David Nichols report
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Olha que ele tem razao!
Cada dia que passa quando chego ao fim do dia pergunto-me se nao seria melhor fechar os curtos. O risco neste momento é brutal!
E viva o event risk... um dia destes levamos uma cacetada...
Um abraço, Eagle
E viva o event risk... um dia destes levamos uma cacetada...
Um abraço, Eagle
Carpe Diem
- Mensagens: 108
- Registado: 5/11/2002 2:31
David Nichols report
TUESDAY a.m.
February 25, 2003
End-Games
by David Nichols
I'm sorry for the delay this morning. It turns out I wasted a lot of time trying to figure out a way to get my charting software to work, when the problem is actually system-wide, and not specific to me. I won't mention my data provider by name (quote.com), but again, I apologize for the delay and the lack of charts.
As far as the markets, it's very tricky right now. Follow-through is a scarce market commodity. Fake-outs are plentiful -- and this dynamic can work in both directions.
Our sentiment dashboard is confirming that this is a particularly obscure period. The mid-term downtrend ended on Feb 13th, right as we took profits on our bearish positions. Now it's unclear whether we're pausing in a bigger descent -- a distinct possibility judging by the long-term dashboard -- or we're fibrillating our way into a mid-term uptrend.
I don't have that answer just yet. Frankly, I don't think anybody has that answer just yet. The move off the low at SPX 806 on Feb 13th was a very strong one, and we haven't even traded significantly into that first big white candle off the low. However, if the markets clearly break down under 830 and stay under, then that is a sign of weakness that needs to be fully respected.
This morning, the futures are below 830, so if there is no rally off this intial gap down, then the fear virus may be once again be truly spreading. This could push the markets into a full-blown capitulation phase. But we don't need to be too quick to embrace that scenario. Capitulation phases are very difficult to capture. If this fear virus really starts spreading -- and the VIX breaks strongly over 40 and stays above it -- then there should be lots of points coming off the market in a hurry, and we should be able to capture big chunks at that point.
One thing that's bugging me about really going aggressively onto the short side is the potential for the Iraqi situation to work itself out in a positive way. I can't recall a time when market positions -- both short and long -- were fraught with this much event-risk.
Let me give you an example. I subscribe to lots of services, including a few really good intelligence sources in addition to Debka -- and I read last night an intelligence report that Russian President Vladimir Putin has already brokered a deal with Saddam Hussein to end the situation peacefully.
Apparently this deal involves Saddam Hussein accepting armed U.N. peacekeepers to back up weapons inspectors, with these armed forces staying on in Iraq until disarmament is complete. Saddam will also give up his Samoud-2 missile program, and invite back big oil companies from the US and Britain that were expelled 30 years ago -- provided the invasion is called off. Chirac is enthusiastic about the plan, and apparently Tony Blair has also reacted favorably. Now Putin's top envoy is on his way to Washington to explain the deal to President Bush.
There's more to it than this, but you get the idea. I obviously have no way of vouching for this intelligence report, but I'm passing it on to illustrate that there are completely plausible scenarios for ending this situation without conflict.
The end-game is likely playing out right now, behind the scenes. It's my feeling that the suprises, geopolitically-speaking, will be to the upside. Saddam has proven over the last 23 years that he is a survivor, first and foremost.
So, until the markets get more clarity of direction, we'll simply stay out of positions in the Rydex funds.
Sentiment Dashboard
by Adam Oliensis
SENTIMENT TANK: The tank filled up by 4% to 81% full of negative sentiment on Monday. The complexion of the formation changes notably with this rise. As of Friday's close the tank gave the appearance of rolling over and being inclined to drain of negative sentiment. Throw in Monday's action and the formation now looks like a "flying plateau," which is a high-level consolidation that suggests continuation (higher levels of negative sentiment to come). A break over 85% on the tank would be at a new local high that would likely project a climactic whoosh to the downside for stocks.
SHORT-TERM: The short-term advance phase of Friday gave way to a short-term decline phase on Monday morning. These short-term flip flops have been harrowing lately. In the main the VIX has been hanging between 35 and 37 over the past week with just Friday's "fakedown" breaking that range. Fear is at a high, but not climactic level, as represented by the 81% reading on the tank.
MID-TERM: The mid-term gauge moved only fractionally on Monday, remaining at 8% in its struggling advance phase. If the market can't advance over the next couple of days then the gauge will move back into a neutral (yellow) condition. If that happens, we'll be looking at a market that is able to remain oversold for a long period without respite. That would be extremely bearish. Our Confidence Diffusion Index (CDI) regressed intoacross the zero line to a "minus one," which represents developing bearish technicals that will, absent some change of character, keep the gauge down in oversold territory.
LONG-TERM: The weekly gauge progressed 4 points to 51% in its decline phase and the weekly CDI flipped back over the zero line to a +2 in its decline phase.
The Dashboard may be a bit confusing today. The CDI's have been flip-flopping around on either side of zero. The short-term gauge is changing direction every day, and the mid and long-term gauges are pointing in opposite directions. This isn't a problem with the gauge. It's actually representing the market pretty well. Point being that the market itself is juking and jiving. As of this writing it's looking like the next move is down. However confidence in the prognosis (as represented in the CDI's close proximity to zero) is at a low level so far.
