31 July 2012

 The summation index for the short term indicator is not agreeing with the Dow's rise the last two weeks.

The medium term summation index looks tenuous at best.


"Successful crime is dignified with the name of virtue; the good become the slaves of the wicked; might makes right; fear silences the power of the law."
Lucius Annaeus Seneca

30 July 2012

Bulls:  Not overbought in the long term.  Bears:  Significant divergence between this peak and the previous.

Bears:  Significant divergence between previous peak and current value.

Bulls:  Beat most recent peak.  Still lagging peak from three weeks ago.

"The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary."
H.L. Mencken

29 July 2012

It should be no surprise that the shortest term indicator is overbought.  The rest are showing divergences with previous peaks, but it hasn't rolled over yet so there is still time.  I've been noticing that a lot of the weaker stocks have been outperforming on this latest small cycle.  That tells me (I've discussed this theory in previous posts) that the cycle that began in June is possibly nearing completion. Each valley in my indicators usually see about 3 to 4 stages.  The initial valley has the strongest stocks bottom first.  The last usually finally is when sector rotation puts money in those that did not respond in the first few.

See SAN, BBVA for examples.

26 July 2012

I'm not too proud to admit that I am getting bailout propaganda fatigue.  I am tired of the can-kicking.  I think that this never-ending fiasco of band-aid after band-aid is actually more detrimental to the human psyche than dealing with problems today.

My first day of bailout fatigue was in spring 2008 when the Federal Reserve announced an emergency .75 basis point cut.  That had a huge effect at the time.  To show how far we've "progressed," we can't even make such a cut any more because we are already at zero.

The TARP debates were a significant source as well, and this Greek drama has been slowly becoming more of a comedy than a tragedy.  Now, its Spain and Italy.  Soon it will be France, the Netherlands and eventually Germany.

The fact that everyone should know is that the banks lent too much money to governments that had no way of ever paying it back.  The governments wasted this money by giving it out as entitlements instead of investing in the future.  The other fact is that the money did not exist before it was lent into existence at interest by the banks via fractional reserve banking (at least 8 to 1).  Since it was squandered, unless we can turn back time, there is no way it can be paid back in full with interest with the current amount of money in existence, and in my opinion, someone should not have to work (taxpayers, businesses) to pay back loans that required minimal work to create.  It is wrong, and in a way, is slavery.

Facebook, Zynga, and Groupon have continued to poke lower, lose Farmville cows, and be sold at a premium which looks like a discount.  If you were dumb enough to buy one of these stocks, you got what you deserved.  Shitty internet stocks are as close as the modern world gets to allowing Darwinism.

 Medium term slowed today.

Short term bounced pretty hard off of lows.

I am still a little weary about the consistent weakness in the medium term indicator, and the new low in the short term indicator despite the indexes chopping upwards.


"The only way to deal with an unfree world is to become so absolutely free that your very existence is an act of rebellion."
Albert Camus

25 July 2012

Buy gold?  Very tempting.

Today was a solid move up out of this pennant pattern.  It occurred before I thought it would..usually these things almost wait until the exact end.  If the 200 day moving average serves as resistance, we should have time to decide if this is a good break and entry point.  Either way, it is better than buying at the peak of last year.

 Silver is still at the lower range in its pattern.  I typically like to see silver leading gold.  The green line should still serve as resistance.  It is also a better buy here than it was at 48.  I know that conclusion seems obvious, but sometimes people will buy at peaks and won't buy at valleys.

Short term is nearing 20% hold long - where I start to consider it oversold.  Remember that I like to see a positive divergence between valleys before declaring a buy.

Medium term is back in bearish territory.  It doesn't look like it will stop above the previous valley, but it may.

"He who dares not offend cannot be honest."
Thomas Paine

24 July 2012

 Medium term continues to dive.

Short term is the same.  It is not extremely oversold, but is close.

I saw on Zerohedge that David Einhorn mentioned France.  Remember, I mentioned France and the Netherlands a few weeks ago.  Germany will be the last.

"To deprive a man of his natural liberty and to deny to him the ordinary amenities of life is worse then starving the body; it is starvation of the soul, the dweller in the body."
Mohandas Gandhi

23 July 2012

 The dollar is heading towards a long term resistance line (it doesn't show up well - its blue and red).  The line connecting the 2002 and the 2010 high has been broken by the recent rally.

 Gold is carving out a wedge.  If we break the red line, we could go lower. If it breaks the white line, we could go higher.

 Medium term is definitely not oversold, and this pullback is weaker than the previous one (new low).

 Silver is sitting on long term support.  It could go to the red line if it breaks this support.  The white line around 23 is the 61.8 fib retracement.

Short term not oversold yet.

"There are no hopeless situations; There are only men who have grown hopeless about them."
Clare Boothe Luce

22 July 2012

 Very significant divergence in the medium term between my index and the Dow.  This is negative.

The same applies to the short term indicator.

Now we will just have to watch the fireworks if they materialize.  VIX did not reach its long term support which could back the bullish case, but it is just one indicator.

