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The Bottom Line

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Posted by Don Vialoux - Timing the Market

on Monday, 27 August 2012 08:10

The Bottom Line

Equity markets on both sides of the border have had a good ride since their lows on June 4th. Now they are showing short and intermediate technical signs of an intermediate peak. It’s time to take profits in selected seasonal trades such as agriculture and leisure & entertainment. Other seasonal trades such as energy and gold have additional intermediate upside potential, but no longer are buy candidates. A cautious stance appears appropriate until the second half of October when upside opportunities are expected to re-appear.


Economic News This Week

The June Case/Shiller 20 City Home Price Index to be released on Tuesday at 9:00 AM EDT is expected to improve on a year-over-year basis from -0.7% to -0.3%.

The August Consumer Confidence Index to be released at 10:00 AM EDT on Tuesday is expected to slip to 65.5 from 65.9.

The Fed Beige Book is scheduled to be released at 2:00 PM EDT on Wednesday.

U.S. second quarter revised real annualized GDP to be released at 8:30 AM EDT on Wednesday is expected to be revised upward to 1.7% from 1.5%.

July Personal Income to be released at 8:30 AM EDT on Thursday is expected to increase 0.3% versus a 0.5% gain in June. July Personal Spending is expected to increase 0.5% versus no change in June.

Weekly Initial Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to slip to 370,000 from 372,000 last week.

Canada’s June GDP to be released at 8:30 AM EDT on Friday is expected to slip to 1.6% on a year-over-year basis versus growth at 1.9% rate.

The August Chicago Purchasing Manager’s Index to be released at 9.45 AM EDT on Friday is expected to slip to 53.5 from 53.7 in July.

The August Michigan Consumer Sentiment Index to be released at 9:55 AM EDT on Friday is expected to remain unchanged at 73.6.

Other Issues

The VIX Index jumped 1.73 (12.9%) last week. Short term momentum indicators are trending higher from oversold levels.

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The earnings focus this week is on the Canadian banks. Look for modest gains on a year-over-year basis. At least two of the banks are expected to increase their dividend.

Economic reports this week are expected to have a mildly negative impact on equity markets (Consumer confidence, Chicago PMI, Michigan consumer sentiment).

Macro news heats up this week. The focus is on Bernanke’s speech next Friday at 10:00 AM EDT and Draghi’s speech on Saturday morning. Other events to watch include Eurozone consumer confidence on Thursday and China’s PMI next Saturday (estimated to fall from 50.1 to 49.8).

Short and intermediate technical indicators for most equity markets and sectors are overbought and are showing signs of rolling over. Mary Ann Bartels, Merrill Lynch’s technical analyst predicted downside risk by the S&P 500 between now and the end of September at 8-10%. Following is a link from CNBC to her video: http://www.cnbc.com/id/48756751

North American equity markets have a history of moving lower from the beginning of September to mid-October during a U.S. Presidential election year (particularly when polls show a close race. Thereafter, equity markets move higher regardless of who wins.

September is the weakest month of the year for North American equity markets. This is the month that analysts review their estimates for the current year, realize their estimates are too high and revise them accordingly. History is about to repeat.

Other issues that could impact equity markets include Hurricane Isaac, the Republican convention and increasing media comments about the possibility of Israel attacking Iran before the Presidential election.

Cash on the sidelines on both sides of the border is substantial and growing. Bank of Canada’s Mark Carney highlighted the situation in Canada last week. However, political uncertainties (including the Fiscal Cliff) preclude major commitments by investors and corporations before the Presidential election.

Equity Trends

The S&P 500 Index slipped 7.03 points (0.50%) last week. Intermediate trend changed from neutral to up when the Index briefly moved above resistance at 1,422.38. However, the Index also recorded a bearish key reversal last Tuesday implying the likelihood of at least a short term peak. The Index remains above its 50 and 200 day moving averages, but is testing its 20 day moving average. Short term momentum indicators have rolled over from overbought levels and are trending down.

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Percent of S&P 500 stocks trading above their 50 day moving average fell last week to 73.40% from 81.40%. Percent is intermediate overbought and has rolled over from above the 80% level, a frequent indicator that the Index has passed a short term peak.

