Every idiot with an Internet connection and chart software is calling for a pullback here. I see a lot of you are talking as if you are loading up on shorts. I think it is too early for that.
You may recall last week when I said I’d be a buyer if the indexes weathered the jobs report, hit resistance, and pulled back in low volume. Last night I mentioned the probability that today would see some weakness in light volume. Since everything seems to be unfolding as I have expected, I’m comfortable staying long, although I may buy a little of the inverse etfs to hold for a couple of days.
So everyone sees downside ahead, but I haven’t seen anyone throw up any targets. I’m looking for a downside move to take us back to the 50 day average. For the Dow Jones, this move may shave off 300 points or so. The Nasdaq may see 60 points get harvested.
Basically, it is simple. If you got excited last week, and wanted to go “all in,” but had the good sense and mental fortitude to not buy an overbought market, the next few days is when you want to be a buyer. Man up, and buy some weakness.
Of course, as I have also outlined many times, I think negative earnings reports will send the markets back to new lows, eventually. Thus, there is always the possibility that there is a report on the horizon that will cause the bulls to panic and the bears to regain control. It may be tomorrow. Until that happens, or the indexes do not find support near the 50 day, the bulls have the ball.
Last time I checked, every idiot with an empty head has been BUYING stocks, not selling them.
Hence, the Dow hit 12,750 today.
What’s so magic about 12,750? lol…
Damn Fly, you sound like you are using strategies of the lazy and ignorant.
Anyway, the buyers aren’t done. We’re going to the 200 day, barring any shitting the shower type earnings guidance.
My point, re: idiots, is that everyone is calling for a pullback, but I think most are wrong about how far we’ll pullback.
By the way, none of you iBC’ers are idiots, even if you were crowing in comments section about said pullback.
Untrue.
Everyone is long.
Quite the contrary.
Most people are pushing the envelope, believing “nothing will go wrong.”
12,750 is where the fun will end, forever.
GO AHEAD, GET LONG INTO EARNINGS AT THE BEGINNING OF A RECESSION.
You chart guys crack me up.
iBC machine still sez this dip is to be bought. if it changes, there ya go. that is all.
Before I die, I will kill the iBC machine.
It vexes me.
Woodshedder,
Was wondering what you think of the near-term prospects for the USD, as its range is tightening recently?
Here is one rough sketch:
http://static.scribd.com/profiles/images/465763m7mfsv5-full.jpg
Seems a bounce would be positive for the market.
Woody, We may even get to 13k this wave but that doesn’t mean one shouldn’t be taking profits. Look at the oils, with crude up $3/barrel today there was plenty of profit taking when the rally faded. Nothing wrong with banking some coin even if prematurely. Not much upside left even if we see 13k from here. Volume on up days has been anemic even when there are good pops other than the 300-400 pt rallies. Can’t help but feel we are on the verge of another leg down and don’t want to be taking a dump or shower (like Danny) when the shit hits the wall.
Why would the 200-dma serve as resistance instead of a level (12,750) that has done so before (and also acted as support)?
Per The Elliott Wave lives on @ http://caldaroew.spaces.live.com/
Support for the SPX remains at 1364 and then 1344, with resistance at 1383 and then 1410. Short term momentum has been vacillating around neutral while the market has remained in the 1364 to 1383 trading range. Near term indicators have slipped back to neutral as well. Tomorrow February pending home sales are released at 10:00, then the FED releases the FOMC minutes at 2:00. The overall medium/short term view remains the same.
Therefore in an uptrend until support broken …
wood,
we only differ in that i think when this pullback is done and it should be short and shallow, we melt up. when we brake those feb highs it will be done with volume. the q’s and the transports already have taken out the feb highs.
Woody, seems like what you are seeing as a low volume pullback I have been seeing as a low volume rally. If you draw a line from the price lows to the highs and draw a line on the volume they seem to be diverging. Thats the thing about charting, it tends to be subjective sometimes but any clarification on your part would be appreciated.
Shed: Your title is – “Expecting a Timid Downside Move”.
yet you include a mongo caveat – “Of course, as I have also outlined many times, I think negative earnings reports will send the markets back to new lows, eventually.”
A move to new lows would hardly be timid. I suppose you did write ‘eventually’. Which quarter are you expecting negative reports to send the market back to new lows?
Sorry to be a dick (not really, Fly) and nitpick.
I think the pullback will be timid for a day or 3 but I also think there will be one sharp move down before one should load the boat for the next move up, and I agree, I do think there will be another up move. But like all ‘idiots with an internet connection’, I am playing for some downside first.
If the reports today are bad AND there is a large correction, I don’t think the Bears are going to get a handle on anything for a few days.
I agree with what Adam said about the Bubble of Complacency. The news has been so bad for so long that it’s become the “new normal” and folks have decided to start buying again. Pure and simple.
anyone have a name for these patterns? looks like a backwards triangle. noticed a lot of them in the last bear market
Good post. Pullback, yes. Degree: unknown.
Demand still there for lots of stocks, until we have more supply (duh!), hedge the bets.
Wood,
Check out NYSE stock chart…although SP,DOW,NAS all remain within a range, NYSE has broken its downward trend, this April.
Can you confirm this?
Hey folks, good comments…I’m swamped at work but will get to answering these as soon as I get a second.
the more i look at it, the more the last month looks like a bearish wedge. the nasdaq and xlf is hugging the support line and NYSE is at the upper part. and the volume has dropped off as the wedge rose so i’m watching for a breakout on the way down in the next week or so
and the news/cnbc monitor has everyone saying the crisis is over and buy stocks now. you know what that means
^I don’t think that is necessarily fadable. After all, you already have record cash on the sidelines.
Retail investors are NOT buying here. how do I know?
my friends. Not savvy at all. not buying. So, my friend who went 60% long NTRI last year at 60…now he’s the prescient market genius for not buying here?
I think he will be wrong again.
plus, as fly mentioned (somewhere) that to repeat q1 performance would be -30odd % annualized. too much.
Lee Bai- interesting. There is definitely a triangle forming in the $USD. While some would say it will just be a continuation of the downtrend, the downtrend cannot continue forever, right?
I do not know if it would be bullish for it to break out above the triangle as part of the bull case is that manufacturing and other sectors are getting a boost from the weak dollar.
DPeezy- I have the 200 day as a target as it is the next technical barrier above the 50 day. Also, it coincides perfectly with the longer term downtrending resistance line.
Market Raider, I agree with you. This rally will fail. Definitely not enough volume. However, the indexes can rally for a long time on very low volume before reversing.
Juice, I think we’re in agreement, and you’re just trying to bust my balls, so I’ll leave it at that.
But I will say new lows by Q3.
Big Mike, I do not see the downtrend broken yet in the NYSE. Start your line from the Oct. top. Long term resistance still at the 200 day, in the same area as the downtrend line.
Alen, could be. If things reverse hard next week, that would put this rally at over 3 weeks. That seems about right.