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Source: http://stockchartsrus.blogspot.com/feeds/posts/default?alt=rss

1. <?xml version='1.0' encoding='UTF-8'?><rss xmlns:atom="http://www.w3.org/2005/Atom" xmlns:openSearch="http://a9.com/-/spec/opensearchrss/1.0/" xmlns:blogger="http://schemas.google.com/blogger/2008" xmlns:georss="http://www.georss.org/georss" xmlns:gd="http://schemas.google.com/g/2005" xmlns:thr="http://purl.org/syndication/thread/1.0" version="2.0"><channel><atom:id>tag:blogger.com,1999:blog-3195143777332217804</atom:id><lastBuildDate>Wed, 07 Feb 2024 03:39:59 +0000</lastBuildDate><title>The Canadian Rational Investor&amp;#39;s S&amp;amp;P 500 Blog</title><description>This is a once a week or two (depending on how active the market is) review of the S&amp;amp;P 500 Depository receipts (SPY:AMEX) using the weekly price chart. The analysis is primarily technical in nature including support and resistance, trend lines and chart pattern recognition. Commentary may include fundamental and seasonal analysis coupled with the technical picture. Hope you enjoy this rather unique look at the market...</description><link>http://stockchartsrus.blogspot.com/</link><managingEditor>noreply@blogger.com (The Cdn. Rational Investor)</managingEditor><generator>Blogger</generator><openSearch:totalResults>143</openSearch:totalResults><openSearch:startIndex>1</openSearch:startIndex><openSearch:itemsPerPage>25</openSearch:itemsPerPage><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-1681641575639259161</guid><pubDate>Tue, 15 Apr 2014 14:51:00 +0000</pubDate><atom:updated>2014-04-15T08:06:55.448-07:00</atom:updated><title>Full steam ahead into seasonal topping area</title><description>&lt;span style=&quot;font-family: Trebuchet MS, sans-serif;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog. Our peak at the SPY (S&amp;amp;P 500 depository trust units):&lt;/span&gt;&lt;br /&gt;
2. <div class="separator" style="clear: both; text-align: left;">
3. <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0JbP6jKLtdHbbqQrN0Ew3XlcGzQHtx2fPfC_ig6OOfMPknxUe0055MIHXo8-kKbdNhGHOQnHvb4zqm6-IBhhjzeklofsVOLcZHNLbazXCJFLhu_YNTaGUlpefUmvItiAcyQJi2ErjdcS7/s1600/SPY041514.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Trebuchet MS, sans-serif;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0JbP6jKLtdHbbqQrN0Ew3XlcGzQHtx2fPfC_ig6OOfMPknxUe0055MIHXo8-kKbdNhGHOQnHvb4zqm6-IBhhjzeklofsVOLcZHNLbazXCJFLhu_YNTaGUlpefUmvItiAcyQJi2ErjdcS7/s1600/SPY041514.png" height="195" width="320" /></span></a></div>
4. <span style="font-family: Trebuchet MS, sans-serif;"><br />
5. Current SPY weekly chart: <a href="http://scharts.co/ZFMFJe" target="_blank">http://scharts.co/ZFMFJe</a></span><br />
6. <span style="font-family: Trebuchet MS, sans-serif;"><br />
7. Commentary: Those that may doubt the power of the Fed should take note of our current stock market. We have been powering our way higher now for more than five years and at present I still don't see any signs of this bull slowing down. The talking heads will try to get investors to emotionally react to day to day fluctuations but the simple fact is the US Fed wants the financial system to get back on its feet and they will keep the cost of borrowing money at historically low levels until they see that has happened. Indeed, prices have risen so much we actually have a 'risky' stock market once again. While I don't foresee any break of real substance over the short term, one must respect the fact that we are fast approaching a seasonally tough window and may need to pause here before any further appreciation in price can occur. Ironically, that pause may come from geopolitical tensions rather then any locally based policies.<br /><br />Rational overview:<br />Fundamentals: Corporate earnings continue to grow and interest rates are at historically low levels. Considering these are basically the two key ingredients in stock market valuations one shouldn't be too surprised to see surging prices. The Fed has engineered a recovery in the US economy and that is exactly what they got. The current US yield curve (<a href="http://stockcharts.com/freecharts/yieldcurve.php">http://stockcharts.com/freecharts/yieldcurve.php</a>) is very healthy and suggests there are no signs of recession anywhere on the horizon. While that may change over time, at present the economy appears to be chugging along rather nicely. There were growing fears of a new housing market bubble but hawkish talk from the Fed through the first quarter seems to have thrown some cold water on that. Indeed, that cooling has now prompted dovish talk from the Fed and the general consensus is for rates not to begin rising again in earnest until we are well into 2015. The only Caveat to all this is geopolitical tensions. Should eastern Europe erupt into a state of war, both economies and equity markets may feel the sting as commodity prices may move higher in earnest. higher energy prices alone shall act as a natural break to the economy and should prices spike dramatically we may see an economic shock. Ironically, this potential scenario may actually do the Fed's work for them putting them on hold for an even longer period of time.<br /><br />Technical:<i> </i>We are fast approaching our typical seasonal peak in the stock market (<i>Sell in May and walk away</i>) and one can not help but get the feeling we are rather over extended. That in itself is not justification for either covering long positions or outright shorting but simply should be a warning to those participating that we definitely do have a bit of risk priced into this market. Considering the late January/early February lows are right on our red trend line, I for one shall be looking for that level to be tested through the seasonal trough expected shortly. This year's January Barometer report (<a href="https://docs.google.com/file/d/0B9fuWeR8s0OKRDFfelJtWEo3TlU/edit">https://docs.google.com/file/d/0B9fuWeR8s0OKRDFfelJtWEo3TlU/edit</a>) did suggest we would see new highs through the summer. With this in mind, I shall be looking for a slight pullback through late May / early June and then a resumption of upward pressure through the late summer. Interestingly, that same January Barometer report suggested this fall may be a tough one. Considering how far away the 50% level, the 200sma and the lower trend channel line (Blue dotted) are a correction of substance shouldn't be too unexpected. That event is many months away and we shall deal with that scenario as we head out of summer and into the fall. Until then, the march higher continues in earnest.<br /><br />Rational Summary: The post US housing market meltdown bull rally is now well into it's fifth year. The Fed has engineered a recovery by basically guaranteeing bank profits. Should they decide to remove their QE stimulus programs we ought to see a period where the market has to adjust. That event is not here at present. it will be one day but it is not today. Corporate profits are robust and shall continue to be so until the cost of borrowing rises in earnest. We are fast approaching a seasonally tough time for the market so a pause certainly wouldn't be unexpected. Put it all together and one is left with the impression of a market that is overextended but remains pointing higher.</span><br />
8. <span style="font-family: "Trebuchet MS",sans-serif;"><br />Trader Stance: As the market continues to make higher highs and higher lows traders have been best to buy breakouts with stops just under previous lows. one might argue bullish resolutions around the 13ema (blue moving average) have also represented interesting entries as well. As long as we keep closing price above that 13ema traders are best to remain with a long bias. Should we close below that level, traders would be best to look for a tag of the 30sma which really isn't that far behind.<br /><br />Investors Stance:<i> </i>While the media will try to get you to panic, there is NO reason for investors to even consider liquidating positions at this point.  Yes our time tested 'investor' trend indicator (that being the relationship between the weekly 13ema and the 30sma) is quite wide at this point, it is still very much bullish. Until that relationship changes, investors are best to enjoy the nice dividends being paid quarterly and appreciate the huge capital gains they are sitting on from the last 'investor' buy signal issues way back in November, 2011.<br />  </span><br />
9. <div>
10. <span style="font-family: Trebuchet MS, sans-serif;">That's all for this post, <br />Brian Beamish FCSI   </span><br />
11. <span style="font-family: Trebuchet MS, sans-serif;">The Canadian Rational Investor</span><br />
12. <span style="font-family: Trebuchet MS, sans-serif;">the_rational_investor@yahoo.com</span><br />
13. <span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span></div>
14. &lt;a href=&quot;http://therationalinvestor.ca/&quot;&gt;&lt;span style=&quot;font-family: Trebuchet MS, sans-serif;&quot;&gt;http://www.therationalinvestor.ca&lt;/span&gt;&lt;/a&gt;</description><link>http://stockchartsrus.blogspot.com/2014/04/full-steam-ahead-into-seasonal-topping.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0JbP6jKLtdHbbqQrN0Ew3XlcGzQHtx2fPfC_ig6OOfMPknxUe0055MIHXo8-kKbdNhGHOQnHvb4zqm6-IBhhjzeklofsVOLcZHNLbazXCJFLhu_YNTaGUlpefUmvItiAcyQJi2ErjdcS7/s72-c/SPY041514.png" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-3228065235787853112</guid><pubDate>Sun, 01 Sep 2013 14:48:00 +0000</pubDate><atom:updated>2014-04-15T08:06:16.132-07:00</atom:updated><title>Over extended but still a bull</title><description>&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.
15. Our peak at the SPY (S&P 500 depository trust units):</span></span><br />
16. <div class="separator" style="clear: both; text-align: left;">
17. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvV9kkpgApvJZ3qqa9pucv64fg7rY1v-FHL_JRw3dW-XKrEwvthAQzTHGFSVxLndKk4TVdIDR9yoSvnJLbIU7tVYGk9Zmn4Cg_K1Xi4_HNLtAtPSAFAQB9puvgRYUubR-KvHHbssyy5dAa/s1600/SPY082913.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvV9kkpgApvJZ3qqa9pucv64fg7rY1v-FHL_JRw3dW-XKrEwvthAQzTHGFSVxLndKk4TVdIDR9yoSvnJLbIU7tVYGk9Zmn4Cg_K1Xi4_HNLtAtPSAFAQB9puvgRYUubR-KvHHbssyy5dAa/s320/SPY082913.bmp" height="197" width="320" /></a></span></span></div>
18. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> Current SPY weekly chart<b>: </b><a href="http://scharts.co/ZFMFJe" target="_blank">http://scharts.co/ZFMFJe</a></span></span><br />
19. <br />
20. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><b>Commentary</b>: Here we go again. It seems to me the more I do this, the more I see the same things over and over again. In September, the US Congress must address the debt ceiling as the US Federal government is expected to run out of borrowing room shortly. One ought to recall our last experience with the political fireworks out of Washington over hitting their respective debt ceiling and how the Republican controlled US House of Representatives could literally be brought to a standstill over an issue that really is completely out of their control. Regardless, those politically motivated will use this <i>crisis dejour</i> to their ends. The problem is the stock market is currently over extended, pointing lower in the short term and heading into a historically questionable seasonal period. Put it all together and price feels a bit vulnerable. <br />
21. <br /><b>Rational overview:</b><br />
22. <b>Fundamentals</b>:
23. Since the 2007-2008 meltdown in the broader US economy, the 'E' in the
24. P/E ratio has been steadily rising in the face of both a very
25. accommodative US Fed monetary policy and relatively easy earnings
26. comparison. That story on both fronts is now more than a few years old
27. and getting a bit stale. Indeed, earnings guidance has waned of late and
28. US Fed policy, while currently still accommodative, has turned more
29. hawkish. Recent talk of 'tapering' purchases of US treasuries seems to be the tightening proxy of this cycle. As Fed. speakers one by one use the term more often, they are trying to introduce an exit strategy for themselves once they feel direct intervention in the US economy is no longer required to maintain necessary growth rates. Having said that, stock prices themselves seem to dictate the pace of that tapering. Should a healthy correction in stock prices occur (like we saw in June) Fed. officials have been quick to back away from tapering talk. While that talk of late has been back on the taper side (as stock prices once again hit new highs) I find it more than coincidental how we have rolled over here heading into the showdown out of Washington and that there is a significant Fed. meeting scheduled for the week of October 31st.....didn't someone once say...'<i>buy when it snows and sell when it goes</i>'.....<br />
30. <br />
31. <b>Te</b><b>chnical</b>:<i> </i>Through the seasonal spring peak of 2013, prices came back to the 30SMA, touched a significant trendline and then rather smartly reversed to new highs. Interestingly, we are currently basically right where we were in May when we were then well advised to expected 'traders' to be short and for 'investors' to remain in their long positions. Once again that seems to be the technical outlook (traders short, investors long) as we head through the current questionable season period. Failure at the 13ema suggests a test of the 30sma ought to be in order. A daily ab=cd bear price pattern confirms a short term target in the 160 area isn't unrealistic. Indeed, a simple 50% correction of this past year's rally suggests 151.71 isn't out of the question either. One final note, considering relative investor complacency and the current position of the 200sma (some 20% lower!), one has to appreciate the considerable risk of any new purchases at or near these levels.<br /><b> </b><br />
32. <b>Rational Summ</b><b>ar</b><b>y</b>: The US stock market, and 'assets' in general did well coming out of the seasonal trough but stocks in particular have not really appreciated too much from those spring peaks. As we head through a usually tough seasonal window, one has to appreciate the short term risks apparent both from the fundamental and technical sides - its a risk market! Investors are so far 'in-the-money' (last signcal for them was at 120 area) they could handle a short term pullback of as much as 10% to 15% and still be in profits. Traders are traders and will be more than happy to go long or short, whenever the potential reward vs. the risk is acceptable.</span></span><br />
33. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> <b> </b><br />
34. <b>Trader Stance</b>: Traders have been given a short setup coming off the 13ema fail and the daily bear ab=cd price pattern. that objective appears to be {(170.97-164.19)-167.30} 160.52 at the moment which happens to be in and around the 30SMA currently at 160.43. 'Bot' short setups look interesting on a failed rally to fill the gap.<br />
35. <br /><b>Investors Stance</b>:<i> </i>While
36. the media will try to get you to panic, there is NO reason for
37. investors to even consider liquidating positions at this point.  Yes our
38. time tested 'investor' trend indicator (that being the relationship
39. between the weekly 13ema and the 30sma) is quite wide at this point, it
40. is still very much bullish. Until that relationship changes, investors
41. are best to enjoy the nice dividends being paid quarterly and appreciate
42. the huge capital gains they are sitting on from the last 'investor' buy
43. signal issues way back in November, 2011.  <br />  <br />
44. </span></span><br />
45. <div>
46. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">That's all for this post,  </span></span>
47. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />Brian Beamish FCSI  </span></span>
48. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The Canadian Rational Investor </span></span>
49. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">the_rational_investor@yahoo.com</span></span><br />
50. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span></span> </div>
51. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">
53. </span></span><br />
54. <div>
55. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
56. </description><link>http://stockchartsrus.blogspot.com/2013/09/over-extended-but-still-bull.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvV9kkpgApvJZ3qqa9pucv64fg7rY1v-FHL_JRw3dW-XKrEwvthAQzTHGFSVxLndKk4TVdIDR9yoSvnJLbIU7tVYGk9Zmn4Cg_K1Xi4_HNLtAtPSAFAQB9puvgRYUubR-KvHHbssyy5dAa/s72-c/SPY082913.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-5137758376119954372</guid><pubDate>Sat, 22 Jun 2013 21:30:00 +0000</pubDate><atom:updated>2013-06-22T14:31:13.326-07:00</atom:updated><title>Sell in May &amp; walk away?</title><description>&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.