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Percent of S&P 500 stocks trading above their 200 day moving average slipped last week to 70.40% from73.40%. Percent is intermediate overbought and showing early sign of peaking

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The ratio of S&P 500 stocks in an uptrend to a downtrend (i.e. the Up/Down ratio) slipped last week to (279/127=) 2.20 from 2.26. Twenty three stocks broke resistance and 24 stocks broke support (mostly utility stocks).

Bullish Percent Index for S&P 500 stocks increased last week to 70.40% from 70.00% and remained above its 15 day moving average. The Index is intermediate overbought.

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The Up/Down ratio for TSX Composite stocks increased last week to (151/73=) 2.07 from 1.72. Twenty stocks broke resistance and two stocks broke support.

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Bullish Percent Index for TSX Composite stocks increased last week to 62.60% from 60.57% and remained above its 15 day moving average. The Index remains intermediate overbought.

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The TSX Composite Index slipped 7.66 points (0.06%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought and showing early signs of rolling over. Strength relative to the S&P500 Index has been negative, but is showing early signs of change.

clip image008_thumb9

Percent of TSX stocks trading above their 50 day moving average increased last week to 72.36% from 69.92%. Percent is intermediate overbought above the 70% level. Peaks from above the 70% level normally lead to at least a short term correction by the Index.

clip image009_thumb11

Percent of TSX stocks trading above their 200 day moving average increased last week to 51.63% from 48.37%. Percent is intermediate overbought.

.....for 40 more charts and commentary go HERE

 

Don Vialoux

Don Vialoux has 37 years of experience in the Investment Industry. He is a past president of the Canadian Society of Technical Analysts (www.csta.org) and a former technical analyst at RBC Investments. Don earned his Chartered Market Technician (CMT) designation from the Market Technician Association in 1995. His CMT paper entitled "Seasonality in Canadian Equity Markets" was published in the Spring-Summer 1996 edition of the MTA Journal. Don also has extensive experience with Exchange Traded Funds (also know as Index Participation Units) as well as conservative option strategies. In 1990 he wrote a report that was released in the International Federation of Technical Analyst Journal entitled "Profiting from a Combination of Technical and Fundamental Analysis". The report introduced " The Eight Phases of the Stock Market Cycle", an investment concept that continues to identify profitable entry and exit points for North American equity markets.   He is currently a member of the Toronto Society of Fundamental Analyst’s Derivatives Committee.   Now he is the author of a daily letter on equity markets available free on the internet. The reports can be accessed daily right here at www.dvtechtalk.com.

Impossible! That’s what institutional investors say about "Timing the Market". Mr. Vialoux will explain that, indeed, it can be done with the appropriate analysis. He also will explain why timing the market will be important during the next decade. Buy and Hold strategies are not working anymore; Investors are looking for alternatives. Mr. Vialoux will demonstrate four techniques that can be used to time intermediate stock market swings lasting 5-15 months. The preferred investment vehicles for investing in intermediate stock market swings are Exchange Traded Funds.

Security positions held or not held by Mr. Vialoux will be indicated at the end of each Tech Talk report.

Comments in Tech Talk reports are the opinion of Mr. Vialoux. They are based on technical, fundamental and/or seasonal data that is believed to be accurate. The comments are free. Mr. Vialoux receives no remuneration from any source for these services. Comments should not be considered as advice to buy or to sell a security. Investors, who respond to comments in Tech Talk, are financially responsible for their own transactions.

All charts in Tech Talk come from StockCharts.com. Stock Charts can be accessed at no cost throughwww.stockcharts.com.

 

 

 

 



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Stocks & Equities

Markets are Rigged…...So What? - Is The Cult of Equities Over?

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Posted by Chris Mayer - Comment by Peter Grandich

on Friday, 24 August 2012 00:48

Peter Grandich: "The market itself is not what it once was. It has really become one big crap shoot. A week doesn't go by when there isn't news of somebody who has illegally or in some way didn't go about it the right way, used the market to a disadvantage or advantage over the general public. And I also think that while that might have spooked the retail person out I believe that continues in many areas unabated.  We saw just a few weeks ago a computer error, just one entry by a programmer almost wiped out and severely wounded a major brokerage house. That's how big and bad the Casino has become and one day that will come back to bite us in a very bad way but for now its really become more like a casino than what was originally intended....a place where you could purchase part ownership in a business but that isn't what really drives the market anymore".

