Friday, April 30, 2010

Trend Model Stocks, follow-ups






NNVC - Elliott Wave update

There is a lot in the chart below, maybe too much, but I have been using these tools since 1994 and they are about 75% accurate, so there is a three out of four chance that the implications for future price movement are on the mark.  The trend models are even more accurate, but are more of a lagging indicator then this EW analysis, which is more prospective.   Between the two tools, there is a high confidence suggestion of much higher prices to come, once the trend model joins in.

NNVC: EW Analysis & Daily Trend Model


This set up is referred to in Advanced GET as a Mechanical Buy Signal.  Its termed mechanical because although it uses subjective underlying themes, they are applied in a purely objective model, i.e. if X and Y, then Z.

(1) Elliott Wave Count - three waves up & one wave down (as a Wave 4);
(2) Buy signal on the False Bar Stochastic;
(3) Decline in the Elliott Oscillator to the zero line;
(4) Wave 4 retracement to a key Fibonacci level;
(5) Prices break out of Regression Trend Channel (Wave 4 break-out).

Add to the above, a Daily Trend Model Buy signal will occur on a close today above $2.36.  This paints a compelling picture that Wave 5 has begun, with an initial target of $3.25-$4.00.  

I should preface all of this with a, "probably" since all of the above is based on probability theory, the wave counts, the mechanical signals, the trend models, even the Wave 5 targets.  There are no guarantees, no perfection, no done deals.  Just a mountain of probabilities that NNVC is headed up to the $3-4 range in the coming weeks.  To start the run off, we need a close today above $2.36, that in my opinion would be the icing on the cake...........carrot cake with cream cheese frosting. 


A

GLD

I wrote to my subscribers last night about GLD; that it is on a fresh Buy on the Daily chart and is in Buy Pending mode on the Weekly chart.  That longer-term Weekly Buy should be confirmed by today's close.  Below is a GLD 240 minute chart:



The most recent Buy on the chart came on April 20th at 111.93.  With GLD up above 115 today, that is about a 3% rise from inception of the trade.  Taking a look at the option tables, a 3% rise in near-term at the money calls translates into a pro-forma rise in the option of well over 100%, i.e. from about $2.07 to between $4.00 and $4.85:


That's a healthy return for a ten-day period.  But it has to be, as the trade has to make up for the previous whipsaw, where I suspect a loss on the option would be about 30%.  Adding it all up,  assuming that for any given two trades there is a 30% loss followed by a 100% gain, at the end of the year you are addicted to the trend models.  

A lot of assumptions here, including pro-forma and/or hypothetical analysis.  But the underlying trading paradigm is not assumed, it is real and based on this rear-view mirror option analysis, is a viable strategy going forward.  Daily and Weekly models offer similar opportunity and I'll eventually get around to posting this same kind of analysis for those time frames.


A

Thursday, April 29, 2010

Retracement levels

The BIDU edge

BIDU is my poster child for weekly trading, using only Friday's close to determine if BIDU should be held LONG or SHORT as of Monday's Open.  You can see on the Weekly chart below, there is not a whole lot of trading going on here:

BIDU Weekly Trend Model


On a more Intermediate time frame, the Daily Trend Model, BIDU's most recent signal was a BUY generated at the close of trading on April 23 @ 645.76:


BIDU Daily Trend Model

BIDU is up 15% today @ 710.95
BEIJING (TheStreet) -- Baidu(BIDI) shares are soaring in premarket trading Thursday after the operator of China's No. 1 Internet search engine said first-quarter profit rose 165%.
The trend models didn't know this news was coming, they only knew that BIDU was in a long term uptrend (weekly model) and a fresh intermediate term uptrend (daily model).

In the vernacular of trend following, that is called an edge.


A

NNVC - Hourly

NNVC Hourly Trend Model

As volume has picked up in 2010, the above hourly trend model has caught my attention, especially for those seeking additional entry points for NNVC.  