February 25, 2003
End-Games
by David Nichols
I'm sorry for the delay this morning. It turns out I wasted a lot of time trying to figure out a way to get my charting software to work, when the problem is actually system-wide, and not specific to me. I won't mention my data provider by name (quote.com), but again, I apologize for the delay and the lack of charts.
As far as the markets, it's very tricky right now. Follow-through is a scarce market commodity. Fake-outs are plentiful -- and this dynamic can work in both directions.
Our sentiment dashboard is confirming that this is a particularly obscure period. The mid-term downtrend ended on Feb 13th, right as we took profits on our bearish positions. Now it's unclear whether we're pausing in a bigger descent -- a distinct possibility judging by the long-term dashboard -- or we're fibrillating our way into a mid-term uptrend.
I don't have that answer just yet. Frankly, I don't think anybody has that answer just yet. The move off the low at SPX 806 on Feb 13th was a very strong one, and we haven't even traded significantly into that first big white candle off the low. However, if the markets clearly break down under 830 and stay under, then that is a sign of weakness that needs to be fully respected.
This morning, the futures are below 830, so if there is no rally off this intial gap down, then the fear virus may be once again be truly spreading. This could push the markets into a full-blown capitulation phase. But we don't need to be too quick to embrace that scenario. Capitulation phases are very difficult to capture. If this fear virus really starts spreading -- and the VIX breaks strongly over 40 and stays above it -- then there should be lots of points coming off the market in a hurry, and we should be able to capture big chunks at that point.
One thing that's bugging me about really going aggressively onto the short side is the potential for the Iraqi situation to work itself out in a positive way. I can't recall a time when market positions -- both short and long -- were fraught with this much event-risk.
Let me give you an example. I subscribe to lots of services, including a few really good intelligence sources in addition to Debka -- and I read last night an intelligence report that Russian President Vladimir Putin has already brokered a deal with Saddam Hussein to end the situation peacefully.
Apparently this deal involves Saddam Hussein accepting armed U.N. peacekeepers to back up weapons inspectors, with these armed forces staying on in Iraq until disarmament is complete. Saddam will also give up his Samoud-2 missile program, and invite back big oil companies from the US and Britain that were expelled 30 years ago -- provided the invasion is called off. Chirac is enthusiastic about the plan, and apparently Tony Blair has also reacted favorably. Now Putin's top envoy is on his way to Washington to explain the deal to President Bush.
There's more to it than this, but you get the idea. I obviously have no way of vouching for this intelligence report, but I'm passing it on to illustrate that there are completely plausible scenarios for ending this situation without conflict.
The end-game is likely playing out right now, behind the scenes. It's my feeling that the suprises, geopolitically-speaking, will be to the upside. Saddam has proven over the last 23 years that he is a survivor, first and foremost.
So, until the markets get more clarity of direction, we'll simply stay out of positions in the Rydex funds.
Sentiment Dashboard
by Adam Oliensis
SENTIMENT TANK: The tank filled up by 4% to 81% full of negative sentiment on Monday. The complexion of the formation changes notably with this rise. As of Friday's close the tank gave the appearance of rolling over and being inclined to drain of negative sentiment. Throw in Monday's action and the formation now looks like a "flying plateau," which is a high-level consolidation that suggests continuation (higher levels of negative sentiment to come). A break over 85% on the tank would be at a new local high that would likely project a climactic whoosh to the downside for stocks.
SHORT-TERM: The short-term advance phase of Friday gave way to a short-term decline phase on Monday morning. These short-term flip flops have been harrowing lately. In the main the VIX has been hanging between 35 and 37 over the past week with just Friday's "fakedown" breaking that range. Fear is at a high, but not climactic level, as represented by the 81% reading on the tank.
MID-TERM: The mid-term gauge moved only fractionally on Monday, remaining at 8% in its struggling advance phase. If the market can't advance over the next couple of days then the gauge will move back into a neutral (yellow) condition. If that happens, we'll be looking at a market that is able to remain oversold for a long period without respite. That would be extremely bearish. Our Confidence Diffusion Index (CDI) regressed intoacross the zero line to a "minus one," which represents developing bearish technicals that will, absent some change of character, keep the gauge down in oversold territory.
LONG-TERM: The weekly gauge progressed 4 points to 51% in its decline phase and the weekly CDI flipped back over the zero line to a +2 in its decline phase.
The Dashboard may be a bit confusing today. The CDI's have been flip-flopping around on either side of zero. The short-term gauge is changing direction every day, and the mid and long-term gauges are pointing in opposite directions. This isn't a problem with the gauge. It's actually representing the market pretty well. Point being that the market itself is juking and jiving. As of this writing it's looking like the next move is down. However confidence in the prognosis (as represented in the CDI's close proximity to zero) is at a low level so far.
Carpe Diem
- Mensagens: 108
- Registado: 5/11/2002 2:31
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