Before the Open (Aug 16)

Posted on by Jason Leavitt

Good morning. Happy Tuesday.
The Asian/Pacific markets closed mostly down but only Singapore (down 1.5%) lost more than 1%. Europe is currently mostly down. Belgium, France, Germany and Stockholm are down more than 2%. Futures here in the States point towards a large gap down for the cash market.

I saw a headline yesterday asking if the summer rally could continue. Huh? Summer rally? Three up days in the middle of August constitute a summer rally? Give me a break. The market went through a 4-day stretch were it was down 50 one day, up 50 the next, then down 50, then up 50 – this is movement never seen before. Then it simply followed through for two days and suddenly we have a summer rally? More headlines like this will give me more confidence that at the very least, the lows will need to be tested.
I saw a simimlar headline referring to a week-long oil rally. Huh? I had to go look at the chart because I figured I missed something. Oil had fallen over 30% in just over three 3 months and then moved up 3 of 5 days. This is a rally? It’s a freaking bounce within a newly established downtrend. Is the AP now working with Wall St. to encourage the lay public to buy?
My stance remains the same. Short term I don’t have a clue. Up 50 one day, down 50 the next. Nobody has any idea what the market will do day to day. But on an intermediate and longer term basis, my bias is to the downside until the market proves to me that bias is wrong. Trading wise I’m keeping things short term until this 100-point S&P bounce decides what it ulitimately wants to do. More after the open.
headlines at Yahoo Finance
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Aug 16)”

  1. Today, on the first move down, puts us in short term sideways mode.
    Traders on CNBC are already talking about how we have support at
    this level, support at that level, yatta yatta. My thinking for
    today at least is we go down in the morning session, stall out
    around mid-day and then retrace 50% for a pretty decent close.

  2. More headline news for ya Jason. From Redlion
    Zweig Breadth Thrust Reversal in process. $Study
    We are currently tracking a rare Zweig Breadth Thrust Reversal signal, and it would fair well for all to heed. This signal is very rare and if it fires would signify a reversal strong enough to propel the markets up another 20% over the next 12 months. If it fails, like all the other attempts since March 2009 (the last firing of the signal) it would signify a retest of the lows or perhaps lower lows.

    1. From the Morningstar discussion board.
      Here’s a to the chart.
      The Record High Percent Index is the basis for another popular index called the Breadth Thrust Indicator. First developed by Martin Zweig, the Breadth Thrust Indicator is equal to the 10-day simple moving average of the Record High Percent Index.
      According to Zweig, a ‘Breadth Thrust’ occurs when the Breadth Thrust indicator rises from below 40% to above 61.5% within 10 trading days. The signal occurs when the given market is in the process of changing from an oversold condition to one of strength, but has not yet become overbought. Zweig goes on to say that this signal typically occurs before most bull markets.
      (personally, I expect this one to fail also)

  4. I like this headline:
    Dead Cat’s Bounce: If you throw a dead cat off a tall building, it will bounce. Same is true of the stock market after a nasty tumble. But after the bounce…it’s still dead!

    1. both my dead cats gruesome and awesome have been working well since 2009
      but are now getting old and tired and are coming to usa to get their $500 000 buck retirement benifits
      buffett the hedgie is buying–or is he
      Neal the investor may be averaging down
      JS-the big horifying discusting repulsive terifying BEAR with breight red fur a purple beard,breathing fire holding a pitch fork and carrying a bushy tail is soon to appear
      but i am concerned about my bushy tail,it could thrust me up

      1. JS: You are coming to the USA? Most hotels don’t allow pets
        (gruesome & awesome), so you can stay with me for a few days
        until you find suitable accomodations. HW

        1. gruesome and awesome will attack wall st there in NY,thanks HW
          they often go to soho bars in london after being kicked out of threadneedle and fleets st

  5. A very successful retail trader friend often reminds me, decide if you are going to be a trader, investor, armchair economist or armchair commentator (blogger). Only one of these makes and keeps money.
    Looking to re-enter longs today. Best of luck.

  8. the mcclellan ind and the thrust ind are both at extremes that could produce a gruesome bounce,wait for a test of low for these inds to give divergence and then we get the ew wave 2
    but gruesome says that will be his last bounce for 10 years as he goes into retirement

    2. AussieJS – assuming you’re still around for the day, I’m curious as to your EW count and how you arrived at the conclusion that we’re in or about to enter a wave 2, depending on the index. What chart are you using, i.e. hourly, daily, weekly? Can I assume you counted 5 waves down for wave 1? If so, from where did wave 1 begin?

      1. ndx is in wave 2 up —cant be anything else–that ndx100 –made new high then down then up
        spx–dji could be 4 or creeppy 2
        but the way the eurpoeans are behaving –they have banned wave 2 and 4’s–just impulsvive down

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