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Catflap's Cycle Views - A Rally into Q3. 2010

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Good call so far.

 

I'm going to hang on to my GBPUSD short for now. I'm planning to hold through the election. Labour will probably win and drop Sterling down to 1.30.

 

I'll be gutted if we get to 1.60.

 

Well there is huge overhead resistance in all but the 20-day EMA. Next one is the 50-day, then the 100-day, then the 200-day, then the 400-day, then the 2-year, then the 10-year and then the 5-year at the top (soon to cross under the 10-year)

 

Long term the pound is only going one way and that's down.

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I think March 17 could be an interim top on the S&P here - again, this is also fitting well with the 2006 cycle which had a top on January 11 followed by a bottom on February 7 and a top on March 17 also.

 

Looking ahead we could see a small move down to the 20-day EMA around the last 2 days of the month (March 30/31) which is what my symmetry work suggests. After that a small rise (maybe 3 days) into early April upon where a more meaningful pull-back occurs with a low into April 13/15 - symmetry work, cycle work and BDI/S&P work all seem to be suggest this.

 

This pull-back to an oversold condition would then hopefully give a good launch for new highs into into May 6/7 to complete the cycle before another correction. Once again, the 2006 cycle also had it's peak on Friday, May 5 before a 7.7% correction going into June.

 

No guarantees of course <_<

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I'm going for a small short position on the FTSE. Target 5350

 

I've still got my short cable. This is a mid term hold (through the election) so I'm not really watching it at the moment.

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I'm going for a small short position on the FTSE. Target 5350

 

I've still got my short cable. This is a mid term hold (through the election) so I'm not really watching it at the moment.

 

Hi Zik

 

You often make some good calls, have you thought of doing an investment diary?

 

You have have noticed Romans & Wanderer have diaries running over on the investment section

 

Ps how are you shorting cable - SB or ETF ?

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I'm going for a small short position on the FTSE. Target 5350

 

I've still got my short cable. This is a mid term hold (through the election) so I'm not really watching it at the moment.

 

Be careful ziknik - remember it's still a bull market (albeit a short 17/18 month cyclical one). I've just gone to 1/3 cash on what I see as being a pull-back, not a correction..... it's a precaution more than anything else. Corrections I would define as being of bigger magnitude like we saw from early June to early July 2009 and early January to early February 2010 - both times the 50-day EMA got taken out.

 

A pull-back IMO should see either the 20-day or 50-day EMA hold the price or thereabouts. I'm not expecting a correction until early May which is where I will be probably have a short positio and/or be mainly in cash.

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Be careful ziknik - remember it's still a bull market (albeit a short 17/18 month cyclical one)...

I understand your argument for the US market ('tho I do not agree).

 

But what do you make of this Hong kong / Hang Seng Index?

 

zzzzq.gif

 

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Hi Zik

 

You often make some good calls, have you thought of doing an investment diary?

 

You have have noticed Romans & Wanderer have diaries running over on the investment section

 

Ps how are you shorting cable - SB or ETF ?

This sounds arrogant... .... but I have thought of starting an investment diary.

 

It won't be for my trading account though because I will probably end up losing every penny in it.

 

I'm going to start a new 'fund' with a 15 year outlook.

 

OMG! I was meant to be starting it today.....

 

EDIT: Just checked my bank and I haven't got any money. I might start next month

 

EDIT2: I'm shorting cable using spredbetting (capital spreads)

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Be careful ziknik - remember it's still a bull market (albeit a short 17/18 month cyclical one). I've just gone to 1/3 cash on what I see as being a pull-back, not a correction..... it's a precaution more than anything else. Corrections I would define as being of bigger magnitude like we saw from early June to early July 2009 and early January to early February 2010 - both times the 50-day EMA got taken out.

 

A pull-back IMO should see either the 20-day or 50-day EMA hold the price or thereabouts. I'm not expecting a correction until early May which is where I will be probably have a short positio and/or be mainly in cash.

