Wednesday, May 20, 2009
CONCEPT #1: Main Equities[Stock] Market is in decline in spite of the tweaks and whacks laid upon it. Various indexes other than the Dow / SPX reveal that there are just too many stocks out there to stay up all by themselves.
Principle "A": Timing is everything, but gravity rules. Play as they may, the market will continue to decline into July from my current view.
Corollary "1a": Continued "Jawboning", and use of obscure, if not skewed data to be fed into marketplace, "Carpet Bombing Investors with Info" to fatigue them.
CONCEPT #2: Due to continued Liquidity fed into market or cash flow leaving market,
until the cycles for Monetary Metals run their course to the downside, they will shadow the main stock markets.
BREADTH and VOLUME
On the first Chart you see ROBO Market in action, driven by all the fiat money shoved into the hands of banks etc. Lots of it leaked into equities, some was injected. The Black Line is the cumulative number of issues advancing over decliners. So straight line, programmed, IMO.
Now since you can only inject any patient with so much of anything before two things happen, 1/ the injections become ineffective ; 2/ the injections cause organ failure. Note how the ORANGE LINE, which is momentum, DECLINES even in the face of HISTORIC Direct Financial Stimulation. Here is where, even MainLining this patient, injecting Financial Steriods directly into the markets biggest arteries, MOMENTUM Still shows us the injections are become ineffective.
Clearly on the SECOND CHART, the volume bars Under the DJIA CHART show Non-Confirmation of a REAL Uptrend.
Wither goest thou from here?
My selections for longs are few. Since this top started forming, good longs have been few and far btwn. Sliding or Trailing stops, offset by a amount equal to One Standard Deviation or One Average True Range, depending on your anxiety or comfort level. The ATR is tighter, but the STAN DEV will avoid being shaken out so easily.
My current selections, I'd hold relatively fearlessly are CXZ, DEJ, BQI. Up the anxiety level one notch, are FTK, MVG, and under watch, JTX. My high anxiety but tenaciously held positions are FAZ, [ a short ETF], Short MAT [ Mattel], GPS [ GAP],
UN [ Unilever], INTC [Intel].
Now of course, if there was a position to worry my readers the most, it would be that my last selection for the simulation is SHORT the DGL, Gold ETF. That is current and will be so until I receive data to help me change my selection there.
Items I'd like to add to my portfolio at my perception of a bottom reversal in the Monetary Metals would be SVM, AGT, THM. In Canadian accounts I am long RSI/Un.to and FWR.v, and XEG.To.
I am selecting pages in "TA for Dummies" so we can refer to them as we progress.
There is an TA Group Forum I have in Investor Village your welcome to join, if you care to explore TA for yourself, "Stars Lie, Numbers Don't", is the board name, and the link is here:
I think it takes a sign up on Investor Village, which is here:
Either way, good luck and stay vigilant,