The recovery late Wednesday from 1.70 to 2.00 was enough to trigger a fresh Buy in the hourly model.  Note also the early warning Sell generated April 15th at about 2.40.  NNVC then dropped to about 2.16, triggered a Buy that was quickly reversed to a Sell at 2.06, which then saw NNVC drop to 1.70  before the reversal Long on yesterday's close.

I'm not suggesting actively trading NNVC based on intraday trends, but, the trades and opportunities are there, for anyone so inclined. 

Wednesday, April 28, 2010

NNVC updated chart



The NNVC Daily Trend Model reversed from Long to Short on April 19th, at $2.01.  Today, NNVC is 15% lower and is flirting with its 50 day moving average.  You can see how this level has provided price support in the past.

As I have written may times, I don't actively trade NNVC,  but that philosophy cuts both ways and anyone holding from the April 15th high of $2.57 is getting clobbered.  But remember it was only about a year ago when NNVC was trading under $0.50 and I was banging the table to get into it at a bargain price.  Thus with the stock up over 200% since then, one could look at the drop to the 50 day moving average as normal and maybe even another buying opportunity.

A

TM


Buy  Dec 1 @ 81.25
Sell  Jan 22 @ 88.17
Buy  Mar 3 @ 76.94
Sell  Apr 8 @ 79.38
Current  =  76.95

VXX Buy Signal

Yesterday's sharp decline was sufficient to generate a reversal from Short to Long on the VXX Daily Trend Model:


VXX is an exchange traded fund that emulates the VIX, a market volatility measure.  As VIX rises, equity prices decline and as VIX declines, equity prices rise.  This is evident from the decline in VXX shown in the chart, coinciding with the market rally of the past two months.

Early trading indicates a bounce-back rally, that coupled with a Fed announcement later today makes anything possible.  But what this chart tells us is that something is different for the first time since mid-February.  Modest new market short positions are suggested, pending confirmation of an intermediate term sell-off in the next few days.

Tuesday, April 27, 2010

Is it different this time?

A couple of weeks ago we had a financial-led decline, but SDS never budged from its Short trend mode.



An hour before the close today, that short trend is in real jeopardy. Regarding the  question first above posed, today's closing price my very well provide the answer.

TZA

TZA is a highly leveraged ETF that is an inverse index for the Russell 2000.  I watch it mostly on an intermediate daily basis, but adding the hourly provides a head start for traders.

TZA sustained downtrend from mid-February


This short from about $10 has been an excellent way to trade the recent market strength, with gains of about 45% in two months.


TZA 60 minute trend model

The hourly model above is on a fresh Buy signal, but prices have fallen back to intersect with the trend reversal line.  One of two outcomes is imminent,  either prices find support and rally off of the trend line, or, prices fall below the line and enter a fresh Sell mode.  One way to trade this is to enter Long here, with a tight stop at the hourly reversal level (5.45) and if TZA closes below that level, cover and reverse Short.  

As long as the daily model is in a Sell mode, that bearish trend gets the benefit of doubt here.  When and if the daily flips Long, TZA's bias becomes bullish.

Monday, April 26, 2010

GOOG

In previous posts about GOOG, I've been able to reverse price action in GOOG simply by posting its chart and commenting on its trend.  Shall we dance?

GOOG Daily Trend Model

GOOG Weekly Trend Model

Comment:

Won't you look down upon me, Jesus
You've got to help me make a stand
You've just got to see me through another day
My body's aching and my time is at hand
And I won't make it any other way


A

Basket of Income

Here is a summary of the Basket of Income Stocks that I sent out to the email list on April 3rd.  As you can see, in addition to the approximately 1% per month in dividends, the basket is up an additional 3.25% in less then one month.


I put a hypothetical $3,000 into each of these ten stocks at the open on April 5, 2010.  These stocks are all using a low-volatility ATR stop, about half the volatility I use as a default on the other stocks.  That has resulted in a more stable trading environment, much fewer trades over the course of the year, albeit at the cost of some additional price slippage on entries and exits.  I am also using only Weekly charts, which in and of itself reduces trading.  So far, this "more patience, less trading" approach has been niecly profitable and a very easy model to manage.

