----- Original Message -----
Sent: Tuesday, October 04, 2005 2:08
PM
Subject: [RT] Market today
My light short turned into a full short at 1234 and my full short would
have turned into a fuller short at 1244 but I doubt we'll see that now.
When my breadth models are updated tonight I expect they will have rolled
over again. I see first significant support around SPX 1187+-, however I
don't expect it will hold for long.
As mentioned earlier, the technicals have been topping for a good
while. I don't generally put a lot of stock in the fundamentals, however
every now and then I am willing to load the boat on fundamentals when the
technicals are in obvious conflict. This time I have given fundamentals a
lot of weight in deciding to scale up shorts against a market rising on the
"good news" that Katrina and Rita did not wipe half the country off the face
of the earth.
Essentially, I would characterize the forthcoming Christmas as cold and
hungry. Energy is now taking a big bite out of consumers and it's going to
get much worse as the heating bills start to roll in. While heating oil may
back off a bit, natural gas is going to remain high for months to come. And
of course, natural gas is used to generate nearly half of our electricity so
electric bills are going up. Then there are the obviously rising costs of
almost everything which requires energy to make or transport. Even the
farmer is seeing the cost of his fertilizer rise out of sight.
Then there are the rising interest rates, especially at the short end
of the curve used for consumer finance and ARMs. Finally, there is the Big
Grinch ... minimum credit card payments are doubling (thanks to new
bankruptcy law) from 1/40 of balance to 1/20 of balance for those who ride
around on a fist full of credit cards on which they make minimum
payments.
Earl
----- Original Message -----
Sent: Thursday, September 29, 2005
6:17 AM
Subject: Re: [RT] Nyse Daily
NYSE 7700 on Sep 30
NDX 1629 on Sep 30
SPX 1264 on Sep 30
From appearance of price relative to MOB I would rate all of these as
very low probability. Attached is GIF of my NYSE breadth models which do
not show the bullish divergences I want to see to support a strong
rally.
In my playbook, I have been shorting ES since July 28 ...
putting limit orders to sell in at 127% and 162% retracements of declines
(rally targets) and taking profits on declines. Topping process can
go on for months so I have not wanted to hold shorts on long term
basis. I am now starting to work on a longer term short position and am
currently lightly short ES mini and watching for opportunities to add to
position on rally -or- break of support.
Earl