What really concerns Peter is the complacency of people who have accepted what the market has become, a place where more and more evidence comes forth that the markets are not fair, that it is heavily tilted against individuals. According to Peter  there doesn't seem to be any change coming, nor desire to change from the regulators  who have accepted that it is the new norm".

Markets are Rigged…So What?

 

Great gobs of money continue to drain away from stock mutual funds. And even some big-name investors have put up the white flag. Louis Bacon famously gave back $2 billion to his investors a couple of weeks ago because, he says, he can’t figure the market out.

This has led some to say that the era of stocks is over. “The cult of equities is dying,” writes the oft-quoted Bill Gross, who manages money at Pimco. “Like a once bright-green aspen turning to subtle shades of yellow then red in the Colorado fall, investors’ impressions of ‘stocks for the long run’ or any run have mellowed as well.”

Well, maybe…

I’m with David Goldman, who writes in the Asia Times under the penname Spengler that Gross is only “half-right.” The market, as always, has its enthusiasms. He writes:

Visible and reliable cash flows trade at an unprecedented premium as bond yields collapse. Valuations of utility, tobacco, energy trust and other big dividend payers are stupidly rich and are likely to remain so. A sea change in equity valuations has put a premium on secure cash flows while amplifying the effect of uncertainty. It is possible to measure these changes by a number of statistical means, some direct, some indirect.

Goldman points to mining stocks, which are very uncertain and have returned a negative 24% in the last two years. Utilities, by contrast, are very stable. Utilities have returned 30% in the last two years. That’s very frustrating for those holding mining stocks.

He offers more evidence, but you get the idea. Stable, predictable cash flows and yields are popular. Unstable, uncertain cash flows with no yield are not. (Eventually, this will break. Timing is, as always, uncertain.)

Second, I wonder if the points Gross raises are even relevant. I mean, investors have been yanking their money out of stock mutual funds since the crisis of 2008. The market has more than doubled since. And it is now within spitting distance of all-time highs.

Volume, liquidity, public participation in equities… All of these are overrated concepts. Market values can move dramatically with hardly any volume at all and be just as real as a change accompanied by lots of volume.

Beyond these objections, though, I think there is some truth to what Gross is saying.

I hear more and more people say the market is rigged against them. They say it is a game for insiders to fleece gullible outsiders. Wall Street has not helped this image at all. There seems to be no end to lurid scandals or crises of confidence in the system.

I have to say I, too, have felt this way more often of late. However, I believe there are ways to invest safely and feel good about it. You can ignore the scandals. You can ignore Wall Street.

One way does involve direct investments in stocks, but by paying careful attention to the tenets of what I call the CODE System:

 

  • Cheap — as measured by stocks trading below replacement costs or below private market value
  • Owner-operators — as measured by high insider ownership of the people in charge and/or a good track record of delivering results for shareholders
  • Disclosures — which means a business we can understand and that reports results with good disclosures. Transparency is another word for the virtue we seek here
  • Excellent financial condition — as measured by a relative absence of liabilities, lots of cash and/or cash flow and the ability to “do deals” (i.e., borrow at super-attractive rates, take advantage of opportunities, convert assets to other uses, etc.).

 

I like to call this philosophy “investing like a dealmaker.” It is one I’ve distilled from a decade of experience as a corporate banker doing deals, along with my own ongoing two-decade study of investing. Of course, I’ve also managed money on my own account all along the way.

Another way to beat rigged markets is to invest in funds or private partnerships that also pass the CODE test.

For example, you can easily buy shares in Gabelli’s Focus Five Fund (GWSVX). This is a fund with a well-defined mission and cut from a process that has produced stunning results. Own some shares and sit on them. Let portfolio manager Dan Miller do the hard work for you.

So my ultimate answer to Gross is this: Who cares? For those of us willing to dig, there are always plenty of opportunities — some of them in the stock market and some not. The question is not about any cult of anything. It’s about what makes sense and what doesn’t. Whatever other people do or think is irrelevant.

I’ve been particularly influenced by the ideas of Martin Whitman, who for years managed the Third Avenue Value Fund. He’s also written a pair of excellent, though technical, books that express similar ideas: Value Investing: A Balanced Approach and The Aggressive Conservative Investor. (Far less technical, though written in the same spirit, is my own first book, Invest Like a Dealmaker: Secrets From a Former Banking Insider.)