Will this technique ultimately migrate into the entire trend following model? 

Maybe.


A

XLF

XLF Daily Trend Model


XLF Weekly Trend Model

This pretty much sums up the dilemma of financials, the GS fallout triggered shorter-term sells, but the weekly trend is still up, over 60% gains from last year's Buy signal.  One of these charts will reverse trends and that reversal will be a heads-up for new positions.

NNVC news

Some on-the-surface uneventful news this morning from NNVC, but I am posting it here because of the concise summary of the underlying science behind the company's patents, a concept that each and every one of you shareholders should understand, so the next time you are tempted to bail out early, you pause and consider the implications of not being on board for the entire ride.


NanoViricides Announces Trademark Registration for "Nanoviricides"

WEST HAVEN, Conn.--(BUSINESS WIRE)--NanoViricides, Inc. (OTC BB: NNVC.OB) (the "Company"), announced today that the mark “nanoviricides” has now become a registered trademark under the US Patents and Trademarks Office (USPTO). The mark was entered into the “principal register” of trademarks at the USPTO on April 20, 2010.

The mark “nanoviricides” consists of standard characters without claim to any particular font, style, size, or color. It is protected in the corresponding plural and singular forms as well as any capitalizations.

The Company created the novel word “nanoviricide®” in 2005. The Company defined “nanoviricide” to describe a specific type of antiviral nanomaterial that is designed to be capable of binding to, encapsulating, and potentially destroying virus particles. Nanoviricides are based on the TheraCour® polymeric micelle technology.

A nanoviricide is created by chemically attaching a “ligand” to a base TheraCour nanomicelle. The ligand is a special chemical entity that is designed to bind to a virus particle. The specificity of a nanoviricide is expected to be determined by the specificity of the ligand.

Viruses continuously change by a number of mechanisms such as mutations, recombinations, or re-assortments. This is why influenza vaccines and antibodies do not always work well against novel strains of influenza. This is also why attempts to develop “universal” vaccines against a number of different viruses such as HIV, Influenza, Dengue, and Ebola have met with limited successes.

It is generally accepted that, in spite of extensive changes in the virus, a given virus continues to bind to the same cell surface receptor(s) in the same fashion. The Company believes that it is possible to design ligands which mimic such invariant binding signature of a given virus. Using such biomimetic ligands, the Company believes that it is possible to create a nanoviricide that will remain active against a given type of virus, in spite of the changes the virus undergoes. The Company believes that a nanoviricide so designed would “fool” the virus into thinking that the virus is binding to and entering a host cell, while in fact it would be binding to and becoming entrapped inside a nanoviricide micelle. The Company believes that some viruses may be dismantled or destroyed upon interaction with a nanoviricide designed against them. Thus the Company believes that there is a strong likelihood of developing nanoviricides from which a given virus could not escape, in spite of mutations.

About NanoViricides:

NanoViricides, Inc. (www.nanoviricides.com) is a development stage company that is creating special purpose nanomaterials for viral therapy. The Company's novel nanoviricide® class of drug candidates are designed to specifically attack enveloped virus particles and to dismantle them. The Company is developing drugs against a number of viral diseases including H1N1 swine flu, H5N1 bird flu, seasonal Influenza, HIV, oral and genital Herpes, viral diseases of the eye including EKC and herpes keratitis, Hepatitis C, Rabies, Dengue fever, and Ebola virus, among others.