57. Our peak at the SPY (S&P 500 depository trust units):</span></span><br />
58. <div class="separator" style="clear: both; text-align: left;">
59. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7v3ejkXYMkRqO-qRmQVLM3UF5d3Ck6PtDhhGWD-i2V4PXKysX4EKGKBtgjrRMc6IipW2xC3D55aJD-OBATVTWYRhravd3vtSzLNhxVwGfRb1-mEqzh7t3gN4z-1lGRDDaulTwBfLNZdSl/s1600/SPY062113.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="197" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7v3ejkXYMkRqO-qRmQVLM3UF5d3Ck6PtDhhGWD-i2V4PXKysX4EKGKBtgjrRMc6IipW2xC3D55aJD-OBATVTWYRhravd3vtSzLNhxVwGfRb1-mEqzh7t3gN4z-1lGRDDaulTwBfLNZdSl/s320/SPY062113.bmp" width="320" /></a></span></span></div>
60. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> Current SPY weekly chart<b>: </b><a href="http://scharts.co/ZFMFJe" target="_blank">http://scharts.co/ZFMFJe</a></span></span><br />
61. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
62. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Commentary</b>: Stocks go up and stocks go down - that is just the way it is. However, I find it fascinating how the public/media seem to only get really interested during the times when the market goes down. While the media plays up the recent pull back in price (no doubt a function of ratings driven news reporting - horrible) few appreciate the fact that the SPY was up more than 16% in less then six month heading into the May peak at 168 and even after the meltdown <i>dejour,</i> we are still up more than 10% for the year (and that is excluding dividends). As the chart above outlines, we are still very much contained within a very wide upwardly pointing price channel. Indeed, into the very typical seasonal peak (<i>Sell in May and walk away</i>) we actually touched the top of the channel. Could we take some time & trade back down the the bottom channel line to 'cleanup' some of the excess euphoria - absolutely. Is this an outright 'sell' signal where one ought to get out of stocks completely - no way, not even close!</span></span><br />
63. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /><b>Rational overview:</b> </span></span><br />
64. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> <b>Fundamentals</b>: Since the 2007-2008 meltdown in the broader US economy, the 'E' in the P/E ratio has been steadily rising in the face of both a very accommodative US Fed monetary policy and relatively easy earnings comparison. That story on both fronts is now more than a few years old and getting a bit stale. Indeed, earnings guidance has waned of late and US Fed policy, while currently still accommodative, has turned more hawkish. Seeming to coincide, investor sentiment hit a new cycle high in May (a reading above 90 on the S&P 500 bullish percent index: <a href="http://scharts.co/11VcAil" target="_blank">chart link</a>) and is now in the process of coming back down to earth. Put it all together and I think one can make the argument for a 'correctionary' period for stock prices in general and a short term end to the run away bull we watched develop since the last 'investor' buy signal in November, 2011.</span></span><br />
65. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
66. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Te</b><b>chnical</b>:<i> </i>As pointed out in the chart above, prices had moved so far that we ended up (through the later part of May) brushing up against the upper channel of the current upwardly pointing price trend channel. The move into the 168 area on the SPY represented a 16% appreciation since the beginning of the year. While we may end the year at or near these levels, a further continuation heading out of the seasonally bullish window seems unlikely. The 13ema and 30sma are very wide at the moment so a period of consolidation to bring those two moving averages back near each other seems realistic too. Lastly, price itself has a 'double top' working which further suggests a 'correction' is underway in equity prices.<br /><b> </b></span></span><br />
67. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Rational Summ</b><b>ar</b><b>y</b>: As our typical seasonal 'peak' window has now come and gone (<i>Sell in may and walk away</i>)
68. one shouldn't be surprised to see stock prices have cooled. The fact that so many in the media are calling for a collapse (yet our time tested 'trending' indicator is still very much bullish) suggests to me investor sentiment is undergoing a very natural correction within a broader bull market. The US Fed has NOT raised interest rates but has suggested they may end their QE programs IF the market warrants it. I would argue the market will remind the Fed that QE is still necessary - the question is, how big of a pull back in price does the Fed need to start turning the printing presses back on? 10%, 20%, 30%....too hard to judge at this point.<br /><b> </b></span></span><br />
69. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Trader Stance</b>: Traders who exited their long positions in early May (at really good reward to risk levels) were forced to watch the market slowly grind higher into the end of the month. While no specific sell patterns were evident one just had to sit, watch and patiently wait for a setup to develop. The recent drop in prices suggests a trader short setup may be in play. The recent double top in price suggests on could be short from the 13ema fail at or near the 159.41 level with corresponding stops just above recent highs at 165.12 (or about 5.5 points of risk). To justify this risk one really ought to see at least 11 points in potential profit. The lows of April 15th at 152.74 look to be right at the 30SMA and would be my target going forward. That would equate to about 7 points of profit and (in my opinion) NOT worth the risk. Should we get a rally back up to test those highs at or near the 165 area, I might be inclined to take a look at the trade at that point.</span></span><br />
70. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /><b>Investors Stance</b>:<i> </i>While the media will try to get you to panic, there is NO reason for investors to even consider liquidating positions at this point.  Yes our time tested 'investor' trend indicator (that being the relationship between the weekly 13ema and the 30sma) is quite wide at this point, it is still very much bullish. Until that relationship changes, investors are best to enjoy the nice dividends being paid quarterly and appreciate the huge capital gains they are sitting on from the last 'investor' buy signal issues way back in November, 2011.  <br />  </span></span><br />
71. <div>
72. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">That's all for this post,  </span></span><br />
73. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br />Brian Beamish FCSI  </span></span><br />
74. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">The Canadian Rational Investor </span></span><br />
75. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">the_rational_investor@yahoo.com </span></span><br />
76. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span></span> </div>
77. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> </span></span><br />
78. <div>
79. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
80. </description><link>http://stockchartsrus.blogspot.com/2013/06/sell-in-may-walk-away.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7v3ejkXYMkRqO-qRmQVLM3UF5d3Ck6PtDhhGWD-i2V4PXKysX4EKGKBtgjrRMc6IipW2xC3D55aJD-OBATVTWYRhravd3vtSzLNhxVwGfRb1-mEqzh7t3gN4z-1lGRDDaulTwBfLNZdSl/s72-c/SPY062113.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-1649851475665369777</guid><pubDate>Sun, 17 Mar 2013 18:32:00 +0000</pubDate><atom:updated>2013-04-06T08:54:13.285-07:00</atom:updated><title>Hope you didn&#39;t get run over</title><description>&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.
81. Our peak at the SPY (S&P 500 depository trust units):</span></span><br />
82. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxxraOYqzb043GzpDVb0XcFADeQuWciUKakE0Q_JHZgurXtCufshiwOgTVY4A8EUKgnoeUoc_BHDTDvJt6i4N5771EHvJLuU7n0mRstThyS8WZNu8AucRgbEnqzTYxvVOBZ1MLqqVEpSyu/s1600/SPY031513.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="199" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxxraOYqzb043GzpDVb0XcFADeQuWciUKakE0Q_JHZgurXtCufshiwOgTVY4A8EUKgnoeUoc_BHDTDvJt6i4N5771EHvJLuU7n0mRstThyS8WZNu8AucRgbEnqzTYxvVOBZ1MLqqVEpSyu/s320/SPY031513.bmp" width="320" /></a><b> </b></span></span><br />
83. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
84. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">Current SPY weekly chart<b>: </b><a href="http://scharts.co/ZFMFJe" target="_blank">http://scharts.co/ZFMFJe</a></span></span><br />
85. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
86. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Commentary</b>: Once a market gets a head of steam behind it, it is both foolish and rather financially dangerous to start 'picking tops'. Indeed, this past month has witnessed countless professionals exclaim 'this is the top' only to be embarrassed. Is the market overbought - unequivocally yes. Is it a short - unequivocally no! Regular readers will recall the title of my last SPY Blog post - Don't get run over by this bull. I sure hope you didn't.</span></span><br />
87. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
88. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Rational overview:</b> </span></span><br />
89. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> <b>Fundamentals</b>: Two month's ago analysis seems to continue to be correct...<i>"the 'E' in current P/E ratios is still rather
90. healthy. Additionally, the US Federal Reserve Board's current low short
91. term interest rate policy is supportive of both yield curve driven
92. earnings and the general cost of doing business going forward. Put it
93. all together and one can make the argument that the underlying
94. fundamentals for corporate profits look ok going forward. Lastly,
95. investor sentiment is currently rather poor. Last summer investors got a
96. little ahead of themselves (with the likes of AAPL etc.) but now much
97. of that euphoria is gone. Sanguine investors don't make the backdrop for
98. stock market crashes. - corrections, maybe - crashes, no." </i>As of
99. this month, the Fed is humming and hawing over when to end QE. Until
100. that event, I shall be looking at US Fed. interest rate policy as market
101. supportive. As for the market's reaction, I shall be watching the <a href="http://stockcharts.com/freecharts/yieldcurve.html">US </a><a href="http://stockcharts.com/freecharts/yieldcurve.html">Yield curve</a>
102. for an indication of anticipated economic expansion (normal yield
103. curve) or contraction (inverted yield curve). As for sentiment, AAPL's
104. collapse has washed many of those 'weak hands' out of the market. It is
105. now the market's job to suck them back in. 
106. <br />
107. <b> </b></span></span><br />
108. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Te</b><b>chnical</b>:<i> </i>While last month's post was on the heels of a dramatic bullish resolution to the 'fiscal cliff', this month's post comes in the face of two significant technical barriers (bullish extension target 158.89 and bullish ab=cd target 154.43). While the former remains open, the later target has now been hit. Additionally, the market has become quite violent and is now almost 10% above our short term moving average (weekly 13ema) suggesting a correctional period may be fast approaching.
109. <br />
110. <b> </b></span></span><br />
111. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Seasonal</b>: Comments from last month's post still seem to be relevant: <i>'Buy when it snows, sell when it goes</i>...'
112. seems to be appropriate here. From now until the end of May is the
113. proverbial 'sweet spot' for the economy in general and the stock market
114. in particular. Bob Pasani (a favorite market commentator of mine)
115. recently did a write up on <a href="http://www.cnbc.com/id/100424669">seasonal tendencies in the market and the January Barometer</a>.
116. I highly suggest you take a look if you have a moment. The January
117. Barometer itself was rather market friendly (suggesting an up year for
118. the market for 2013) and as pointed out above, the market is currently
119. in a very seasonally friendly time of year. That in itself doesn't
120. guarantee price performance, but it does suggest the wind is at our
121. backs for the next few months, not in our faces...<b> </b>
122. <br />
123. <b> </b></span></span><br />
124. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Rational Summ</b><b>ar</b><b>y</b>: As our typical seasonal 'peak' window fast approaches (<i>Sell in may and walk away</i>) the market has moved higher in earnest. Over the course of the post 'fiscal cliff' rally traders were given a fabulous 2:1 risk/reward trade that should have been exited over the past week and investors have built an even further cushion to their purchases made in November 2011. While there is no 'top' in place as of yet, certainly no new long positions should even be considered until we consolidate some of these gains.
125. <br />
126. <b> </b></span></span><br />
127. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Trader Stance</b>:
128. Traders were given the green light to get back in on the long side of this market when prices broke their highs at 144.55 on the bullish resolution to the 'fiscal cliff'. The break back above the previous peak represented both a 'key
129. reversal' and a short term bullish ab=cd price pattern. While buying the
130. 13ema touch was the correct 'knife catching' trade (and boy where they
131. rewarded) a more conservative trader ought to have bought the reversal
132. at 144.55. Since the trade itself had about $5.00 in risk (stops just below the reversal low of 139.54) a 2:1 risk reward model would suggest taking profits at or above $154.55; and as pointed out above, that trade should have been filled this past week. WTG Traders!</span></span>
133. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
134. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Investors Stance</b>:
135. I hate to say it for you investors out there....but more of the
136. same....last month's post was spot on so I don't see any reason to
137. change it...<i>"</i><i>While this commentary may sound boring and very repetitive, this camp
138. has been well advised to be long and stay long for more than a
139. year now. Those that took last year's investor 'buy' signal are well
140. into double digits returns (if not more) considering dividends. As long
141. as the 13ema remains above the 30sma I see no reason to touch long
142. positions at the moment. Be long and stay long as we collectively climb
143. the 'wall of worry'."</i> <br />
144.  
145.  
146.  
147. </span></span><br />
148. <div>
149. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">That's all for this post,
150.  </span></span><br />
151. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
152. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">Brian Beamish FCSI
153.  </span></span><br />
154. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">The Canadian Rational Investor </span></span><br />
155. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">the_rational_investor@yahoo.com </span></span><br />
156. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span></span> </div>
157. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">
158.  
159.  
160.  
161.  
162. </span></span><br />
163. <div>
164. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
165. </description><link>http://stockchartsrus.blogspot.com/2013/03/hope-you-didnt-get-run-over.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxxraOYqzb043GzpDVb0XcFADeQuWciUKakE0Q_JHZgurXtCufshiwOgTVY4A8EUKgnoeUoc_BHDTDvJt6i4N5771EHvJLuU7n0mRstThyS8WZNu8AucRgbEnqzTYxvVOBZ1MLqqVEpSyu/s72-c/SPY031513.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-6194093495443736705</guid><pubDate>Sun, 10 Feb 2013 01:02:00 +0000</pubDate><atom:updated>2013-02-09T17:10:42.399-08:00</atom:updated><title>Fiscal cliff? What fiscal cliff....Don&#39;t get in the way of this bull</title><description>&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.
166. Our peak at the SPY (S&P 500 depository trust units):</span></span><br />
167. <div class="separator" style="clear: both; text-align: left;">
168. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqE3LEbA0-mv3fCw9rg4SiwgmLHuACL68eaRrqJHoEg4ZqVYVGC3kZl5oc1IGCoJohqkmdeUtSKMNvbZQKYR-M8rQrCSiLI8Q5lpTI0I35a-juSomYZQ8g4YYnh7TyZGXcXmWVbLdBu55d/s1600/SPY020813.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="201" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqE3LEbA0-mv3fCw9rg4SiwgmLHuACL68eaRrqJHoEg4ZqVYVGC3kZl5oc1IGCoJohqkmdeUtSKMNvbZQKYR-M8rQrCSiLI8Q5lpTI0I35a-juSomYZQ8g4YYnh7TyZGXcXmWVbLdBu55d/s320/SPY020813.bmp" width="320" /></a></span></span></div>
169. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Commentary:</b> I find it fascinating to watch cycle after cycle (I have been doing this now for almost 20 years and this blog in particular for 5 years) as we humans repeat the exact same behavior and yet each time we expect a different result - didn't someone famous say something about exactly that? At the time of my last SPY blog post (mid December) I found it very hard to find too many outright bulls and even today, still seem to encounter a fair amount of resistance to the idea of the market moving higher. But in very typical fashion, the market charged higher on that sanguine sentiment, broke to new highs and has further pulled a few more of those previous bears over to the bull's camp. The fiscal cliff turned out to be a pothole at worst and in very market friendly way (and completely expected...I might add) Washington did absolutely nothing on the issue. The fundamental backdrop for stocks has been rather good of late and it is interesting to see (because of a project I have been working on specifically within the field - <a href="http://www.therationalinvestor.ca/wdb/wdbscreen.php/">WDB Options Pricing Model</a>) many smaller companies are starting to outperform on what I would consider very reasonable fundamental valuations. The Russell 2000 (small cap benchmark) broke to new highs a while ago and has been leading this bull charge which seems to further confirm this notion. Ironically enough, it will only get dangerous to own stocks again once  everyone else likes the idea. </span></span><br />
170. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
171. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">As I post this blog, the market is charging to new highs and looks to be heading even higher. Are we near a blow-off top? That is hard to say, but we are fast approaching two technically substantial upside targets so a euphoric melt-up into that area certainly isn't out of the question. Keep in mind, markets are often most volatile at the tops and bottoms of moves, so given the recent rather orderly move to new highs, price action itself isn't suggesting an end just yet. If you see some violence, then we may be getting closer.</span></span><br />
172. <br />
173. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Rational overview:</b>
174. <b> </b></span></span><br />
175. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Fundamentals</b>:
176. Last month's analysis seems to continue to be correct...<i>"the 'E' in current P/E ratios is still rather
177. healthy. Additionally, the US Federal Reserve Board's current low short
178. term interest rate policy is supportive of both yield curve driven
179. earnings and the general cost of doing business going forward. Put it
180. all together and one can make the argument that the underlying
181. fundamentals for corporate profits look ok going forward. Lastly,
182. investor sentiment is currently rather poor. Last summer investors got a
183. little ahead of themselves (with the likes of AAPL etc.) but now much
184. of that euphoria is gone. Sanguine investors don't make the backdrop for
185. stock market crashes. - corrections, maybe - crashes, no." </i>As of this month, the Fed is humming and hawing over when to end QE. Until that event, I shall be looking at US Fed. interest rate policy as market supportive. As for the market's reaction, I shall be watching the <a href="http://stockcharts.com/freecharts/yieldcurve.html">US </a><a href="http://stockcharts.com/freecharts/yieldcurve.html">Yield curve</a> for an indication of anticipated economic expansion (normal yield curve) or contraction (inverted yield curve). As for sentiment, AAPL's collapse has washed many of those 'weak hands' out of the market. It is now the market's job to suck them back in. </span></span><br />
186. <br />
187. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Te</b><b>chnical</b>: '<i>Show me a new high</i><i>, and I'll show you a buy...</i>' seems to be appropriate here. The trading range established into the fiscal cliff resolved bullishly. Those traders that took the OTE short trade heading into the event ought to have been stopped. As pointed out in my last commentary, the bullish stance on the MA's (13ema > 30sma) suggested the bears where in for a tough fight and indeed the market turned right back up as price entered that support area. Either the bullish resolution of that test (buy the 13ema with 2:1 r/w) or the subsequent reversal breakout (bull ab=cd on move back above 144.55 with stops just below 139.54) should have swept traders long . On the reversal trade the risk is about $5.00 so a 2:1 r/r model would have traders looking to book profits at or above the 154.55 area. Based on the working bull ab=cd pattern target (155.12) that doesn't seem unrealistic. </span></span><br />
188. <br />
189. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Seasonal</b>: <i>'Buy when it snows, sell when it goes</i>...' seems to be appropriate here. From now until the end of May is the proverbial 'sweet spot' for the economy in general and the stock market in particular. Bob Pasani (a favorite market commentator of mine) recently did a write up on <a href="http://www.cnbc.com/id/100424669">seasonal tendencies in the market and the January Barometer</a>. I highly suggest you take a look if you have a moment. The January Barometer itself was rather market friendly (suggesting an up year for the market for 2013) and as pointed out above, the market is currently in a very seasonally friendly time of year. That in itself doesn't guarantee price performance, but it does suggest the wind is at our backs for the next few months, not in our faces...<b> </b></span></span><br />
190. <br />
191. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Rational Summ</b><b>ar</b><b>y</b>: Price has resolved bullishly heading out of the 'fiscal cliff' and given the rather friendly fundamental backdrop will probably continue to do so into the next political showdown out of Washington. Technical targets suggest the mid to high 150's aren't out of the question and unless we get some horrendous reversal I can't see our slow march higher stop until those levels are hit (and even exceeded). In either case (trader or investor) if you are not currently 'in' then it seems a little too late to chase this bus, the next one will be along in ten minutes....
192.  
