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Registered User
Joined: 10/25/2005
Posts: 145
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With the risk of crashing and burning................here's the latest:
Short-term Traders: The Pivot Model is projecting FEB 13 as a likely "PIVOT UP" day for the major averages (DJIA, COMP, SP500), where we can expect to see a change in the short-term trend. I emphasize that by "short-term", the model is attempting to identify a change in trend that will carry for at least several days.
Leading up to the projected pivot day, ideally, there will be an established trend in place for 2-3 days (e.g., consecutive days of advances//declines) so the determination of the new trend (always a reversal from the prevailing trend) is more easily determined. As of this writing (WED evening), I am looking at an SP500 that appears to have peaked on 2-9-09 @ 875.01. The immediate prevailing trend is DOWN, therefore the anticipated pivot move should be UP. I'm making this determination based upon TUE's 4--5% decline, and WED's less than 1% advance. We'll have to see what happens on THUR. Please refer to a daily chart of the SP500 for help in visualizing these pivot points.
Past performance implies that the pivot day should initiate the new trend, or set the peak//trough of the prevailing trend, with the new trend getting underway the following day.
Strategy: I will enter FRI's session with a positive bias, expecting a new uptrend to initiate. However, I will not take positions until I see evidence of the advance materialize. If the pivot "hits" as expected, I may close positions prior to FRI's close, and start anew on TUE, following the MON holiday. Recall last time (FEB 3 pivot) we gave back some of the first day gains on FEB 4 before advancing further in later days.
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Worth Mentioning: This is a separate matter from my note above, but I'd like to bring it to your attention.
While the bad economic news continues to pile up day after day, don't totally disregard the possibility of a surprise rally.
Please refer to a multi-month daily chart of the SP500, and plot the 60-day exponential moving average. You will notice that since approximately JUNE 3, 2008 the SP500 has failed to close above this line for more than one consecutive day.
As of WED's close, this resistance level on the SP500 is @ 884.90 (readjusted daily). If we close above this level for more than 1 consecutive day, I believe the bullish leveraged ETF's that I track (QLD, DIG, SSO) could breakout to 50%(+) returns over a multi-week time period.
Now, while I'm not anticipating this scenario to manifest itself in the immediate future, I'm surprised we haven't yet retested the NOV 20 closing lows, and believe that Mr. Market is always capable of surprises.
Best of Luck
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 Gold Customer
Joined: 11/13/2004
Posts: 102
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Thanks for the update, Scanit.
Soc
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Registered User
Joined: 2/13/2005
Posts: 368
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Scanit,
Your pivot model is interesting. Could you tell me a little more about it and what indexes it is composed of?? Thanks.
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Registered User
Joined: 10/25/2005
Posts: 145
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We have an unexpected development.
SP 500 DAILY PRODROME MODEL XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
It is now after 1:00PM EST, and the SP500 has failed to penetrate outside the range of HI = 829.91......
........LO = 811.35, so this model is issuing a CAUTION.
If we make it to the session close still without a breakout//breakdown from the above range, then a stronger WARNING will be issued and the odds for weakness over the next 3--7 days are increased.
Good Luck
(this model operates independently of my previous recent comments//predictions)
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Unexpected, in the sense that this appears in conflict with the PIVOT MODEL's projected call for a Pivot UP day on FEB 13. Of course, one resolution to this discrepancy could be for a short-term advance of a few days, followed by weakness, thus satisfying both models.
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Registered User
Joined: 10/7/2004
Posts: 2,181
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I think the 3 o'clock hour answered that concern
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Registered User
Joined: 10/25/2005
Posts: 145
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Following the CAUTION issued by the SP500 PRODROME MODEL, we broke below the given range at approx. 2:47PM EST, thus avoiding an escalation to a full WARNING. The last signal generated by this model was on JAN 26, and the SP500 advanced 2 more days before pulling back to a lower close. Let's hope we can get some short-term gains from the SP500 before any weakness develops this time.
I'm very curious to see what happens on FRI, specifically, if we get a short-term rally initiated to fulfill the projected PIVOT UP day.
Among the bullish leveraged ETF's that I track, I'd especially like to see a FRI close above the following levels:......................QLD = 27.58...............DIG = 27.54...................SSO = 22.04
While these levels may not seem impressive at all, a FRI close above these, should bode well for the next few days.
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- US Futures & Markets Indicators
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| S&P 500 |
+2.10 |
837.50 |
2/12 11:32pm |
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| Fair Value |
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833.05 |
2/12 9:17pm |
| Difference* |
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+4.45 |
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| NASDAQ |
+5.00 |
1250.25 |
2/12 10:56pm |
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| Fair Value |
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1242.06 |
2/12 9:17pm |
| Difference* |
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+8.19 |
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| Dow Jones |
+8.00 |
7945.00 |
2/12 10:56pm |
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Registered User
Joined: 10/7/2004
Posts: 2,181
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I'm going to go out on a limb and say that I think we're going to get a short rally (2 - 5 days is my guess).
Rally levels in my view will be Dow > 8180, VIX < 35, S&P500 > 859 and Nasdaq > 1590. If we hit those numbers, I think we will have a few good long days.
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Registered User
Joined: 2/17/2008
Posts: 132
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it might not have been an up day, but the major indices kept their heads above key support levels. do you still see a rally next week? and do any of you entertain the possibility that a bottom has been put in? we still haven't quite retested those november lows. the S&P hasn't even got to within 50 points of it.
another question is that next week we'll come to the end of this symmetrical triangle. will only a convincing break up persuade you that a bottom has been put in?
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Registered User
Joined: 10/7/2004
Posts: 2,181
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I remain convinced that the market wants to rally. It's just waiting to see what kind of magic Obama might be able to work.
As to a bottom, no way. I'm convinced that we're heading for around 5500 or so; just not sure when.
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Registered User
Joined: 9/25/2007
Posts: 1,506
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I agree that the money flows typical of this period of the year should favor a rally ...
But that time frame is waning ... about 2 months left in it ...
As far as Obama's "magic" is concerned ...
I've been waiting for them to announce that they will permit a one-time ... without penalty ... hardship distribution from IRA and 401(k) accounts ... along the order of 50% of the balance ... not to exceed $50K ... in order to deal with the crisis ... and hopefully spur some spending ...
And if that happens ... it should create a "sucking sound" on Wall Street ...
I fully agree with Tobydad that it is doubtful that we have witnessed the ultimate bottom of this bear ...
Had that happened ... we should have been straight up from the retest bottom in November ...
This market is just laying on support ... and that's generally not a good sign ...
Like a dieing man on his deathbed ... clinging to life ... but with little long term hope ...
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Registered User
Joined: 12/19/2004
Posts: 415
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QUOTE (tobydad) I remain convinced that the market wants to rally. It's just waiting to see what kind of magic Obama might be able to work.
As to a bottom, no way. I'm convinced that we're heading for around 5500 or so; just not sure when.
What makes you convinced that the market "wants" to rally? Looks to me like lower prices are in the horizon, only getting sharp short covering rallys when/if the guys running the treasury/administration or Federal reserve make comments that at first blush gives an indication of some sort of governmental support, then cooler minds look at what was proposed and trash the market again.
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