
Finally, while waiting this out, please manage risk by implementing a stop loss strategy, using strength to hedge, reduce or sell positions that have been underperforming the market for weeks or months and don’t be averse to locking in profits.
I say this because most of the major market indices are up on a year-to-date basis (as of the close 8/8/07, 13.6% of the stocks on the NYSE are down 10% or greater; on the NASDAQ the figure is 17.8%). What this means to you is that despite what the market indices show for 2007, certain sectors and individual stocks have been “taken out behind the tool shed” and…well you get my drift.
The Importance of The Process
While the stock market very rarely repeats itself, in many instances it rhymes. What I mean is that while one can never tell exactly what the stock market is about to do, it can be beneficial to look back at previous periods to observe how the market acted and try to see if there is some correlation to the current period.
That being the context of this report, and without spending the time describing in detail how (breadth and volume non-confirmations and waning momentum) the stock market got into its current condition, I want to state upfront how critical it is that the market indices successfully complete what is known as a “low-rally-retest” sequence; or a bottoming process, or simply, The Process.
In the midst of the 2000 – 2002 Bear market, my former colleague and friend and I, correctly identified two separate trading lows in 2001. But we were wrong in our belief, at the time, that those particular sell-offs were part of the ultimate Bear market bottom. This was especially true after the climactic selling that occurred post “9-11”, as that low was eventually violated in July 2002. It was at that time (July 2002) when I did a study of all the “Bear-market bottoming formations” that had developed over the previous 50 years. I was hoping to identify similar characteristics of “The Process.”
What I discovered was that most (NOT all) bear markets ended following a “low-rally-retest” sequence. However, it was first necessary to distinguish between a “low” and a “bottom.” A “low” is a function of price only, a starting point for a rally and the beginning of the bottom-building process. A “bottom” is a function of price and time, meaning it isn’t a single-day event but one that develops over time.
Besides this, why is it so critical, in my opinion, to see this process develop and get successfully completed?
Here are two real-time observations:
In July, the S&P 500 (SPX) rallied right to, but failed to break above, its intraday peak (resistance) from 2000. In the process, the SPX recorded what is known as an “Outside Reversal” pattern, which has negative implications. This pattern is evident when the current months (July) intraday high is above the previous months (June) intraday high; the current month’s intraday low is beneath the previous month’s intraday low and the index closes down for the month and below the previous month’s intraday low. Following is a chart of the SPX, showing this development.
Click to enlarge
From both a technical and fundamental perspective, conditions similar to 1998 currently exist. In 1998 there were a string of giant corporate unions, beginning with Traveler’s and Citigroup ($46.90). In today’s environment this can be likened to “Private Equity.” Also in 1998, Mr. Greenspan warned of interest rate increases. Following the Fed meeting Tuesday, Raymond James’ Senior Economist, Dr. Scott Brown wrote “the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected.” Finally, in 1998 there was major credit anxiety, tied to Russia’s default on its domestic debt and ultimately the Long Term Capital Management hedge fund debacle. Today, you can liken this to the subprime mortgage, credit crunch, hedge fund issues.
Additionally, even the charts, then and now, look similar. The following first chart is from 1998. The second chart is from 2007.
Click to enlarge
Click to enlarge
In summary, consistent with the observations above, I will look to see which of the following scenarios develops:
1) The market shakes off both the current fundamental concerns mentioned above and overhanging selling pressure, and powers towards its old highs. Based on how the advance - decline figures currently stand, the odds would favor another “non-confirmation” between the markets breadth and the major indices. If a second “non-confirmation” occurs (don’t anticipate), it would be very bearish.
2) Over the next week(s) - months (“time” is a critical element in this process as retest historically doesn’t occur over a few days, but weeks - months) market indices retest their initial low, support levels. Please remember, a retest can occur slightly above or ideally, slightly below, the initial low point. If this occurs on less selling pressure than what developed during the initial low it would play a major role in completing the bottoming sequence. This would be bullish.
3) The market shakes off bad news, ignores the overhanging selling pressure and moves laterally for another few days - weeks, never retesting support. If this is accompanied by good “internal” readings it would be bullish.
4) Support levels are violated, on a closing basis, accompanied by greater selling pressure than what occurred when the initial support lows were recorded. This would imply lower prices and the need for the “low-rally-retest” process to start all over again, but from lower levels.
Finally, while waiting this out, please manage risk by implementing a stop loss strategy, using strength to hedge, reduce or sell positions that have been underperforming the market for weeks or months and don’t be averse to locking in profits.
I say this because most of the major market indices are up on a year-to-date basis (as of the close 8/8/07, 13.6% of the stocks on the NYSE are down 10% or greater; on the NASDAQ the figure is 17.8%). What this means to you is that despite what the market indices show for 2007, certain sectors and individual stocks have been “taken out behind the tool shed” and…well you get my drift.
feliceanima
Forumer attivo
Giorno Gipa potresti preparare una tua view del mercato in questo momento topico.
Prima domanda questa liquidita' iniettata quali effetti sortira' a breve ?
Seconda domanda se bernacca gia dal prossimo metting invece di alzare li abbassa i tassi secondo te i corsi azionari quali saranno ?
Alla fine di reale per l'economia i suprime cosa intaccheranno effettivamente cosa pensi del Dax che ha perso di meno nella giornata di ieri rispetto a Londra e Parigi come tu ben sai hanno piu' una vocazione finanziaria .