In my Capital & Crisis newsletter, I’ve been more draconian in applying the CODE of late, which in part has accounted for an itchy trigger finger in selling positions. The time to get tough is when the market is merrily rolling along. Before things roll over — not after. Otherwise, I’m happy to sit with my cash for a while until an extraordinary new opportunity opens up.

More time and care yield a much more-satisfying result. This is the way it is in life. Investing is no different. The results will be better and more satisfying than if we try to take shortcuts to find and trade more ideas. In my mind, it’s a lot like finding and eating good food.

Last night, we ate dinner on the back patio amid the hum of cicadas. We had basil from our garden, tomatoes from my in-laws’ garden and cheese from a local farm. Of course, it would be easier to just buy tomatoes and cheese from the grocery store. But it would not be the same.

I grilled chicken thighs over hardwood charcoal. (We raise chickens, but for eggs.) It’s a rare thing to do it this way nowadays. It takes more time. You have to light the fire and let the coals ash over and spread them around. The heat is uneven and you have to watch more closely what you are grilling.

I remember one little guest asking once, “What’s that?”

“Charcoal,” I said.

“Oh,” he said. “My dad just turns it on,” he said.

Yes, it would be faster to have an electric grill that you just turn on. But I can’t help but think of the words of that great eater (and cook and writer) Nicolas Freeling. “Nothing, of course, could be more stupid than an electric barbecue,” he writes in his classic The Kitchen Book. “The principle of a grill is that the food should meet smoke as well as heat.”

Of course, it would be much easier to just buy ticker symbols based on what you hear other people tell you on TV or what you hear in the news, rather than do all this research. But the result, like a store-bought tomato, is very different from the juicy blood-red tomato from a home garden. It is the difference between the work of an electric grill and that done by flames and smoke.

Everyone is always in a hurry, it seems to me. I say relax and slow down with your life and money. Enjoy, savor and seek out quality over quantity.

I just finished reading Bill and Will Bonner’s book, Family Fortunes: How to Build Family Wealth and How to Hold on to It for 100 Years. The key to old money — those long-lasting fortunes — boils down to one thing. “The secret is simply this,” the authors write: “The rich take the long view.”

They go on:

“If you look carefully, almost all ‘Old Money’ secrets can be traced to a single source: a longer-term outlook. The truly wealthy are careful to spend their money on things that hold their value over time…

“Serious Old Money investors barely follow the news and never react to it. They know that the really important trends take years to develop and then many years to play themselves out. You can take your time… months… years… before making a decision. There is no need to feel rushed…

“Investment success happens by taking big positions in big trends and leaving them alone for a long time.”

Not easy to do, but I think this is right. It is something to shoot for.

Regards,

Chris Mayer,
for The Daily Reckoning


Chris Mayer

Chris Mayer is managing editor of the Capital and Crisis and Mayer’s Special Situations newsletters. Graduating magna cum laude with a degree in finance and an MBA from the University of Maryland, he began his business career as a corporate banker. Mayer left the banking industry after ten years and signed on with Agora Financial. His book, Invest Like a Dealmaker, Secrets of a Former Banking Insider, documents his ability to analyze macro issues and micro investment opportunities to produce an exceptional long-term track record of winning ideas. In April 2012 Chris will release his newest book World Right Side Up: Investing Across Six Continents

Video Report: Legally Collect Thousands of Dollars Each Year…From the OTHER government-backed retirement program! Finally – you can get on the inside! Here’s why you must do so now…



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Stocks & Equities

Copper Prices Signaling Stock Market Top

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Posted by Chris Vermulen - GoldandOilGuy.com

on Thursday, 23 August 2012 08:30

The past 5 – 6 weeks have seen equity prices move considerably higher amid growing concerns regarding the European debt crisis, the instability of the Middle East, and ultimately the potential for a major economic slowdown in the United States.

U.S. equity indexes have continued to climb the proverbial “Wall of Worry” since the first week of June and have put on an incredible run. This past Friday saw the S&P 500 Index (SPX) post the highest weekly close of 2012. The perma-bears have been calling for a top and continue to run scared as light volume and volatility have given the bulls an edge during August.

The next key overhead resistance level for the S&P 500 Index to hurdle is the 1,440 resistance zone lingering slightly overhead. I try to refrain from calling tops or bottoms as I feel its a fool’s game that ultimately humbles most market prognosticators. If calling tops and bottoms was easy, investors and traders alike would be able to produce monster gains all the time with uncanny precision.