This press release contains forward-looking statements that reflect the Company's current expectation regarding future events. Actual events could differ materially and substantially from those projected herein and depend on a number of factors. Certain statements in this release, and other written or oral statements made by NanoViricides, Inc. are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company's control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Important factors that could cause actual results to differ materially from the company's expectations include, but are not limited to, those factors that are disclosed under the heading "Risk Factors" and elsewhere in documents filed by the company from time to time with the United States Securities and Exchange Commission and other regulatory authorities. Although it is not possible to predict or identify all such factors, they may include the following: demonstration and proof of principle in pre-clinical trials that a nanoviricide is safe and effective; successful development of our product candidates; our ability to seek and obtain regulatory approvals, including with respect to the indications we are seeking; the successful commercialization of our product candidates; and market acceptance of our products.

Saturday, April 24, 2010

Island of Allan


In the solemnity of our national anthem, this collection of mostly immigrants were unaware that in their future would be a resounding Game 5 victory against a tough, agile and speedy upstart opponent.

In a similar fashion, we embark upon our own challenges, daily.  In this spot, we are taking on the financial markets and in the spirt of Ed Koch, former mayor of NYC,  "How am I doing?"

From a subscriber to my email list:

For months you've been offering a short opinion , while your system was predominately long and right! I think you are at odds with the purpose of a trend following system. Just for the record, your system has been right and profitable, your short opinion has been unprofitable and wrong.

And another, because it meant so much to me:

You are making a difference in my life, outlook, and confidence with regard to trading.
The support you provide, the tutorials, the advice, the lessons, the comment.
I call it the island of Allan in a troubled sea.

Somewhere between the Wings victory last night and these two emails, there is inspiration and penance.   Despite occasional dalliances  with Armageddon scenarios, my work here has uncovered and exploited the absolute truth of the market.  It is not the future, nor the past that guides us, it is the now, a/k/a trend following.


If you're going to follow something, follow #13 above, Pavel Datsyuk, as inspirational as they come, a Russian hockey player for the Detroit Red Wings, but more then that, a boy who loves his job, his work, his passion.  It's in his smile, his way, his karma.  Fallen far from my own, last night I watched in awe as he mastered his game.  Time to step up, Allan.

If you are looking for perfection, you will not find it here, nor in the Red Wings, nor in my writings, my life, or my trend tables.  But as the subscribers above-referenced point out, there is value here, big value, but it comes with fallibility.  Most of Datsyuk's shots don't go in the net, but of the ones that do, they make a difference, a consequential, almost eloquent difference, not only for Pavel, but for his teammates; not only for Allan, but for his teammates. 

 
Thirteen is a Fibonacci number.  Can we use this to make money in the markets?  Yes, by discarding it in its entirety, it is just a number and tells us nothing about how to make money in stocks.  One less piece of information to deal with in our work.  Eliminate enough errant pucks and what we are left with is something that works; then we trade it.

From my stock trend tables sent out this weekend:

Daily Trends

TNA:    Long;  Bought 2/16/2010 @ 41.70; current 70.78
AAPLLong;  Bought 3/1/2010 @ 208.99; current 270.83
TZA:    Short;  Sold 2/12/2010 @ 10.13; current 5.41

Weekly Trends

SSO:    Long; Bought 3/1/2010 @ 39.91; current 45.43
FAZ:    Short; Sold 3/16/2009 @ 350.00; current 11.09
BIDU:  Long; Bought 3/9/2009 @ 172.66; current 645.76

These are some of the trend table's better trades, so don't for a minute think they are all that good.  In fact, the trend following service didn't even exist last year, so those trades from early 2009 are all pro-forma, hypothetical, but nonetheless are based on the strict application of a rule-based trading system and methodology. The same rule-based system that is in use today, in real time and real money. A few of the above trades reflect real time application of the methodology.

My point, if there has to be one, is that the opportunity and potential to garner impressive profits from application of systematic approach to trading is there, imperfect as it may be.  Throw enough pucks at the net and some are going to go in; just be sure that the ones that miss don't come back to burn you, don't go so far the other way as to score against yourself.  Built into this system is a fail-safe trailing stop discipline that provides a guard against the risk of ruin; a lesson in life in and of itself.