193. <b> </b></span></span><br />
194. <br />
195. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Trader Stance</b>: Aggressive traders where short heading into the fiscal cliff (OTE Short SS entry) but were rejected when price couldn't break back below the MA's. The break back above the previous peak represented both a 'key reversal' and a short term bullish ab=cd price pattern. While buying the 13ema touch was the correct 'knife catching' trade (and boy where they rewarded) a more conservative trader ought to have bought the reversal at 144.55. As pointed out above, that trade has (and still does have) about $5.00 of risk (stops just below the reversal low of 139.54) so using a risk reward model of 2:1 would have them looking for at least $154.55. And as pointed out above, that target area isn't unrealistic given the two rather significant looming upside technical targets.</span></span><br />
196. <br />
197. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Investors Stance</b>:
198. I hate to say it for you investors out there....but more of the same....last month's post was spot on so I don't see any reason to change it...<i>"</i><i>While this commentary may sound boring and very repetitive, this camp
199. has been well advised to be long and stay long for more than a
200. year now. Those that took last year's investor 'buy' signal are well
201. into double digits returns (if not more) considering dividends. As long
202. as the 13ema remains above the 30sma I see no reason to touch long
203. positions at the moment. Be long and stay long as we collectively climb
204. the 'wall of worry'."</i> <br />
205.  
206.  
207. </span></span><br />
208. <div>
209. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">That's all for this post,</span></span><br />
210. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">Brian Beamish FCSI</span></span><br />
211. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">The Canadian Rational Investor</span></span><br />
212. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">the_rational_investor@yahoo.com</span></span><br />
213. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span></span> </div>
214. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">
215.  
216.  
217. </span></span><br />
218. <div>
219. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
220. </description><link>http://stockchartsrus.blogspot.com/2013/02/fiscal-cliff-what-fiscal-cliffdont-get.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqE3LEbA0-mv3fCw9rg4SiwgmLHuACL68eaRrqJHoEg4ZqVYVGC3kZl5oc1IGCoJohqkmdeUtSKMNvbZQKYR-M8rQrCSiLI8Q5lpTI0I35a-juSomYZQ8g4YYnh7TyZGXcXmWVbLdBu55d/s72-c/SPY020813.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-3806749573126103767</guid><pubDate>Sun, 30 Dec 2012 20:27:00 +0000</pubDate><atom:updated>2012-12-30T12:30:28.591-08:00</atom:updated><title>Fiscal Cliff setup is in place &amp; ready to go</title><description>&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.
221. Our peak at the SPY (S&P 500 depository trust units):</span></span><br />
222. <div class="separator" style="clear: both; text-align: left;">
223. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhV3e0cVfnhyphenhyphenmsyMKFQ6nCLMnPm5V92TqdH5J1qxokZq4wwL-m0eD4lnTPjd_kwTdC5lwyBT_taXnk-nxZ-MQq9hiIk1PMfqVjv49rJN8a5AVnbdbHM-lhLr8HHDTMnDe7u7lWeu9B9X_oD/s1600/SPY122812.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="193" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhV3e0cVfnhyphenhyphenmsyMKFQ6nCLMnPm5V92TqdH5J1qxokZq4wwL-m0eD4lnTPjd_kwTdC5lwyBT_taXnk-nxZ-MQq9hiIk1PMfqVjv49rJN8a5AVnbdbHM-lhLr8HHDTMnDe7u7lWeu9B9X_oD/s320/SPY122812.bmp" width="320" /></a></span></span></div>
224. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> 
225. The final week of 2012 brings us all to a very interesting point in the market. Due to political gridlock from Washington it would seem we here in North America are going to jump off the 'fiscal cliff' in unison come January 1st, 2013. Considering this was a term coined by a US government official, there really isn't any telling exactly what is going to happen to the North American economy once the calendar turns, but it is very interesting to watch the collective psychology of 'investors' as they hum-and-haw over the possibilities. Fundamentally, one could make the argument that the US government's balance sheet has long been due for some cleaning up and the broader market drivers (interest rates & corporate profits) are actually very supportive of higher not lower stock prices. Additionally, markets love split democratically elected governments. The more gridlock, the less that can be done to tinker with the market's underlying fundamentals. The 64k question really seems, do we get caught up in the short term 'panic' or do we approach our market participation from a Rational perspective and not get caught up in the short term hoop-la.</span></span><br />
226. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
227. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Rational overview:</b></span></span><br />
228. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Fundamentals</b>: As pointed out above, the 'E' in current P/E ratios is still rather healthy. Additionally, the US Federal Reserve Board's current low short term interest rate policy is supportive of both yield curve driven earnings and the general cost of doing business going forward. Put it all together and one can make the arguement that the underlying fundamentals for corporate profits look ok going forward. Lastly, investor sentiment is currently rather poor. Last summer investors got a little ahead of themselves (with the likes of AAPL etc.) but now much of that euphoria is gone. Sanguine investors don't make the backdrop for stock market crashes. - corrections, maybe - crashes, no.</span></span><br />
229. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
230. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Te</b><b>chnical</b>: This market is a bit overdue for some sort of corrective price action. We have basically been heading straight up for more than a year now and find ourselves quite far away from serious support (200 period simple moving average - our 4 year business cycle - is currently more than 17% lower than current prices). Additionally, there are noticeable gaps to the downside (in that 200sma area) that ought to be filled in at some point down the road. Even a move back to our time tested '50%' level would imply a better than 10% correction from where we are now. Finally, as hopefully you can see from the chart above, the market is currently working a 'bullish wedge' pattern (Notice the converging Red and Blue trend lines). Unfortunately, these types of patterns often resolve themselves bearishly. </span></span><br />
231. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
232. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Seasonal</b>: The seasonal underlying drivers were supportive of price moving higher into the end of the year both from a regular annual event driven basis (Santa Clause rally) and from the US Presidential election year cycle forces. Unfortunately, that bullish window is closing and typically the period from the first week of January through the middle of February has been met with selling pressure since the beginning of the current 'fear' cycle back in 2001. This seasonal  tendency shall continue for another five years (into anticipated peak Q3'17) and there is no reason to suspect otherwise this go round. Once through the middle of February we ought to see our regular seasonal pressures drive prices higher into the spring but that is at least a month and a half away.</span></span><br />
233. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> <b> </b></span></span><br />
234. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Rational Summ</b><b>ar</b><b>y</b>: Put it all together at it would seem to me we are due for some price consolidation. But that does not mean we have broken down. Indeed, at worst, one can argue we are stuck in a very wide trading range at the present (146.29 to 133.75). Fundamentals would still support higher prices over the medium term but maybe a period of technical 'cleaning-up' is in order. With that said, one should determine what kind of market participant you are and then act accordingly.</span></span><br />
235. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
236. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Trader Stance</b>: Traders have been given a nice shorting opportunity heading into the end of the calendar year with the rally into the daily OTE Short SS (70.5% retracement of previous sell-off) at 142.59. With stops just above the old highs 146.30 area (4 points of risk) and targets near the recent lows 133.75 (9 points of reward) this represented an attractive 2:1 reward to risk ratio. Aggressive traders could add to their short positions on the close below the 13ema (with stops on the added position just above last week's high). But given the fact that our 'fast' indicator (13ema) is still well above our 'slow' indicator (30sma) I don't think we are quite ready to break down in earnest just yet.</span></span><br />
237. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> 
238. </span></span><br />
239. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Investors Stance</b>:
240. While this commentary may sound boring and very repetitive, this camp has been well advised to be long and stay long for more than a
241. year now. Those that took last year's investor 'buy' signal are well
242. into double digits returns (if not more) considering dividends. As long
243. as the 13ema remains above the 30sma I see no reason to touch long
244. positions at the moment. Be long and stay long as we collectively climb
245. the 'wall of worry'. </span></span><br />
246. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> 
247. </span></span><br />
248. <div>
249. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">That's all for this post,</span></span></div>
250. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">
251. </span></span>
252. <div>
253. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">Brian Beamish FCSI</span></span></div>
254. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">
255. </span></span>
256. <div>
257. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">The Canadian Rational Investor</span></span></div>
258. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">
259. </span></span>
260. <div>
261. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">the_rational_investor@yahoo.com<br /><a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span></span> </div>
262. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">
263. </span></span>
264. <div>
265. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
266. </description><link>http://stockchartsrus.blogspot.com/2012/12/hi-there-and-welcome-back-to-cris-s-500.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhV3e0cVfnhyphenhyphenmsyMKFQ6nCLMnPm5V92TqdH5J1qxokZq4wwL-m0eD4lnTPjd_kwTdC5lwyBT_taXnk-nxZ-MQq9hiIk1PMfqVjv49rJN8a5AVnbdbHM-lhLr8HHDTMnDe7u7lWeu9B9X_oD/s72-c/SPY122812.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-730220656260059433</guid><pubDate>Sun, 16 Dec 2012 18:55:00 +0000</pubDate><atom:updated>2012-12-16T10:55:43.553-08:00</atom:updated><title>Santa&#39;s in charge - for now</title><description>&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span&gt;&lt;span&gt;&lt;span&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;
267. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><span>Our peak at the SPY (S&P 500 depository trust units):</span></span></span></span></span><br />
268. <div class="separator" style="clear: both; text-align: left;">
269. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzLOyPQGTU7s4UmLOEcvLXvMT6SFI4KewNwgdEYyp0dVb5tQ-ROsHs8k2576MmOZ3tuqHAzLk9tsAvpORXEK4IwRkdZwohGM4ORLtRcwhh19vFkWwXYBE41ewMFTqKL53EMUd2o_V3_5Q4/s1600/SPY121412.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="196" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzLOyPQGTU7s4UmLOEcvLXvMT6SFI4KewNwgdEYyp0dVb5tQ-ROsHs8k2576MmOZ3tuqHAzLk9tsAvpORXEK4IwRkdZwohGM4ORLtRcwhh19vFkWwXYBE41ewMFTqKL53EMUd2o_V3_5Q4/s320/SPY121412.bmp" width="320" /></a></span></span></div>
270. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><span>While surfing the web I came across an interesting blog entry from <a href="http://www.avondaleam.com/2012/11/is-santa-claus-rally-real.html">Avondale Asset Management</a> on the Santa Claus rally and its effect on stock prices in general through the end of year holiday season:</span></span></span></span></span><br />
271. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9RIq7DGL9ne00_4uotUJ4Kjb4xmNebA_2b6mOWEDAaDsZpuTmKzwrhAZEZ3zQzmrFONGbTCSEWkP9RoNXmowHmqoY80MtIPTjkJvMXA0mNgh38nhggv9oFhgm-IVrnsMLTLpf7alwwa4/s640/S&P+500+Santa+Claus+Rally.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="219" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9RIq7DGL9ne00_4uotUJ4Kjb4xmNebA_2b6mOWEDAaDsZpuTmKzwrhAZEZ3zQzmrFONGbTCSEWkP9RoNXmowHmqoY80MtIPTjkJvMXA0mNgh38nhggv9oFhgm-IVrnsMLTLpf7alwwa4/s320/S&P+500+Santa+Claus+Rally.png" width="320" /></a><span><span><span><b> </b></span></span></span></span></span><br />
272. <br />
273. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><span>So here we are at the end of another year. 2012 is almost behind us but doesn't seem to want to go out without a bang. As was posted in our last entry, stocks themselves looked to be 'climbing-the-wall-of-worry' heading into and now out of the 2012, US Presidential elections. Historically, markets often do quite well coming out of October and into the end of the year and because of the US Presidential cycle's influence it seemed as though this year would be very much like others of the same ilk. Indeed, prices have slowly chopped their way higher over the past month or two and there still is no solid reason to abandon what has turned out for investors, to be a very fine trade. Regular readers will remember that our 'investor camp' was given the 'buy' signal (based on our time tested weekly 13ema/30sma cross over system) a little over a year ago. The capital gain on the trade alone is more than 18% and if you included dividends it is well over 20%. As long as that moving average relationship remains bullish then we are best to just sit back and leave the trade alone. Having said all that, one must respect the 'nose-bleedy' territory the market is currently within. As the chart above illustrates, we recently bumped up against a resistance line (red dotted line) and failed. Should we reverse and start closing below the support lines (blue dotted lines) we may see the end of this current rally. </span></span></span><span><span><span><span><span><span>Given that backdrop, i</span></span></span>t should also be noted, price are indeed currently over-extended. A 50% retracement of the last year's rally represents almost a 15% correction in price from current levels. Notice too how far away our 200 week sma (or our 4 year business cycle moving average) is. Real support in price ironically is back around where our 'investor camp' last bought in. Should a correction in earnest occur through the early part of 2013 (fiscal cliff worries et all) we may see our 'investors' get a chance to buy their investments back at the prices they paid a little over a year ago.   </span></span></span></span></span><br />
274. <br />
275. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><span></span></span></span></span></span><br />
276. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><span><b>Trader Stance</b>:
277. Traders were given a shorting opportunity on the double top and subsequent break of the weekly 13 ema about eight weeks ago. That pattern was quickly reversed when prices rejected the weekly 30 sma touch and we have basically rallied since then</span></span></span>. Traders may consider OTE Short SS ent<span style="font-size: small;">ri</span>es at or near a 70.5% retracement of the recent trading range [0.705(147.32-134.7)+134.7=143.59]. Stops would be at least 10 ticks above those highs at 147.32 and targets would have to be at least two times risk. Should one take the OTE <span style="font-size: small;">short, <span style="font-size: small;">t</span></span>ra<span style="font-size: small;">ders w<span style="font-size: small;">ould be well advised to take parti<span style="font-size: small;">al profits on a test of recent support at or near 134.70.</span></span></span></span></span>
278. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
279. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><span><b>Investors Stance</b>:
280. This camp has been well advised to be long and stay long for more than a
281. year now. Those that took last year's investor 'buy' signal are well
282. into double <span style="font-size: small;">digits</span> returns (if not more) considering dividends. As long
283. as the 13ema remains above the 30sma I see no reason to touch long
284. positions at the moment. Be long and stay long as we collectively climb
285. the 'wall of worry'. </span></span></span></span></span>
286. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
287. <br />
288. <div>
289. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><span>That's all for this post,</span></span></span></span></span></div>
290. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">
291. </span></span><div>
292. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><span>Brian Beamish FCSI</span></span></span></span></span></div>
293. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">
294. </span></span><div>
295. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><span>The Canadian Rational Investor</span></span></span></span></span></div>
296. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">
297. </span></span><div>
298. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><span>the_rational_investor@yahoo.com<br /><a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span></span></span></span></span> </div>
299. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">
300. </span></span><div>
301. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><span><a href="http://therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></span></span></span></div>
302. </description><link>http://stockchartsrus.blogspot.com/2012/12/santas-in-charge-for-now.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzLOyPQGTU7s4UmLOEcvLXvMT6SFI4KewNwgdEYyp0dVb5tQ-ROsHs8k2576MmOZ3tuqHAzLk9tsAvpORXEK4IwRkdZwohGM4ORLtRcwhh19vFkWwXYBE41ewMFTqKL53EMUd2o_V3_5Q4/s72-c/SPY121412.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-5498659676245864637</guid><pubDate>Sun, 21 Oct 2012 19:41:00 +0000</pubDate><atom:updated>2012-10-21T12:41:53.760-07:00</atom:updated><title>Climbing the wall of worry</title><description>&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span&gt;&lt;span&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
303. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span>Our regular weekly peak at the SPY (S&P 500 depository trust units):</span></span></span></span><br />
304. <div class="separator" style="clear: both; text-align: left;">
305. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBwRMyJMKW7xmUlHNbKOYewIg7uNtuEP8QAUWSmckfLzmCtv-6hMHuIkC0QJy0pFcbVgui1eJID-kkD3U3LHXnG1iElOexBxN8nJiU7gj2RBbw_lQjoCPBzhmM3lINWPoF3gxrhUoR0np9/s1600/SPY101912.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="196" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBwRMyJMKW7xmUlHNbKOYewIg7uNtuEP8QAUWSmckfLzmCtv-6hMHuIkC0QJy0pFcbVgui1eJID-kkD3U3LHXnG1iElOexBxN8nJiU7gj2RBbw_lQjoCPBzhmM3lINWPoF3gxrhUoR0np9/s320/SPY101912.bmp" width="320" /></a></span></span></div>
306. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span> Special treat from the Foundation for the <span style="font-size: small;">Study of </span>Cycles (Dow cycle projections):</span></span></span></span><br />
307. <div class="separator" style="clear: both; text-align: left;">
308. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://cycles.memberlodge.com/Default.aspx?pageId=1245872"><img border="0" height="197" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFy3le73w2DQS-W7qQ2wz616LimvgGx7qGe4D0H8TINOdu51KXCo9_8Ta2RowrSLBMFY3QBm0ifWtiabJeBbD1sDmNArM4mDgB8eZUHmCROSZSLa5t4pqC1yGQPFAWmJIqlhlQRjODzn-p/s320/SPY101912b.bmp" width="320" /></a></span></span></div>
309. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><br /></span></span></span></span>
310. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span>With my personal activity focused on the very difficult notion of day trading the Crude Oil markets I must admit I have let some of my other free blog services slide of late. Having said that, the best part of using a very slow timing signal (like our weekly 13ema/30sma cross system) is that once a trend is established, it can often go on for far longer than any of us would expect. Indeed that does seem to be the case with the US stock market in general and the S&P 500 stock index in particular. </span></span></span></span><br />
311. <br />
312. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span>The current price action seen in stocks globally reminds me of the old cliche of 'climbing the proverbial wall of worry' in that the average investor panicked into the financial crisis and dumped their long positions. They will continue to be bearish as price moves back up and claim that 'fundamentals don't justify prices rising'. Ironically, it is at the point where the average investor capitulates (and buys back their positions) that we as 'smart traders' need to start to get worried. As long as I turn on CNBC or Bloomberg TV or any or the other major media outlets and they are talking bearishly then I am more than happy to stay long. Once they start to get bullish, then I will start to get concerned.</span></span></span></span><br />
313. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span>   </span></span></span></span><br />
314. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span>Our last trade (investor 'buy') signal was generated way back in the fall of 2011 (at or near the 120 level on SPY) when the weekly 13ema crossed back above the weekly 30sma. The market has rallied more than 20 points from that level and investors are still cautioned to remain long as that moving average relationship is still pointing rather bullishly. Considering dividends, this one trade about a year ago has turned out to be very profitable.</span></span></span></span><br />
315. <br />
316. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span>Given the dramatic rise in stock valuations over the past year investors should not be surprised if we do indeed have to go through a short term correctionary period in the not too distant future. Our other time tested trading tool (the 50% rule) suggests this market at any given point in time could be subject to a 10% correction. As well, I do believe there is significant support at or near the original breakout point (125 area) and that is indeed about 10% lower than where we currently are.  I say correction because there is little evidence to support the notion that this bull is finished.</span></span></span></span><br />
317. <br />
318. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span>Fundamentally, corporate earnings (while not gangbusters) are 'ok'. Additionally, the yield curve is currently in a normal or healthy state (ie short term interest rates are lower than long term interest rates). Seasonally, we are entering an 'ok' time of year for stocks too (once out of October markets very rarely crash until into the new year) and finally, we have a pending election to deal with. Put all this together and it is my assumption that prices may 'correct' over the coming weeks but that correction is a buying opportunity.</span></span></span></span><br />
319. <br />
320. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span>As an added bonus this post, I have included a chart from the good people at the Foundation for the S<span style="font-size: small;">t<span style="font-size: small;">udy of Cycles</span></span> (<a href="http://cycles.memberlodge.com/">webiste</a>). The chart is an actual price action chart of the Dow overlaid against their current cycle projections. While the chart in itself isn't enough to base an investment decisions, it is interesting how it seems to correlate with the notion that we ought to see higher not lower stock prices over the coming weeks/months.</span></span></span></span><br />
321. <br />
322. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><b>Trader Stance</b>: With the recent daily/4hour double top coming in on SPY traders ought to be looking closely at the weekly 13ema for short term direction. If the market fails then a short trade back to the 30sma seems likely and if that push has any enthusiasm we may see the daily 50% level hit. Traders ought to be focused on OTE ss entries with tight stops just above resistance.</span></span></span></span><br />
323. <br />
324. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><b>Investors Stance</b>: This camp has been well advised to be long and stay long for almost a year now. Those that took last year's investor 'buy' signal are well into double digets returns (if not more) considering dividends. As long as the 13ema remains above the 30sma I see no reason to touch long positions at the moment. Be long and stay long as we collectively climb the 'wall of worry'. </span></span></span></span><br />
325. <br />
326. <div>
327. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span>That's all for this week,</span></span></span></span></div>
328. <div>
329. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span>Brian Beamish FCSI</span></span></span></span></div>
330. <div>
331. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span>The Canadian Rational Investor</span></span></span></span></div>
332. <div>
333. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span>the_rational_investor@yahoo.com<br /><a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span></span></span></span> </div>
334. <div>
335. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span><span><a href="http://therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></span></span></div>
336. <span style="font-size: x-small;"><span><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"> </span></span> </span></span></span></span></span></span> </span></span></span></span></span></span></span></span> </span></span></span></span><br />
337. <br />
338. &lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;</description><link>http://stockchartsrus.blogspot.com/2012/10/climbing-wall-of-worry.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBwRMyJMKW7xmUlHNbKOYewIg7uNtuEP8QAUWSmckfLzmCtv-6hMHuIkC0QJy0pFcbVgui1eJID-kkD3U3LHXnG1iElOexBxN8nJiU7gj2RBbw_lQjoCPBzhmM3lINWPoF3gxrhUoR0np9/s72-c/SPY101912.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-2957627468765346952</guid><pubDate>Sat, 25 Aug 2012 14:01:00 +0000</pubDate><atom:updated>2012-08-25T07:01:37.642-07:00</atom:updated><title>Late summer rally into resistance</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;
339. <span style="font-size: small;"><span>Hi there, and welcome back to CRI's S&P 500 blog.</span></span></div>
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343. <span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdb6NQ0jSyyPyiso25iyGhyHasCq4J-5qH7EGsbbLhYIkQwHIJ1nrBZtYwKx3ah7ppMmEyJXFo8gxuT-_hYDlPUsWhQmNDKGB6Va6n3VW19jrTMIJQxVv-tNiZ6NT8w2twxTbou3fWWBnn/s1600/SPY082412.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="197" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdb6NQ0jSyyPyiso25iyGhyHasCq4J-5qH7EGsbbLhYIkQwHIJ1nrBZtYwKx3ah7ppMmEyJXFo8gxuT-_hYDlPUsWhQmNDKGB6Va6n3VW19jrTMIJQxVv-tNiZ6NT8w2twxTbou3fWWBnn/s320/SPY082412.JPG" width="320" /> </a></span></div>
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347. <span style="font-size: small;">As has been the case now for more than a couple months, the US stock market (as measured by the S&P 500 stock index) has been moving higher after a rather healthy spring correction. So much so that it has broken the spring highs and looks like it wants to move higher in the short term. The trading sessions around big holiday pivots (NewYears, Easter, July 4th, and Labor Day) often see some wild gyrations. This year's Labor Day transition period may see very much the same. The market is moving higher, but we are approaching a significant resistance zone. </span></div>
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351. <span style="font-size: small;">So what may take the wind out of our proverbial sails? Well there are several 'normal' seasonal drivers this time of year as well as some more pressing short term market issues that need to be dealt with. Firstly, the commodities markets are subject to their seasonal issues (the end of the driving season is near and that means a transition of focus away from natural gas and unleaded and back to heating oil for the energy market; construction season is winding down so that means copper and metal markets need to reprice demand; and fall harvest is fast approaching and that means a glut of agricultural supply ought to hit the market in the coming months). Secondly, from a supply/demand perspective of equity (ie stock ownership) the sessions following the Labor day weekend are when many market professionals come back from their summer holiday's and look to take advantage of higher prices to lock in some profits. They will often dump their under performers and look to acquire new names into the anticipated fall dip. And lastly, from a more shorter term perspective, there are several fundamental drivers (specifically from Europe and votes on bailouts of the PIGS nations) that will take place through the end of September. These events ought to inject some uncertainty and fear into the market. So, put it all together and one ought to temper their bullish enthusiasm through the next few months. We have enjoyed a nice rally in many markets through the first eight months of 2012 - now is not the time to get too greedy when it comes to capital gains.</span></div>
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355. <span style="font-size: small;">If one were to look at the chart above, it should be fairly clear to see the current support and resistance zones the equity market is working with. We are now brushing up against the underside of a rather significant trendline that ought to keep a lid on price for at least the short term. That trendline appears to come in at or near the 145 area so there is still a little wiggle room higher should we get some sort of burst higher in the coming sessions (holiday pivot volatility). Conversely, we are more than 10% higher than any real support as the current '50% rule' level is more than 15 points lower than where we closed Friday. Considering too the historic nature of September (it is often the worst performing month in the calendar year), the converging trendlines and the noticible gaps and we have a building list of reasons why price ought to correct. I will be expecting that correction to test the spring lows (126.48 on SPY) and for the market to ultimately trade back to the 50% level (124 area). I say 'correct' and not 'crash' because 1. The yield curve is still very
356. healthy and the US Fed has just recently suggested it will add liquidity
357. (not take it away). 2. Corporate earnings are still very robust. 3.
358. November is a US presidential election and very rarely do markets break
359. in earnest ahead of such events. </span></div>
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363. <span style="font-size: small;">Once past November, all bets are off as the looming 'fiscal cliff' shall dominate trade. Is the market getting ready for that event now by topping out? That could very well be the case but we won't know for sure until we start to actually see some price deterioration. One of the biggest mistakes I see new investors make (and I still make) is to assume something has happened (or is going to happen) before it actually does. As of now, our time tested 'investor signal' (that being the relationship between the weekly 13ema and 30sma) is still positive and has been so since the market turned up late last year. One would have been remiss to step in front of that indicator and as long as it remains positive 'investors' ought to sit tight and hold on to their long positions.</span></div>
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367. <span style="font-size: small;"><b>Trader stance</b>: this camp ought to be long from the significant breakout through 137.80. Stops on that trade still ought to remain below the 132.50 area as no new support zone has been established since the breakout. The break above the spring highs (141.48) does imply a massive bullish ab=cd formation; so until the market does actually breakdown, one still ought to be looking for higher, not lower prices... </span></div>
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371. <span style="font-size: small;"><b>Investor stance</b>: As outlined above, 'Investors' were given the signal to get back into stocks almost a year ago (when the 13ema crossed back above the 30sma) at or near the 120 area. They ought to be sitting on the better part of a 16% capital gain as well as dividends paid along the way. Does it seem realistic for the market to give a bit of that back? Considering the historic average return for stocks is 11% (capital gains plus dividends) and I think one could argue that yes it does. Having said that, our time tested indicator is still bullish so one ought to sit tight and enjoy the nice late summer warm weather - just be ready to act, should the market tell us to do so. </span></div>
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373. <span style="font-size: small;"><br /></span></div>
374. <div style="font-family: "Trebuchet MS",sans-serif;">
375. <span style="font-size: small;"><span>That's all for this week,</span></span></div>
376. <div style="font-family: "Trebuchet MS",sans-serif;">
377. <span style="font-size: small;"><span>Brian Beamish FCSI</span></span></div>
378. <div style="font-family: "Trebuchet MS",sans-serif;">
379. <span style="font-size: small;"><span>The Canadian Rational Investor</span></span></div>
380. <div style="font-family: "Trebuchet MS",sans-serif;">
381. <span style="font-size: small;"><span>the_rational_investor@yahoo.com<br /><a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span></span> </div>
382. <div style="font-family: "Trebuchet MS",sans-serif;">
383. <span style="font-size: small;"><span><a href="http://therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
384. </description><link>http://stockchartsrus.blogspot.com/2012/08/late-summer-rally-into-resistance.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdb6NQ0jSyyPyiso25iyGhyHasCq4J-5qH7EGsbbLhYIkQwHIJ1nrBZtYwKx3ah7ppMmEyJXFo8gxuT-_hYDlPUsWhQmNDKGB6Va6n3VW19jrTMIJQxVv-tNiZ6NT8w2twxTbou3fWWBnn/s72-c/SPY082412.JPG" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-6695959437024161816</guid><pubDate>Mon, 06 Aug 2012 13:17:00 +0000</pubDate><atom:updated>2012-08-06T06:17:37.473-07:00</atom:updated><title>Summer rally back into resistance</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;
385. <span style="font-size: small;">Hi there, and welcome back to CRI's S&P 500 blog.</span></div>
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387. <br /></div>
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389. <span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdqDJWe-9XqjzcnvoOdPjRDxSMYrZ-DRFg4Ja-c4o-X_IDa9HktL6vIyx_N_Rmo0za-cnyi51KwfqbZGAOUbKYWnno1byJa60PY5T_E3SR_gRk9XO-r-ExAX9zu8cCAjTAsCQscT4zLnjH/s1600/SPY080312.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="202" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdqDJWe-9XqjzcnvoOdPjRDxSMYrZ-DRFg4Ja-c4o-X_IDa9HktL6vIyx_N_Rmo0za-cnyi51KwfqbZGAOUbKYWnno1byJa60PY5T_E3SR_gRk9XO-r-ExAX9zu8cCAjTAsCQscT4zLnjH/s320/SPY080312.JPG" width="320" /></a></span></div>
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391. <br /></div>
392. <div style="font-family: "Trebuchet MS",sans-serif;">
393. <span style="font-size: small;">It has been a few months since I have posted an SPY blog update. I have been so busy trading Crude Oil, I just haven't had the time to address this market in earnest. Additionally, the seasonal top has played itself out rather 'normally' so I didn't feel there was anything of note to mention. </span></div>
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397. <span style="font-size: small;">So without further delay, here is CRI's latest offering on the S&P 500 stock index (as measured by the S&P 500 depository notes, SPY).</span></div>
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401. <span style="font-size: small;">Our last post (May, 2012) suggested the bulls needed to take a break heading into the anticipated seasonal peak of late spring. Indeed, the market did break down in the short term when we reached the upper channel trend line (refer to chart above). The correction itself was less than 50% of the run up which suggests the bull is stronger than price would suggest. Interestingly, through the entire correction process, our time tested 'investor' signal (that being the relationship between the weekly 13ema and the 30sma) did not flash any sell signals. While the moving average relationship is tight, it is still bullish and we would be remiss to step in the front of that. If and when it does turn negative, we shall be prompted to act. It has not, so we ought to sit on our long positions and enjoy the nice summer weather.</span></div>
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405. <span style="font-size: small;">Trader Stance: Those wishing to trade the market are faced with a tough trade right at the moment. Over the past few weeks we have rallied right back up into significant resistance (original double top breakdown). Those that are long ought to look for a test of the highs (141.48) but I am not totally convinced we will break those highs. Should we fail at the top of the range here, I will be looking for a test of the summer lows going forward and an ultimate move back to the 50% level and to fill in the rather noticeable gaps left last winter. The market has yet to fail, so for the time being, be long and again....enjoy the nice summer weather. </span></div>
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409. <span style="font-size: small;">Investor Stance: Unlike traders, Investors would have been best serviced doing absolutely nothing through the very normal seasonal top coming out of last spring and into early summer. As stated above, as long as our time tested 'investor signal' remains positive we would be best served staying long and (like our traders buddies) enjoy the nice summer weather...</span></div>
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411. <span style="font-size: small;"><br /></span></div>
412. <div style="font-family: "Trebuchet MS",sans-serif;">
413. <span style="font-size: small;">That's all for this week,</span></div>
414. <div style="font-family: "Trebuchet MS",sans-serif;">
415. <span style="font-size: small;">Brian Beamish FCSI</span></div>
416. <div style="font-family: "Trebuchet MS",sans-serif;">
417. <span style="font-size: small;">The Canadian Rational Investor</span></div>
418. <div style="font-family: "Trebuchet MS",sans-serif;">
419. <span style="font-size: small;">the_rational_investor@yahoo.com<br /><a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span> </div>
420. <div style="font-family: "Trebuchet MS",sans-serif;">
421. <span style="font-size: small;"><a href="http://therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></div>
422. <div style="font-family: "Trebuchet MS",sans-serif;">
423. <br /></div>
424. <div style="font-family: "Trebuchet MS",sans-serif;">
425. <span style="font-size: small;"><br /></span></div>
426. &lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;&lt;/span&gt;</description><link>http://stockchartsrus.blogspot.com/2012/08/summer-rally-back-into-resistance.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdqDJWe-9XqjzcnvoOdPjRDxSMYrZ-DRFg4Ja-c4o-X_IDa9HktL6vIyx_N_Rmo0za-cnyi51KwfqbZGAOUbKYWnno1byJa60PY5T_E3SR_gRk9XO-r-ExAX9zu8cCAjTAsCQscT4zLnjH/s72-c/SPY080312.JPG" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-6312213576995026050</guid><pubDate>Sun, 13 May 2012 17:53:00 +0000</pubDate><atom:updated>2012-05-13T10:53:55.723-07:00</atom:updated><title>The Bull Needs To Take A Break</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;
427. <span style="font-size: small;"><span><span><span><span><span>Hi there, and welcome back to CRI's S&P 500 blog.</span></span></span></span></span></span></div>
428. <div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;">
429. <span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmegAB4KakLelVBOdxek7xMA_5g_iJP3wE-9uQTMjHB7fI2evZDMR-ereNr_nZVe-xRwp__32NS-TvTq4AkRzcEuv6Spm4EVytPZ2chRULmkhPqD8blrDx3_kHgW4sDBaUqKletFEMfXcq/s1600/SPY051112.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="193" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmegAB4KakLelVBOdxek7xMA_5g_iJP3wE-9uQTMjHB7fI2evZDMR-ereNr_nZVe-xRwp__32NS-TvTq4AkRzcEuv6Spm4EVytPZ2chRULmkhPqD8blrDx3_kHgW4sDBaUqKletFEMfXcq/s320/SPY051112.JPG" width="320" /></a></span></div>
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431. <span style="font-size: small;"><span><span><span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">The seasonally positive window for assets in general and equity related ones in particular has begun to close.  As suggested recently, those long the breakout trade from last fall ought to have been stopped out of their long positions when the market broke the 135.76 lows (marked as point A on the chart above). Since our Investor signal (that being the relationship between the weekly 13 EMA and the 30 SMA) is still sitting rather bullishly; I am reluctant to consider the current pull back anything more than a correction within a broader move higher. Should that moving average relationship change (over the coming weeks/months) our collective stance on equity investments will change - but that is not the case at present.</span></span></span></span></span></span></span></div>
432. <div style="font-family: "Trebuchet MS",sans-serif;">
433. <span style="font-size: small;"><span><span><span><span><span><br /></span></span></span></span></span></span></div>
434. <div style="font-family: "Trebuchet MS",sans-serif;">
435. <span style="font-size: small;"><span><span><span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">So if I believe price is correcting, were we ought to expect it to move to? Since there are both a 50% retracement target and a rather noticeable gap around the 125 area, that shall be my short term target going forward (point B on chart above). That represents about a 12% correction from the highs and is historically 'normal' given the upcoming seasonal pressures. Should all hell break lose, my secondary downside target will be a test of the entire uptrend (and another significant gap) in and around the 115 area (point C on chart above).</span></span></span></span></span></span></span></div>
436. <div style="font-family: "Trebuchet MS",sans-serif;">
437. <br /></div>
438. <div style="font-family: "Trebuchet MS",sans-serif;">
439. <span style="font-size: small;"><span><span><span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">Traders Stance: Either flat and enjoying the nice profits from being long through the seasonally bullish window or if one must, short from the break of 135.76 (with stops just above the recent highs at 141.66). This would represent a six handle risk for a ten handle profit potential and frankly I wouldn't be surprised to see the trades run those stops. One probably ought to try and get/be short from above the 137.5 area expecting them to run it to new highs. A stop above the 142.5 area would represent a $5 risk for a $12.50+ reward (or about </span></span></span></span></span></span></span><span style="font-size: small;"><span><span><span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">1</span></span></span></span></span></span></span><span style="font-size: small;"><span><span><span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">:</span></span></span></span></span></span></span><span style="font-size: small;"><span><span><span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">2.5). The market may not rally back up to the 140 area and I might miss the trade but I like the risk reward ratio better by being a little patient if I must be short - which really I am not leaning to be.</span></span></span></span></span></span></span></div>
440. <div style="font-family: "Trebuchet MS",sans-serif;">
441. <br /></div>
442. <div style="font-family: "Trebuchet MS",sans-serif;">
443. <span style="font-size: small;"><span><span><span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">Investors Stance: As investors we were given the 'time to get back in' signal more than five months ago. E</span></span></span></span></span></span><span><span><span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">ven with the recent pullback that represents a  7.5% capital gain</span></span></span></span></span></span></span><span style="font-size: small;"><span><span><span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">. With dividends, this represents a very acceptable return. While no Investor sell signal is close, based on the chart analysis above, one ought to expect to see some more softness in the coming weeks and that capital return may 'come-in' a bit more. </span></span></span></span></span></span><span><span><span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">Having said that, t</span></span></span></span></span></span><span><span><span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">hat softness isn't necessarily a bad thing. Indeed, what we may find is that the next significant low represents a place where we as investors can move our collective stops and 'lock-in' profits over the longer term. Markets just can't keep going up indefinitely. Like stair-cases, there is a rise then a pause, then a rise, then a pause. For now, our 'Investor signal' is still bullish and therefore we must consider this a 'pause' and nothing more. </span></span></span></span></span></span></span></div>
444. <div style="font-family: "Trebuchet MS",sans-serif;">
445. <br /></div>
446. <div style="font-family: "Trebuchet MS",sans-serif;">
447. <span style="font-size: small;"><span><span><span><span><span><br /></span></span></span></span></span></span></div>
448. <div style="font-family: "Trebuchet MS",sans-serif;">
449.  
