Yves Sell Signal

Neely is bullish this morning, up to SP800.  Market is struggling to maintain rally, but have just turned positive again.  Cramer says last night on CNBC that financial stocks are a surprise buy after the Citi profit yesterday.  Yet all is not rosy.  Yves has a new update:

Is this the sign of real danger ahead?

This is the first time that my liquidity index has generated 3 consecutive sell signals.  At the top just before getting to 14,000 on the Dow, we did get  2 sell signals. Getting 3 in a row is a first. It does contradict technical analysis where many bears are looking to turn bulls. It also weighs against our current perception of wave structure. The battle is on and the answer coming up shortly. Is my liquidity index telling us something important ?

Yves Lamoureux, Investment Advisor, Blackmont Capital Inc.

Disclaimer: opinions and projections contained are of the guestblog author and may not represent the views of Yelnick, Blackmont Capital (BCI) or any other organization. The information contained herein is for information purposes only and this report is not to be construed as an offer to buy or sell any securities. Neither Yelnick, BCI nor the author accepts any liability whatsoever for any loss arising from use of this report or its content. The comments and opinions expressed in this letter are the result of work done by Yves Lamoureux. They may differ from the opinion of Blackmont Capital Inc. ("BCI") and should not be considered as representative of BCI, belief, opinion, or recommendations. The statements and statistics contained herein have been prepared by sources we believe to be reliable but we cannot represent that they are complete and accurate. This material is published for general information only. BCI assumes no liability for financial decisions based on this information. Readers should obtain professional advice before applying any ideas mentioned to their own personal situation to ensure their individual circumstances have been properly considered.  BCI is an independently owned subsidiary of CI Financial Income Fund. CI Financial is a Canadian owned diversified wealth management firm

Comments

[george]

Yves,
sounds rather bearish.
maybe your wave count is
incorrect. your liquidity
index has been doing
pretty well for sometime.
you haven't adjusted your
liquidity components? that
could explain it. if not
it is bearish.
george

[Bull]

Sentiment-wise, I just don't think the bottom (before the really big mid-bear rally) is near yet (not even after a wave 4 or X wave rally over the next few days and an even lower low than we have had). There's not enough gloom and doom out there. Too many people seem to feel that all they need to do is "just hang in there." Personally, I don't have that kind of fear in my own gut yet -- the kind that nearly prohibits me from buying a bottom because I'm too afraid that it's just going to keep going down. Not enough fear from either the general public or from investors. I want to hear more comments like Buffet's "the economy fell off a cliff" remarks. I want hopelessness; more really bad headline news in my hometown paper. There certainly has been more of that bad news over the last 2 weeks, but not enough for the mid-bottom of the magnitude that we all seem to feel we're in (Supercycle Bear).

[crashish]

Lots of people turning bullish. Is there anything to indicate that this is anything other than a small 4th wave of 5?

[Yves]

George, my index has been designed for adjustment .It will weigh in more toward leading factors.In early 2007 I did have an easy time picking up weakness in CDS.In 2008 it did pick easily the weakness in monetary aggregates.Right now it is picking up on shorter term behavioral components.The last october buy in was a bit premature for my taste but had to kick out the baltic dry index.Perhaps I could have waited to do that and would have resulted in picking better that bottom.Aside from that I am happy with it.This is uncharted waters maybe it is signaling a crash ? Then yes thats bearish
-your liquidity index has been doing pretty well for sometime- thanks !

Yves

[Mamma Boom Boom]

>>This is the first time that my liquidity index has generated 3 consecutive sell signals.<< Of course, I don't know how you have it constructed, and it's none of my business.

But I have some proprietary indicators of my own (plural) and one by one they are turning bullish. I actually gave a buy on my website, today. Not sure I like being on the same side as Neely, though.

[Some will win, some will lose, and some were born to sing the blues]

[Yves]

Ned , you told me already at higher levels that you were thinking it was a bottom.Then it continued to fall through your bottom and you said I might be right.
You know we might be close in time but not in price .That is where technicals fail miserably.