There is more then a pristine beach to this Island of Allan.  Call it a rugged outback, a insect invested swampland, an unbearable abyss of burden and failure.  Its all part of the same asylum.  You have to pick your spots, follow a trend and go with it.  Above all, keep skating, keep you feet moving and don't stop until you find something that works..........then trade it.

And always, always, beware of the dark side:



Finally, an excerpt from the Weekend Update sent out a few hours ago:


The question I pose up front in AllAllan is,

Why are you here?
If the answer is to make money, or to improve your market results, or to find something that works, you are at the right place.  Yes, I occasionally proffer market observations or opinions that stray from strict allegiance to the trend tables and the principles of trend following. But ask yourself this, how boring would this become if all I ever did was repeat the mantra, "Respect the Trends?"

My penance for such digressions (thanks again, "C" for your heads-up observations and email), is to devote an entire Weekend Update to illustrate the ease, elegance and efficiency of this trading system. 

Enough words and explanations.  Let's get on to the Trend Tables.  In the spirit of "C's" observations, I will let the symbols, tables and trends speak for themselves this week. Instead of trying to figure out where the markets are going in the future, let us focus completely on what direction they are going now.  That is clearly set out in the tables below, believe in what you see, it is the absolute, unbending, tough-love truth.


A

Friday, April 23, 2010

Trading the SPX

Below is the SPX hourly trend model for the past two weeks.  The beauty of this model is that it has no directional bias, it is simply a trend following, rule based, purely mechanical, objective, algorithm-based trend line. 

SPX 60 minute trend model


I'm not advocating short-term trading here, just providing an illustrative model of trend following on a shorter-term time frame. 

 The monthly chart isn't all that different:

SPX monthly trend  model


This weekend I hope to provide a fresh overview of these models in my Weekend Update to the email list.  



A


Thursday, April 22, 2010

A few good shorts

X - Short Trade of the Week, April 12

FAS - Still floating above 100

GS - a break of 155, then 145, then.......

 BAC - too big too rude too arrogant to survive


C - some cheap puts if Sell pans out

YHOO - fresh signal

Wednesday, April 21, 2010

Absurdism

 Absurdism is a philosophy stating that the efforts of humanity to find inherent meaning in the universe will ultimately fail (and hence are absurd), because no such meaning exists, at least in relation to the individual. - wikipedia

This is my version of a DJIA monthly chart that appeared last week in the Elliott Wave Theorist.  Using the definitions of a Head & Shoulders Top, by Edwards and Magee, this analysis targets an ultimate price objective, "below zero." 



Seems like we can miss the first 1,000 points and still do pretty well, although I suspect the Daily and Weekly Trend Models will both flip Short much sooner then that.  More interesting would be what fundamental phenomena could by any stretch of the imagination generate this kind of catastrophe?


Katla Volcano: Threat Of New, Larger Icelandic Eruption Looms
For all the worldwide chaos that Iceland's volcano has already created, it may just be the opening act.

Scientists fear tremors at the Eyjafjallajokull (ay-yah-FYAH-lah-yer-kuhl) volcano could trigger an even more dangerous eruption at the nearby Katla volcano – creating a worst-case scenario for the airline industry and travelers around the globe.

A Katla eruption would be 10 times stronger and shoot higher and larger plumes of ash into the air than its smaller neighbor, which has already brought European air travel to a standstill for five days and promises severe travel delays for days more.

The two volcanos are side by side in southern Iceland, about 12 miles (20 kilometers) apart and thought to be connected by a network of magma channels.

Katla, however, is buried under ice 550 yards (500 meters) thick – the massive Myrdalsjokull glacier, one of Iceland's largest. That means it has more than twice the amount of ice that the current eruption has burned through – threatening a new and possibly longer aviation standstill across Europe.

Katla showed no signs of activity Tuesday, according to scientists who monitor it with seismic sensors, but they were still wary.

Pall Einarsson, professor of geophysics at the Institute of Earth Sciences at the University of Iceland, said one volcanic eruption sometimes causes a nearby volcano to explode, and Katla and Eyjafjallajokull have been active in tandem in the past.

