Technical Analysis - Triple bottom -S&P

[dex]

Take a look at the S&P chart.
The July low of 1214 could be tested today or tomorrow.
If it holds it would be a double bottom and if you look a the past Sept low of 1224 (close to 1214) a triple bottom. Showing a strong support level.
Also the VIX is at a recent high of near 30 - a contrary indicator.

A couple of people (e.g. Cramer) says he sees the bottom of the market being the third quarter of next year.

So you might regret getting out around here.

 

[harley]

I'm not good with technical analysis and formulas. Does this also mean maybe a good time to be getting in, index-wise?

 

[dex]

I'm not good with technical analysis and formulas. Does this also mean maybe a good time to be getting in, index-wise?

Technical analysis is a bit of an art and definitely not a science. If the 1214 level holds it could be a good time to begin to average into the market. Timing wise it does not mean the s&P will not revisit the 1214 level again. It means that it is a strong support level.

The VIX chart is interpreted as a level of fear in the market - a contrary indicator.

Match up the highs of the VIX with the lows of the S&P to see what I mean.

 

[al_bundy]

i'm watching the MACD

back around February March we had a lower low on the indexes and a higher low on the MACD which confirmed a rally. looks like same thing is being set up now, but i'm watching it carefully.

long term if you look at a 30 year chart of the SP500 you'll see a double top developing. First top was in 2000 and the second seems to be last year. i'm thinking we'll probably see 700-800 again and i've read some opinions that say the SP500 might fall to the 500 range before it's all over.

back in the last secular bear the Dow made a double bottom over a period of several years with the SP500 just barely missing it.

 

[harley]

Nevermind, I'm going back to my simple DCA plan. I can't understand a word y'all are saying.

 

[al_bundy]

Nevermind, I'm going back to my simple DCA plan. I can't understand a word y'all are saying.

Amazon.com: Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications (New York Institute of Finance): John J. Murphy: Books

the $60 or whatever I paid for it, saved me a lot more than that in the last year

 

[REWahoo]

harley, maybe this little rule of thumb will help:

Whenever you see a head and shoulders followed by a double bottom, you'd better have a large pair if you plan to invest.

 

[harley]

LOL! Now there's invesment advice I can understand.

 

[dex]

long term if you look at a 30 year chart of the SP500 you'll see a double top developing. First top was in 2000 and the second seems to be last year. i'm thinking we'll probably see 700-800 again and i've read some opinions that say the SP500 might fall to the 500 range before it's all over.

There is a theory that the past rise from 2000 was a bear market rally and that this bear market will last into the twenty teens -2018 similar length to the rise.

That 1500-1550 level has 4 tops to it.

There looks some good multi year support at 1150

Maybe the best we can hope for at this time is that we stay in a trading range from 1200 to 1400 for awhile and put in a good base for the future.

"the market teaches you to lose"

 

[Running_Man]

Re: Cramer

Cramer has been wrong more often than right in the past 18 months, despite the fact I like him, but he is a bull market maven. He is totally off his balance in a declining market. Just following his logic in Starbucks is so convoluted that his picking of a bottom for the market has little credibilty, about as much as when he said Bear Stearns would never go under and then spent weeks parsing what he actually meant. However, in a rising market he does pick a lot of winners from what I have seen.

As for the double bottom techinical analysis, the best part of knowing technical analysis is knowing where a bunch of buyers and sellers will accumulate. There is and will be alot of buying at the 1214 level unless it doesn't hold, in which case you'll have a big leg down. This does not feel like a bottom of a market run down as the averages really have not fallen that far and the economy is doing ok. Major firms going belly up are not a good sign of themselves as the "this is the last one" has been heard before with Fannie and Freddie and Bear Stearns yet the market has not dropped further since then, far from taking that as a good sign I see that as optimism with no fundamentals behind it. However if you look since then both commodities and the shipping indexes have dropped greatly and the Federal Reserve is now willing to take low grade stocks for loans. Near term puts on the market with an expectation of an explosive downside once the bottom breaks would be the bet I would make.

 

[cute fuzzy bunny]

Its easy to pick winners in a rising market.

Someone keeps tabs on Cramers picks and pans over the long term and he loses money vs buying and holding the s&p 500.

I posted a youtube video about 5-6 months ago where someone took several of his screaming matches and put them all together. One week he's telling you you're an idiot to not jump into several stocks and segments. In the next week, he said you were nuts if you bought any of that stuff (which had dropped like a rock)...seems he forgot that he was pumping it the week before.

 

[dex]

Re: Cramer

As for the double bottom techinical analysis, the best part of knowing technical analysis is knowing where a bunch of buyers and sellers will accumulate. There is and will be alot of buying at the 1214 level unless it doesn't hold, in which case you'll have a big leg down.

Well, it closed at 1,201.51
Vix closed at 30.92 - I had the previous close wrong it was 25.66
The VIX is at the point were recent lows have been made.

More down - looks likely - I don't think many people see a reason to buy.
We still have October to get through
Will there be a Santa Clause rally
Will there be the January effect
Will the market get better after the election
A terrorist action could get us back to that low Al Bundy mentioned

 

[Bails]

Well I'm an overseas observer, and I don't want my money in the US at present. Actually there isn't many markets that I want to be in at present. When I look at some of the fundamentals it seems to me that the US will be a long time recovering, one thing to be sure about is the Government will not allow what has happened to repeat itself, so I would think you are in for a lot more regulation, people who have suffered losses will be wary , and some of the losers have been the people you need to keep the economy going, ie: off shore funds . If the interest rates keep going down, basically the only action the FED has left, you will end up with a Japanese scenario , a problem with no easy solution.

