wndysrf Posted February 28, 2005 Report Share Posted February 28, 2005 Many technicians are frustrated with how traditional technical analysis has failed the last several years. Actually, technical analysis has simply morphed into a "New Age", concurrent with Greenspan's "New Age" monetary policy. Since the FOMC HedgeFund launched the liquidity explosion after the stock bubble crash, he has created an environment where over 9000 HedgeFunds, Funds of Funds, and Momentum Shops are all gaming the system using the same datapoints everyone else is using. With billions of eyeballs looking at the same moving averages, the same "support and resistance" lines, the same time cycles, etc., it is very easy for the PigMen (aka Proprietary Trading Desks) to pull the rug out from these guys at the most inopportune moments. That means that trading must now be done using "New Age" technical analysis. This means that many technical breakdowns must be bought with a vengeance. And some of the breakouts need to be shorted. Remember the August 2004 lows, when all the broad indexes broke support, taking out multiple trend lines, moving averages, etc.?? The PigMen saw this setup as an easy point to reverse the engines, unleash a derivatives tornado into the S & P futures pits, and create a short squeeze at the exact moment the 9000 HedgeFunds went 200% short the market. Now, we have some recent examples. After trading in a narrow trading range during January, the HedgeFunds were certain that AIG would slowly roll over, as stocks usually do when they are in a bear trend. The stock breaks out instead in mid-February, and all the HedgeFunds which were short flipped their positions and went long. Two days later, the stock started falling back, creating the illusion of a bull flag, and most thought that the stock would break out. Instead, the stock fails and breaks down again. Once again, inside info into Spitzer's office is reserved only for the Proprietary Trading Desks. Successful traders using "New Age" technical analysis would have been long the stock during January, and then shorted the breakout day. On Friday, the bears were climbing all over XMSR, since the stock had "failed" according to normal technical analysis, and had broken various support lines on heavy volume. Of course, the PigMen were floated the XMSR price increase memo over the weekend, and they used that opportunity to squeeze the stock today. XMSR was up 12% today, and 4 days worth of shorts are now in a losing position. Once again, "New Age" technical analysis would have dictated that this breakdown should have been bought aggressively. Of course, New Age technical analysis doesn't mean that all breakouts are to be shorted and all breakdowns are to be bought. It just means that forensic analysis must be employed to do the opposite of what is supposed to happen, and just try to think like the PigMen, who are constantly eyeballing highly publicized setups which are attracting the most attention by the hedge fund community. So it will be important to see what happens if the Dow and S & P break out to new highs this spring. More than likely, a new breakout high will be all over the news, wildly advertised by the financial stations, and the PigMen will be salivating on how easy it would be to let the market hang near its highs for a few days, and pull out the clothesline. What better way to generate more obscene profits to be used to make Summer 2005 reservations out at the Hamptons?? Link to comment Share on other sites More sharing options...
machinehead Posted February 28, 2005 Report Share Posted February 28, 2005 After breaking out past the round number of 300.00 last Friday afternoon, the CRB index of 17 commodities printed 305.00 today. It closed right at the high of day. http://www.bloomberg.com/markets/commodities/cfutures.html Softs and grains were the top gainers. The grains have been the most depressed segment of the CRB index for almost a year. Now they are really starting to move. Probably we are in a secular commodities bull market that started in late 2001. But it is keeping a very low profile. And that's good for its longevity. We're a long way from what it was like in 1979, when the shelves in the business section of the book store groaned with tomes on gold, silver, hard money and inflation protection. It may not be the ground floor anymore ... but there's still of lot of buttons pushed in the 'up' elevator. Link to comment Share on other sites More sharing options...
machinehead Posted February 28, 2005 Report Share Posted February 28, 2005 Dec. 2005 crude oil closed above $50.00 for the first time ever today. Spot crude oil is not at a record high (the high was $55.67 on 25 Oct 2004), but most 'out month' crude oil contracts are breaking out to new record highs. Look out above -- energy is on the move. And they aren't printing any more of it. Link to comment Share on other sites More sharing options...
stanley Posted February 28, 2005 Report Share Posted February 28, 2005 --deleted by poster-- Link to comment Share on other sites More sharing options...
