The market broke into the Box of Bulls today, and halted at the first Fibonacci level (click chart to enlarge):
The SPX came up a little shy of the 1029.21 level at the green arrow on the chart. However, the futures hit their first fib level in their box right on the nose (not shown). You will often see the futures hitting important targets before the SPX itself does.
Now look at the red arrow on the chart at June 11th. As soon as the SPX broke into the Box of Miracles and tagged the first fib level, it went into a month-long correction. The market probably won’t repeat history exactly, but at a minimum, I would expect a drop back to the 1014 area to back-test the breakout.
Matt, thanks for the update & your suggestion. I use drinkorswim and it seems it can only displace moving averages.
Mitch, as the oldest bar gets removed from the calculation, indicators move even when price does not move. The brief downturn we had earlier this week was pretty likely as the stochs were more likely to go down than up (of course not true for a violent move up)
Bank Failure #78: ebank Atlanta, Georgia
1 down 5 more to go for the weekend?
8-20-2009.. another repeat of 7-13-2009 ? http://bit.ly/4xZ0y
CapitalSouth Bank, Birmingham AL
First Coweta Bank, Newnan GA
K,
RE: “Professionals are fully invested; Individuals are mostly under-invested.”
With light volume, I would think there were few sellers. While individuals catch up with the professionals, it will continue moving the market up. All a logical guess on my part.
Sorry about the link I posted at 6:35Pm. looks like it might have been popular and my site is down…. check back later
Am in love again!!!!!!!!!!
http://www.calculatedriskblog.com/2009/08/meredith-whitney-300-banks-to-fail.html
Meredith Whitney: 300 Banks to Fail
Bank Failures:
#79: CapitalSouth Bank, Birmingham, Alabama
#80: First Coweta, Newnan, Georgia
#81: Down Goes Guaranty
add this to
K Says:
August 21st, 2009 at 5:40 pm
Bank Failure #78: ebank Atlanta, Georgia
1 down 5 more to go for the weekend?
and you get 4 down 2 to go? ( I doubt it will get there but I feel good)
Matt,
Is the next hierarchy in boxes a “box of chocolate”? You never know what you’re going to get.
I realize these are called “banks” and certainly there is impact on local levels along with “every little bit adds up” effect. But even with 300 banks going under, their accounts will be picked up by larger fish and it will be business as usual and in some cases, better than usual.
I’m trying to be an optimist here so let me know how I’m doing.
How are you doing?
http://www.safehaven.com/images/steiman/14264_a.png
In my experimenting with trendlines, I posted that SPY could breakout of a symmetrical triangle. The measured distance was calculated from near the initiation of the pattern. It was calculated to go up an additional 4.5 points. It did break out to the upside of that pattern but only traveled half way to the target.
Here is that same chart with the original trendline:
http://www.freestockcharts.com?emailChartID=afab9ba1-7d7d-49a7-ab3c-505171546be6
K,
Good chart of the SPX. I never noticed the weekly H&S. That must have been what trumped the daily inverse H&S. Interesting the use of 70MA.
Matt, in the box of miracles the retracement play you are suggesting happened every time a higher fib line got hit. Also it should be noticed most moves between the lines are linear (gaps?) eg who is not positioned correctly takes a hit and who is not in never gets on the train.
The dax 5505 level has not been hit but we are close, so maybe we see a stronger early European trading and then a reversal. Or the rule in the box of bulls is: No pullbacks
George, the troubling thing is that not only the smaller community banks take a bit but also banks of close to system-relevant size like Colonial (into bbt) and Guaranty (into bbva). And there is the discussion if the FDIC has money left or not…
re the dollar and liquidity interesting perspective here: http://www.zerohedge.com/article/time-different-reverse and the comment by “AKA Clark”. From what I see the dollar is more likely to pass 1.44 than not. Larry, you remember the perfect setup? Dollar and oil have not met their targets yet, stocks are overextending.
Yerk,
Yes, the FDIC is taking a huge hit on those banks. Most likely some payola goings on inticing the bigger fish to incorporate these failures. I can’t imagine the deficits at this point that don’t even show up on the “debt counter”. But these FDIC expenditures are, for now, backroom economics. They won’t come to the forefront until the smoke clears and we realize the holes in our pockets.
Hard to reconcile with the insider selling going on, but noteworthy.
http://www.financialsense.com/Market/pretti/2009/0821.html
Check this out. Coppock curve indicator, one I’ve never heard of before.
I’ve clicked on some of the hyperlinks to research the settings and here’s what I found: “You can keep track of it yourself. Here’s the recipe: you need historical monthly Dow Jones Industrial data. You add the 14 month ROC to an 11 month ROC, then you take a 10 month (simple linear) weighted moving average of the result. That’s it.”
I haven’t nailed how to use it but should be easy to find.
http://tinyurl.com/kwa3jv
Yerk,
Good article. Finally, a leading indicator?
George i’ve used the coppock with forex I believe. than i lost track of it
my spy 100 puts gained value
In this latest release from China’s Human Resources, the country’s planners worry about finding 12-million jobs. That is the gap between the number of positions required to support 8% planned GDP growth, and the number the economy actually seems to want.
I had a dream that we crash august 27
might have been sept 26 not sure. was I in the right year? anyways enough crazy talk. one of those days will need to be watched.
Yerk, thanks for the link.
Asian CB’s look at Oil and Food (rice) prices. Rice is not an issue for the next couple of months. Oil might be.
George, Congress needs to approve increased funding of FDIC. I think they are on vacation.
30 short
K, central planners are full of hot air. China don’t need anything, their people can return to farms or find domestic-oriented jobs during a temporary recession. Having said that, central planners run the show, and that means more liquidity, or at least attempts to constantly increase liquidity.
The liquidity provisioning is getting more and more absurd. Whole of AIG’s free float trades within a day and
“If the SEC considers 5 stocks accounting 30% of all NYSE volume as a normal phenomenon, one wonders just what would cause their computerized alerts to actually go of? Well, aside from a market crash, of course, which would prompt the uptick rule to be implemented within minutes of any sudden price drop, as well as the prohibition of shorting of all financial stocks, at least if one tries to determine their pro-cyclical response MO based on empirical evidence.”
http://www.zerohedge.com/article/five-financial-stocks-dominating-market-volume
oil
http://farm3.static.flickr.com/2445/3845487319_896ecefb98_o.jpg
I received my new mattress and bed today. extra firm so i can have some support when my accounts crash hard.
now next up is a good computer chair that will help my posture and also feel comfortable. any ideas?
K the supporting trend line since the March lows has been tested and held. Break out depends on the dollar in the end – as with everything…
Re chair: http://tinyurl.com/lzdvo8
Sorry Yerk,
I’l have to pass on the chair mainly because I suspect that’s what Matt has and i don’t want to be a copycat
K, you would only be a copy cat if you were to follow your system… And I thought he uses something like this: http://tinyurl.com/mqr8n9
Here is George’s set-up (without the nuts): http://tinyurl.com/nbnz7y
Well,
I own a chair at the boston stock exchange but they got bought out so I need to replace my old chair. Hence I need either a tree stump or a real chair like the one in George’s setup but comfier. (I tend to sweat when sitting down because of trading pressure I stop breathing then I miss my system’s calls.)
If you want to go for the best (from my butt’s experience) go for Recaro. I can’t recall which trade floor had them but they were great. Pricey though. The chair I’m using now is too comfortable as I tend to fall asleep during trading hours… especially on days like last Friday.