Expect A Bounce

By: Stock Barometer | Wed, Oct 24, 2012
Print Email

10/24/2012 8:10:56 AM

As Sell Pressure Picks Up...

Real quick update on our trade here:

QQQ

If you'd like to sign up for our service, you can get a $1/4week trial by using discount code DSB1. Visit the home page to sign up. www.stockbarometer.com

The level of selling on Tuesday was enough to trigger our short term trin bounce. Looks like this may be a stair step sell off. Overnight the futures bounced and tested the trading highs from Tuesday. That may have been enough to satisfy our trin bounce. We'll see more today.

One thing lacking in this sell off is volatility. That suggests to me that we haven't seen the bottom yet. But obviously every day the market sells off brings us another day closer to a bottom.

The timing of the month end and the election are becoming more and more critical. Overnight there was also a record set on Intrade in the money voting for a romney win. Call it a break out if you will. I'll throw the chart up on my blog this afternoon. It won't fit in my article. So there's a sea change in the election.

We are 5 days away from the October 30 Key Reversal Date. A bounce could last 3-5 days. And then a larger move lower. There's an election signal on the DOW that's 90% accurate that says if the market is lower then where it was on Labor day, then the encumbant loses. So I think both camps are really watching the markets here...

I also talk about the perfect storm for stocks is forming with bonds and the dollar - if there's one thing that can keep these markets moving lower is both of those moving higher, combined with funds selling for their early year end (10/31).

Here's a look at the global stock markets:

Global Markets

On the economic front, here is the schedule for this week. Pay close attention to the timing of the report and the potential for the markets to make short term reversals at those points.

Economic Calendar

On to the charts:

Daily Stock Barometer


Stock Barometer Analysis

remains in Sell Mode as we're looking for a move lower into 10/30 and a consolidation of that low into 11/15.

The Stock Barometer is my proprietary market timing system. The direction, slope and level of the Stock Barometer determine our outlook. For example, if the barometer line is moving down, we are in Sell Mode. A Buy or Sell Signal is triggered when the indicator clearly changes direction. Trend and support can override the barometer signals.


Money Management & Stops

To trade this system, there are a few things you need to know and address to control your risk:

Accordingly;


Potential Cycle Key Reversal Dates

2012 Potential Reversal Dates: 1/12, 1/27, 2/16, 2/23, 3/16, 4/9, 4/25, 5/26. 6/2, 6/15, 7/2, 7/25, 8/13, 8/30, 9/8, 9/25, 10/7, 10/30, 11/15, 12/17, 1/15/13. These dates have an accuracy of +/- 2 days. We publish dates up to 2 months in advance.

With a bounce into 10/7, we're looking for markets to move lower into 10/30.

We added the last date for the year and the first date of next year... Again, how the previous dates set up, predict future dates (rule of alternating) but there is no guarantee that will be the case.

Our IRG Market Timing and Sentiment data service shows the performance of these forecast turn dates going back to 2003 and for the remainder of 2012.

My Additional timing work is based on numerous cycles and has resulted in the above potential reversal dates. These are not to be confused with the barometer signals or cycle times. However, due to their past accuracy I post the dates here.


Timing Indicators

Use the following Timing/momentum indicators to assist in your trading of the QQQQ, GLD, USD, USO and TLT. They are tuned to deliver signals in line with the Stock Barometer and we use them only in determining our overall outlook for the market and for pinpointing market reversals. The level, direction, and position to the zero line are keys in these indicators. For example, direction determines mode and a buy signal 'above zero' is more bullish than a buy signal 'below zero'.

QQQ Timing Indicator (NASDAQ:QQQ)

QQQ Timing Indicator

The QQQQ Spread Indicator will yield its own buy and sell signals that may be different from the Stock Barometer. It's meant to give us an idea of the next turn in the market.

Gold Timing Indicator (ARCX:GLD)

Gold Timing Indicator

Want to trade Gold? Use our signals with the Gold ETF AMEX:GLD. Gold gives us a general gage to the overall health of the US Economy and the markets.

US Dollar Index Timing Indicator (INDEX:DXY)

US Dollar Timing Indicator

Want to trade the US Dollar? Use our signals with the Power Shares AMEX:UUP: US Dollar Index Bullish Fund and AMEX:UDN: US Dollar Index Bearish Fund.

Bonds Timing Indicator (AMEX:TLT)

Bond Timing Indicator

Want to trade Bonds? Use our signals with Lehman?s 20 year ETF AMEX:TLT. The direction of bonds has an impact on the stock market. Normally, as bonds go down, stocks will go up and as bonds go up, stocks will go down.

OIL Timing Indicator (AMEX:USO)

Oil Timing Indicator

Want to trade OIL? Use our signals with AMEX:USO, the OIL ETF. We look at the price of oil as its level and direction has an impact on the stock market.


Secondary Stock Market Timing Indicator

Equity Put/Call Ratio

We maintain hundreds of popular and proprietary technical indicators that break down market internals, sentiment and money flow to give YOU unique insight into whether you should BUY or SELL the market. We feature at least one here each day in support of our current outlook.

As a subscriber to the Daily Stock Barometer System, you also get access to all our charts and research. Email Customer Support at stockbarometer@gmail.com to upgrade your subscription.


Daily Stock Market Outlook

We remain in Sell Mode, looking for a move lower into 10/30. Now cautious of the 11/15 date being a 9 month cycle low date as well. In the very short term, the market will bounce. Whether or not that turns into a multi day move higher is the question. That could position the market for a bounce into 10/30 and a move lower into the election...

The above chart shows the Equity Put Call Ratio - which is at a relative low. I expect a higher level of put buying to mark this bottom, and volatility to pick up, but we're not there yet.

Bigger picture - if we get that bond rally, odds are the S&P will test this longer term uptrend.

SPY versus Bonds Relative Strength

If you live in the Franklin, MA area, I'll be teaching my Stock Trading Secrets course (which is mostly for new traders) through Tri County's Adult Education program. If you're interested in attending, it's a lot of fun. The course is scheduled for 3 hours, but it normally runs 4-5 hours as no one wants to leave and I love to talk... And the money goes to the school, which I like to support.

Click here and my course is in the Finance/Business section.

If you want to participate in our Social Media experience, please visit and "LIKE" our FaceBook page. I'll have periodic updates on there and I WANT your feedback. This will be a good way to share your views with other traders. http://www.facebook.com/InvestmentResearchGroupInc


Here's our current positioning.

If you want to learn more about some of my models and indicators, I use my blog to cover them in more detail. If you're looking for more information, please visit our blog - I'll have updates and publish other articles there. http://investmentresearchgroup.com/Blog/

Regards,

 


 

Stock Barometer

Author: Stock Barometer

www.stockbarometer.com

Stock Barometer is completely independent. We have never and will not ever accept compensation from any company whose stock we recommend.

Our goal is to make you money. We offer you the tools and information to do so and leave it to you, the individual investor, to apply them in the best way possible.

Important Disclosure: Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.

Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.

In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.

For a complete understanding of the risks associated with trading, see our Risk Disclosure.

Copyright © 2004-2014 Investment Research Group, Inc.
d/b/a www.Stockbarometer.com. All Rights Reserved.

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com

SEARCH





TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/