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« Predictions 2010 | Main | Consensus 10 for '10 Predictions »

Monday, January 04, 2010

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Milen

I think Yelnick has the best take, and recommendations to watch. However,it doesn't matter which count is correct. The signs, that the market rally is running out of steam is a fact. It’s just a matter of time. Well, important tops are usually a process, not a one day event. Money first flows from more risky assets to more conservative. Then eventually it flees to bonds. And then it goes to cash equivalents. All that takes time. It doesn’t occur from one day to the next.

TC

Milen,

Given that you conveniently ignore providing one single FACT that supports your claim that the market rally "is running out of steam" I find it hard to believe anything that you say.

Michael

Yelnick - - - Saying that Glenn Neely has been rather "squirrely" is being far too kind. He's speaking out of BOTH sides of his mouth with the proverbial . . . "Could go down, but could also blast up to 1200".

How can anyone trade off that information?

Captain Obvious

How can anyone trade off that information?

I'm just guessing here, but maybe that's why Neely isn't currently recommending any trades.

Michael

If you are a TRADER why would you not want to take advantage of an 85 point rally in the S&P up to 1200 if your Neowave count can make a case for such a move?

Care to answer that one, Captain Obvious?
:)


TC

I must admit, that Neely isn't making a whole lot of sense right now. I believe that that he was calling for a rally to "at least 1150" about a week ago before Wave E runs out of time.

He now claims that the S&P must either soar upward this week, collapse, OR do nothing . . . which negates both scenarios.

And people pay for this stuff?

Captain Obvious

If you are a TRADER why would you not want to take advantage of an 85 point rally in the S&P up to 1200 if your Neowave count can make a case for such a move?

You'd have to ask Neely for a specific answer, but my guess is that he'd say that the risk-reward isn't favorable for the placement of a good stop. IF the 85 point rally comes to pass, it's only a missed opportunity. Since opportunities come along all the time in the market, missing one isn't a big deal, unless you're trading for that day's daily bread or something, which is probably imprudent.

TC

Captain,

Neely says that he is ALSO looking for the FIRST MAJOR correction since last July. Thus, he is willing to sell short the March S&P on a sell-stop down at 1083.50 just in case a dramatic sell-off occurs, using 1131.25 as a stop-loss.

Interestingly enough, the trade above risks 47.75 S&P points.

But (in your mind) the upside to a potential of 1200 doesn't provide a favorable placement for a good stop?

Why not use last Thursday's low at 1115.10 SPX?

Captain Obvious

But (in your mind) the upside to a potential of 1200 doesn't provide a favorable placement for a good stop?

Why not use last Thursday's low at 1115.10 SPX?

In Neely's mind, it doesn't and he may (is?) see something different from what you or I see, whether that "something different" is real or not. Yes, last Thursday's low would be a place where an objective stop-loss could be set, though.

Michael

My "Stock of the Year" continues to act well. This is just the beginning. Exact Sciences (EXAS).

joe

I do hope everryone had a really good New Year - and I think this year could be a pretty good trading year.

Yelnik - your overall analysis is very good - if we have completed this corrective wave or are about to complete it 30 S&P points higher in a few weeks - it really doesn't matter in the bigger picture.

I do think some event in Q1 will be followed by a more dramatic event at end Q3 - as you say - as hope becomes change. If we can just trade these moves...

Again - a very happy New Year to everyone.

Joe

Anon

Apropos of nothing, http://tinyurl.com/yea4yry

cloudslicer

Has anybody been watching TYX?

We are now near to testing a MULTI-DECADE channel line.

Hank Wernicki

There are no proven market theories only proven trading systems.

Find one and avoid reading / suffering all the grieve.


joe

Wouldn't a trading system, by definition, imply a market theory?

Joe

twitter.com/DrBubb

Here's Apple/AAPL, which shows this last leg up, is on light volume
http://img20.imageshack.us/img20/1873/aa1y.gif

No "push" this time, just a V-shaped rise on fading volume, which I reckon is long term bearish.
If the correction comes with volume, it may morph into something big

KRG

"He now claims that the S&P must either soar upward this week, collapse, OR do nothing . . . which negates both scenarios."

For each of the scenarios listed above there appears to be a specific neo-wave count with different possibilities in each case

Cheers

Douala D

"PY"... Something you may find interesting. UK Telegraph International Business Editor, Ambrose Evens-Pritchard, raises the specter of a global capital market meltdown in 2010. He lays it out. Not pretty! And finishes with this: "The dollar rally will gather pace. America's economy – though sick – will shine within the even sicker OECD club..... By mid to late 2010, we will have lanced the biggest boils of the global system. Only then, amid fear and investor revulsion, will we touch bottom. That will be the buying opportunity of our lives."

