In this video I review projections of Advance-Decline Time Symmetry with center post on December 1, 2016. This "Winter T' was originally identified in December (post link) and later updated in January (post link). Although i had some concerns about validity of this T, it worked out very well and guided stock market higher without any meaningful pullback.
There still remains a matter of unresolved "Nested T' with centerpost on January 19, 2017, identified only a few days after center post was fixed. Here, the initial projection is already satisfied, but "Nested T' displayed some strange behavior in a beginning of February, which leads me to believe that remaining projections for March 17 and especially April 4 will most likely target a low (give or take 3-4 days).
My Advance-Decline Indicator (MADI) is under 'Zero" line, indicating unfavorable period for stocks.
S&P500 Trend analysis, based on custom Keltner channels, shows market as overextended and on a cusp of imminent correction. Based on prior occurrences, this dip may be about 7% (or as far down as 2200SPX). Caution is required, accordingly I carry about 40% cash balance in main account, but my approach will remain flexible and subject to change based on constantly evolving variety of possible outcomes.
I discovered a small T, nested inside larger 'Winter T' (post link).
Also I updated target dates for 'Winter T', to correct for a discrepancy due to how my charting service accounts for future dates.
Any way I look at it - there is a period of heightened volatility in near future and no top projection dates past March 1, 2017
'Winter T' projects tops and bottoms for Stock Market in January and February 2017.
Upon closer inspection I discovered a T with center posts in November and possibly in December of this year. Because 'Winter T' is too short in duration, has questionable center post for 'Last Low' and some other concerns I explain in video - I don't consider these time projections as reliable for top placement. However, if Advance-Decline Line reverses and falls going into some of these dates - then there is a high chance that 'Time Symmetry' actually points to a bottom date and will be useful to find a buyable dip.
Considering that Rate T (post link) projects a Stock Market Lows in spring of 2017 and then again in summer, I think that there are opportunities ... for which cash will be needed.
I want to remind that T Theory is not a trading tool, but a 'range of options' that will have to be evaluated by other measures in real time.
A 5 year study of T Theory - a method of analyzing general investment trends using time symmetry.
Based on T-Theory concepts of Terry Laundry.
From "A 1997 Introduction to T Theory" by Terrence Laundry:
'The Law of Matched Trend Time' basically states that duration over which investors can obtain 'superior equity returns' will always be equal to the previous time period in which returns were subnormal. A simpler way to put it is to say: the market can only 'make strong run' as long as it previously 'rested'.
Completed 2015 Rate T correctly forecast 2016 market lows, by providing multiple estimates over period of time when buyable dips are likely to appear in S&P500.
This is based on T-Theory concepts of Terry Laundry, who discovered these Rate T's back in 1970's (I think) and used this concept quite successfully for many years. Generally it states that a period of time it takes for interest Rates to fall from high to low is approximately equal to period of time from interest Rate low to important low in Stocks.
He acknowledged difficulties with accuracy of these projections since rates went into historic downtrend in 1980's and also during times of heavy intervention.
1st High to 1st Low in Rate = 1st Bottom in Stocks (in 2015)
Highest High to Panic Low in Rate = 1st Bottom in Stocks (in 2015)
Last High to Lowest Low in Rate = Final Lowest Low in Stocks (in 2016)
In this video I discuss support and resistance in S&P500 index, SPY and NYA.
I present a traditional way to look at NYSE Advance-Decline issues and my alternative use of this indicator.
MADI- My Advance-Decline Indicator - is a multifaceted tool offering a simpler way to analyze market breadth and (sometimes) pick a bottom.
S&P500 Index and Sectors Analysis based on Composite Score Indicator (CSI). I discuss buy signal on $XLU Utilities sector, and stop placement on $XLK Technology.
In this video I recap last CSI Trend in S&P500 ETF - $SPY. The SPY trend started on a week of Brexit June 27 and completed with an 'OFF" sell signal on a week of August 29. All S&P sectors are either in correction or 'OFF'. A timely sell signal in Industrial sector $XLI from my video a couple of weeks ago revisited.