In fact, the last three times that Eyjafjallajokull erupted, Katla did as well.

Katla also typically awakens every 80 years or so, and having last exploded in 1918 is now slightly overdue.

"Supervolcanoes:" A Potential Global Catastrophe
As if the world's increasingly violent weather weren't enough (See previous article), the BBC is set to air a two part documentary on the potential threat of mass destruction posed by "Supervolcanoes."

The program, which will be aired in the U.K. March 13 and 14, describes the phenomenon as the accumulation of massive amounts of magma beneath the earth's crust. Unlike garden-variety volcanoes, such as Mt. St. Helens, Supervolcanoes "begin life when magma rises from the mantle to create a boiling reservoir in the Earth's crust. This chamber increases to an enormous size, building up colossal pressure until it finally erupts."

The program focuses on a region that Americans know well - Yellowstone National Park. Under all those geysers and hot springs lies a pool of molten rock, which could become a supervolcano. Even though, as the BBC points out, "Only a handful exist in the world, when one erupts it will be unlike any volcano we have ever witnessed. The explosion will be heard around the world. The sky will darken, black rain will fall, and the Earth will be plunged into the equivalent of a nuclear winter." The potential death and destruction caused by such an eruption is virtually incalculable.

NNVC - Analysis

At the bottom of this TA analysis there is an email from NNVC CEO, Dr. Eugene Seymour, posted yesterday at the iHub NNVC forum.  The email contains a lot of information, literally as well as by implication, reading between the lines.

Speaking of implications, this piece of fundamental analysis goes well with the underlying implications of the following three charts:


NNVC Daily


NNVC 240 min


NNVC 120 min


TA Discussion:

It looks like a corrective wave has taken over which has me looking for a reliable pattern that will suggest its time for the rally to resume.  For this I am using the False Bar Stochastic shown on all of the above three charts, in conjunction with the ATR Trend Models.  Those models suggest that 2.46, 2.28 and 2.26 are all thresholds that will signify a resumption of the uptrend.  Based on the patterns shown in the stochastic for all three time frames, hitting those prices will surely generate Buy signals.

---------------------------------------------------------


Re: SHELF stock price.
Tuesday, April 20, 2010 12:16 PM
From:
"Eugene Seymour, MD, MPH"
View contact details
To:

There is something very important to remember about a shelf registration

It's effective for a number of years and merely allows us to register treasury shares so they can be used as currency. For example, to buy equipment, pay for laboratory improvements or, to raise money, (sold as an offering). This offering can take different forms and is considered to be a "secondary offering".

However, we are under no obligation to do anything with those registered shares. They can simply sit there until we decide to use them (if ever).

As you can tell from our previous SEC filings, we have enough money to last for one year at our current burn rate so we are not in a panic to get more capital. We will do a financing, if and when we think it is in the best interest of both the Company and its shareholders to do so. In the meantime, I am actively exploring other forms of capital acquisition that will have no effect on the number of shares outstanding.

When the S3 was filed, many different investment banks contacted me. I have interviewed all of them, most in person, in an effort to chose the institution or institutions that will be important to us as we move forward into the FDA process and beyond.

I feel that we're at an important juncture in the life of NanoViricides. We now have a number of "lead drug candidates" for an FDA filing(s) and will decide in the next 2-3 months what the submission order will be. The priority voucher program is an important consideration, especially since there are a number of tropical medicine diseases that don't require human trials except for Phase I safety when the drug is given to healthy volunteers. And, there's an immediate financial payoff once approval is obtained. Only a few non human primates are needed for the other Phases which makes the trials go rather quickly.

There is now widespread understanding in the scientific community about the usefulness of nanomedicine and particularly of our nanoparticles, called nanomicelles. You only have to go to http://nano.cancer.gov to see that they're doing the same thing in oncology, targeting and destroying individual cancer cells, as we're doing with viruses.