"They know their future, and the future of their loved ones, is on the line. And they know we are running out of time to turn things around. The closer we get to that point where it's too late, the less people have to lose by fighting back. The power of the Justice Department is based on its ability to take things away from people. The more that people feel that they have nothing to lose, the more that power begins to shrivel. The people who are committed to fighting for a livable future will not be discouraged or intimidated by anything that happens here today.

"And neither will I. I will continue to confront the system that threatens our future. Given the destruction of our democratic institutions that once gave citizens access to power, my future will likely involve civil disobedience. Nothing that happens here today will change that. I don't mean that in any sort of disrespectful way at all, but you don't have that authority. You have authority over my life, but not my principles. Those are mine alone."

Timothy DeChristopher

(I'm not a global warming alarmist - I just like the quote)

19 July 2012

Long term is still in positive territory and is not overbought.  There is quite a divergence between this reading and the previous high.

 Medium term is severely lagging its previous peak.  Once/if this turns downwards below that previous peak, that will be a very negative sign.

The same thing shows up in the short term.

It seems that the only thing lifting this beast is the declining VIX which still is not at its long term support.


Simple pleasures…are the last refuge of the complex.
Oscar Wilde

18 July 2012

Integral of medium term is still lagging.

Integral of short term seems to be mostly coincident with the Dow.

17 July 2012

The shorter term time frames are not responding that well to the latest rally.  The composite of many time frames just crept back above its long term average.  Its ascent has been slow and steady.

The VIX still has some room to the downside which means this rally could have legs for a little longer.

The next Bradley Siderograph turning point is 28 July.  Last year's point around this time marked the S&P US debt downgrade.


If you live your life fully, you will die only once. But if you are scared of every step, fear will kill you day after day.
Paul Coelho

16 July 2012

 Still closer to overbought territory for the medium term.

This is seriously lagging the previous peak if it quits here.


No man does anything from a single motive.
Samuel Taylor Coleridge

14 July 2012

None of my indicators are screaming overbought or oversold.  If they are going to go up and challenge recent highs, it is likely that there will be heavy weakness in the event of a failure to confirm.

Medium term's decline slowed sharply yesterday.

Percent of stocks above 200 day moving average still maintains its uptrend.  This will be good to watch for a new high or a divergence.

The same goes for the percent of stocks above their 40 day moving average.

Advance-decline line for the Russell 3000 shows a lot of weakness.  Remember the Russell 3000 is what the Federal Reserve was boasting about boosting with QE2.

Short term indicator made a low that we lower than the previous low.  On one level, this shows some weakness.  On the other, it still does have a lot of room to the upside if it chooses.


"Economics exists to make astrology look respectable."
John Kenneth Galbraith

13 July 2012

Of the 485 stocks that made new highs last week, 346 are already below their close from five days ago.  This typically signals excessive panic-buying which is followed by selling.

 Long term is still substantially below its peak values.

Medium term has declined sharply from overbought territory.

Short term is not extremely oversold.  However, it is becoming more risky to initiate short sales.


"People often say that this or that person has not yet found himself. But the self is not something one
finds, it is something one creates."
Thomas Szasz

11 July 2012

Medium term remains overbought.  Its summation index remains subdued.  I would assume this is a sign of weakness, but this index is too new to derive much information from it.

Short term's decline slowed today.  It is not oversold.  Its direction from here is anyone's guess.

"Constant development is the law of life, and a man who always tries to maintain his dogmas in order to appear consistent drives himself into a false position."
Mohandas Gandhi

10 July 2012

I was wrong. Medium term definitely did not bounce today.  It remains overbought.  This rally really painted the bulls into the corner.

I've seen some recent articles saying that silver should have weak performance during a recession.  They all seem to leave out that it is already down about 50% from its high.  I said it was a sell at its peak, and now I am not so sure it is a sell as the pundits seem to believe.  If we break the long term upwards trendline, then yes, it could sell off more.  But until it decides one way or another, all bets are off the table.  Due to the already extended sell-off, odds are beginning to look better to the upside.

Short term getting oversold again.  It is not at extreme levels.

"The expected never happens; it is the unexpected always."
John Maynard Keynes 

9 July 2012

 Medium term overbought still but looks like it could be vulnerable to a short term pump back upwards.

Wait for that wisest of all counselors, Time.

Pericles

Short term still hasn't broken its upward trendline (connecting recent valleys).  Could also have a pump back upwards now that the indexes are sitting on their 50 day moving averages.  Play it if you want, but I don't mess with those short term plays any more.

Death twitches my ear, “Live,” he says, “I am coming.”

Virgil

8 July 2012 (Gold Versus Nasdaq Update, US Energy Consumption Update)

 Although it doesn't fit my bias, oil does look like its previous bubble decline.  Gold and silver continue to consolidate gains at elevated levels.

Crude's long term trendline remains intact.

 The warm winter kept this pretty suppressed through March.  Anxious to see what the ridiculously hot summer does.

 Natural gas consumption looks to be steadily rising with the increased production.

 Definitely increasing activity in the GTL realm.

Petrol consumption is steadily declining since 2005.

Some of the medium term time frames remain overbought.  The composite indicator (at the bottom) shows a significant divergence in strength from its previous high values.  Its upward trendline (not drawn) is also in danger of being broken.


"The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary."
H.L. Mencken