Yves

[DG]

From Ned's site:

SHORT TERM: (3 days - 3 weeks) - I will not be doing short term opinions, unless demand should warrant it.

MEDIUM TERM: (1 month - 5 months) - Buy - I've been watching what I thought was a bottom formation, and I see enough evidence to go for a 'buy'. I don't have to tell you that this is early in the advance, be careful. On the plus side, it may turn out to last months. Stay tuned, for more conformations.

LONG TERM: (More than 6 months) - Neutral - An opportunity that comes only a couple of times in an investors life time, is being carved out. I have been a long term stock market bear since the summer of 1998. At present, 10 years later, we are far below that level and below the crash level of that year. I am starting to see value in this market. IMO, shares of solid companies, will beat any other investment in the treacherous world I see in the future. And make no mistake, the world is becoming treacherous.

------------------------------------------------------------------------------------------------------------------------

Do you do E-wave? If so, what "bottom formation" are you seeing? If you explain it in E-wave terminology, it'd be easier to follow, since this is, at least nominally, an E-wave blog.

Also, anyone who's been "a stock market bear since the summer of 1998" probably, pardon my French, doesn't know what the f*ck he's doing and has missed not one, but two huge runs. And you presume to say you don't "like being on the same side as Neely"? Neely has been trading this decline extremely well, to say the least. If the market hits his downside targets under 500, there's a good chance he will have gotten his customers 1,000 ES points since the Lehman collapse! 1,000. If you were only trading 1 ES contract at a time with a $10,000 futures account, that's a $50,000 net gain. If we go under 500 S&P and then rebound to 750 or so, there's a good chance I will be able to retire off the past six months of trading alone and I'm not even 40 years old. You're over 60 and still working, if you're website's any indication. You tell me who's "winning" here, people on Neely's side or people on Ned Bushong's side.

This is a pretty good site, but boy does it attract ankle-biters.

[Harry]

Let's see how you're doing at 60, DG! 20 years is a long time in which to lose money, health, and happiness! Keep it cool, dude. We're all going through this same crazy ride called life and none of us asked to be here.

[DG]

Harry,

Fair point. As Sophocles said "Tomorrow is guaranteed to no man".

I just hate ankle-biters.

[Mamma Boom Boom]

Yves and DG,

I think the confusion comes in 'timeframes'.

Yves, privately I told you we were near a bottom, but remained neutral on my website. I don't publicly do short term forecast, so it was an intermediate call, lasting up to half a year. Being off a bit is acceptable for this duration, IMO.

DG, your taking context from a long term call, 6 months to a lifetime. Some people do not want to trade, they want to put money away and forget it. Just abot every one of those long term investors are today crying that their retirement has been ruined, they're screwd and scared. They should have been in cash or bonds for the past 10 years, not stocks. I've done very good in my bond calls during that time frame. It's called 'Wealth Management'. And 'no', I put little faith in e-wave. Your insult of ankle-biting has no place in investing. Are you a paper trader?

Harry, I appreciate your showing some understand. As you know, maintaining control of your wealth, in our Plutacracy, is quite challenging.

Ned

[Genesis]

I follow a similar, more complex, pattern, Yves. My 90-day target (from this morning's opening index averages) on the DJIA is -41%, S&P is -40%, NAZ is -49%. We should find the "bottom" in equities before July 1.

In the same timeframe, Au at +423%, Ag at +1,862%.

If you haven't done so already, you fella's should seriously consider storing 3-4 months worth of canned foods and water. Things could get ugly...

*Nothing I wrote in this posting should be considered trading advice. These comments were written for entertainment purposes only. All investors should conduct there own due dilligence before making any investment decisions*

[Yves]

Genesis , thanks for sharing your target.We seem to be on the same page.I did not label the last A wave down but if my count is accurate the doors are about to open wide and down hard we go .The set up is similar to October. We are about to find out next week.