I realize that some of CSI (Composite Score Indicator) terminology may sound a bit bizarre, but I try to explain it in these videos the best I can, with actionable points along the way. I never published any info about CSI and don't think I should just put it out in the open. Including CSI overview and rules into a paid subscription service seems to best option at this time. Any questions or suggestions are welcome - use comment section or Twitter: https://twitter.com/i_Bergamot
I also discuss My Advance-Decline Indicator (MADI) - a slightly different approach to $NYAD analysis. Instead of plotting a Cumulative chart of NYSE advance-decline line (which will change depending on starting point), I look at them as an average. Basically, MADI is similar to McClellan Oscillator, but more adjustable. I will explain more in next video.
This video was published a couple days ago, but i forgot to link it to this blog. The plan is to put these videos out every week on Monday, or maybe during a weekend. I find them pretty useful as summary of recent past and different scenarios for immediate future. I hope my dear readers are as well...
In this video I discuss a progression of weekly SPY trend, based on interpretation of my Composite Score Indicator (CSI).
Sell Signal warning on a week of August 22, 2016, weak condition of S&P sectors and relative under-performance of NYSE composite index ($NYA). Also I talk about multi-year sideways grind, with bear market stuck in-between (yes, bear market - I'll explain next week), and illustrate how personal investors walked away from trading.
In this video I discuss a progression of weekly SPY trend, based on interpretation of my Composite score Indicator (CSI). Relative trend stages of the sectors can be seen in image below the video. I note a double sell signal in Industrials $XLI and explore possible scenarios.
Here, courtesy of ZeroHedge, is a page of 1st issue of Wall Street Journal on July 8, 1889.
Colorful annotations draw shocking parallels between trials and tribulations of distant past and today's news. Like I mentioned before, nothing ever changes. Not in human affairs, nor in markets. Ever...
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Marc Faber, Schiff, and Gartman talk markets
Oy Vey Iz Mir, you know...
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John Williams of ShadowStats talks at length about gov statistics mambo-jumbo, and how distorted it is, comparing to old ways of dicing and slicing of economic data. For only 175/year, responsible Mr. Williams delivers reshuffled economic reports, based on 'right' methodology.... no, I will not be cursing here...
Still, interesting talk, worth a listen... minus f@%#ing statistics http://www.shadowstats.com/
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Robert Kessler of Kessler Investment Advisors shorted bonds while long term bullish. ... Because 'its reasonable to be careful'... Classic... But really, these are the guys who ALWAYS win, even when they losing... He-he
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Old School Charlie Munger in 2009, talks about idiot boom, false competitiveness, and Berkshire investment tricks.
Plain spoken, rare these days.
It Means Continue Mission. Usually said after an interruption or hiccup
in whatever you're doing. This phrase is derived using the phonetic
alphabet (Military Alphabet).
Some Theme changes and notes:
- In Agriculture I removed NIB and BAL, they don't move enough. Added couple stocks, but they all pretty well correlated.
- Shippers are not correlated very much, plus a big advance in $BDI from summer last year is almost gone.
- Precious Metals and miners reduced somewhat.
- Marijuana was reduced drastically on last rip. I added a little recently.
- Uranium is looking better than ever since Fukushima. Unfortunately, that industry was all destroyed, most stocks are in single digits.
- Graphite coming out of multi-year base. I'm buying dips in half positions. Miners are Canadian penny stocks - no go. My list is old - need to review.
- Solar. With all my great expectations for Solar industry, I never got around to making a list.
- Copper was all stopped out, no re-enrty, temp on hold
----------------------------IN THE NEWS---------------------------------
The biggest stir in a market (unbelievable) is actually Michael Lewis's new book "Flash Boys" about HFT and how "markets are rigged". Story will sell, politicians and FBI are involved, floor traders are shouting behind the scene - what a fucking circus.
Volume is not liquidity, you simple-minded scoundrels! High Frequency Traders (HFT) are not market-makers! Scalping doesn't make markets more efficient!
None of this even matter, but makes for exciting TV (they even held commercials for entire segment)
Whats really funny is none of it is new, and shills on a Tee-Vee has been in bed with these same fuckers since forever. Here is Cramer sweating bullets in 2009, admitting that he is wrong as much as right (o, horror), that CEO's lie to him on his very show, that investors being sold down a river ... and this moron is still on boob-tube pimping same crap to new generation of suckers.
The real kicker thou is a ticker tape at 0:30. Here is SPX 70 points off the bottom @ 736; oil @ 45; ESLR @ 1.18... and they tell me that long-term investing has no merit, o, and somebody scalping a penny off the vig make any difference at all. How? Today SPX 1888; oil doubled, Gasoline tripled... they can have a damn penny. Evergreen Solar (ESLR) filed for bankruptcy in Massachusetts in 2011, moved to China, and now a billion dollars in sales private company.
