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Archive for the ‘NAMO’ Category

NASDAQ McClellan Oscillator ($NAMO)

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NAMO090805The NASDAQ McClellan Oscillator, a short term breadth indicator, began a downtrend on Wed. Whether this turns into a sustained move lower remains to be seen, but it is an early warning sign that you should be aware of.

To my dismay, I was stopped out of one of my favorite leading stocks, STEC. Weakness in a market leader is never a good broad market sign, so I’m growing a bit wary of more bullish proclamations.

Though the trend is technically higher, it is likely that I will be cutting any positions that are underwater and raising my stops to protect my gains. Tops and bottoms take days, weeks and months to form, so I’m not selling the farm yet. Trade what you see, not what you think.


Written by chucklesamadeus

August 6, 2009 at 9:32 am

Manic Markets

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The market continues to churn in a wide range, but there are some signs of change.
Hedged trading has begun under performing the underlying index, signaling short term bullishness. Volatility is falling, but remains high, so stay cautious.
Tuesdays selling may be a capitulation point considering the ratio of down/up volume.
Up/down volume on Wednesday is in an uptrend, so look for markup and accumulation.
The NAMO has stopped falling, and though it remains below 0, it could turn bullish fast.
TBT has showed impressive strength in the last few days, even during the sell off. This is my favorite long candidate, target ~50.

The weakness in the VIX is encouraging, but one day does not make a trend. I’m still very cautions, and more liable to sell rips than buy dips. Nevertheless, if Treasuries continue to fall, I will begin to get long.

Written by chucklesamadeus

January 22, 2009 at 12:01 am


Historical Indeed

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A new guy moves to the White House every eight years. I think the real news is here; today was the biggest Dow drop on inauguration in history.
Volatility is screaming upwards, and clearly fewer stocks are in bullish formations. The tape still warrants selling the rips, and I suspect we’re in for bigger dips.
Buy write strategies continue to outperform the underlying index, indicating bearish sentiment as the market seeks to hedge long positions.
The momentary bounce in the NAMO was snuffed out by torrential selling. Unless you can move quickly, defense wins this game, so don’t jump on the equity train.
The scariest chart I follow is the NASI. A run to the LEH collapse lows would be a doozy. Like all of the charts in this post, I have no confidence in any bounce until I see an X.
Amid the increasing volatility, fewer stocks are trading above the 50dma, so investors will probably continue to sell their increasingly worthless stocks.

The collapse of RBS and BCS should be making headlines every 2 minutes, but all eyes and ears are tuned to the $170 million party in D.C. A massive liquidation could be in the works as Britain finds itself trapped between a collapsing Pound and hemorrhaging banks. Cash remains king for all but the most nimble traders and disciplined short sellers. Breath deep.

Written by chucklesamadeus

January 20, 2009 at 6:42 pm


Digesting Indecision

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Not much action in the equities market this week.


According to my indicator, the SPX has managed to stay bullish, but it is very close to resuming a downtrend.


The buywrite/index spread is rising (bearish), but it is in a resistance area, and any turn around would be bullish.


The NAMO has turned positive, which is good for equities.


The summation index continues to rise, another reason to be positive on stocks.


Finally, the 30Y Treasury is beginning to show weakness relative to Gold.  This may signal an end of deflationary fears.


Until volume returns to the market, any move should be view with suspicion if you’re a trend trader.  Equities remain range bound, so I’m focused on opportunities in fixed income.  I suspect the primary direction of 2009 will be revealed within the first two weeks of January, so I will continue to sit patiently, watch Twitter and play the Ukulele during market hours.

Written by chucklesamadeus

December 27, 2008 at 12:47 pm


Indexes, Oscillators and Bears, Oh My!

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Today wasn’t quite enough to put the nail in the bulls’ coffin, but it isn’t getting any prettier.
My SPX index is clinging to a bullish signal by a few points.
The NAMO is signaling a downtrend, but we remain in bullish territory.
Banks look ready to break down and test their lows.
MLP’s continue to get sacked as oil goes lower than most can imagine. Looks like a good short.
I got stopped out of my SLV position for a break even trade. A new downtrend could bring a retest of the lows.

It is getting harder to defend the bullish side of things. My favorite long play is GDX, but it was up on weak volume as precious metals fell. It smelled like a suckers rally to me, so I’ve closed the position. For now, I will stick with fixed income until the equities tape gets a bit more positive. I’m shorting whatever pops up on StockTwits and keeping my positions small for the sake of my own psychological well being.

Written by chucklesamadeus

December 23, 2008 at 9:46 pm


Tale Of The Tape

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This market continues to exhibit an upward bias, so keep buying the dip. Risks remain high.
The markets haven’t looked this bullish and stable since Obama was elected.
The spread between Buywrite and Buy ‘N’ Hold indexes made a new low and violated the lower Bollinger Band, signaling a potential trend change.
The falling spread between US Equity and Bonds indicates an increasing appetite for risk.
The Yen vs the Dollar continues to look strong. Though it is a bearish trades, it hasn’t suffered in the recent rally.
The McClellan Oscillator is overbought by recent historical measures, but we’re in unprecedented times.

Shorting this market is suicidal for all but the quickest. Ride the wave up, but know that it will come back down. I’m interested in accumulating breakout stocks on pullbacks, so I’m not bottom fishing. I will hedge by getting long SKF or buying Yen.

Written by chucklesamadeus

December 8, 2008 at 11:23 pm


State Of The Market

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A few market signs for the lost. The following precipitous graph is an example of the impact the financial crisis is having on the real economy.
The BDI indicates how much shippers get paid for carrying freight. Due to the unwillingness of banks to write letters of credit for merchandise, shipping is mired in a death spiral.
US Bonds continue to outperform US Equities.
The NASDAQ continues to hold on by the skin of its teeth, but with the risks so high, holding equities overnight is a game for people much braver than I.
Less NASDAQ stocks are above their 50dma, but if the index doesn’t collapse tomorrow, we could see a short squeeze.
Nevertheless, the NAMO is a tad overbought, so I expect choppy trading for a day or two. Time to take photos, sculpt, and learn to play music.

The market is still volatile and thus provides great opportunities. On the other hand, my trading costs are starting to rise as I get whipsawed and suffer prolonged cognitive dissonance. I’m trading with small amounts, trying to find/keep a rhythm, but nothing seems quite clear after today.

P.S. Has anyone else in the blogosphere suffered ISP problems during very volatile market days?

Written by chucklesamadeus

December 2, 2008 at 10:00 pm