When The Suckers Are Marchin' In

By: Boris Chikvashvili | Fri, Oct 6, 2006
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10/6/2006
OK Our profits are rolling see http://borisc.blogspot.com.

SPX - 1342, 1375 resistance
DOW - 11820, 12283 resistance
BKX - 114.60, 120-122 resistance
JPM - 48.85 resistance
XAU - 122, 103-105 support
GOLD -555, 470 support,
TNOTE - 4.0 support, yeh, I think very uniikely, holding short durations/insurance
$Dollar - 94, resistance, yeh, very unlikely

Dow at the record! Celebration time! Well, we have predicted it, one might say, our most likely resistance was a new all time high and it has arrived. Our opinions about the bull or bear are well expressed in It is the Dollar Stupid. Whoever thinks we are in the bull market needs to get a new tools, cause you can not measure with the changing tool ( $Dollar ). Public is in the market already (pension funds), the BIG BOYS with CNBC, BLOOMBERG, look for new ones before downturn. It is true they had a little success so far, but help (DOW HIGH) is on the way. Thus the name, "The Suckers Rally". None can predict exact timing of the top, but our proprietary BUY-SELL-PRESSURE index in conjunction with our short term indicators will alert us. Look at the graph and you will see that SELL-PRESSURE is at the extreme. That indicates the top (local/alltime) is within 2-4 days of churning.

Did you notice SPX gap 1t 1342? Yeh, that is how the game is played.
Our pressure indicator at neutral was among the reasons we were ready to go long or short Update, but now the scales are tipping on the short side. Is JPM afraid of highs? Is BKX scared to death? Both churning within less then 1% from resistance.

Nimble types, sell them using your favorite short-tern sell signals.
If profitable, may convert the positions to long-term.

Gold. We took quick profits and let the Gold/XAU take another dive. XAU could be making the last stand at 122 ( spike below, but close above ). Gold stocks and Gold have all retested our support levels, where we first recommended them and bounced again.

Nimble types, buy them using your favorite short-tern buy signals.
If profitable, may convert the positions to long-term.

Oil dropped below 60, Ultimate support is at 55. Can not rule out the 1973 type rocket up.

Nimble types, buy them using your favorite short-tern buy signals.
If profitable, may convert the positions to long-term.

Bonds choppy, not very bullish on them. If bonds move higher with quality spreads, which, so far, stopped doing that, then look for a crisis ahead?

Hold short duration for insurance.

Dollar choppy still confusing everybody. With a weekly buy and daily buy, move up is still possible.

Very short-term players only, Go long.

Some sectors, that look good/bad. Incomplete list

Gold stocks, bounced from strong support.
Drug stocks, good long term, many at resistance.
Biotech, good long term, some bounced from support.
Oil stocks, good-long term, some are at support.
Oil/Gas trusts good overall, 2-5 % from terrific support, 10-15 yields!
Pipelines, not at support, but can you give up 7-8% yields? Gas price do not matter?
REITS, disaster waiting to happen, at historic resistance levels 2-5% yield!
Banks/Brokers, can they save/sink market. Last horses running. The 30% of S&P. Will the cup underflow. See the cup at BKX chart on your favorite site.

Long-term portfolio:
Cash/Short term Bonds - 60%
OIL/GAS Trusts/Piplines - 30%
Gold - 10%

Bottom Line. Enjoy our analysis and support/resistance numbers.
The markets will, often, turn at those numbers, but it takes a short-term system perfection to take advantage of these turn-around/drill-troughs.
Some of them will be short-lived and some will make a fortune if let run.
We got it down close to perfection.

 


 

Author: Boris Chikvashvili

Boris Chikvashvili
borisc.blogspot.com

In short... I was supposed to be a theoretical physicist (Russia+Jerusalem Hebrew University, MS Physics, with distinction, toyed with QUARKS). Somewhere on the road to PHD I have discovered, first the Computers - at Carnegie Mellon University (MS EE, Fathered UNIX, adopted WINDOWS), and second Finance on Wall Street.President ITI,(Computer/Finance Consulting Firm) Consulted AT&T,IBM,SUN,CITIBANK,JP MORGAN, LEHMAN, MICROSOFT. Designed/implemented Trading Systems - BLOOMBERG LLP. There is nothing more to say professionally speaking.

Please Note: The opinions expressed here are only for education purposes and do not constitute the advice in any shape of form.

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