As for me, I remember 2009 like it was yesterday. No, I wasn't buying SPX for a Thousand points gain in 5 years. I was scared that the sky is falling, watched CNBC 24/7, and was shorting everything via options. Nobody told me that I was 'over-thinking' back then...
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There is another book about HFT etc, I am actually more interested to read. In it there is a story about Thomas Peterffy of Interactive Brokers saying back in October 2010:
"Technology, market structure, and new products have evolved more quickly than our capacity to understand or control them. The result has been a series of crises over the past few years that have caused many investors to lose confidence or to think that the whole system is a rigged game."
According to Google, 'Character' is a "the mental and moral qualities distinctive to an individual."
As one of my favorites, Mr Wolfe in Pulp Fiction pointed out:
Just because you are a character doesn't mean that you have character.
Two of my biggest gains of 2013 came from investing in companies led by very strong personalities, extraordinary people, real 'Characters'. A series of profitable trades in strong uptrend of Navios Marine (NM) made me think of Angeliki Frangou each and every time. Its not an accident that while doing initial analysis of shipping industry in March 2013 (in Discovery at Sea post), I picked her interview out of all speakers of latest TradeWinds conference. Mindboggling 400% profit in TSLA was delivered courtesy of Mr. Elon Musk of Tesla (TSLA) and SolarCity (SCTY). I actually started investing in SCTY in this post (link), based solely on "young faces of their management team". Company just came public, so I had no indicators, no support/resistance, no earnings, no price history. I wrote:
...it gives me real
pleasure to see young faces of their management team. I am a pretty
good face reader, and I am smiling looking at these boys and
girls... ...management of SCTY are young, ambitious,
driven young people. In finance it's bad, in service/manufacturing it is
a combination that been changing the world thru-out history. Look up
Elon Musk and see what he did, and what he set out to do. Having said that, my stop is below most recent low, until further instructions...
“Character is like a tree and reputation its shadow. The shadow is what we think it is and the tree is the real thing.”
―
Abraham Lincoln
"Character cannot be developed in ease and quiet. Only
through experience of trial and suffering can the soul be
strengthened, vision cleared, ambition inspired, and
success achieved."
- HELEN KELLER (1880-1968) American blind and deaf writer/lecturer
“Fame is a vapor, popularity is an accident, riches take wings, those
who cheer today may curse tomorrow and only one thing endures -
character.”
―
Harry S. Truman
“Love should be treated like a business deal, but every business deal
has its own terms and its own currency. And in love, the currency is
virtue. You love people not for what you do for them or what they do for
you. You love them for the values, the virtues, which they have
achieved in their own character.”
―
Ayn Rand
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I find it bit alarming that usage of the word 'Character' has been dwindling over past 150 years
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Wally Weitz, whose flagship Weitz Partners Value Fund is celebrating its
thirty year anniversary, and Tom Russo, with his market-beating Semper
Vic Partners Fund
I've been looking at this Weekly Nasdaq A/D line for months. Its kinda different from other internal indicators, because it shows a cash build-up phase for all of 2011-2012, with low on Nov 12, 2012 and high on Feb 14, 2011. Projected peak end of July 2014. Reliability of this analysis is questionable, T-Theory had alot of misses lately, it may be unsuitable for run-away bull market conditions.
Of note (and may-be more actionable) is a negative divergence in oscillators between July and October peaks of A/D line. Daily version of Nas A/D Cumulative plot also shows this divergence.
It's been my (non-scientific...lol) observation - this rally sucks.
Update 11/26/2013
Just to illustrate how illiquid this market has become, here is a 5 minute chart of E-mini S&P contract ESZ13. Overnight markets are notoriously illiquid, as seen 10pm to 2am. Surprisingly similar price action clearly visible during previous day session - between 10am and 2pm, and especially so around after 12pm and again around 1pm.
And again, even worse, on 12/10/2013
I have another personal observation. I've been watching ES streaming live chart for years. Its a lively, active contract, and machines loved it.
You can still see them working at open and close, when candle starts
jumping at incredible rate, bid/ask size fluctuates greatly, and trades
come in 1000's of contracts. Other than that, I have not seen bot
activity in Months!
