Was surprised that there was not a sell off leading into the weekend, anyone else?  Sold most of my positions for the week leading to a modest profit, but could of held on longer Friday and increased it by ~30%, but who can complain about pulling any profit in these crazy times.  I am happy to see here and in the market overall a more deliberate analysis of the markets and world economies vice the 2007-2008 period.  It will be important over the rest of the year and probably into next year as we will probably see the third major downwave in this bear market rally.  This time, the culprit with be national debts, but that shouldn't be a surprise at this point.  I wish we would see this turning around at some point, but that has not been the case obviously.

I saw an article on CNBC about why you should keep your money in Greek banks (although it doesn't apply much here) and another article about how the market will bounce regardless of the election outcome, but is anyone buying either of those assertions?  I'm not, nothing is being fixed and the can is being kicked down the road with increasing smaller positive results for those measures.  The issue is not if but when (late this year/early next year) and how bad the world markets will suffer from the utter lack of progress in improving the economies of the world since the last downturn.

Happy Father's Day btw, lol

Sold my retail stocks (TGT specifically) in anticipation to the retail spending results that came out a couple of days ago, which ended up being the appropriate thing to do IMO.  8 of 13 tracked categories of consumer spending shown to have declined last month and once car sales are removed, these results showed the largest decline in consumer spending in two years (stat taken from profitconfidential.com).  Aside from the continuing drama known as Europe, let us not forget that we have significant weaknesses here that will continue to make it difficult to rally the markets in a sustainable fashion.  How much of our economy/GDP is built upon consumer spending?  A lot (~70% right?).

Recent market rally...I wonder how much of you was built upon England shoring up Europe's shortcomings with the money printing press.  The hangover will be upon us soon though.  Please be careful this week and watch for the bull trap as things are looking enticing from some technical aspects.  I would reemphasize SJ's 1340 target in his explanation of the impending wave 2.  Even though we summited that level today, it doesn't look promising ahead.  Not saying it is next week or months from now, but we will touch levels lower then we have in the last couple of years.

Disclaimer: profitconfidential pushes hard for gold investments, which I do not support in the current environment.  All these economic situations while valid, are my opinion of where we are going.  I am long JPM, KO, MSFT.  Don't have any shorts nor will I initiate any in the current environment.

Quote:

Originally Posted by z00lander 

 It will be important over the rest of the year and probably into next year as we will probably see the third major downwave in this bear market rally.  

 

 The issue is not if but when (late this year/early next year) and how bad the world markets will suffer from the utter lack of progress in improving the economies of the world since the last downturn.

What bear market? It may be several years before we see a bear market.

The last bear market was in 2007.

Good point Bob. Until proven otherwise we are still in a bullmarket....

Quote:

Originally Posted by rg7803 

Good point Bob. Until proven otherwise we are still in a bullmarket....

I trade the trend and that's all I need. There are short term trends called Corrections. A correction is a short term price decline of 5% to 20% but that is not to be confused with a bull or bear market trend. A market trend is a long-term trend that lasts 5 to 25 years

if what you're saying is true, then the sell off we had from 2007- early 2009 cannot be considered a downtrend. Actually the last time we were in a "downtrend" (according to your definition) for 5years + was during 1930's-1940's if I'm not mistaken..

by your definition we are in a sideways market ranging between 800-1400 for the past 12 years..

Quote:

Originally Posted by BobK 

 

I trade the trend and that's all I need. There are short term trends called Corrections. A correction is a short term price decline of 5% to 20% but that is not to be confused with a bull or bear market trend. A market trend is a long-term trend that lasts 5 to 25 years

Correct, if you mark your trend from the bottom of the last significant downturn, then yes you could say we are in a bull market.  Like you said though, it could last as much as 25 years, so why is it appropriate to choose the last bottom as your starting point vice the peak in 2007 or the time before the previous bottom to that?  I only ask because it seems nebulous to determine where you will take that trend.  On the flip side, EW subscribes to the theory that there will be another (third) significant downturn.  I know what they base their assumptions on and they've shown historical cases where this pattern has occured in the markets.

Maybe you'll be right though, but I don't see the justification for calling the uptrend from the bottoms in 2009 a bull market unless you can also entertain that we are in a downtrend from the highs in 2007.  Why is one correct over the other?  And for that fact, why couldn't we call it a sideways market like charulz highlighted is the case if you want to draw your trend from the highs in beginning part of the century?  Ultimately we'll find out within the next year who is correct, but I would be interested in knowing your methodology for when and where you choose to start your trend lines.

