"Houston, we have capitulation".....
Ok, sure the market could drop a few percentage points further, but evidence abounds we are near a point that should drive a 20-30% rally. Here are a few of the indicators saying we are very close to a rally:
- Put/Call ratio of 1.2 ....http://stockcharts.com/def/servlet/SC.web?c=$CPC,uu[h,a]daclyyay[df][pb50!b200][vc60]&pref=G
- S&P 500 Bullish percent below 30 .....http://stockcharts.com/def/servlet/SC.web?c=$bpspx,uu[h,a]daclyyay[df][pb50!b200][vc60]&pref=G
- Nasdaq Summation RSI (14) below 4.0.....http://stockcharts.com/def/servlet/SC.web?c=$nasi,uu[h,a]daclyyay[df][pb50!b200][vc60][iLb14]&pref=G
- Volatility Index above 40.....http://stockcharts.com/def/servlet/SC.web?c=$VIX,uu[h,a]daclyyay[df][pb50!b200][vc60]&pref=G
- NYSE advancing/declining volume below negative 10,000 (actually at 10 year low now)....http://stockcharts.com/def/servlet/SC.web?c=$nyud,uu[h,a]daclyyay[df][pb50!b200][vc60]&pref=G
- NYSE advance/decline below 1500....http://stockcharts.com/def/servlet/SC.web?c=$nyad,uu[h,a]daclyyay[df][pb50!b200][vc60]&pref=G
- Series of NYSE ticks below negative 1100 on stockcharts.com data......2 on 7/11, 2 on 7/15, 2 yesterday.
- S&P 500 drops sharply and gets to more than 15% below 50 day moving average.....http://stockcharts.com/def/servlet/SC.web?c=$SPX,uu[h,a]daclyyay[df][pb50!b200][vc60]&pref=G
- Wall Street Journal wrote an article last week about the the stock picking small town barber last profiled in March 2000.
- Friday night and Saturday morning news extensive coverage of market decline. Local news interviews experts and people on the street about the market decline.
- Front page of local paper has plot of Dow Jones showing the decline and big front page article.
- Tone on SI is very negative with posts about those poor idiot bulls and “buy and holders”.
Looks like some pretty good evidence of a near term bottom.
Tom
PS...my timing model will take me to maximum invested position (for me) Monday morning at 110% invested. Calls of the model this year are shown below:
- January 2nd: buy qqq at open 39.57......$100,000 in qqq.
- January 4: sell qqq at open 41.95.......$106,005 in cash.
- January 7: short 25% of account at open 42.11......$79,504 cash, $26,491 short qqq.
- February 7: buy back qqq short at $36.00......$109,829 in cash.
- February 20: go 50% long, buy qqq at 34.9......$54,904 in qqq, 54,915 in cash.
- February 22: go to 100% long at open, buy qqq at 33.61.....$107,780 in qqq.
- April 25: Went to 110% long at open at qqq of 32.3.
- May 14: Sold 10% of long position going back to 100% long on open at qqq of 32.05.....$102,687 in qqq.
- May 15: Went to 100% cash next open at 32.54....$104,247 cash.
- May 27: Went to 25% short at next open at 31.47.
- June 10: Went to 100% cash at open......$106,802.
- July 3: Went 50% long at open at 23.85....$53,391 in qqq, $53,401 in cash.
- July 5: Went to 100% long at open at $25.26. Total 4352 shares qqq long.
- July 20: Will go to 110% long at the open.
YTD July 20: Model is up 4% vs qqq down 39%. |