450. <span style="font-size: small;"><span><span><span><span><span>That's all for this week,</span></span></span></span></span></span></div>
451. <div style="font-family: "Trebuchet MS",sans-serif;">
452.  
453. <span style="font-size: small;"><span><span><span><span><span>Brian Beamish FCSI</span></span></span></span></span></span></div>
454. <div style="font-family: "Trebuchet MS",sans-serif;">
455.  
456. <span style="font-size: small;"><span><span><span><span><span>The Canadian Rational Investor</span></span></span></span></span></span></div>
457. <div style="font-family: "Trebuchet MS",sans-serif;">
458.  
459. <span style="font-size: small;"><span><span><span><span><span>the_rational_investor@yahoo.com<br />
460. <a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span></span></span></span></span></span> </div>
461. <div style="font-family: "Trebuchet MS",sans-serif;">
462.  
463. <span style="font-size: small;"><span><span><span><span><span><a href="http://therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></span></span></span></span></div>
464. &lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;span&gt;&lt;span&gt;&lt;span&gt;&lt;span&gt;&lt;br /&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;</description><link>http://stockchartsrus.blogspot.com/2012/05/bull-needs-to-take-break.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmegAB4KakLelVBOdxek7xMA_5g_iJP3wE-9uQTMjHB7fI2evZDMR-ereNr_nZVe-xRwp__32NS-TvTq4AkRzcEuv6Spm4EVytPZ2chRULmkhPqD8blrDx3_kHgW4sDBaUqKletFEMfXcq/s72-c/SPY051112.JPG" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-8317992740361461159</guid><pubDate>Sat, 28 Apr 2012 15:37:00 +0000</pubDate><atom:updated>2012-04-28T08:37:59.384-07:00</atom:updated><title>The bulls remain in control</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;
465. <span style="font-size: small;"><span><span><span><span>Hi there, and welcome back to CRI's S&P 500 blog.</span></span></span></span></span></div>
466. <div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;">
467. <span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYIy7UGMO9VirtoWULdNtmhHexYuqk1VB2bbSnfOsSmRNLm5n_DCcMx2EJ-N7Biqhz8j6B_GrhmDMnZDtEEB7VGEX0gt2uFE-5tl6sDjY3aoGn8y5BQzGyUOFYGsk6hwp5iciJEXHFYvOl/s1600/SPY042712.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="198" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYIy7UGMO9VirtoWULdNtmhHexYuqk1VB2bbSnfOsSmRNLm5n_DCcMx2EJ-N7Biqhz8j6B_GrhmDMnZDtEEB7VGEX0gt2uFE-5tl6sDjY3aoGn8y5BQzGyUOFYGsk6hwp5iciJEXHFYvOl/s320/SPY042712.JPG" width="320" /></a></span></div>
468. <div style="font-family: "Trebuchet MS",sans-serif;">
469. <span style="font-size: small;"><span><span><span><span>Through this seasonally good time of year for the economy in general and equity investments in particular, it is not surprising to see the SPY move up to our previously stated upside objectives. While the weekly bull flag target was hit rather briskly, the market came within a whisker of the monthly target before backing off here recently. The recent pull back probably represents a good place for traders to move their collective stops to lock in a good portion of the late winter early spring rally. While I am still looking for another burst higher here in the short term, one must appreciate both the seasonal nature of stocks and the sheer distance of this latest bull run. Interestingly, a 50% retracement of this bull run would bring us right back to about where the original buy level came in - but we will leave that analysis for when the market does indeed breakdown.</span></span></span></span></span></div>
470. <div style="font-family: "Trebuchet MS",sans-serif;">
471. <br /></div>
472. <div style="font-family: "Trebuchet MS",sans-serif;">
473. <span style="font-size: small;"><span><span><span><span>Trader Stance: As stated above, traders ought to move their stops on the remaining half of their long position [exiting first half upon hitting the first upside target (136.71)] to just under the recent lows (135.76) and exit should the market break below this important pivot area.  </span></span></span></span></span></div>
474. <div style="font-family: "Trebuchet MS",sans-serif;">
475. <span style="font-size: small;"><span><span><span><span><br /></span></span></span></span></span></div>
476. <div style="font-family: "Trebuchet MS",sans-serif;">
477. <span style="font-size: small;"><span><span><span><span>Investors Stance: Investors have been long since last fall (when our time tested indicator - that being the relationship between the weekly 13 EMA and the 30 SMA - turned bullish) and there appears to be no reason to change that stance as of this week's close. While price may fluctuate for a while in our current trading range, collect dividends and know you already have a capital gain buffer to absorb any short term pullbacks. As long as our moving average relationship remains positive, stocks are an ok place to be.</span></span></span></span></span></div>
478. <div style="font-family: "Trebuchet MS",sans-serif;">
479. <span style="font-size: small;"><span><span><span><span><br /></span></span></span></span></span></div>
480. <div style="font-family: "Trebuchet MS",sans-serif;">
481. <span style="font-size: small;"><span><span><span><span><br /></span></span></span></span></span></div>
482. <div style="font-family: "Trebuchet MS",sans-serif;">
483. <span style="font-size: small;"><span><span><span><span>That's all for this week,</span></span></span></span></span></div>
484. <div style="font-family: "Trebuchet MS",sans-serif;">
485. <span style="font-size: small;"><span><span><span><span>Brian Beamish FCSI</span></span></span></span></span></div>
486. <div style="font-family: "Trebuchet MS",sans-serif;">
487. <span style="font-size: small;"><span><span><span><span>The Canadian Rational Investor</span></span></span></span></span></div>
488. <div style="font-family: "Trebuchet MS",sans-serif;">
489. <span style="font-size: small;"><span><span><span><span>the_rational_investor@yahoo.com<br />
490. <a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span></span></span></span></span> </div>
491. <div style="font-family: "Trebuchet MS",sans-serif;">
492. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&lt;span&gt;&lt;span&gt;&lt;span&gt;&lt;a href=&quot;http://therationalinvestor.ca/&quot;&gt;http://www.therationalinvestor.ca&lt;/a&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;</description><link>http://stockchartsrus.blogspot.com/2012/04/bulls-remain-in-control.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYIy7UGMO9VirtoWULdNtmhHexYuqk1VB2bbSnfOsSmRNLm5n_DCcMx2EJ-N7Biqhz8j6B_GrhmDMnZDtEEB7VGEX0gt2uFE-5tl6sDjY3aoGn8y5BQzGyUOFYGsk6hwp5iciJEXHFYvOl/s72-c/SPY042712.JPG" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-5490248677680285719</guid><pubDate>Sun, 19 Feb 2012 18:33:00 +0000</pubDate><atom:updated>2012-02-19T10:33:53.478-08:00</atom:updated><title>The bulls are back in control</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&lt;span&gt;&lt;span&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
493. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi3yFZrMuYrqqu0jQ-xWl2dkZ8MPxjIgMKzyFluOQv4lk_cwbK2MVhe3kBJL22sOkp2uVJAHOPhBYL3hH7WmCEIVu_UHKqhvnoPjbgin4a3tUfWXjrM6vCDktPAIVrpyB8dwRvJ5YVeU_Vk/s1600/SPY021712.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="194" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi3yFZrMuYrqqu0jQ-xWl2dkZ8MPxjIgMKzyFluOQv4lk_cwbK2MVhe3kBJL22sOkp2uVJAHOPhBYL3hH7WmCEIVu_UHKqhvnoPjbgin4a3tUfWXjrM6vCDktPAIVrpyB8dwRvJ5YVeU_Vk/s320/SPY021712.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
494. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span>The more I do this the more I am reminded that more than 80% of people who 'play' the market lose money. Only those that can remove emotion from trading can truly prosper. Case in point - those that sold (or even went short) into the panic of last fall are feeling the pain today. Indeed, if one were to believe the media, there is plenty to bring the markets down, and yet they rise. I myself was incredibly reluctant to believe the latest 'Investor' buy signal and yet here we are - moving higher. Having said that, with this past week's breakout through last spring's highs on the SPY we are registering yet another massive buy signal. As the saying goes, higher highs and higher lows define a bull market. Seasonally too, we can and ought to see the markets move higher. The current seasonal window closes near May which is several months away. Make no mistake, there are plenty of reasons to see a quick 1-2 percent drop. But unlike the last five months of 2011, pull backs ought to be considered as buying opportunities. </span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
495. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span>The current bull charge began some eight weeks ago. Traders and investors got the signal to 'get back in' in unison (which is rather bullish in itself). The signal was both a crossing of the 13 EMA back above the 30 SMA (Investor signal) and a double bottom price pattern (trader signal). </span></span></span><span><span><span></span></span></span><span><span><span> </span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
496. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span><b>Traders Stance</b>: As suggested above, one ought to be long now (from about 126.46) and that trade has been on now for more than seven weeks. Stops ought to be just below the recent significant lows and the 13 EMA (just under 130 area). The market is still pointing higher so I wouldn't be in a big hurry to take the position off; ultimate target is 143 area (weekly bull flag).</span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><b><span style="font-size: small;"><span><span><span><br />
497. </span></span></span></span></b></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span><b>Investors Stance</b>: Investors got the signal to get back into stocks at just about the same time as traders (in and around the 126.50 area). This 'investment' is up more than 7% so a period of consolidation ought to be expected at some point in the not too distant future. As the massive bull flag suggests an ultimate upside target of 143 (or a 13.5% capital gain from 126) will be the point when we officially suggest taking profits. That may not happen for many months down the road, but considering the January Barometer's reading, the fact that this is a US Presidential election year, and the fact we are very early in the seasonal trade, it does seem like a realistic target.   </span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
498. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span>That's all for this week,</span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span>Brian Beamish FCSI</span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span>The Canadian Rational Investor</span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span>the_rational_investor@yahoo.com<br />
499. &lt;a href=&quot;http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink&quot;&gt;http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink&lt;/a&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt; &lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&lt;span&gt;&lt;span&gt;&lt;a href=&quot;http://therationalinvestor.ca/&quot;&gt;http://www.therationalinvestor.ca&lt;/a&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;</description><link>http://stockchartsrus.blogspot.com/2012/02/bulls-are-back-in-control.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi3yFZrMuYrqqu0jQ-xWl2dkZ8MPxjIgMKzyFluOQv4lk_cwbK2MVhe3kBJL22sOkp2uVJAHOPhBYL3hH7WmCEIVu_UHKqhvnoPjbgin4a3tUfWXjrM6vCDktPAIVrpyB8dwRvJ5YVeU_Vk/s72-c/SPY021712.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-5262408322030959746</guid><pubDate>Tue, 10 Jan 2012 17:20:00 +0000</pubDate><atom:updated>2012-01-10T09:20:02.232-08:00</atom:updated><title>A resolution to the upside</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&lt;span&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
500. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVzI8t4JosfLGjin_ZKwcxA2HhY6oyEHJzqn6MHqyhR0mXww0vpXNiZuSb-18IKnejwlw4UwMp8A2I3Uvi8bhn5Tysxb4LSu7EWjkg8xC2vbE0hJGhQvR8YX3Nnd8k3-gTvSidQKs_lYFb/s1600/SPY011012.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="198" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVzI8t4JosfLGjin_ZKwcxA2HhY6oyEHJzqn6MHqyhR0mXww0vpXNiZuSb-18IKnejwlw4UwMp8A2I3Uvi8bhn5Tysxb4LSu7EWjkg8xC2vbE0hJGhQvR8YX3Nnd8k3-gTvSidQKs_lYFb/s320/SPY011012.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><br />
501. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
502. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span>After taking some time off to visit with family I am back in the saddle to comment and guide readers through these tumultuous markets. And what greeted me first thing yesterday morning was a surprisingly bullish tone to the market. They often say that January's price action will give you an indication of what to expect for the remainder of the year (known as the January Barometer). With this in mind, I will be closely watching how January plays itself out. Additionally, we are now into the second week of Q1, 2012 so I will be watching how each sector finishes the week for an indication of where international money managers are putting money to work. The more I do this (I'm now comfortably into my 17th year of being a full time student-of-the-market) the more I find it interesting how we move from one market cliche to another. In this case, I am reminded of Don </span></span>Vialoux<span><span>'s addage..... <i>buy when it snows and sell when it goes</i>.</span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
503. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span>So Lets review how our two primary camps ought to be positioned:</span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><b>Traders:</b> Interestingly, both traders and investors got good looking buy signals four weeks ago, each for their own reasons. Traders ought to have bought the steep double bottom formation where the long trigger was the high of 126.46 (from the week of December 5th). This occurred through the end of the week of December 19th. Santa Claus came this year, indeed. Targets on this trade should be in and around the 131.00 area [Bull flag formation: (126.46-115.47)+120.03 = 131.02]. Stops on this trade ought to be just below the recent significant lows of 120.03.</span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><b>Investors:</b> As indicated above, investors finally got the signal to get back into stocks through the week of December 19th. This signal was generated when the short term moving average (13 EMA) crossed back above the slow moving average (30 SMA). And again, this signal was generated when the market broke back above the early December highs of 126.26. For those that missed the initial signal, look to buy half your position now and use any pullbacks to add to the position. I do see a rather noticeable gap at 125.50 that was left just a couple weeks ago. My hunch would be that that gap will be filled at some point in the not too distant future. With the move though 128.60 just this week, we now have a rather large upside target of 138.32 </span></span><span><span>[Bull flag formation: (128.6-106.75)+120.03 = 115.47]. Yes this number does seem a bit extreme, but as we head into the typical seasonal peak of late spring, I wouldn't be surprised to see that number hit. And as Don suggests, Sell those stocks when that snow melts!!!</span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
504. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span>That's all for this week,</span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span>Brian Beamish FCSI</span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span>The Canadian Rational Investor</span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span>the_rational_investor@yahoo.com<br />
505. &lt;a href=&quot;http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink&quot;&gt;http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink&lt;/a&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt; &lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&lt;span&gt;&lt;a href=&quot;http://therationalinvestor.ca/&quot;&gt;http://www.therationalinvestor.ca&lt;/a&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt; &lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;</description><link>http://stockchartsrus.blogspot.com/2012/01/resolution-to-upside.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVzI8t4JosfLGjin_ZKwcxA2HhY6oyEHJzqn6MHqyhR0mXww0vpXNiZuSb-18IKnejwlw4UwMp8A2I3Uvi8bhn5Tysxb4LSu7EWjkg8xC2vbE0hJGhQvR8YX3Nnd8k3-gTvSidQKs_lYFb/s72-c/SPY011012.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-3794087257852795923</guid><pubDate>Tue, 13 Dec 2011 19:18:00 +0000</pubDate><atom:updated>2011-12-13T11:18:55.862-08:00</atom:updated><title>Correction at key pivot</title><description>&lt;div style=&quot;font-family: &amp;quot;Helvetica Neue&amp;quot;,Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Helvetica Neue&amp;quot;,Arial,Helvetica,sans-serif;&quot;&gt;&lt;br /&gt;
506. </div><div class="separator" style="clear: both; font-family: "Helvetica Neue",Arial,Helvetica,sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhW0GJl4f9HELVw5ytFI6DFo4i0s81Gnr-M7QZMexlXFL7KCxrkcw9Zcwk1IjZN0tIkP1iopIpaa5UIfM5o3wDIPHBpJmjZn_WLUmc6qK9AgJmbGS8_grqiE138EadDpQyvWLqkJcrXkUus/s1600/SPY121311.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="199" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhW0GJl4f9HELVw5ytFI6DFo4i0s81Gnr-M7QZMexlXFL7KCxrkcw9Zcwk1IjZN0tIkP1iopIpaa5UIfM5o3wDIPHBpJmjZn_WLUmc6qK9AgJmbGS8_grqiE138EadDpQyvWLqkJcrXkUus/s320/SPY121311.JPG" width="320" /> </a></span></div><div class="separator" style="clear: both; font-family: "Helvetica Neue",Arial,Helvetica,sans-serif; text-align: left;"><br />
507. </div><div class="separator" style="clear: both; font-family: "Helvetica Neue",Arial,Helvetica,sans-serif; text-align: left;"><span style="font-size: small;">As we enter the 20th week of this current correction we seem to be approaching some kind of pivot. You will notice on the chart above, a massive wedge pattern that has taken a year and a half to form. While I am reluctant to call a breakout just yet, a weekly close above the 128.60 area would imply a resumption of last year's bull run at best and at worst would represent an indication of a serious test of last summer's peaks. That has not happened yet and as of writing we are still very much range bound between that 129.42 peak and the recent violent low of 116.2. From a cautionary perspective - our time tested trending indicator (that being the relationship between the 13EMA and the 30SMA) is still sitting in a negative position [Interestingly, a break above that 130 area would probably be enough to drag the short term moving average back above the medium term moving average]. Until that relationship changes (no matter how tempting it may be) it is well advised for those 'investors' out there to error on the side of caution. Another additional cautionary note - the low of just three weeks ago was extremely violent and did leave a sizable gap which all suggest we need to test that level again at some point down the road.</span></div><div class="separator" style="clear: both; font-family: "Helvetica Neue",Arial,Helvetica,sans-serif; text-align: left;"><br />
508. </div><div class="separator" style="clear: both; font-family: "Helvetica Neue",Arial,Helvetica,sans-serif; text-align: left;"><span style="font-size: small;">So what fundamentals could be causing the market to consolidate and possibly resume it's upward march? There are two answers to that I believe. 1. Corporate earnings have been remarkably good. From what I understand, S&P 500 company earnings are nearing 2007 levels once again. Third quarter earnings season put a bottom in the market. 2. Macro economic developments could help the market. Specifically, there is talk of QE3 once again. Should the US Fed. embark on yet another currency printing regime, the markets will eat it up just like the last two QEs. Additionally, there is some optimism about European debt. While not definitive, bond yields themselves have begun to trend lower. It is far too early to declare that problem over (or really near over) but as long as it isn't in crisis mode, equity prices will generally move higher through this seasonally good time of year. Speaking of seasonality, equity markets generally get a bid through the end of the calendar year. Weather it be portfolio dressing by find managers, or the generally upbeat feeling around holiday spending, prices generally rise in what is called 'The Santa Claus Rally'. </span></div><div class="separator" style="clear: both; font-family: "Helvetica Neue",Arial,Helvetica,sans-serif; text-align: left;"><span style="font-size: small;"><br />
