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Monday, June 07, 2010
Blogger was a nice Goaltender today
I was blocked out today during my normal posting time by Blogger being down, so as a result I did not post anything this morning. This will serve as Monday and Tuesday's post. Above is a weekly chart of the SP 500 with alot of things on it that regular readers have seen before. First on the top chart you see price with cycles overlayed. These cycles also match up with the bottom pane which shows a low coming, but not for a bit. The second pane shows Larry Williams Will Go which predicts stock prices through the use of Bond and Stock yields. It is far from perfect, nothing is. However, it gives us a good idea of when fundamentally flows should go from one place to another. Today's value is not displayed, but the black line shows a nice curl down in it to about where the Red Line is. This tells us that via yields, stocks should decline here.
The middle panel which is my Commercials Hybrid is not showing any selling yet. Even though I have bashed the COT report recently, you can still see that in general, this Hybrid has been a reasonable predictor of price moves, especially with the trend. It is telling us this dip is a buy, but the other things are not lined up and we have also broken the weekly uptrend in one of the three indexes now, so I am not paying close attention to this at the moment.
My shorter term indicators had been indicating to try and buy this for a bounce until today. We have now gone down enough where things have turned down too much for a buy signal it appears. I think we are on very dicey ground right here. If we do not hold here, be prepared to tune out the Abby Joseph Cohens of the world, who today proclaimed everything is fine and not to worry. "The US is much stronger than the other countries." I guess the world is not flat in her world. She may be right, but my work tells me to be very careful right here. I would not short this here either, unless you are a day trader. We are now seeing end of the day selloffs, the trademark of a downtrend. This is in sharp contrast to the PPT end of day buy programs we have seen for so long.
Here is one market that appears to be setup to rally, and there are not many, Soybean Meal. We have a good weekly uptrend, not shown, and now the daily is appearing to be turning up. If we close down on Tuesday I will be looking to get long here Wednesday.
I do also think we are due for a dollar decline and Swiss and Euro rally. If for no other reason, than an oversold bounce. I have orders in for the Swiss tommorrow, so let's see what happens. It does not appear they will rally if stocks continue to decline but you never know.