Bancos centrais não param de acumular ouro. Tendência deve manter-se no próximo ano

[Camisa Roxa]

Já não me lembro o que fiz, mas aí há uns 2 meses que recebo todos os dias a newsletter e para mim tem sido uma óptima referência, ainda para mais porque ele não é faccioso, há tempo de ser bull e tempo de ser bear

Cumprimentos!

[Ulisses Pereira]

Obrigado Camisa Roxa por estas prendas diárias!

Um abraço,
Ulisses

[Camisa Roxa]

TUESDAY a.m.
December 17, 2002



Big Candles
by David Nichols

Yesterday brought fresh evidence on how difficult it is to make money on the short side at this time of year. You'd be hard-pressed to script a more bearish set-up for the markets coming out of last week: There was a big breakdown day last Monday, followed by a tepid bounce, with the week ending in a slide to lower lows.

The odds strongly favored the next candle to be a big red one.



But that's not how it went. Prices came into a hot zone, and bounced hard off recent support.

The big white daily candle has a "shaven head", which means prices closed at the high of the day. Straight-ahead candlestick interpretation holds that this is a strong sign of continuation, as it shows robust buying pressure into the close.

Such a big white candle also gives us an excellent gauge to judge the subsequent action. If this is just the first candle in a much bigger move, then usually such a big white candle will be immediately followed by another sizeable white candle.



If however we see a red candle work its way back into the body of the white candle -- and close there -- then that puts a damper on the prospects of a big turnaround, and a lot of follow-through to the upside.



Keep in mind that almost always there is some sort of foray down into a big white candle. In the strong cases this is quickly repelled back, which leaves a "tail down" into the candle, but no red candle. That's undeniably bullish, showing a successful test of the conviction behind the white candle.

I bring this up in a little more detail than usual because I've found that paying very close attention to the candles can be really helpful after a big red or white one. The subsequent behavior usually tips you off to the way the trend is going to unfold.

We also have a crucial level that needs to be breached before a big bullish case can be made, and that's the big red candle from last Monday. A decisive move above this level will be bullish, plain and simple.



A check of our two main sentiment gauges also shows big candles. The VIX dropped sharply yesterday, confirming that the momentum of sentiment is moving towards more bullishness. With the VIX still at relatively high levels in absolute terms, then there is still plenty of available fuel in the tank to push the markets higher. (See dashboard below). We really haven't seen that big push down to the low 20s on the VIX.



Bonds also had a big fall yesterday.



This adds a lot of validity to the bullish case for stocks. Bonds have to confirm the move in this current market.

So the pieces are in place for a potential turnaround, and a run into the new year. Today's action should tell the story.

Sentiment Dashboard
By Adam Oliensis

SENTIMENT TANK: The tank drained of bearish sentiment from 59% all the way down to 54% on Monday. The strength of that "suction" on the fuel of negative sentiment suggests that the tank could drain significantly further before running dry. Why do we think such a strong drawdown suggests continuation? One of the ingredients in the brew of Negative Sentiment is the demand for bearish options (puts). On Monday the demand for puts rose strongly. The CBOE Put/Call ratio was 0.98. On a contrarian basis readings above ONE can often suggest a short-term low. (The highest one-day ratio in during this bear market was 1.36.) The Put/Call ratio doesn't normally spike up on a rally. However on Friday's decline the P/C Ratio was 0.87 while during Monday's session it was 0.98! So the Put/Call Ratio (a measure of relative demand for puts) was notably HIGHER during Monday's rally than it was during Friday's decline! In other words, investors were buying insurance against a decline as the market was rising. That's a lot of negative sentiment. The process of unwinding those puts could create buying pressure, just like a short squeeze, and push the market UP!

(Note: Triple Witching comes on Friday of this week, at which time the Christmas holiday week of will begin for many. It is possible that this unusual behavior is at least partly attributable to these factors. Options players may try to close their books on the week early and get out of town.)

SHORT-TERM GAUGE: The short-term gauge turned up early in Monday's session. This end-of-day reading is simply a snapshot of a very dynamic process.

MID-TERM GAUGE: The mid-term gauge dropped another couple of points into the downtrend to 35. That might seem wacky to you. But slower indicators often have some lag in responding to market moves. That's why we watch the various time frames for divergences and confirmations. Because of the strength of the upturn in Price on Monday, and in the short-term gauge, our mid-term Confidence Diffusion Index (CDI) did something we had not anticipated. It actually moved into a bullish phase while our mid-term gauge dropped further into the downtrend. The mid-term CDI is now showing us a +1 BULLISH reading on the daily reversal. We were able to begin to capture some (as yet unrealized) gains on the reversal. However the mid-term gauge is not designed to necessarily catch that first impulsive move. Rather it finds confirmed, sustainable moves If the short-term upturn goes unconfirmed by the mid-term gauge we won't hesitate to take profits on our newly initiated long positions, and consider them to have been countertrend scalping. If we get mid-term confirmation then we'll be looking for more sustained bullish moves.

LONG-TERM GAUGE: Monday's action was not sufficient to move the weekly gauge out of its neutral position. The market is still in a whippy stage and has no discernible weekly trend in price or sentiment. The VIX has been between 26 and 35 for the past six weeks and the SPX has gone from down to up to down...now up again between about 890 and 950 during the same period. Our weekly CDI is, though, giving a bullish hint after Monday's session, though it's unconfirmed.