I am sure they are still there, executing strategies for arbitrage and working large orders in a way that it doesn't move markets much. I just don't see them the way I used to. Did machines walked away, or did they kill each other off, or may be they just waiting for command? That I don't know. For better or worse, the nature of this market has changed. I don't know what it means to me and my own Systems. That's all.
HDGE is actively managed short fund with bottom-up, fundamental, research driven security selection process (that's what they say). Expence ratio is 3.3%, only 270mil, no leverage, premium/discount very small.
The idea is this - if we are going into a sizable shit-storm, I want to be short weakest companies. Letting somebody make a picks? Lets see what they can do. So far not very impressive, but it is a bear ETF in a bull market
Charlie Munger in 2009, talks about idiot boom, false competitiveness, and Berkshire investment tricks.
Plain spoken, old school.
Nassim Taleb. Antigragility. the idea that through small shocks and surprises humans (and financial systems)
can become more than robust – they can thrive and become antifragile. http://nassimtaleb.org/
Self-Directed Investor Chris Camillo talks about "Crowd fund investing" ? I never heard about this.
Hey look, he even got himself a blog to pump his-n-hers investments http://chriscamillo.com/blog
BOT: CG @ 26.20 (1 full position - I want more hopefully at higher price and soon)
I was stopped out of Carlyle Group at the lows of last reaction here (link) and I said: 11/27 - (sell) CG on stop 24.95. Re-entry possible, just need to close over 25.50.
Well it did, and more. Need wider stop.
Some things are really strange. Company website has total shares 300mil, but float only 43mil. Can't find when and if more shares coming to market. SI is 1.5mil - that's 15 to 20 days to cover!
20mil shares (or half! the float) belongs to Hank Herrmann of Waddell & Reed and Ivy Funds. WASAX (link) is a mut fund that holds 8.8mil . WSJ has the most data on ownership here.
What is the connection between these people? Would David Rubenstein be worried that some dude holds half the shares. Do they trust each other so much? That I don't know, but from the chart I see that
25.50 area should hold any reaction, but I will give it extra day and 0.50 or more.
PF targets are all over the place - 29.20; 30.15; 31; 31.20.
Here are other PE firms. CG is not the strongest chart, but they are similar and look good. http://stockcharts.com/freecharts/candleglance.html?spy,cg,kkr,apo,bx|B|P5,3,3
See the little faggot with the earring and the make-up
1/2/2013
Boy, am I glad for taking early exit on my shorts on Monday. Sometimes it's better to be lucky...
12/31/2012
First I did this: XHB is setting up nicely. Started a position with easy stop under today's low. BOT: 26.20
Than: I am seriously considering to close my QQQ short early. That would be
"breaking the rules", cus neither stop nor objective are hit.
And finally: Out of shorts.
(Including SRS at loss, and final piece of ZSL. Silver short runner failed, but total profit from "Silver Bullet" that started on 12/14/2012 here is quick 8% in 2 weeks. Good) Holiday or not, if this doesn't fail - we have a valid reversal. A/D, VIX, bonds - all in agreement. IWM
strong, homebuilders(XHB) lead, emerging markets (EEM) didn't even
blink, retailers (XRT) reversing strongly. I thought post-Xmas retail is
dead, guess not. I'm not doing anything today, but SIL is the one to watch The day is not over, lets see what she can do
12/27/2012
This is Santa Clause Rally. No?
O, I know. This is sideways consolidation, because of Cliff. No?
Short squeeze coming? With 2.7mil cars on ES - there are no bears to kill. No.
How about 100 Samurai aka QQQ. This chart is a BBands madness, but I see a brick wall resistance at 66 and no strong support.
Inflection point? It does't get any better than this. Yes.
Short via QID at the moment
Later that day I bought EEM @ 43.50 without any specific reason. It was just stronger than anything out there and I had too many shorts. I wrote here (link):
"Buying EEM. Stop under 43.
Lets see what she can do"
With seemingly unending sell-off in ag commodities, one has to wonder if
food bull market is over. My personal opinion is biased - I think we
will never pay low prices for food again, however it may be because of
retail mark-up and fuel prices. Case in point - look at coffee. Never
mind that its been going down for 2 years, retail coffee is more
expensive than ever.
That aside here is JJG (all grain etf). Look at
volume difference in beginning of 2011 and now. This makes the "money
hair" on my back go wu-wu-wu
"December is the number one S&P 500 month..." and more about seasonality of December and early January from Jeff Hirsch