Instead of trying to predict where the S&P 500 Index will find resistance or create an intermediate to longer-term top, I will simply posit some technical and macro-economic data that indicates we are likely closing in on a major top.

As stated above, the recent rally we have seen has taken place on relatively light volume and plunging volatility as measured by the Volatility Index (VIX).

trading-Chart1

As can be seen above, Friday’s weekly close for the VIX was the lowest in 2012 and ultimately one of the lowest closing price levels in several years. While the VIX is trading at a major intermediate low, there remains a lower support level going back to late 2006 and the early part of 2007 around the 10 price level.

The perma-bulls would argue that we could see those 2006 – 2007 lows tested, but based on September monthly VIX options the option market seemingly is arguing that we are approaching an intermediate low in the Volatility Index. The chart below illustrates the September VIX option chain based on Friday’s closing prices.

trading-Chart2

Price action is never wrong, but many times a great deal of information can be acquired by simply reviewing option prices. As can be seen above, the VIX closed on Friday at 13.45, a new 2012 low. However, when we consider the prices in the VIX September option chain shown above I would point out that the VIX September 13 Puts are 0 bid.

What this essentially means is that the VIX options market is saying that the Volatility Index is unlikely to move below 13 in September. For readers unfamiliar with options, selling a naked put or using a put credit spread are two trading structures that are bullish regarding the underlying asset which in this case is the VIX.

The VIX September 13 puts are offered at 0.05 on the ask, but are at 0 on the bid. This means that the VIX market makers are not expecting to see the VIX move below 13. Clearly this is not a guarantee as there is never a sure thing in financial markets. However, this pricing situation for the September 13 VIX Puts is favorable for the equity bears in September.

In layman’s terms, the VIX needs to move higher in the next 3 weeks based on the fact that the September VIX 13 Puts are 0 bid. This is one of several clues that we could be nearing a major top in the S&P 500 Index in the very near future.

When we look at a weekly chart of the S&P 500 Index (SPX) it is obvious that we have a major longer term breakout which occurred this past week. However, there remains additional resistance overhead in the 1,440 – 1,450 price range.

trading-Chart3

While 1,440 might be a major area where a significant top could form, a rally above this level cannot be ruled out entirely. However, the chart above gives traders and investors a context for where possible tops could form.

A reversal could play out almost immediately at the current levels or we could move considerably higher before finding major resistance that holds. For now, we do not have enough evidence based on the S&P 500 Index price chart to proclaim that a top has formed or will form in the near future.

Another underlying asset that I monitor closely is copper futures. Generally speaking, if copper futures are rallying economic conditions tend to be strong. The opposite can be said when copper futures are under selling pressure. Recently copper futures prices have been trading in a relatively tight trading range, but the longer-term weekly chart shown below demonstrates that should prices start to selloff, a major selloff could transpire.

trading-Chart4

As shown above, there is a monstrously large head and shoulders pattern (bearish) that goes back to early 2010 that has formed on the weekly chart. Should the neckline of this pattern get taken out on a weekly close the selling pressure that could transpire could be devastating regarding the price of copper.

However, a major selloff in copper would also indicate that economic conditions were weakening globally. If copper triggers this bearish pattern, it would likely not be long before other risk assets followed suit.

In addition to the possibility that major selling pressure could await copper should that pattern trigger, another macroeconomic data point would argue that economic conditions are already starting to contract. The chart shown below, courtesy of Bloomberg, illustrates the amount of waste hauled by railroad cars and the implicit correlation to U.S. gross domestic product (GDP).

trading-Chart5

Recently Zerohedge.com posited an article that featured this chart and a link to that article is found HERE. The article and the accompanying chart demonstrate that as more products are produced, additional waste can be expected. As shown above, the amount of waste being produced and hauled by railcar has fallen off a cliff and should longer-term correlations remain intact a contraction in U.S. GDP is likely not far away.

There are a multitude of other topping triggers that I follow that are all screaming that a major intermediate and possibly even a longer-term top is nearby. However, at the moment the price action in the S&P 500 Index (SPX) is arguing otherwise.