509. </span></div><div class="separator" style="clear: both; font-family: "Helvetica Neue",Arial,Helvetica,sans-serif; text-align: left;"><span style="font-size: small;">So with all that being said, how ought our two camps to be positioned?</span></div><div class="separator" style="clear: both; font-family: "Helvetica Neue",Arial,Helvetica,sans-serif; text-align: left;"><span style="font-size: small;"><b>Investors:</b> while it has been tempting to get back into the stock market, our time tested 'Investor' indicator is still pointing lower. It is approaching a potential cross and there is a bullish price pattern trying to form. So pay close attention over the coming weeks as we attempt to breakout.</span></div><div class="separator" style="clear: both; font-family: "Helvetica Neue",Arial,Helvetica,sans-serif; text-align: left;"><span style="font-size: small;"><b>Traders:</b> One has to have an iron stomach to trade this market. From the one day crash/reversal seen just three weeks ago to the even more violent reversal of ten weeks ago, those getting caught short are getting punished. If you have the good fortune to short the tops you must take profits along the way down or you may see a winner quickly turn into a nightmare. My personal hunch is to stay on the sidelines until we get a new price pattern to work with. Currently I am looking for a test of the low seen just a few weeks ago. I would use a weekly close above 128.6 to look for new long entries.</span></div><div class="separator" style="clear: both; font-family: "Helvetica Neue",Arial,Helvetica,sans-serif; text-align: left;"><br />
510. </div><div class="separator" style="clear: both; font-family: "Helvetica Neue",Arial,Helvetica,sans-serif; text-align: left;"></div><div style="font-family: "Helvetica Neue",Arial,Helvetica,sans-serif;"><span style="font-size: small;"><span></span></span><div><span style="font-size: small;"><span>That's all for this week,</span></span></div><div><span style="font-size: small;"><span>Brian Beamish FCSI</span></span></div><div><span style="font-size: small;"><span>The Canadian Rational Investor</span></span></div><div><span style="font-size: small;"><span>the_rational_investor@yahoo.com<br />
511. &lt;a href=&quot;http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink&quot;&gt;http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink&lt;/a&gt;&lt;/span&gt;&lt;/span&gt; &lt;/div&gt;&lt;div&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&lt;a href=&quot;http://therationalinvestor.ca/&quot;&gt;http://www.therationalinvestor.ca&lt;/a&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;/div&gt;</description><link>http://stockchartsrus.blogspot.com/2011/12/correction-at-key-pivot.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhW0GJl4f9HELVw5ytFI6DFo4i0s81Gnr-M7QZMexlXFL7KCxrkcw9Zcwk1IjZN0tIkP1iopIpaa5UIfM5o3wDIPHBpJmjZn_WLUmc6qK9AgJmbGS8_grqiE138EadDpQyvWLqkJcrXkUus/s72-c/SPY121311.JPG" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-1410628781447675522</guid><pubDate>Sat, 26 Nov 2011 20:36:00 +0000</pubDate><atom:updated>2011-11-27T09:23:34.605-08:00</atom:updated><title>The Painful Process of Correcting Continues</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
512. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhruRUKLV6vIVNt3Zh5qkwMGuIiS3N6uCd08GIUMC68GhmyJncBHBW-lgYHOr5ECZToJFytFVinhx6TmITdvCmB3Jq2a9Zl6xREu07NA50bcsIyswkqpg_ZH5f2N3d3c0xxJplBwbSzrmFP/s1600/SPY112511.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="199" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhruRUKLV6vIVNt3Zh5qkwMGuIiS3N6uCd08GIUMC68GhmyJncBHBW-lgYHOr5ECZToJFytFVinhx6TmITdvCmB3Jq2a9Zl6xREu07NA50bcsIyswkqpg_ZH5f2N3d3c0xxJplBwbSzrmFP/s320/SPY112511.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
513. </div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
514. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Third quarter, 2011 earnings season came to the market's rescue. Indeed (as measured by the S&P depository receipts - SPY) the market enjoyed a 20% bounce off the lows seen in early October.  As earnings season has drawn to a close, macro-economic concerns have overtaken the bullish euphoria seen just a couple weeks ago. Since many industrialized countries spend far more than they bring in they are held hostage by the market. If the market feels there may be a chance of default, countries can literally see their cost of borrowing skyrocket. That seems to be the case for the 'PIGS' of the Euro land but it now seems like that contagion is spreading the previously thought immune countries like Germany. Many have suggested that (in our globalized system) if a region as large as Euro-land slips into recession, the rest of the world will be dragged down with it. While it may be a bit early to come to that stark conclusion, one must respect the fact that Europe is now firmly on the road to recession. Couple this with the fact that China is in the process of 'cooling' its economy (in an effort to dampen inflation fears) and one can't help but get a rather gloomy feeling for equity valuations going forward.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
515. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">Having said all that, lets take a look at the chart and see what it suggests we ought to expect going forward. The one thing that stands out to me when I look at this chart is the fact that the market moved back to the 50% level of the 2010-2011 rally (117.735) and has spent the past four months oscillating around this number. As is so typical of us humans, in both overly optimistic and overly pessimistic fashion, we moved way below and then way above the 50% level only to be pulled back to it. Consider too the fact that our time tested 'trending indicator' (that being the relationship between the 13 EMA and the 30 SMA) has been bearish for more than four months (and still remains very bearish) it shouldn't surprise anyone that our cautionary stance on equity investments continues. The market is correcting and until things settle down a bit, the correction will go on.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
516. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">Now lets take a look at how our two investment 'camps' ought to be positioned through this well defined correction:</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Investors</b>: Investors have been well advised to be in cash for more than a quarter of a year now. Our trending indicator (as outlined above) suggests cash is the place to be and will remain so until the 13 EMA can cross back above the 30 SMA on a weekly basis. If and when that relationship does change, so too will our Investor stance.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Traders</b>: Those who consider themselves swift enough to take advantage of the turns have seen some wild price action over the past few months. Since the October lows, the broader market has rallied some 20 plus percent (from trough to peak) and then turned and gave a large portion of that back. Currently we are heading towards filling an important gap that was left at 115.71. Additionally, a move back to that area would bring the market back to a significant trend-line (dotted trend-line on chart above). My hunch, if you can have one, is that we will test this trend-line over the coming sessions. </span><span style="font-family: "Trebuchet MS",sans-serif;">I  believe we will hit some sort of selling climax in early December and  then have a small counter-trend rally into the seasonally friendly end  of year - the Santa Claus rally.</span></span><span style="font-family: "Trebuchet MS",sans-serif; font-size: small;"> It is important to note</span><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">, the lows from October were 'V' shaped which does suggest they will need to be tested in earnest some time down the road. Once into January, I expect that October low to be tested. We will then find out if the</span></span><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> perceived</span></span><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> bottom put in just last month is for real or not - trade accordingly.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
517. </div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
518. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">That's all for this week,</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Brian Beamish FCSI</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The Canadian Rational Investor</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">the_rational_investor@yahoo.com<br />
519. <a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span> </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></div><span style="font-size: x-small;"><br />
520. &lt;/span&gt;</description><link>http://stockchartsrus.blogspot.com/2011/11/painful-process-of-correcting-continues.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhruRUKLV6vIVNt3Zh5qkwMGuIiS3N6uCd08GIUMC68GhmyJncBHBW-lgYHOr5ECZToJFytFVinhx6TmITdvCmB3Jq2a9Zl6xREu07NA50bcsIyswkqpg_ZH5f2N3d3c0xxJplBwbSzrmFP/s72-c/SPY112511.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-8352383925303347448</guid><pubDate>Sat, 12 Nov 2011 17:55:00 +0000</pubDate><atom:updated>2011-11-12T09:56:21.697-08:00</atom:updated><title>Consolidating in Upper End of Bearish Channel</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
521. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgG-i7mF67eFyqOqm6eFpWzNzd9CLoXcYZmiCk84Gxacb5lEK3LFBiCaiyZ6DNwv5-Nllq8G8v4lp8FVc-rcmZ3YlQuDJxBI7veC-qqFzHXPNruQGjTPJNKNKdaJtfWDHpvc7MTXg5TWHxa/s1600/SPY111111.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="198" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgG-i7mF67eFyqOqm6eFpWzNzd9CLoXcYZmiCk84Gxacb5lEK3LFBiCaiyZ6DNwv5-Nllq8G8v4lp8FVc-rcmZ3YlQuDJxBI7veC-qqFzHXPNruQGjTPJNKNKdaJtfWDHpvc7MTXg5TWHxa/s320/SPY111111.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
522. </div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
523. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">While the world awaits some sort of climactic finish to the European debt situation, corporate earnings have come to the market's rescue. Indeed, given the relatively stellar performance from a wide variety of sectors, one can now understand the relative ferocity of the October bounce. The pros knew earnings were going to be good and stocks were bid up into the event. Unfortunately, that event is now almost done and macro economic events may start to dominate the investment stage once again. While we have yet to break back into the 'glass half empty'' side of this correction (dominated by doom and gloom) we are consolidating right on the pivot line. Should we fail through these consolidation lows, a revisit of the 50% level (and more importantly the gap left on the weekly charts just under it) seems highly likely. Given too our fear of the rising 'Ted spread' (and more importantly its' accelerating trend) investors are still well advised to sit on the sidelines, pay off all your debts and ride this current market out.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
524. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><b>Investors:</b> As has been the case for some time, investors were well advised to 'get-out' through the end of July/beginning of August. Out time tested 'investor' indicator (that being the relationship between the 13 EMA and the 30 SMA) turned bearish the week of July 25th and the market broke its most recent support the following week. Since then, the moving averages have been pushed to extremes but still remain bearish. Until that relationship changes (as seen through the correction of 2010) one is best to keep investment dollars in a nice safe place.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
525. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><b>Traders:</b> This market isn't for the faint at heart. If you can consistently make money in these markets then congrats to you - but enough commentary, on to the trade. After the sizable bounce through October, we are now entering the 3rd week of consolidation. Through this period that market has been bounded by the 30 SMA on the upside and the 13 EMA on the downside. The market tested the 13EMA again this week and it held. We finished the week back above the 30 SMA and are now within shouting distance of a breakout. Should the 129.42 level be breached one could realistically see a test of the summer highs in earnest. Conversely, should we fail through last week's lows of 121.52, one ought to expect a move back to the weekly 50% level and the rather noticeable gap left just below it. Either way, stops (and here I mean risk) on the trade would be rather wide and may not be worth the potential profit. As I said earlier, this market ain't for the faint at heart. I myself may just leave the whole thing alone for a little while. Check in on <a href="http://www.therationalinvestor.ca/RI_Tradents.php#daytrade">CRI's Day Trading Blog</a> to see if and where I am doing any day-trading at all.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
526. </div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
527. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">That's all for this week,</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Brian Beamish FCSI</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The Canadian Rational Investor</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">the_rational_investor@yahoo.com</span><br />
528. <span style="font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink" style="font-family: "Trebuchet MS",sans-serif;">http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink</a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></div><br />
529. &lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;</description><link>http://stockchartsrus.blogspot.com/2011/11/consolidating-in-upper-end-of-bearish.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgG-i7mF67eFyqOqm6eFpWzNzd9CLoXcYZmiCk84Gxacb5lEK3LFBiCaiyZ6DNwv5-Nllq8G8v4lp8FVc-rcmZ3YlQuDJxBI7veC-qqFzHXPNruQGjTPJNKNKdaJtfWDHpvc7MTXg5TWHxa/s72-c/SPY111111.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-2656434959857008499</guid><pubDate>Wed, 02 Nov 2011 00:23:00 +0000</pubDate><atom:updated>2011-11-01T17:32:01.808-07:00</atom:updated><title>Volatility can go both ways</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
530. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFlth0QnM1CGOIGDgjyF-lciT9um6R0b1mXCFW3XM575SZEc8h71OqYWhTmnfIR53Pj-vUpB5Mq_T3Pim3fGNUEXZzTA_dRsMpikZJGZhShum3DnDgZuXD9fBh9tl75lkTZsODbC1U_zNt/s1600/SPY110111.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="199" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFlth0QnM1CGOIGDgjyF-lciT9um6R0b1mXCFW3XM575SZEc8h71OqYWhTmnfIR53Pj-vUpB5Mq_T3Pim3fGNUEXZzTA_dRsMpikZJGZhShum3DnDgZuXD9fBh9tl75lkTZsODbC1U_zNt/s320/SPY110111.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
531. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The current fundamental-reassurance-vacuum (wow, there's a word) that is overhanging the market can and is leading to violent ups and downs as new potentially 'game-changing' fundamentals hit the market. "Will the Greeks default or won't they", seems to dictating trade on a daily basis. These short term blips can translate into wild gyrations. Interestingly, I have personally found that those</span><span style="font-size: small;"> markets that have just completed a 50% retracement of their primary move often see some dramatic swings.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
532. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Our goal here at the S&P blog ins''t to tell you (the reader) where the market is going, but rather to give you a basic framework (50% rules, double tops/bottoms, flagpoles, MA crosses, seasonality etc) that will help you understand where we have been. Hopefully, with that contextual understand, you may be able to glean a sense of where the market ought to go- that's the plan anyway.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
533. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">So with all being said, lets take a look at this chart. First off, we must appreciate the fact that the broader US stock market has just gone through a very natural 50% correction of a larger trend that began just about one year ago. As should be expected, the price action is very violent right now as the market digests its new fundamental backdrop. One could argue that September's sell-off left the market very oversold and a counter trend rally was likely. What I personally find most interesting is that the market 'topped' last week just under the original breakdown. As for the 'why', It simply appears as though the market just ran out of sellers heading into October. In the absence of new sellers, the market's 'path-of-least-resistance' was up, and boy did we go up. The tragedy is that we may go back down just as fast. Volatility does indeed work both ways.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br />
534. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Trader:</b> Traders want to be in and out on tops and bottoms which seem to be coming in on the hourly charts. This market is moving so fast that you simply can not see the turns on the weekly chart. Indeed, I don't remember hearing anyone was call for a 2000 point rally in the Dow, but it happened and here we are. My 'hunch' during these times is just leave the market alone until it calms down. Having said that, there are those of us need who want to trade, or at the very least try and understand short term price action. So to that end, I will give you my .02 cents. Since we are currently above the 13 EMA one might argue that pull backs represent buying opportunities. Also too, given the fact that we are selling off into a Fed announcement, we may find an ultimate bottom within that first hour after their announcement Wednesday. It's just a guess, but it will be what I am looking for.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br />
535. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Investors</b>: This camp was well advised to get into cash back in the late summer. I find it fascinating that the market's recent rally failed at almost the exact original exit point. The market was literally giving those that missed the first short entry another opportunity to get short again. As long as the 13EMA is lower than the 30SMA one is best to leave this thing alone. Should that relationship change then so to will our investor stance. Yes, we have seen a very nice rally in equities over the past month. But no, it really hasn't changed things in the longer term all that much.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