BeerMarket Posted February 28, 2005 Report Share Posted February 28, 2005 ugly picture for OVTI longs after yearnings. looks like they raised EPS guidance for next qtr but their rev est looks light. Link to comment Share on other sites More sharing options...
capitall Posted February 28, 2005 Report Share Posted February 28, 2005 K Wave-- Do you have any thoughts on the currencies at the moment? I expect a dead cat bounce on the dollar at some time, to allow the Big Money to get completely out of their remaining dollar denominated assets before the thing crashes. But don't know anything about picking bottoms and tops like you do. What do you think? Capitall Link to comment Share on other sites More sharing options...
wndysrf Posted February 28, 2005 Author Report Share Posted February 28, 2005 Nice close on the HGX, which is still unfazed by the bond market. PigMen must be sniffing out a very weak jobs number on Friday. Link to comment Share on other sites More sharing options...
Charmin Posted February 28, 2005 Report Share Posted February 28, 2005 at this point what might spur another leg up in the market would be the SOX powering above the old highs and 450 area othewise, the bears will probably come out of hibernation for a bit back to some support.... Link to comment Share on other sites More sharing options...
wndysrf Posted February 28, 2005 Author Report Share Posted February 28, 2005 Top Tankers up 7% on heavy volume. Only a P/E ratio of 6. Nice....... Link to comment Share on other sites More sharing options...
BeerMarket Posted February 28, 2005 Report Share Posted February 28, 2005 completely false statement in OVTI yearnings release: Our 5-megapixel sensor -- which, as announced last week, is now in volume production and has achieved eight design wins since its introduction last September -- remains the only CMOS sensor able to compete head-to-head with comparable CCD sensors in applications such as high-resolution digital still cameras. OmniVision Reports Record Revenues and Earnings for the Third Quarter of Fiscal 2005 oh, really, then what do you call the CMOS sensors you don't make that are found in many of the high end digital SLRs?: Professional Digital Cameras Link to comment Share on other sites More sharing options...
Charmin Posted February 28, 2005 Report Share Posted February 28, 2005 Top Tankers up 7% on heavy volume. Only a P/E ratio of 6. Nice....... <{POST_SNAPBACK}> did you see the mid day shanking from 22 down to 20 to close the gap - then right back up Oil and shippers appeared to do the same things today.... Link to comment Share on other sites More sharing options...
wndysrf Posted February 28, 2005 Author Report Share Posted February 28, 2005 Usually a heavy slamming of the Russell 2000 futures will tip off a collapse, especially if they outrun the cash market to the downside near the close. But so far, they have held up OK. Link to comment Share on other sites More sharing options...
psyche doctor Posted February 28, 2005 Report Share Posted February 28, 2005 Speaking of failed technical analysis- The qqqq daily chart is forming a short term head and shoulders pattern. The right shoulder is forming now. The million dollar question is will the pattern fail as it has done so many times in the past. Link to comment Share on other sites More sharing options...
machinehead Posted February 28, 2005 Report Share Posted February 28, 2005 Brain-damaged gibbering from some drool-flecked casualty at Elliott Wave International: Now, I could give you my opinion of all this, but it's probably better to stick with the facts, to wit: There is no shortage of oil. There will be no shortage of oil. Not now, not next year, not in 50 or 100 years. Oil: the inexhaustable fountain Note to self: buy more crude! Link to comment Share on other sites More sharing options...
wndysrf Posted February 28, 2005 Author Report Share Posted February 28, 2005 Wow, just think where this will go if gold and silver decide to take off........ Link to comment Share on other sites More sharing options...
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