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The chart that could be pointing to trouble for stocks
And that divergence grows even more so today. After newsletter sentiment reached multi decades highs in bullishness, now all I am seeing is how technically vulnerable the market is. I can make a case a reset is coming or has already arrived. But the market has a way of making soothsayers look bad.
Can we say these could point to trouble for market? 1) S&P price about to break below its moving average (that I pulled out of my a**) 2) Price Momentum crossover forebodes impending doom. 3) MACD crossover already spelling doom. 4) MACD also showing negative divergence in its highs vs S&P price at its highs.
We talk about simplifying our life by investing in index funds. I think we should also simplify our life by not doing too much analysis. Or ANALysis. Or both.
I think VF is on to something here ... as Jeffrey Saut of Raymond James wrote in one of his recent weekly commetaries sometimes it's best to just sit.
How many of us have been expecting a dip in the markets? I have for one have so these technicals are a signal this could develop into the dip (possibly pullback) many of us have been looking for. From the S&P 500 Index's recent high of March 1st (2396) to it's close on March 8th (2363), a time period of 1week, the Index is down 1.37%. So, if you were looking for a 3% dip (2325) to 5% pullback (2275) as I am we still have a ways to go.
With the earnings outlook ... I just do not see a big correction in the stock market taking place unless forward earnings fail to materialize.
We interpret charts based on what we wish should happen in the markets. Now, there is nothing wrong with that.
It's one thing for me to get paranoid about an unfavorable MACD crossover if I'm mulling taking gains in one of my holdings. I can convince myself if I sell and the security then goes up, at least I "acted" in the present. Similarly if I was looking to buy a security and then I can use a positive MACD crossover (among other things) to decide I need to buy it. Once again, if the security starts plummeting at least I did my ANALysis.
What is NOT okay, is to write a BS article every other week trying to predict the direction of the market based on a chart and get paid for it. Because there is no personal money at stake in doing that. It is just utter nonsense, and is THE reason investor returns do not match fund returns. These experts are making money and they don't even have to invest it because they get a consistent "return" for every such article they publish while investors use real money when reacting to these articles.
Let's all agree to not perpetuate this criminal enterprise.
Comments
I can make a case a reset is coming or has already arrived. But the market has a way of making soothsayers look bad.
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=9&dy=0&id=p73061033693
Can we say these could point to trouble for market?
1) S&P price about to break below its moving average (that I pulled out of my a**)
2) Price Momentum crossover forebodes impending doom.
3) MACD crossover already spelling doom.
4) MACD also showing negative divergence in its highs vs S&P price at its highs.
We talk about simplifying our life by investing in index funds. I think we should also simplify our life by not doing too much analysis. Or ANALysis. Or both.
I think VF is on to something here ... as Jeffrey Saut of Raymond James wrote in one of his recent weekly commetaries sometimes it's best to just sit.
How many of us have been expecting a dip in the markets? I have for one have so these technicals are a signal this could develop into the dip (possibly pullback) many of us have been looking for. From the S&P 500 Index's recent high of March 1st (2396) to it's close on March 8th (2363), a time period of 1week, the Index is down 1.37%. So, if you were looking for a 3% dip (2325) to 5% pullback (2275) as I am we still have a ways to go.
With the earnings outlook ... I just do not see a big correction in the stock market taking place unless forward earnings fail to materialize.
Old_Skeet
It's one thing for me to get paranoid about an unfavorable MACD crossover if I'm mulling taking gains in one of my holdings. I can convince myself if I sell and the security then goes up, at least I "acted" in the present. Similarly if I was looking to buy a security and then I can use a positive MACD crossover (among other things) to decide I need to buy it. Once again, if the security starts plummeting at least I did my ANALysis.
What is NOT okay, is to write a BS article every other week trying to predict the direction of the market based on a chart and get paid for it. Because there is no personal money at stake in doing that. It is just utter nonsense, and is THE reason investor returns do not match fund returns. These experts are making money and they don't even have to invest it because they get a consistent "return" for every such article they publish while investors use real money when reacting to these articles.
Let's all agree to not perpetuate this criminal enterprise.