wednesday brainstorming

1. Window dressers happy times – well they made back 10% of equity value and so far we seem to repeat last years low once again. Some very conflicting and troubling for bears is that the Rydex ( Chart at the bottom) is at extreme bearish levels despite the rally and most sentiment indicators I track as well like the ISE moving averages (MAs) with yesterdays mind-boggling number of 56 (mostly due to a massive EEM put purchase).

That are aspects pointing rather to a low, a severe one despite we have already going up sharply. On top of that BAC ( Merril Lynch) says Hedge Funds are extremely short all together and trader positions (NYSE shorts  and position commitments plus options data) confirm that.

As we are getting close to my wave 4 target area SPX 1220-40 it will be very interesting to see how that plays out as I get cautious on the downside potential. Usually sentiment numbers win it is not precise on a daily basis but overall shows where stocks are heading ( from a contrarion point of view, hence when the market is too bearish markets go up).

The monthly charts still produce a sell signal and initiates the bear market and the point is rather on the timing and from what level the next big selling wave will start. For now we have a support by sentiment and still a wave 5 to go down and we have risen in a classical way just around the death crosses occured like last summer.

excerpt

Rydex Nova/Ursa Ratio

 

print Print |  1 Month |  3 Month |  6 Months |  1 Year
Date NAV Adjusted N/U Ratio
08/29 0.194
08/26 0.195
08/25 0.187
08/24 0.194
08/23 0.196
08/22 0.190
08/19 0.190
08/18 0.211
08/17 0.223
08/16 0.227
08/15 0.232
08/12 0.236
08/11 0.251
08/10 0.248
08/09 0.250
08/08 0.274
08/05 0.350
08/04 0.511
08/03 0.452
08/02 0.450
Historical
ISEE Date
Previous Trading Day 56 08/30/2011
10-Day Moving Average 89 08/17/2011 – 08/30/2011
20-Day Moving Average 92 08/03/2011 – 08/30/2011
50-Day Moving Average 100 06/21/2011 – 08/30/2011
52-Week High 230 12/10/2010
52-Week Low 55 06/30/2011
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~ by behindthematrix on August 31, 2011.

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