Bob are you saying that you trade 'short-term' trends?  If so then that makes sense for what you advocate.

Quote:

Originally Posted by z00lander 

Bob are you saying that you trade 'short-term' trends?  If so then that makes sense for what you advocate.

You got it. Notice above I posted 2 up trends in the above charts, short and long. I trade futures and the following chart shows 3 possible trades and the start of a fourth. The chart covers the last 3 sessions. I do not use stops and I don't expect to hit the perfect top or bottom, that's why no stops. Price will always return but you could end up with a long term hold instead of a few days.

There will always be a few exceptions but you'll be way ahead of the game just trading the trend.

Was just going over the UUP chart to try to gain some more perspective .....  With the daily you can see it ran out of mustard trying to break above that $22.85 mark and has now pulled back below it with support back around $22.45. This is confirmed by the negative divergence of the price action from the volume, as well as the short term CCI.  It's also worth noting that little area I circled at the very end of the volume chart.  Technically sell volume has decreased overall, but in the last 8 candles you can see the scales tipping towards the sellers again.  In fact, sell bars have been out-sizing buy bars since May 29th.   Based on the candles I don't see how it does't temporarily re-test that $22.40's support level.  I'm leaning towards it being weak support and we'll be seeing $22.20's again.  This also coincides with the weekly chart. 

The weekly chart gives an interesting perspective.  It clearly shows the bounce on the dollar as losing some mustard with negative divergence between price and volume.  Both short term and long term CCI's hit a +200 climax, which typically signal pull backs from buyer's exhaustion.  Support at creek/POC is in the area around $22.20's, but as you can see it ran out of motivated buyers to really take that area out and POC's are always resistance until broken and held.

Daily chart of the SPY coincides with the pullback we're seeing in the dollar.  As you can see the next value area isn't that far away and neither is the dollar's short term support levels as shown above.  We have a falling wedge that was broken to the upside, a bullish sign.  The 5th wave was completed, there was a positive divergence, and we bounced.  We have the obvious inverse H&S that has been talked about in here ad nauseum.  It's important though to pay close attention to the price action vs. the volume.  There was a sell climax with decreasing sell peaks followed buy a round of brand new buyers.  You can see the significant increase in the buy volume from the bottom as we broke above the POC.  It is extremely important to have significant volume when attempting to break/hold the POC, since buyers will be absorbing trapped sellers at that level.  That is precisely what we didn't see in the UUP charts.

Here's what I have on UUP using a 5 minute. The downtrend started on Tue and it's now way below the standard auction. I would expect a rebound to at least 22.62 and should go to about 22.90.

Quote:

Originally Posted by BobK 

 

What bear market? It may be several years before we see a bear market.

 

The last bear market was in 2007.

 

Bear Market is the term CNBC uses to make money off you.. As well as 21st century basic finance and economic principles... It doesn't really exist in its simplistic sense...

A Bear market is an environment created through circumstances relative to many many things.. 2007 wasn't really a "bear market" because one, the term doesn't really exist in it's simple sense (please don't link investopedia), and two, it was just panic selling and stop clearing... News or conspiracy driven it doesn't matter, price was moving based on a unpredictable mode more so than other times, which is characterized by what ever... There is no answer or special technical pattern or magic theory of why price did what it did each day.. Irrationality has no answer, and at times like that there is no irrationality indicator on your charts to provide you with that information.. More so experimental than anything... 

Trading is not about going into a trade and just counter trading and expecting it to go back to a relative mean.. without a defined exit strategy and hard+reactive+mental stops It's about taking the best edge you can find with your own mind in terms of increasing your probabilities of #winning.

wut bear market bob?

Van Tharp: http://www.vantharp.com/Tharps-Thoughts/580_June_06_2012.html

Trading volatility without different stops will be an eye opener.

market going up for now though... Friday's action is no surprise..

I should also note the UUP retracement has fallen further than 31.8% FIB on this move up from May.  It is now headed to the 50% area which is the $24.40's level that I spoke of as temporary short-term support.  Dollar bulls absolutely must defend that level, otherwise a more bearish tone will re-enter the picture.

i wonder if we rally monday & tuesday, then have a sell off wednesday no matter what the news is.

disclaimer: i have not had sleep for 30 hrs so i'm thinking like a retard. but sometimes thinking like a retard is the best route to take when trading