Link: http://tinyurl.com/ybe9sxr

Sendo

Neely talks like a bad broker, S&P is either up, down or go sideway... its all BS.... anyone who has any intelligence will not say something like that.

Michael

Coal stocks continue to surge . . .

ACI, ANR, BTU, CNX, MEE, and CLF.

Captain Obvious

Neely talks like a bad broker, S&P is either up, down or go sideway... its all BS.... anyone who has any intelligence will not say something like that.

I was always told that it's very intelligent to admit you don't know something when you don't know it.

Sendo

Captain.... maybe afterall predictions or forecasting are for fools... ie: Neely is a fool after he declared the top sometime in summer.

Captain Obvious

Captain.... maybe afterall predictions or forecasting are for fools

It depends on the process used to reach the forecasted conclusion. If I forecast that the sun will rise in the west tomorrow because I've "got a hunch it wants to do something different", that's foolish. If I forecast that it will rise in the east because "it's done that every day of history so far", that's a reasonable forecast.

But, that's an easy one, of course.

Anyone who studies Decision Science will tell you that the process you use to reach your conclusions is as important or more important than the conclusions themselves. Since we are not omniscient, that is the best people can do.

I will tell you this. Neely outperforms "buy and hold" and isn't that, on one level, what trading is about? Otherwise, just "buy and hold", right?

Michael

My first boss, Victor Sperandeo once told me to "Observe what is happening and assume that it will continue."

In other words, the TREND is your friend.

I believe that there is a lot of significant value in this rather simplistic statement that can keep a trader out of trouble . . . but that only works if he doesn't have a top or bottom picking Ego.

Captain Obvious

he doesn't have a top or bottom picking Ego.

So, every trader trying to pick a top or bottom is doing so out of ego?

Michael

Captain,

No, I did not say that.

But given how many Elliott Wavers have been trying to "Pick the Top" ( bloggers like Binve, Daneric, Kenny,and newsletter writers like Prechter, etc. ) since last August I think that my statement makes a lot of sense.

Equity markets and various stock market sectors spend an extraordinary amount of time TRENDING, especially given a low interest rate, excessive liquidity environment.

They do not spend a lot of time "reversing" trend. Thus, trying to chase such an absurd premise is pure folly in my opinion.

It is a "trait" that has very little to do with being a successful trader that consistently makes money. Anyone that trades every single day of the year and has actual "skin" in the game is fully aware of this.

Captain Obvious

Equity markets and various stock market sectors spend an extraordinary amount of time TRENDING, especially given a low interest rate, excessive liquidity environment.

They do not spend a lot of time "reversing" trend. Thus, trying to chase such an absurd premise is pure folly in my opinion.

Gee, the market doesn't spend a lot of its time reversing? Let it not be said that you don't have a little Captain in you, only I am referring to Captain Obvious, not Captain Morgan.

What did you do in October 2007, when the market broke to a new price high? Was that the sign of a continued trend? How would you have distinguished between that breakout, which was obviously a peak, and this recent breakout? Other than by hindsight, obviously.

Michael

Captain,

I use several moving averages ( and the second derivatives of each ) to identify and confirm the TREND on an hourly, daily, weekly, and monthly basis.

Divergences showed up in the rates of change and the relationships between my moving averages which lead me to lighten up positions.

The trend change was finally confirmed when a break of all moving averages occured, at which point I stopped playing the long side.

It's a rather simple system that identifies and confirms the trend. I've developed this technical system with the help of a friend of mine over the last two decades.

It has worked extremely well for me, and has kept me IN positions and correctly identifying the TREND longer than I normally would have given my very short-term trading nature, developed over the course of 10 years as a commodity floor trader.

Hank Wernicki


Map the Market, and Don't make the Market fit the Map !!

Michael

For example, take a look at a stock in the coal sector such as Massey (MEE).

Once the stock got back over several MA's in early November and held the low of 28.26 of Oct. 28th, it has been in a very strong uptrend and has not once broken below my "third" MA, thereby keeping the uptrend intact.

The stock is now trading $48 today.

Hank is right.
Simply "map" the market and listen to what it is trying to tell you, and DO NOT FIT THE MARKET to the map!

:)

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