Yves

[DG]

Ned,

What do you call a completely gratuitous swipe at someone who wasn't even the topic of Yves' post, if not ankle-biting?

As for your rationalization of your "advice", it's lame. If people had put their money into stocks in 1998, they would have had to make a grand total of three trades, had they followed Neely's advice to get out in September of 2000, get back in in the spring of 2003 and get out in the fall of 2007. Almost every IRA or 401(k) has a money market or stable value fund option that would have been perfect for these long-term traders. The fact that now, after 10 years, bonds have eked ahead of stocks in total return, following one of the worst bear markets in history, is hardly justification for your "advice".

And, yeah, I'm going to retire on my "paper trading" profits.

[Mamma Boom Boom]

DG,

Let me provide you with some advise from this 62 year old man, as you called me.

To the best of my recollection, every person, whom I've ever met, and had the attitude "And, yeah, I'm going to retire on my "paper trading" profits.", ended up BROKE and sad.

Very few, if any, bat a thousand! End of story!

Warmly,

Ned

[DG]

Ned,

Let me make it clear to you in plain English because you clearly misunderstood that I was being sarcastic in response to your question of whether or not I was a "paper trader". Have you ever heard of a "paper trader" retiring on "paper trading profits"? I admit, I haven't been around as long as you have, but that would be a new one on me.

IF the S&P goes under 500 and IF it rallies back to 700, THEN my real profits will exceed the amount of income necessary to sustain my lifestyle for the next few decades. I already have a job that pays over 6 figures, which I do enjoy, so I may keep it anyway, but I definitely won't be tied to it.

There ain't gonna be nothing "paper" about those profits, though, IF those two conditions come to pass. Capiche? Is that simple enough for you?

Way to go avoiding the substance of my post on the poor quality of your "advice" of the last decade, too.

[Mamma Boom Boom]

DG,

Main thing is to have fun and enjoy what your doing.

Yes now that you memtion it, it did not explain my Neely poke. Actually, I have more respect for Neely than any other timer. Believe it! But, it just seems everytime he gains enough confidence in a trade to take it to the masses, it turns out to be 180 degrees off. Bad luck?

As for my predictions (advice is for professionals) I would stack my record against anybody. Been trading for 30 years. And my advice is 'FREE', I do it to have fun and enjoy what I'm doing.

I want to end with:
a)we should not be jostling on Yelnick's site.
b) when are you going to grow up to make your own predictions, and not blindly following someone else?

Let's see, which will it be? A? B? I just can't decide.

[DG]

Ned,

I think it's less "bad luck" and more "selective memory" on your part. Whatever, I've got the data, have done the analysis and know what's what and what's not. No need to jostle, but just realize that you come across as immature when you go after people without A) explaining why or B) offering a realistic alternative. Sorry, I don't think waiting 10 years for one asset class to outperform another is even worth the price you're charging for it, i.e. nothing. It's worse than worth nothing because of the opportunity costs involved. Anyone doing asset allocation on your "predictions" missed out on two significant moves of nearly 100% each. If you don't think that impacts those people's retirement opportunities, you're crazy.

Anyway, I see no need to reinvent the wheel vis-a-vis wave theory. When Neely starts going off the rails, I'll jump off the train, but I doubt he will because his foundation is solid. Until then, I'm happy to be along for the ride. I don't have the kind of ego that says if I'm not the one making the predictions, they're somehow worth less. What I like best about Neely's system of rules is that it gives everyone who bothers to read his book and internalize it the opportunity to speak a "common language" of market analyis. To me, that's a huge advance in the ability to share thoughts on where the market has been and is going. I can pretty much predict what Neely will say about any given move in the markets at this point, having read his book many, many times, but I stick with him as a subscriber because he's a good guy and my wave analysis does sometimes miss things that he picks up on. Since he turns out to be right more often than not, I think I'm getting my money's worth in the deal.