Wall Street fecha semana em alta. S&P 500 e Nasdaq atingem recorde

[Info]

tks Ulisses.. hoje foi "morning out".

Para quem quiser o file em word... como os anteriores .. é só descompactar o doc dentro do zip em anexo.


Cump.

[Ulisses Pereira]

"Sentiment Dashboard "
by Adam Oliensis



"SENTIMENT TANK: Remained unchanged at 4% full of negative sentiment.

SHORT-TERM: Backed off from an advance phase to neutral status with an advance bias.

MID-TERM: Still trying to turn up into an advance phase at 76/24. With Confidence at a Bullish 2 it's tempting to call this a bona fide advance phase, but with the tank down at 4% (almost empty) we may be very close to hitting our heads on the ceiling.

LONG-TERM: Progressed 5 points to 30% on the decline side with Confidence still on the wrong side of 0 at a bullish 1. While the gauge is moving down that's a function mainly of elevated readings falling off the back of the look-back period (26 weeks) more than it is a result of current movement in sentiment readings.

BOTTOM LINE: The stock market apparently went on a fast for the Yom Kippur holiday. The volume was low as was the volatility. As Earnings Binge weeks approach it's pretty unusual to have the tank at such an extreme of bullish sentiment, especially in light of the impending seasonal weakness. (The 4th week of October is one of the worst of the year, statistically speaking.) The potential exists for one more smallish leg up, but after that it's going to take some pretty extraordinary liquidity fuel to drive the markets higher in the short-term.

The P/C 5-dma line has descended from 0.95 to 0.73 most recently. It's only got 0.09 to go before it hits the lower Standard-Deviation line at 0.64. Recently hitting that line has correlated with local tops.

On this reckoning this rally leg looks to be at LEAST 70% complete. If the SPX does break over 1040 watch for whether that level holds as support. On a number of measures we're approaching a short-term top. Once again the quality of the impending dip will be key. "

[Ulisses Pereira]

TUESDAY a.m.
October 7, 2003


"Congestion "
by David Nichols

"I'm recommending that you shut down all bearish positions in the Rydex funds -- if you haven't done so already -- with the decisive close above 1030 on the SPX. Even though Monday was a waffling, inconclusive, low-volume affair, the market did manage to drift higher, and that's a subtle but important data point after such a streaky move up. Our short position -- while not necessarily wrong -- just isn't "clean enough" anymore. The risk to the position got out of whack on that jobs spike on Friday.

To me, getting quickly stopped out like this is not a big deal. If you run a methodology based on specific criteria, then getting stopped out is perfectly normal and acceptable. With any trading method, there is always risk, and always the possibility of being wrong. The key is having a methodology that gives you an edge, and then faithfully sticking to your discipline, with the full knowledge that some set-ups are going to work, and some aren't, and you're just going to do them all come what may. (That last part is hardest of all, as I stupidly didn't take the big fat buy signal at the March bottom, because of WMD fears, which of course turned out to be phantom. Inevitably the ones you skip turn out to be the great ones....)

My work with the VIX and "fading the crowd" worked so well during the first phase of the bear market -- racking up big winners and going nearly 2 years without a losing position -- that it gave the illusion that my methods were very low risk. But let's be honest: You can't get triple digit returns without risk. It can't be done. But we can always strive to minimize the attendant risks, and that's a constant goal.

Speaking of risk, I've received many e-mails about what to now do with long positions in the QQQ and SPY. As I said, I'm an awfully squeamish long with the VIX (old VIX, new VIX -- it doesn't matter) under 20. If you can handle that, then stick with it -- provided the SPX doesn't tumble back down through SPX 1024. In fact, I'd stop the long and reverse short when that happens. But we can talk about that later.

Lately the VIX and volatility have been behaving in a highly unusual way, and it's causing a little rough patch for the methodologies I employ. Not only has implied volatility (the VIX) been scraping along the bottom for months, but each and every upside spike on the VIX has been quickly rejected.



This is not normal behavior. The VIX is one of the only market traits that is anti-persistent, meaning it exhibits no "memory effect" like other trending price series -- like the SPX, for example. In other words, if the VIX is low, statistically speaking it's likely to turn around and move higher. If it's high, it's a darn good bet that it's going to go low. (Sounds like a trading plan for VIX futures, doesn't it?)

Some day soon, the VIX is going to revert back to its normal patterns and break-out on a run to 30 or higher. If certain bear market extrapolations are correct -- and I think there is a huge likelihood that they are -- then the VIX has a date with destiny up over 70 sometime in 2004. But again, we'll talk about that later.

Right now I want to continue my discussion about fractal dimensions in the markets, as this idea seems to have really struck a chord with readers. I want to keep going with this idea to explain it in more detail, using the current market as our real-time study. Hopefully in the process we can get at least a little insight into one facet of behavior of this incredibly complex, chaotic market system.



As I mentioned yesterday, when prices extend the hourly fractal dimension down to the rarified low ranges, it's almost certain that the market is going to pause in its trend, or even flat-out reverse.

This is exactly what Monday was -- a slow, drifty congestion day. But when a streaky up move congests sideways, that's generally a bullish sign for continuation of the trend. "