Picking tops and bottoms in advance is extremely difficult and generally foolhardy, however when multiple triggers are going off regarding a possible type I pay close attention to price action. While I will not go as far as to say where specifically a top in the S&P 500 Index will form, I believe that a top is forthcoming and could even occur in the next 2 – 3 weeks.

Price is never wrong, and eventually I suspect that price will tell us what we wish to know. For now, I am going into the next few weeks with caution regarding the upside in risk assets. However, it is important to point out that I am not looking to get short risk assets either.

My research indicates that a major inflection point is coming and it could coincide with the Federal Reserve’s Jackson Hole summit. It could coincide with an event that we are unaware of as well. At the moment risk in either direction seems high and caution regardless of directional bias should be exercised. The next few weeks should tell the ultimate tale.

By Chris Vermeulen and J W Jones

If you would like to receive my free weekly analysis like this, be sure to opt-in to my list:http://www.thegoldandoilguy.com/free-preview.php

By Chris Vermeulen 
Chris@TheGoldAndOilGuy.com

Please visit my website for more information. http://www.TheGoldAndOilGuy.com

If you are looking for a simple one trade per week trading style then be sure to join www.OptionsTradingSignals.com today with our 14 Day Trial.

 

J.W. Jones is an independent options trader using multiple forms of analysis to guide his option trading strategies. Jones has an extensive background in portfolio analysis and analytics as well as risk analysis. J.W. strives to reach traders that are missing opportunities trading options and commits to writing content which is not only educational, but entertaining as well. Regular readers will develop the knowledge and skills to trade options competently over time. Jones focuses on writing spreads in situations where risk is clearly defined and high potential returns can be realized. 



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S&P 500 ready for 10% correction and bad 2013 says Marc Faber

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Posted by Marc Faber via CNBC

on Wednesday, 22 August 2012 07:29

Legendary investment adviser Dr Marc Faber thinks the S&P 500 is on the brink of a 10 per cent correction that would herald QE3 money printing from the Fed. He is always worth following and often accurate.

Dr Faber reckons the S&P is seeing its high for the year and that 2013 will be a very difficult year for stocks…



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Stocks & Equities

Finally, A Hopeful Signal

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Posted by Richard Russell - Ross Clark

on Monday, 20 August 2012 12:29

What? You're not happy with the market? It could be worse. You could have loaded up on the Facebook IPO at 44, and today the dog is selling at 19.07. But I'm not sure I feel sorry for Zuckerberg. After all (sniff) he's no longer one of the five richest tech-lords. Now there is talk that he should be removed as CEO, because he's too immature.

Fred Hickey, my vote as the top expert in tech, thinks the tech bubble has popped, and that tech is now in a secular bear market. I agree with him, only because I can't really work my iPhone (I claim it's not really user-friendly), and because I think playing with Facebook is a royal pain.

Hickey, by the way, is a huge fan of gold and the gold mining stocks. But don't get me wrong about tech, I love Amazon and Google, and I love the Internet. I think the Net has changed the world. It allows almost everyone on earth to know what's going on in the rest of the world, and we know that "the truth will set you free." Every dictator loathes and fears the Internet, because the Net allows people to know what's going on. Why even North Korea is showing signs of crumbling, not only because of the Internet -- but because their newest boy dictator was educated in Switzerland.

Yesterday, the Dow almost made it to its May 1st peak, but at the close they sold the Dow off. The Transports still have a way to go before they can close above 5285.97. What will I do if both D-J Averages do close above their May peaks? In that case, the facts will have changed, and I'll change with them. There's nothing stupider in this business than an analyst who dreams up a scenario and who sticks with his scenario no matter what. I often have a scenario, and as long as the markets go in harmony with my scenario, I'll stick with it, but when the facts change I revise or jettison my scenario -- to do otherwise would be idiotic. 

I may appear fussy in my insistence that the two D-J Averages close above their May peaks, but whether they do or do not could be unbelievably important.

sc

....read mor from 84 Year Old Richard Russell HERE 


The following is an excerpt from Richard Russell's Dow Theory Letters

Two days ago, amid all the low volume and sluggishness, the Transports gave us just a hint of something hopeful. It was a breakout of the declining trendline, as you can see on the chart. The Transports have been the laggers all year, and it seemed as though if the Industrials closed above their May peak, the Transports would not confirm. Now with this little upside breakout, the Transports are giving us a ray of hope. Maybe, just maybe, the Transports will add on a few more point, and get in the game.



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