I stopped out at 5,680.

 

I'm not prepared to hold this short above 5,680

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I understand your argument for the US market ('tho I do not agree).

 

But what do you make of this Hong kong / Hang Seng Index?

 

Doesn't look as powerful as the FTSE and S&P, but is it because the constituents of the asian indices contain a lot of producing stocks (ie they consume commodities to make products, so a falling dollar is bad for profits) rather than the FTSE for example that has a lot of commodity producers like oil and mining which become worth more on a falling dollar?

 

If the FTSE gets anywhere near 6500 it will be because of a falling dollar into Q3.

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I stopped out at 5,680.

 

I'm not prepared to hold this short above 5,680

 

Don't blame you, but there will be a better opportunity in the weeks ahead I feel sure.

 

This doesn't make any sense at the moment - dollar is going higher and so are stocks even though the indicators were saying a pull-back was coming and the market looked overbought. Goes to show that it's sometimes best not to try and second guess the market - it usually goes higher when you think it can't go any higher and lower when you think it can't go any lower!.

 

Seems very strong today though - maybe more dumb money coming in that doesn't want to miss the boat!. I wanted a pull-back to the 20-day EMA to get long again but no such chance, it won't let me back in. Even the two rallies from the March and July 2009 lows would have given you a pull-back by now....

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Thanks Ziknik - strong bull market action. The 10-day EMA is getting bought before it can fall to the 20-day so I'm still waiting to put the rest in. Hopefully a low at the end of next week - not sure about the next correction being severe now so may keep a number of shares after May 6/7.

 

I think this bull market could be consisting of 3 legs. March 2009 to June 2009 (3 months), July 2009 to January 2010 (6 months) and February 2010 to August 2010 (6 months) with 2 corrections separating them. Any prelonged fall in the dollar from here is just going to act as a tailwind driving the FTSE higher via commodity stocks IMO.

 

I just don't see the dollar having another strong leg higher from where it is now that would give us a correction like we saw in June/July 2009 or January/February 2010, so a pull-back to the 50-day EMA is what I'm now anticipating. The 50-day EMA should be at 1150 next week and on a horizontal line it now also acts as strong support.

 

 

 

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Oh, and what do you think of Index Linked Bonds?

 

K-winter suggests binds after the interest hike - But I'm starting to like the idea of buying some linkers

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It's possible the Greek crises herds investors in to the relative safety of USD(???)

 

I can't see it - everything is now priced in IMO. Greece is just a small fraction of the Euro GDP, but what about some of the US states?...... in terms of GDP California is bigger than many countries including Greece.

 

 

Oh, and what do you think of Index Linked Bonds?

 

K-winter suggests binds after the interest hike - But I'm starting to like the idea of buying some linkers

 

I'm looking at global/overseas bond funds (that's government bonds) come August time - yields should be good (ie low price) wih the chance of capital appreciation as we enter another bear market in equities. I quite like the Henderson fund which has little/no UK gilts (as per Bill Gross)

 

http://www.trustnet.com/Factsheets/Factshe...EOBA&univ=U

 

Not sure about Index linked bonds - prefer using funds for this coming bear market as I can buy/sell easily using the same broker (Hargreaves Lansdown which discounts all/virtually all the initial charge). Have to see what the charts look like in a few months time - hopefully down as we approach a top in equities.

 

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Following on from the Nasdaq / Nikkei comparisons.

 

Any thoughts on the following analogy: Nasdaq 2009-2010 vs final run up in Nasdaq 1999-2000 !?

 

 

Adjusted (i.e., March 2009 low = October 1998 low, April 2010 peak in RSI = December 1999 peak in RSI)

 

Picture6-2.png

 

 

Non-Adjusted

 

Picture4-5.png

 

 

 

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Following on from the Nasdaq / Nikkei comparisons.

 

Any thoughts on the following analogy: Nasdaq 2009-2010 vs final run up in Nasdaq 1999-2000 !?

