Stock Market Indices Discussion: Dow, S&P 500, Nasdaq 100

[MC]

Originally Posted by Amphibithen

Why would you all buy when it's hitting resistance?

x2

That red level would push us to fill the long wick on that wild candle down. That's market excess and there's lots of pain/supply to be found in that dead cat bounce area.

If we hit mid 9000's and show rejection on the tighter timeframes (daily, 60 min) I'll be unloading some more of my 401k into stable value funds as planned. That's the area I could foresee capping this rally.



If we pierce into that red supply zone I could see investing but with a trade style stop. Once inside that range we MUST hold or I would run to the hills as they say. Though all in all I think one is nuts to buy long into all this supply. Bulls either bought awhile ago or they should wait and pray for supply to prove broken and buy new found support. The support would be the top of the red zone and should be confluent with the bottom line of the downward sloping channel. Simple as that IMO.

I'm not saying longs can't squeak more $ out of the rally, just that the upside to downside risk is rather bearish at this point.

[MoneyShaker]

Originally Posted by Lyricist

I'm waiting for this next pullback, which I hope comes soon. RSI and Stochs are screaming for a pullback of some sort. Been stuck in some SRS I'd like to unload.

you should buy URE to rid the pain.

[MC]

This new weekly chart shows the Point of Control being tested already. The green arrow is upside potential (assuming the supply range holds) and the red arrow is the downside potential (assuming the green support levels don't hold). Range bound is ok to make moves in, but either use the range extremes for entry and stops or employ some scaling method using the extreme levels as stops. Or use range breaks to enter of course...breakouts are a very sound way of trading. In range the market is said to be "in balance", and when balance is disrupted it tends to move to the next level of "balance" for testing. Enjoy!

[vtjohn]

Originally Posted by MC

This new weekly chart shows the Point of Control being tested already. The green arrow is upside potential (assuming the supply range holds) and the red arrow is the downside potential (assuming the green support levels don't hold). Range bound is ok to make moves in, but either use the range extremes for entry and stops or employ some scaling method using the extreme levels as stops. Or use range breaks to enter of course...breakouts are a very sound way of trading. In range the market is said to be "in balance", and when balance is disrupted it tends to move to the next level of "balance" for testing. Enjoy!

Thanks MC. Looks like pivot points may be an efficient way to trade the range. Your charts and explanations have been $$ in the bank for me, and I can think of no higher praise to give

[xasdta]

Here is an email from:

David A. Rosenberg
Chief Economist & Strategist Gluskin Sheff
Market & Data Musings
Brunch with Dave

June 4, 2009

Everyone is back in the same trade

* Buy stocks (massive multiple expansion - S&P 500 priced for $75 operating EPS)

* Buy commodities (still long-term bullish but a pullback is definitely overdue)

* Buy non-Treasury bonds (same story as commodities - long-term bullish on corporates, but supply is now coming in droves and being gobbled up - this is NOT the contrarian trade of six-months ago)

* Buy gold (again, in a secular bull phase, but the dollar is not going to zero and being bearish on the greenback has become far too fashionable - especially in the wake of Bill Gross's latest missive; the Euro is saddled with problems at least as deep as the USD, if not deeper)

* And of course, sell Treasuries (that was a good trade coming off the 2% lows on the 10-year note, but what we just saw crammed into six months, which took 48 months to accomplish in the last bear market in govie bonds, was yields soaring 175bps from the low). Sentiment on government bonds is exceedingly bearish and inflation views have become too extreme for my liking. I believe there is a lack of appreciation from what history tells us about the aftershocks that occur after a cycle that was dominated by a credit collapse and asset deflation, as opposed to a garden-variety inventory-led recession. In five words: economic fragility, lingering deflation pressure.

[Runswithscissors]

Originally Posted by xasdta

Here is an email from:

* Buy commodities (still long-term bullish but a pullback is definitely overdue)

After selling off all my positions a couple days ago, I bought back in on my favorite commodities stocks on yesterday's pullback. Smiling now. These have made me big $$$ lately. Damn things are on fire! Watching close to exit again soon though.

[Korey]

Commodities have been easy lately. Just buy the dips lol.

[MC]

Originally Posted by vtjohn

Thanks MC. Looks like pivot points may be an efficient way to trade the range. Your charts and explanations have been $$ in the bank for me, and I can think of no higher praise to give

Glad they help.

[learning]

Anyone willing to take bets on the 3:30 rally? I wonder if it will be on time, as once it becomes too predictable, you cant make money on it.

[Jym]

JP Morgan keeps changing its market pump time. 3:41 yesterday