It's important to look into the future but at the same time make the correct decisions that will help us achieve our long-term goals

I'm most interested in seeing this S3 shelf registration go effective so we can leave this quiet period and update everyone on our most recent studies.

I hope this has been helpful


EUGENE SEYMOUR, MD, MPH
Chief Executive Officer
NANOVIRICIDES, INC
Nanotechnology-based targeted anti-viral therapeutics
http://www.nanoviricides.com
eugene@nanoviricides.com
310-486-5677

AAPL Trend Models

AAPL Weekly Trend Model


AAPL Daily Trend Model

Silver and Stocks

Below are two daily trend charts of Silver (SLV) and Stocks (SPY).  My interpretation is that these two markets are highly correlated, with SPY turning in a much smoother trend profile. 

SLV Daily


SPY Daily


That said, a longer term application of the low-volatility algorithm to Hecla (HL) shows stellar results:


HL Weekly 4.0 Trend Model


Tuesday, April 20, 2010

Socionomics In One Lesson

Could the 11,000-Point Dow Make Us All Miserable?

If a group of predictive theorists are to be believed, the market's about to nosedive — and Americans will get very, very angry... about everything. So is it B.S., or might a national malaise take down Obama?

By John H. Richardson (Esquire, April 14, 2010, link below)

For decades, stock investors have known that hemlines track stocks — that short skirts mean good times. That's always been my philosophy, for sure. But there's definitely a dark side to ponder: Did you know that bear markets tend to trigger wars? That the size of a war almost always correlates with the size of the bear market that preceded it? That the use of words like "we" and "they" appear to increase as economic trouble approaches? That the popularity of horror movies increase as economic trouble approaches? (Seriously: Check out this report and see how Night of the Living Dead, released at a market peak in 1968, was followed by steady erosion in stocks accompanied by the mood music, as it were, of The Texas Chainsaw Massacre, Halloween, and finally, in 1980, at the grim bottom of the '70s recession, by Friday the 13th).

These statistics come courtesy of the Elliott Wave theorists, a cult of chart obsessives who try to predict the stock market by following trends in social mood — most recently, in an article in The Socionomist (the Elliott Wave newsletter) that follows the current growth of secessionist sentiment — the militias, the tenthers, the birthers, the federal-reserve haters, the fad for nullification of federal laws. A recent Rasmussen poll found the gap between the government and the people as big as the one that preceded the Revolution — just 21 percent of voters now believe that our government rests on the consent of governed, which is a founding principle of our country. To help track all this, the Socionomist article includes the first-ever index of secessionism as it corresponds to dips in the stock market — which is, it turns out, pretty damn close.

The bad news is that the theorists think civil war is a "distinct possibility."

Complete article here

More Socionomics


Sea change

Sea change or seachange is an idiom for broad transformation drawn from a phrase in the song "Full fathom five" in Shakespeare's The Tempest, and connotes a transformation: see Sea change (transformation) - wikipedia

The past trading sessions have seen a shift in my daily charts from all-bullish-all-the-time to  a mixed bag of longer term Buys and now new Sells that are spreading across a wide spectrum of ETF's and individual stocks.  Is it time to become all out bearish, again? 

It's time to stick to our trend models and follow their lead.  As I have published, the Daily SPX Model has flipped Short.  Since this is my main market gauge, this Sell carries a lot of weight.  But as we have seen with charts like SDS, the shift in trend has not extended across the board.  Note that the strongest market index this past year, Value Line (chart below), has flirted with Daily Sells for the past two days, but remains entrenched in its mid-February Buy signal.   For the time being, that too has to be taken seriously. 

Whether or not markets are exhibiting a sea change to the downside, has yet to be determined.  I remain mostly in cash, awaiting a higher confidence resolution, one way or the other.

Respect the trends.


 Value Line Daily Trend Model


A

Monday, April 19, 2010

Scariest chart in the world

DJ Shanghai Index, Weekly Trend Model