 

Hi HN - sorry I didn't answer on that other thread, just got very busy with everything!. Regarding the Nasdaq lows - on Stockcharts it does look like November 2008 were the absolute lows but on Yahoo it does show the March lows as being lower

 

November 20, 2008 = 1316.12

March 9, 2009 = 1268.64

 

http://uk.finance.yahoo.com/echarts?s=%5EI...=0;logscale=off

 

Good work - that second chart fits the timeline better/exactly with an end of August peak date and a Bradley turn date on June 26, which is also my 'rally from a 4th full moon'

 

eg:

March 11, 2009

July 7, 2009

November 2, 2009

February 28, 2010

June 26, 2010

 

Could you clarify exactly what you mean by 'non-adjusted' and explain what you've done - I'm intrigued, but don't fully understand!. I think you were also saying about the Nasdaq being a better graph to use for the long wave on the other thread - absolutely. It's amazing how the it compares from 2000 to the 1929 to 1949 Dow and the size of the crash compared to the Dow from 2000.

 

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Regarding the Nasdaq lows - on Stockcharts it does look like November 2008 were the absolute lows but on Yahoo it does show the March lows as being lower

 

November 20, 2008 = 1316.12

March 9, 2009 = 1268.64

 

http://uk.finance.yahoo.com/echarts?s=%5EI...=0;logscale=off

 

Quite right! Strange, I was sure the Nasdaq bottomed out in 2008. But that would suggest the market could drag on a bit further into Q3 as you suggest. Hmm. Interesting. The March low (vs the October/November low that "should" have happened) has certainly thrown a spanner in the works ;)

 

For what its worth, I am still keeping an eye on the alternative overlay that suggests we might see a top in 4 or 5 weeks, given the recent peak in RSI above 90 (highest reading since 2000).

 

 

Good work - that second chart fits the timeline better/exactly with an end of August peak date and a Bradley turn date on June 26, which is also my 'rally from a 4th full moon'

 

eg:

March 11, 2009

July 7, 2009

November 2, 2009

February 28, 2010

June 26, 2010

 

Could you clarify exactly what you mean by 'non-adjusted' and explain what you've done - I'm intrigued, but don't fully understand!. I think you were also saying about the Nasdaq being a better graph to use for the long wave on the other thread - absolutely. It's amazing how the it compares from 2000 to the 1929 to 1949 Dow and the size of the crash compared to the Dow from 2000.

 

As for the Nasdaq 2000 vs Nasdaq 2010 comparison, I'm not sure how "valid" this is. What prompted me to look was the recent peak in RSI, the highest since 2000.

 

On the non-adjusted graph, the time scale is the same on both graphs. On the adjusted graph, I compressed the time scale on the Nasdaq 2000 to match the March low with the recent peak in RSI. This is with the idea that cycles exhibit similar structural characteristics, but can stretch in time?

 

 

However, I still think the Nikkei / Nasdaq comparison is the more useful one :)

 

 

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I can't see it - everything is now priced in IMO. Greece is just a small fraction of the Euro GDP, but what about some of the US states?...... in terms of GDP California is bigger than many countries including Greece.

 

 

 

 

I'm looking at global/overseas bond funds (that's government bonds) come August time - yields should be good (ie low price) wih the chance of capital appreciation as we enter another bear market in equities. I quite like the Henderson fund which has little/no UK gilts (as per Bill Gross)

 

http://www.trustnet.com/Factsheets/Factshe...EOBA&univ=U

 

Not sure about Index linked bonds - prefer using funds for this coming bear market as I can buy/sell easily using the same broker (Hargreaves Lansdown which discounts all/virtually all the initial charge). Have to see what the charts look like in a few months time - hopefully down as we approach a top in equities.

 

 

Great thread Catflap & all.

 

My thoughts here - imo the markets have not priced in Europe contagion into the Euro ie a slaughter across all PIGs in due course. Personally playing a 12 month forward sell of EUR against the USD & contrary I believe to your thoughts, am targeting a level of 1.24 but would not be surprised to see around 1.15 in this period.