536. &lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;That&#39;s all for this week,&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Brian Beamish FCSI&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;The Canadian Rational Investor&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;the_rational_investor@yahoo.com&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;a href=&quot;http://therationalinvestor.ca/&quot;&gt;therationalinvestor.ca&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;&lt;a href=&quot;http://www.therationalinvestor.ca/RI_Tradents.php#sp500bloglink&quot;&gt;CRI&#39;s S&amp;amp;P 500 Blog&lt;/a&gt;</description><link>http://stockchartsrus.blogspot.com/2011/11/volatility-can-go-both-ways.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFlth0QnM1CGOIGDgjyF-lciT9um6R0b1mXCFW3XM575SZEc8h71OqYWhTmnfIR53Pj-vUpB5Mq_T3Pim3fGNUEXZzTA_dRsMpikZJGZhShum3DnDgZuXD9fBh9tl75lkTZsODbC1U_zNt/s72-c/SPY110111.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-5483795448758345196</guid><pubDate>Sun, 23 Oct 2011 19:10:00 +0000</pubDate><atom:updated>2011-10-23T12:23:29.889-07:00</atom:updated><title>They got them shorts on the run now</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif; text-align: left;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQxojp7UR5E1dLg2XeZTU4JVRjvNLCs5riPAJhewDl4OQnvhgqeybJrzaVswriOXSf7CYM2xMzBFy3gCWUmrtP6umu52gEl7f9MoGNTfvLJ6FabGKWDm9ZbO30pDw-28bI3x3ac6aC9TtM/s1600/SPY102111.bmp&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;199&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQxojp7UR5E1dLg2XeZTU4JVRjvNLCs5riPAJhewDl4OQnvhgqeybJrzaVswriOXSf7CYM2xMzBFy3gCWUmrtP6umu52gEl7f9MoGNTfvLJ6FabGKWDm9ZbO30pDw-28bI3x3ac6aC9TtM/s320/SPY102111.bmp&quot; width=&quot;320&quot; /&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
537. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">For those new to investing, this is a very dangerous market to learn the ropes. </span><span style="font-size: small;">Making a bet long or short during these 'clean-up' phases can be profitable but it also can be very costly.</span><span style="font-size: small;"> We always want to look at any trade from a risk perspective and given the volatility seen lately, one has to appreciate the associated risk. Talk about volatility - over a three week period (through the end of the summer) the market fell 18% (133.89-109.7/133.89) and now in just three weeks it has rallied 15% (123.97-107.43/107.43). Could another double digit percentage swing be far off? Only time will tell but one thing is for sure - expect more volatility. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
538. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">While the fundamental backdrop has been relatively good over the past year or so, things aren't looking so rosy going forward. Two factors drive stock valuations - earnings and Interest rates. We have been confident of earnings but one can't help but get concerned when 2009-2011 market darlings like RIMM/AAPL/NFLX have either completely fallen apart or are starting to miss expectations. Corporate short term interest rates (as measured by Eurodollars futures contracts) are now trending higher not lower. This means that the credit squeeze that started the meltdown back in 2007-2008 is back on. At the same time, longer term government bonds have moved violently higher pushing their yields down. While not inverted, the yield curve is flattening which suggests that the broader economy is starting to slow. Weather it be the effects of Europe's indecisiveness over its' Sovereign debt or Chinese Central bank tightening economies are slowing and as savvy market participants we must listen to what the market is telling us. We talked a while ago on WCTS Spotlight blog about HG Copper and how it is called The Professor of Economics. <a href="http://wtcsspotlight.blogspot.com/2011_08_01_archive.html">Read our comments re. copper</a> and you will further see validation to the notion of a slowing global economy.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
539. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">So with all that said, how ought smart market participants to be positioned?</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
540. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><b>Investor</b>s: In our last blog entry (10/07) we suggested 'Investors' ought to be sitting in cash and doing nothing and have been advocating that stance for some time. I would re-iterate that mantra today. While our time tested trending indicator (that being the relationship between the weekly 13 EMA and the 30 SMA) remains negative, one ought to just sit on the sidelines and wait it all out. </span><span style="font-size: small;">Considering the extreme volatility of the market  right now, as investors we don't want to be looking at the screen every  five minutes. </span><span style="font-size: small;">Should that moving average relationship change (at current levels that isn't likely for some time) we will change our stance. </span><span style="font-size: small;">While you won't make a pile of money sitting in short term government paper, this is a time not to be greedy. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
541. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><b>Traders</b>: In these kind of trading environments, fortunes can be made and lost in a matter of minutes and it is not for the faint-of-heart. Ironically, this kind of trading pattern is very common after prices have corrected to the 50% level. The 'trade' was to short up top and take profits at the 50% level, what we are seeing now is the clean-up from the trade. Quite often a market will break lower, consolidate, then break lower again (as was the case three trading weeks ago) but the last break lower turns out to be a trap. The market quickly reverses and heads right up to the top of the range. This is exactly what happened here. The 110 level was taken out three weeks ago which suggested we were going lower. The market then reversed and took out the trading range high of 122.87. In essence, the market ran out of sellers on the push through 110. When the floor traders saw this, they ran the market back up looking for any sellers and for the 'stops' on existing short positions. In summary - they got the shorts on the run.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
542. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Since we have left a rather large gap right at the 50% level (117.715), I personally wouldn't be inclinded to chase the market here. It looks to me like we will take a serious run at the origional breakdown point of 125.05 and then the 127.50 area (trend line resistance) after that. Considering how close we are to those levels now (123.97) the associated risk of going long doesn't make the trade justifiable. Those that were able to switch long on the pivot through 120 (congrats on a smooth trade) ought to look to those upside targets as areas to exit. This may happen in the coming days or may take a few weeks to develop. Keep in mind, the market is once again getting overbought on a daily basis and we are still bearishly trending on a weekly basis so at best one ought to be looking for a seasonal top over the next eight week to sell into.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
543. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
544. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;That&#39;s all for this week,&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Brian Beamish FCSI&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;The Canadian Rational Investor&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;the_rational_investor@yahoo.com&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;a href=&quot;http://therationalinvestor.ca/&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;therationalinvestor.ca&lt;/span&gt;&lt;/a&gt;&lt;/div&gt;</description><link>http://stockchartsrus.blogspot.com/2011/10/they-got-them-shorts-on-run-now.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQxojp7UR5E1dLg2XeZTU4JVRjvNLCs5riPAJhewDl4OQnvhgqeybJrzaVswriOXSf7CYM2xMzBFy3gCWUmrtP6umu52gEl7f9MoGNTfvLJ6FabGKWDm9ZbO30pDw-28bI3x3ac6aC9TtM/s72-c/SPY102111.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-1876113386433008569</guid><pubDate>Sun, 09 Oct 2011 15:21:00 +0000</pubDate><atom:updated>2011-10-09T08:25:37.898-07:00</atom:updated><title>The long slow process of cleaning things up</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
545. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBpB_69ly2fP2d26y_BCqqrKva5WiXSw7rXauZ7BC1MqRp1pAsVTfMnUw2za88GmQaUimr7jmDQVMvCn6NKBIBUOZmTfsFi96FYiuKZloGiiQZys5Yq8K-WOIF8iuil76EhnW0x5mrka-y/s1600/SPY100711.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="199" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBpB_69ly2fP2d26y_BCqqrKva5WiXSw7rXauZ7BC1MqRp1pAsVTfMnUw2za88GmQaUimr7jmDQVMvCn6NKBIBUOZmTfsFi96FYiuKZloGiiQZys5Yq8K-WOIF8iuil76EhnW0x5mrka-y/s320/SPY100711.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
546. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">As the stock market in general (and in this case SPY specifically) has entered its twelfth week of consolidation one can't help but notice how bearish market sentiment has become of late. Only a few months ago we were pushing to new relative highs on both a healthy yield curve and robust corporate profits. While the yield curve has flattened appreciably over the intervening period, corporate earnings are still holding in which suggests to this market watcher that the bear market we entered through the late summer shall be only that and that we are in nothing more than a healthy (albeit painful) correction period for the market. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
547. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">Technically speaking, one should have appreciated the noticeable bearish cross of the weekly 13 EMA and the 30 SMA some twelve weeks ago. That relationship is still very much bearish suggesting there ought to be further correction ahead. One should also respect the fact that the important low put in  nine weeks ago (109.70) was violated just this past week. Lower highs and lower lows define a bear market - and judging by the market's action over the past week - we are still very much in a bear market. Having said that, the time to short was at or near 125 not now. Indeed, fortunes are won and lost trying to pick exact bottoms so I will leave that thought with the basic message that we have hit many of the well defined down side targets (50% rule, previous rally peak, 200 Week SMA, etc.) and one ought to be taking profits on shorts - not adding new ones.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
548. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">So lets see how our two respective market participants ought to be positioned:</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
549. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Traders</b>: This camp would have gotten new sell signals on the break of 109.70. Stops on the trade should be just above recent resistance (just above 122.80). This would represent a 12% risk and maybe a little to large of a risk for most traders to take.  For those wishing to trade to the short side - use this past week's rally to look for a failure into resistance (just above 120 area) on the daily charts. The lows of this past week ought to be tested at some point down the road and that would be my short term target on any shorts taken.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
550. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Investors</b>: This camp was well advised to get out of the market in earnest back through the late summer and more specifically upon the break of the important low of 125.70 in late July. Our time tested trending indicator (that being the relationship between the 13 EMA and the 30 SMA) is still very much pointing lower and has been the mantra for some time now - CASH IS KING. Consider too that the US Dollar index has been moving higher for about the same period, it would appear that international money managers are respecting that mantra.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
551. &lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;That&#39;s all for this week,&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Brian Beamish FCSI&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;The Canadian Rational Investor&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;the_rational_investor@yahoo.com&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;the-rational-investor.com&lt;/span&gt;&lt;/div&gt;</description><link>http://stockchartsrus.blogspot.com/2011/10/long-slow-process-of-cleaning-things-up.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBpB_69ly2fP2d26y_BCqqrKva5WiXSw7rXauZ7BC1MqRp1pAsVTfMnUw2za88GmQaUimr7jmDQVMvCn6NKBIBUOZmTfsFi96FYiuKZloGiiQZys5Yq8K-WOIF8iuil76EhnW0x5mrka-y/s72-c/SPY100711.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-8821142790978812066</guid><pubDate>Fri, 09 Sep 2011 18:21:00 +0000</pubDate><atom:updated>2011-09-09T11:21:01.327-07:00</atom:updated><title>Correction healthy &amp; normal.....for now</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif; text-align: left;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEioyyGY3cxEWwhxvUF0PmIt27ixrSiZatdNzUuK5j-XVq0-bYo36FoWJtYUmXs784fqNpsJE22igqq9OBgiotRaWV-05Myy8_t6_y5CsK0dba2uWxeCXzyQ539DG9rAdoFSglV_HV_9bPUS/s1600/SPY090911.bmp&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;198&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEioyyGY3cxEWwhxvUF0PmIt27ixrSiZatdNzUuK5j-XVq0-bYo36FoWJtYUmXs784fqNpsJE22igqq9OBgiotRaWV-05Myy8_t6_y5CsK0dba2uWxeCXzyQ539DG9rAdoFSglV_HV_9bPUS/s320/SPY090911.bmp&quot; width=&quot;320&quot; /&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
552. </span> </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">As has been the theme now for more than a month, the stock market (as measured by the SPY - S&P 500 stock index ETF) has corrected from an over bought condition that developed through the spring and early summer of 2011. The correction at the moment represents a healthy and normal market occurrence - the questions is, where do we go from here. Considering the seasonal nature of stocks, the  looming US fiscal year end, and the considerable credit problem developing in Europe my hunch is we will be pointing lower for some time to come.  Having said that, markets often look the absolute worst at the bottom. Things look rather bleak at the moment so as a contrarian notion, we must be getting close to some sort of climax . Regardless of personal opinion lets let the chart tell us what to do - and to that end lets review how our two primary market participants ought to be positioned.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><b>Investors</b>: Investors should be in cash! Until the 13EMA can cross back above the 30SMA you are best to leave your money in t-bills or short term US treasury notes that you intend to hold onto until maturity. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><b>Traders</b>: After a great short trade (through the break of 125.70) profits ought to have been taken. The past 5 weeks have defined the current market's trading range. Where a break of either (top 123.51 and bottom 110.27) would be your signal to act. We shall test the bottom of the range over the coming days so be prepared should you want to act.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
553. &lt;/span&gt; &lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;That&#39;s all for this week,&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;Brian Beamish FCSI&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;The Canadian Rational Investor&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;the_rational_investor@yahoo.com&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;the-rational-investor.com&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;</description><link>http://stockchartsrus.blogspot.com/2011/09/correction-healthy-normalfor-now.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEioyyGY3cxEWwhxvUF0PmIt27ixrSiZatdNzUuK5j-XVq0-bYo36FoWJtYUmXs784fqNpsJE22igqq9OBgiotRaWV-05Myy8_t6_y5CsK0dba2uWxeCXzyQ539DG9rAdoFSglV_HV_9bPUS/s72-c/SPY090911.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-530531400194302981</guid><pubDate>Sun, 28 Aug 2011 18:46:00 +0000</pubDate><atom:updated>2011-08-28T11:48:27.144-07:00</atom:updated><title>Clean up time</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
554. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitX4AEjU2ADHL0TBUai2DY7YoUgK9xbE1poUWG829sTgVoj682UvjCKs3WmWZs69D162qmIrTyoJiXkRbd066SBP7lzJosWSIck1GkH8Vo2aWdeewogTh0WEicG3evfvek-7URDD4H0uf4/s1600/SPY082611.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitX4AEjU2ADHL0TBUai2DY7YoUgK9xbE1poUWG829sTgVoj682UvjCKs3WmWZs69D162qmIrTyoJiXkRbd066SBP7lzJosWSIck1GkH8Vo2aWdeewogTh0WEicG3evfvek-7URDD4H0uf4/s320/SPY082611.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">Amid all of the 'end-of-the-world' talk out there the broader stock market (as measured by the S&P 500 stock index) has worked its way back to the 50% rule and begun to consolidate in a very orderly (if not swift) fashion. Currently, the market is doing nothing more than cleaning up the excess's of the past year's bull run. We have made a very natural 50% correction of that move and shall now need some time to confirm that this is indeed nothing more than a healthy correction within a massive bull market.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
555. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">As has been previously stated, this correction comes on the heels of US federal political instability rather than poor economic fundamentals. As a result, one is left with the feeling that if only Washington could just get it's act together the market would stabilize and resume its previously well established up-trend. Make no mistake, the 135</span><span style="font-family: "Trebuchet MS",sans-serif;"> area</span><span style="font-family: "Trebuchet MS",sans-serif;"> (on SPY in this case) shall now act as considerable resistance to the upside but given that the two primary drivers for stock valuations (earnings and the yield curve) continue to be supportive, a resumption of that uptrend would seem likely upon a resolution. The big 'if' now is indeed Washington (or more succinctly - US Federal political leadership) and given the current extreme polarization of the US Congress (and now the US Fed's insistence that any solution must be fiscal in nature and not monetary) that much needed leadership is in serious question.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br />
556. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">So lets review how our two primary market participants ought to be positioned.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br />
557. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Investors</b>: As has been the case now for several weeks, cash is king! Investors were given a very clear 'exit' signal when our time tested trending indicator (that being the relationship between the weekly 13 EMA and the 30 SMA) crossed bearishly 5 weeks ago. That exit should have come on a break of key support in and around the 125.70 level (or about 6% higher than where we are currently). Until the moving average relationship turns back up, investors are well advised to sit on the sidelines and watch the fireworks. Ironically enough, this camp is cheering for further price deterioration which would make their exit look all the more significant.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br />
558. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><b>Traders</b>: This camp was well advised to begin shorting the market in earnest through the final week of July and again when the important 125.70 level was breached. Those that were fortunate enough to get short should have been more than happy to take profits on those short positions as we approached our well established downside target zone (119.15 - 111). The fact that the market has basically oscillated around the 50% level </span><span style="font-family: "Trebuchet MS",sans-serif;">(for the past four weeks) </span><span style="font-family: "Trebuchet MS",sans-serif;">suggests that the market is trying to relieve the oversold condition that developed on the initial downward move. The recent consolidation in price has both relieved that short term oversold condition and may be laying the ground work for the next leg lower. Should the 110.27 level be taken out, one would have no choice but to look for another move lower equal to or greater than the previous. This bear flag formation would imply a price target of 96.65 [(134.82-110.27)-121.20]. Conversely, should the 121.20 level be taken out, one ought to look for a counter-trend rally that would imply an initial price objective of 122.935 [50% retracement; (135.6+110.27)/2]. Should that breakout occur, one could also argue that the 13 EMA shall act as resistance and it ought to be in and around that level as well.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br />
559. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">So in summary then, the market needs political leadership in order to continue the expansion that was established last fall. The US Federal reserve has stated that it will be very reluctant to initiate a QE3 program and that in its opinion, fiscal stimulus is what is needed. Couple this with extreme political polarization in Washington and there appears to be no quick resolution on the horizon. All of this suggests that the market will have to take some more time to clean up this mess and that if one were to suggest a general direction for price in the coming weeks/months, that direction continues to suggest down rather than up.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br />
560. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">That's all for this week,</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Brian Beamish FCSI</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The Canadian Rational Investor</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">the_rational_investor@yahoo.com</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">the-rational-investor.com</span></div><br />
561. </description><link>http://stockchartsrus.blogspot.com/2011/08/clean-up-time.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitX4AEjU2ADHL0TBUai2DY7YoUgK9xbE1poUWG829sTgVoj682UvjCKs3WmWZs69D162qmIrTyoJiXkRbd066SBP7lzJosWSIck1GkH8Vo2aWdeewogTh0WEicG3evfvek-7URDD4H0uf4/s72-c/SPY082611.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-6261102351517726630</guid><pubDate>Sun, 14 Aug 2011 02:23:00 +0000</pubDate><atom:updated>2011-08-13T19:23:05.718-07:00</atom:updated><title>A violent conclusion to a well telegraphed event</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&lt;span&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
562. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOBDcbwvJyvFz3cy43AGriRHeSk5qOKRIAPsbYmus7I8H9SrLeBVvkc7r89OoeLvARuTK3ahYr2pp_BHE5K_NDl_atdEd1smBGDHtOu_jN9VnBssntCdCOPAiIxR6q0C7Iw2TWSQgvA3rX/s1600/SPY081211.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="201" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOBDcbwvJyvFz3cy43AGriRHeSk5qOKRIAPsbYmus7I8H9SrLeBVvkc7r89OoeLvARuTK3ahYr2pp_BHE5K_NDl_atdEd1smBGDHtOu_jN9VnBssntCdCOPAiIxR6q0C7Iw2TWSQgvA3rX/s320/SPY081211.bmp" width="320" /></a></span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGK0RR4Gyh7pSrnUy3BWqvfvATAFGD6hM2ehc6NuVTdt0wbtsgZbUnRfkUtUTQu68nNYI8ZM731PBWessid415anaM-qvFC3XWNdbZYvBSiVv2d7lhJgbR7CYOQi6gPcKo_r-CQ-voL7__/s1600/SPY081211Daily.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="304" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGK0RR4Gyh7pSrnUy3BWqvfvATAFGD6hM2ehc6NuVTdt0wbtsgZbUnRfkUtUTQu68nNYI8ZM731PBWessid415anaM-qvFC3XWNdbZYvBSiVv2d7lhJgbR7CYOQi6gPcKo_r-CQ-voL7__/s320/SPY081211Daily.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><br />
563. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span style="font-family: "Trebuchet MS",sans-serif;">The past two weeks have virtually wiped out an entire years worth of growth in the market and have underscored the significance of adding a little timing to anyone's portfolio. </span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
564. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span style="font-family: "Trebuchet MS",sans-serif;">From the violent break seen just weeks ago prices have fallen more than 14% and as of yet haven't shown clear signs of a bottom. Yes downside targets have been hit (and even exceeded at times) but to get back to a more 'normal' market we may have to see some violent tugging and pulling over the coming weeks/months. Make no mistake - the bull run (that was initiated with QE2 and the re-alignment in the US Congress) just 10 months ago is over and some tough slogging will have to lay ahead.  It is unfortunate if you are just reading this blog for the first time because you will fail to fully grasp how entirely predictable this correction has been.</span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
565. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span style="font-family: "Trebuchet MS",sans-serif;">So what happened?</span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span style="font-family: "Trebuchet MS",sans-serif;">To answer this one need only look at the charts above. First is our regular weekly chart of SPY (S&P 500 depository receipts) and then below that is a daily look at SPY. First off, our time tested trending indicator (that being the relationship between the Weekly 13 EMA and the 30 SMA) and our 'investor-signal' turned negative two weeks ago. Our collective 'stops' (that being the point that if breached would represent our time to get out) were just under recent lows (support) at 125.70. We here at the SPY blog made it very clear that cash was king and all those that did get out - congrats! </span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
566. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span style="font-family: "Trebuchet MS",sans-serif;"><b><u>Market Participant Position Review</u></b></span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span style="font-family: "Trebuchet MS",sans-serif;"> </span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span style="font-family: "Trebuchet MS",sans-serif;"><b>Investors</b>: Those out there who consider themselves investors in stocks and not market timers are sitting in cash. How long is anyone's guess, but until our 'Investor-buy' signal comes back - cash is king. Yes our downside targets have been hit, but that by no means we are in a bull market.</span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
567. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span style="font-family: "Trebuchet MS",sans-serif;"><b>Traders</b>: Traders were well advised to short the market when it broke back below the 13 EMA (at or near 130.68) just three weeks ago. Those that were able to short on the break (if you don't like to short stocks then consider buying Put options) are well advised to take some profits. </span></span></span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">Readers were made well aware of our target zone (119.15 to 111.15) which has now been hit and if its one thing you shouldn't be in this kind of market is greedy. Take it - you won - be happy! </span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
568. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span style="font-family: "Trebuchet MS",sans-serif;">So where do we go now?</span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span style="font-family: "Trebuchet MS",sans-serif;">That is a very good question, and a reason why I have included the daily chart in this week's blog post. Based on the daily chart, we entered and extremely oversold condition just a few days ago. Traders would have seen the fact that the market was getting 'washed-out' - and figuring the risks were relatively low. They gained further support on the news that European countries would be outlawing the shorting of bank stocks for the next two weeks. </span></span></span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">With the short sale ban, those wanting to short will have no choice but to sit on the sidelines. T</span></span></span><span><span><span style="font-family: "Trebuchet MS",sans-serif;">hose willing to step into the breach have been rewarded for their courage as the SPY itself has rallied some 7% off the bottom. This vacuum has and will pressure stocks higher as late summer trading volumes are very thin and anyone who did want to sell (positions that they already owned) has already done so. The rally may be short lived as we head into the Labour Day weekend. The week following the holiday is when many professional traders come back to work and will be more than happy to sell into any strength. Additionally, the short sale ban will have expired and those wishing to short European bank shares will be given the green light to do so once again. </span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
569. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span><span style="font-family: "Trebuchet MS",sans-serif;">Summary: In this very oversold market, expect there to be a slightly bullish bias to trade but once the 'no-shorting' ban expires (in about 2 weeks) and the Labour Day weekend holiday is behind us - there is no telling were they will take this market - Cash is King!</span></span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
570. &lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&lt;span&gt;That&#39;s all for this week,&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&lt;span&gt;Brian Beamish FCSI&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&lt;span&gt;The Canadian Rational Investor&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&lt;span&gt;the_rational_investor@yahoo.com&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;&lt;span&gt;the-rational-investor.com&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;</description><link>http://stockchartsrus.blogspot.com/2011/08/violent-conclusion-to-well-telegraphed.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOBDcbwvJyvFz3cy43AGriRHeSk5qOKRIAPsbYmus7I8H9SrLeBVvkc7r89OoeLvARuTK3ahYr2pp_BHE5K_NDl_atdEd1smBGDHtOu_jN9VnBssntCdCOPAiIxR6q0C7Iw2TWSQgvA3rX/s72-c/SPY081211.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-5456267046813574495</guid><pubDate>Thu, 04 Aug 2011 18:04:00 +0000</pubDate><atom:updated>2011-08-04T11:04:04.263-07:00</atom:updated><title>All good things must come to an end</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
571. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYDWWUtFlwXjjCKfB-H3cRJYWU-AUkQytog5mEHaUQfrAacS_HvUAsYlNOA3D5L4w_caklHSuRmpDSRoMrXlOcPyc2TOZP4KEfduoe4m2lZDNTr_eoHk0gFOC8wD0lWLFqENnw3nnlMf7F/s1600/SPY080411.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="203" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYDWWUtFlwXjjCKfB-H3cRJYWU-AUkQytog5mEHaUQfrAacS_HvUAsYlNOA3D5L4w_caklHSuRmpDSRoMrXlOcPyc2TOZP4KEfduoe4m2lZDNTr_eoHk0gFOC8wD0lWLFqENnw3nnlMf7F/s320/SPY080411.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
572. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span>As the title of this week's blog entry outlines, the bull run that began last fall has run its' course. Our time tested trend indicator (and our 'investor buy/sell' signal) has turned negative with this weeks collapse in equity prices. Furthermore, those investors that bought on the last bullish cross-over (at or near 110.95) should have exited that position when the market moved through the most recent support level (125.70) talked about at length in previous posts. This trade (that lasted about 10 months) equated to more than a 13% return on invested dollars in a little less than a year. Considering that the long term historical average return for stocks is about 11%, our 13% beats that number comfortably. Consider too that this return does not take into account any dividends paid while holding the position (add another 2%) and one can clearly see that this was a very profitable position to take. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
573. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span>So where does this leave us now? The market is heading down - and rather quickly at that. Political rhetoric is at a fevered pitch and there have been no clear indications of the beginnings of a QE3 program by the US Federal Reserve Board. Additionally, the debt situation in Europe is still dominating the headlines suggesting that there ought to be some sort of climatic finish to that problem before it goes away in earnest. Ironically enough, the best thing the market has going for it is that corporate earnings are still ok and the yield curve is still supportive going forward. This indicates to me that there probably won't be a 'crash' but rather a normal 'correction' in the market going forward. So where might prices go over the coming period. As the chart above suggests, there are three significant technical targets I have in mind going forward. Firstly, a 50% retracement of the 10 month bull run ought to bring prices back into the 117 area. Secondly, the breakout high from April, 2010 was near the 119 area. And lastly, the weekly 200 SMA currently sits near 111.5. This all suggests to me that the market will take a run into the 111-119 area before this correction has ultimately run its course.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><br />
574. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span>So lets review the to major investor groups and how they ought to be currently positioned:</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><br />
575. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><b>Traders</b>: those that are nimble enough to be able to move in and out of the market quickly would have been well advised to be short from the recent daily double top breakdown which occurred when the market moved back below the weekly 13 EMA (129.63) just last week. As the market is in 'free-fall' at the moment, profits should be taken whenever possible.  Picking an exact bottom is never easy and the recent volatility suggests we could bounce right back up top. So with this in mind, I myself have covered my shorts (long put option position) and am sitting comfortably in cash for the time being.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><br />
576. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><b>Investors</b>: because our time tested 'investor' signal has officially rolled over, investors would be best to sit in a cash position. They should have exited their long position on SPY (and the broader market in general) on the break of recent support (at or near 125.70). Since the market is in flux at the moment, one would be best to put that money into a 90 day t-bill and just sit back and enjoy the rest of the summer.</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><br />
577. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span>So in summary then, the bull run that began last fall has come to an end. the break of recent support (125.70) represents a significant breakdown in the market and it will take some time to clean up the mess. One can't know for certain exactly where the bottom of this move shall be so for safety sake, cash is king!</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><br />
578. &lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;That&#39;s all for this week,&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;Brian Beamish FCSI&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;The Canadian Rational Investor&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;the_rational_investor@yahoo.com&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;the-rational-investor.com&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;</description><link>http://stockchartsrus.blogspot.com/2011/08/all-good-things-must-come-to-end.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYDWWUtFlwXjjCKfB-H3cRJYWU-AUkQytog5mEHaUQfrAacS_HvUAsYlNOA3D5L4w_caklHSuRmpDSRoMrXlOcPyc2TOZP4KEfduoe4m2lZDNTr_eoHk0gFOC8wD0lWLFqENnw3nnlMf7F/s72-c/SPY080411.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-3195143777332217804.post-8251696048072850135</guid><pubDate>Mon, 25 Jul 2011 00:16:00 +0000</pubDate><atom:updated>2011-07-24T17:18:02.140-07:00</atom:updated><title>The previously outlined trading range continues</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hi there, and welcome back to CRI&#39;s S&amp;amp;P 500 blog.&lt;/span&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif; text-align: left;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhy5Zkt3cr2d2nY9-xqf8uWfvbh4sPddJWrCWtJphPWBGeBEoK85kdmBNhKav3h-VpJC8DbAuJ7NVOJ2MhCVt63yCfwx9ioCUQeWsidT2n6z861DJNnH8sTzCrvtXbH2nl5NS7xek5upf9S/s1600/SPY072211.bmp&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;196&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhy5Zkt3cr2d2nY9-xqf8uWfvbh4sPddJWrCWtJphPWBGeBEoK85kdmBNhKav3h-VpJC8DbAuJ7NVOJ2MhCVt63yCfwx9ioCUQeWsidT2n6z861DJNnH8sTzCrvtXbH2nl5NS7xek5upf9S/s320/SPY072211.bmp&quot; width=&quot;320&quot; /&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
579. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">As was mentioned in depth last week, the market has established a trading range for the time being. Considering the end of QE2 (and no clear indication of the beginnings of a QE3), an unstable if not uncertain situation with regard to European sovereign debt and an equally unstable if not uncertain future for the US's coveted triple A credit rating, the market is relatively neutral. Ironically enough, the two most important factors for stock prices (earnings and yield curve) are both in good positions for stock appreciation. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
580. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Fundamental backdrop: Lets take a closer look at the current market fundamentals. In any given market, there are two types of risk - systemic and un-systemic. Systemic risk has everything to do with macro-economic situation (stability of governments, demographic composition etc) while un-systemic risk is directly attributable to an individual issues' concerns (earnings, management etc). The current economic backdrop, and its predominantly uncertain macro-economic outlook means we are trading more on systemic concerns rather than un-systemic. At the same time, one might argue that individual company balance sheets are quite healthy with robust earnings to back this notion up. Supportive of price appreciation too - the yield curve is quite healthy (where short term interest rates are generally lower than longer term interest rates). Put this all together and one gets a fairly clear idea of what is going on - macro-uncertainty coupled with micro certainty. Generally, this is bullish of equities over the longer run and if the macro situation can calm down a bit, one might see substantially higher equity prices in the quarters to come.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
581. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Traders: since the market moved back above the 13 EMA (129'ish) just a couple weeks ago, traders have been long the market expecting a test in earnest of the early May highs. Stops are probably fairly tight given the seasonal nature of the current rally and those traders would be best to exit long positions should the market fail through the late spring lows (127.50). Most undoubtedly, those traders would probably be best to go short on that break should it occur.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
582. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Investors: our time tested 'investor' signal (that being the relationship between the 13 EMA and the 30 SMA is still supportive of higher prices to come. Investors were given a long entry signal way back in the fall of 2010 and have been best to sit on the long side of the market and slowly move their collective stops higher as newer/higher lows have been established. Like the traders, investors would probably be best to exit those long positions should the market (in this case the SPY is our proxy for the broader US stock market and really of the world) break back below the late spring lows (at or just under 127.50).</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
583. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;That&#39;s all for this week,&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Brian Beamish FCSI&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;The Canadian Rational Investor&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;the_rational_investor@yahoo.com&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;the-rational-investor.com&lt;/span&gt;&lt;/div&gt;</description><link>http://stockchartsrus.blogspot.com/2011/07/previously-outlined-trading-range.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhy5Zkt3cr2d2nY9-xqf8uWfvbh4sPddJWrCWtJphPWBGeBEoK85kdmBNhKav3h-VpJC8DbAuJ7NVOJ2MhCVt63yCfwx9ioCUQeWsidT2n6z861DJNnH8sTzCrvtXbH2nl5NS7xek5upf9S/s72-c/SPY072211.bmp" height="72" width="72"/><thr:total>0</thr:total></item></channel></rss>

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