 

[Running_Man]

Well, it closed at 1,201.51
Vix closed at 30.92 - I had the previous close wrong it was 25.66
The VIX is at the point were recent lows have been made.

More down - looks likely - I don't think many people see a reason to buy.
We still have October to get through
Will there be a Santa Clause rally
Will there be the January effect
Will the market get better after the election
A terrorist action could get us back to that low Al Bundy mentioned

Interesting that yesterday it came right up to the previous "bottom" as Dex pointed out and is now falling away.

 

[al_bundy]

not really

magic number for the SP500 is around 1165 which is around a 50% retracement of the 2002 - 2007 bull market. it's a fibnonacci number and that is where it bounced off a few days ago and seems to be holding

technicals for the SP500 seem to be hinting at a rally as well and i'm looking at jumping back in

 

[Running_Man]

not really

magic number for the SP500 is around 1165 which is around a 50% retracement of the 2002 - 2007 bull market. it's a fibnonacci number and that is where it bounced off a few days ago and seems to be holding

technicals for the SP500 seem to be hinting at a rally as well and i'm looking at jumping back in

I don't see how 1165 is a fibnonacci number?? But to me fundamentals of the economy are falling away so rapidly that the triple bottom break that Dex pointed should result in 1165 being run through like Sherman through Georgia. Be interesting to see how the market votes on this.


0,1,1,2,3,5,8,13,21,34,55,89,144,233,377,610,987,1597

 

[ziggy29]

technicals for the SP500 seem to be hinting at a rally

I'd love to know how you figure this. The technicals and the fundamentals seem simply terrible in my eyes, possibly the worst I've ever personally seen them.

 

[al_bundy]

The Big Picture | 50% Retracement of 2002-2007 Rally

i'll have to double check the Fib part, don't have my book in front of me but read it in a blog a few days ago

back in 2002 when the bull market started everyone thought the world was going to end as well. this is why you never trade based on what you think the economy is going to do

 

[al_bundy]

I'd love to know how you figure this. The technicals and the fundamentals seem simply terrible in my eyes, possibly the worst I've ever personally seen them.

if you look at the chart over a year the MACD looks like a reverse head and shoulders and building a right shoulder. the MACD histogram from march to now also looks like a bullish divergence. full stochastics are looking bullish since mid July while the market is lower, another bullish divergence.

weekly 3 year chart of the sp500 is also showing bullish divergences on the macd and stochastics. very similar to 2002. i don't think it's the bottom, but i think we'll see a rally from here

 

[ziggy29]

if you look at the chart over a year the MACD looks like a reverse head and shoulders and building a right shoulder. the MACD histogram from march to now also looks like a bullish divergence. full stochastics are looking bullish since mid July while the market is lower, another bullish divergence.

weekly 3 year chart of the sp500 is also showing bullish divergences on the macd and stochastics. very similar to 2002. i don't think it's the bottom, but i think we'll see a rally from here

Wow. That's a pretty impressive batch of lemonade you're making out of this big box full of lemons...

 

[dex]

if you look at the chart over a year the MACD looks like a reverse head and shoulders and building a right shoulder. the MACD histogram from march to now also looks like a bullish divergence. full stochastics are looking bullish since mid July while the market is lower, another bullish divergence.

weekly 3 year chart of the sp500 is also showing bullish divergences on the macd and stochastics. very similar to 2002. i don't think it's the bottom, but i think we'll see a rally from here

I think you only apply "H&S" to price no other indicators.
The MACD is below the 0 line and pointing down on the daily and looks flat on the weekly - some hope?
I don't do Fib. (or Elliot wave).

The 1165 (mine 1150) number is close to the resistance in 2004 and support in 2005. So that could be considered an important area.
The other support areas 1100 & 1050 but those are really weak so there is a lot of air below 1150

 

[al_bundy]

i've noticed the chart pattern play out in the technicals as well


check out a 1 year chart of the SP500 and you'll see a H&S around the time of the March rally. the low point was at 1256 SP in February and the higher low came in a month later at a 1256 SP and the left shoulder was around late november 2007

 

[cute fuzzy bunny]

My magic 8 ball says "Not right now, ask again later."

 

[FinanceDude]

I'd put all my stock picks in the hands of CFB's Magic 8 Ball before I start buying into technical analysis for buyin points.......

Of course, if one can eloquently regale me with Elliot Wave theory or stochastics, I might get all warm and fuzzy........

 

[al_bundy]

stochastics, macd and others are either averages or simple statistical formulas to measure the stock or market index price over a period of time. sometimes you get what are called divergences when the tech trend goes against the market trend. rule is if tech trend is up and market is down it's a buy signal. if the market trend it up and tech trend is down then it's a sell signal. Neither is 100%, but pretty close to 100% accurate. and depending on which you use there is some lag, sometimes months. different technical formulas are used for different time periods.

elliot wave is simple. everthing moves in 5 waves. 3 up and 2 down or the opposite i think. now if you can only figure out how to read it, although Robert Prechter and his team seem to be pretty good. i read their newsletter on safehaven with a week or so lag because i get it free that way and don't want to pay. they are very accurate in their predictions

ultimately it's a mathematical way to show mass psychology of greed, fear and a few smart people