 

Yes, the US too is still a disaster area, so in general for 30 /90 day bonds & currency holdings my preference is certain Asian & Latams.

 

Question, what happens if this manipulated melt-up just keeps running? You would have to be a brave or a poor man :mellow: to short the equity markets in this recent run. I agree at some point it has to stop but we could be saying that a year from now, no.

 

 

 

 

 

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You would have to be a brave or a poor man :mellow: to short the equity markets in this recent run. I agree at some point it has to stop but we could be saying that a year from now, no.

 

I have short positions on FTSE, S&P, RBS, and Copper. This week looks good for the shorts so far.

 

I'm already brave and poor(er).

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The FTSE came back to 5,680 again.

 

That number has been playing on my mind for ages.

 

It must be a sign.... I'm going long again.

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The FTSE came back to 5,680 again.

 

That number has been playing on my mind for ages.

 

It must be a sign.... I'm going long again.

 

the market certainly seems to have confidence even if many others on GEI do not !

 

there my comment will probably kill it :lol: - but in all seriousness, I hope not

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...

It must be a sign.... I'm going long again.

It was a sign.... I should have gone short.

 

I'm keeping my foot in on this one for now.

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Great thread Catflap & all.

 

My thoughts here - imo the markets have not priced in Europe contagion into the Euro ie a slaughter across all PIGs in due course. Personally playing a 12 month forward sell of EUR against the USD & contrary I believe to your thoughts, am targeting a level of 1.24 but would not be surprised to see around 1.15 in this period.

 

Yes, the US too is still a disaster area, so in general for 30 /90 day bonds & currency holdings my preference is certain Asian & Latams.

 

Question, what happens if this manipulated melt-up just keeps running? You would have to be a brave or a poor man :mellow: to short the equity markets in this recent run. I agree at some point it has to stop but we could be saying that a year from now, no.

 

I still believe the dollar has topped - price momentum looks weak and my fractal work says it's going down to the old lows over the next few months. Despite Greece I think risk appetite has come back and the action in equities has been very strong over the last few weeks.

 

If the Germans sort the Greece problem out then I think the Euro is due a bounce. In a way, the Euro is a better model just like having lots of smaller banks - it's strength is that the risk is spread over several countries. The US on the other hand is like a single bank that is too big to fail....

 

Hopefully the Greece thing gets sorted very soon which gives confidence to the markets for a while longer, allowing the FTSE/S&P turkey to get a bit fatter yet!.

 

I'm still 70% long until next week - think we could get a good short squeeze from here to new highs as the bulls buy this latest dip. I had always planned to sell early May so if we make new highs next week then I'm out ready for the next correction (don't think this is it)

 

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I still believe the dollar has topped - price momentum looks weak and my fractal work says it's going down to the old lows over the next few months. Despite Greece I think risk appetite has come back and the action in equities has been very strong over the last few weeks.

 

If the Germans sort the Greece problem out then I think the Euro is due a bounce. In a way, the Euro is a better model just like having lots of smaller banks - it's strength is that the risk is spread over several countries. The US on the other hand is like a single bank that is too big to fail....

 

Hopefully the Greece thing gets sorted very soon which gives confidence to the markets for a while longer, allowing the FTSE/S&P turkey to get a bit fatter yet!.

 

I'm still 70% long until next week - think we could get a good short squeeze from here to new highs as the bulls buy this latest dip. I had always planned to sell early May so if we make new highs next week then I'm out ready for the next correction (don't think this is it)

 

 

You could well be right on the USD...but as long as Europe implodes we will see more days like yesterday, strong dollar, strong gold..also lets see what comes out of the meet this afternoon... 0 or a quarter point.

 

Maybe the Euro's weakness is that the risk is spread over several countries :blink:

 

Agree, this is not it yet...plenty of room for some further ramping..

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