Te lo spieghi solo per il semplice fatto che il Dax ha una maggiore componente di titoli Industriali .
Gipa cosa ci vuoi fare ho preso il posto di Giomf a fare domande
.
Di tutto questo mi spiace per Dan si e perso il movimento sullo Yen lo avrebbe cavalcato a mo di .
Per diana tutti gli short che aspettava sono passati propiro quando lui e' in vacanza .
Grazie a tutti
Prima domanda questa liquidita' iniettata quali effetti sortira' a breve ?
Seconda domanda se bernacca gia dal prossimo metting invece di alzare li abbassa i tassi secondo te i corsi azionari quali saranno ?
Alla fine di reale per l'economia i suprime cosa intaccheranno effettivamente cosa pensi del Dax che ha perso di meno nella giornata di ieri rispetto a Londra e Parigi come tu ben sai hanno piu' una vocazione finanziaria .
Te lo spieghi solo per il semplice fatto che il Dax ha una maggiore componente di titoli Industriali .
Gipa cosa ci vuoi fare ho preso il posto di Giomf a fare domande
.Di tutto questo mi spiace per Dan si e perso il movimento sullo Yen lo avrebbe cavalcato a mo di
.Per diana tutti gli short che aspettava sono passati propiro quando lui e' in vacanza .
Grazie a tutti
Inshar
Forumer attivo
feliceanima ha scritto:Giorno Gipa potresti preparare una tua view del mercato in questo momento topico.
Prima domanda questa liquidita' iniettata quali effetti sortira' a breve ?
Seconda domanda se bernacca gia dal prossimo metting invece di alzare li abbassa i tassi secondo te i corsi azionari quali saranno ?
Alla fine di reale per l'economia i suprime cosa intaccheranno effettivamente cosa pensi del Dax che ha perso di meno nella giornata di ieri rispetto a Londra e Parigi come tu ben sai hanno piu' una vocazione finanziaria .
Te lo spieghi solo per il semplice fatto che il Dax ha una maggiore componente di titoli Industriali .
Gipa cosa ci vuoi fare ho preso il posto di Giomf a fare domande
Di tutto questo mi spiace per Dan si e perso il movimento sullo Yen lo avrebbe cavalcato a mo di
Per diana tutti gli short che aspettava sono passati propiro quando lui e' in vacanza .
Grazie a tutti
up
feliceanima
Forumer attivo
Inshar ha scritto:
lasciamogli il tempo di andare al Mare
masgui
Forumer storico
feliceanima ha scritto:Giorno Gipa potresti preparare una tua view del mercato in questo momento topico.
Prima domanda questa liquidita' iniettata quali effetti sortira' a breve ?
Seconda domanda se bernacca gia dal prossimo metting invece di alzare li abbassa i tassi secondo te i corsi azionari quali saranno ?
Alla fine di reale per l'economia i suprime cosa intaccheranno effettivamente cosa pensi del Dax che ha perso di meno nella giornata di ieri rispetto a Londra e Parigi come tu ben sai hanno piu' una vocazione finanziaria .
Te lo spieghi solo per il semplice fatto che il Dax ha una maggiore componente di titoli Industriali .
Gipa cosa ci vuoi fare ho preso il posto di Giomf a fare domande
Di tutto questo mi spiace per Dan si e perso il movimento sullo Yen lo avrebbe cavalcato a mo di
Per diana tutti gli short che aspettava sono passati propiro quando lui e' in vacanza .
Grazie a tutti
aho...sembra di stare su bloomerg...
feliceanima
Forumer attivo
masgui ha scritto:aho...sembra di stare su bloomerg...
meglio direi non credi
gipa69
collegio dei patafisici
feliceanima ha scritto:Giorno Gipa potresti preparare una tua view del mercato in questo momento topico.
Prima domanda questa liquidita' iniettata quali effetti sortira' a breve ?
Seconda domanda se bernacca gia dal prossimo metting invece di alzare li abbassa i tassi secondo te i corsi azionari quali saranno ?
Alla fine di reale per l'economia i suprime cosa intaccheranno effettivamente cosa pensi del Dax che ha perso di meno nella giornata di ieri rispetto a Londra e Parigi come tu ben sai hanno piu' una vocazione finanziaria .
Te lo spieghi solo per il semplice fatto che il Dax ha una maggiore componente di titoli Industriali .
Gipa cosa ci vuoi fare ho preso il posto di Giomf a fare domande
Di tutto questo mi spiace per Dan si e perso il movimento sullo Yen lo avrebbe cavalcato a mo di
Per diana tutti gli short che aspettava sono passati propiro quando lui e' in vacanza .
Grazie a tutti
L'analisi la faccio domani (se riesco
) per il resto:1)Dipende se servirà a ripristinare fiducia nel sistema opppure no, la reazione dei tassi overnight è stata tale che non potevano fare altrimenti.
2)Secondo me se può Bernanke i tassi non li tocca a meno che la situazione finanziaria non impatti sulla crescita
3)Questa è la domanda che si pongono tutti, cosa potranno essere i subprime per l'economia... a domani l'ardua sentenza
)4)Secondo me quella è una buona motivazione dei comportamenti dei vari mercati europei.
feliceanima
Forumer attivo
feliceanima
Forumer attivo
Grazie 
Domani Moglie permettendo
Domani Moglie permettendo