Reply #7161 of 7173
Looking ahead- Coming to life- Brad
If you go back three weeks I had posted the correction levels I expected DOW to hit, you will find the post and I would apprecaite if someone can dig it from this thread- I thought 8200 8050 7824 and 7615 as major correction supports, I was wrong by 3 ticks looking back as DOW reversed up from 7618, my whole correction theory is based on direct relationship of bond yields and the market valuations.
Going forward my predictions has to develop some relationship with long bond yields and at the moment what is happening in the bonds is not very helpful, since last two days bond is failing to break an important 114,29 resistance so as to probe 115,12 if I go back to my working chart where I pointed 7615 I come up with following overhead resistances for DOW to overcome first hurdle is on a daily chart 7942 second is 7977- in my opinion 7977 is as important a hurdle as
7615 support was on the way down, I know it very well that market will have difficult time crossing it unless bond yields does not break this 114,29 resistance, around those levels we will see market strecthing itself to thin, we need to have this resistance of bonds convincingly taken out otherwise I will be looking for recommending cover.
I am adding new elements for everyone to have some grip on the market. as you must have realised market as a mixture of many forces it is important to read the TA but once TA is tied up with a general out look you find a picture evolving based on which you can trade. Market forecasting is a dynamic struggle with changing forces, you just cannot be a bear or a bull, but I am loking at some very disturbing signs far off on the horizon and I have decided to address them, may be my brother Mohan will have some little smile on his face.
Yesterday a wrote that what are the fundamental conditions which helped DOW to bounce from my support of 7615 today I am trying to make a case for market lack of flexiblity on the upside, last friday you must have noticed I was first day short term positive above 931, but market opened lower and headed straight down, in my overall bearish trans I did signal out IBM INTC AMAT as my picks with some reservation on INTC, now if you look at friday recommendation it will be clear that my three stocks reisted the decline but INTC suffered the most and it did touch my level of 90 whereas IBM AMAT both came out of the correction just fine.
I see some of the stocks whose PEG is below 1.7 doing well in this market others with very high PEG will not stack well like EXXON is one good example- you got to be very specific in this market- watch out long bond yields and market resistances and moment you find one of the supports breaking you better find the reasons anfd if by any chance you see Long bond breaking 113,29 or 113,16 better go and buy OCT OEX puts, let the market run it will fail if long bond does not relate and 115,12 is not taken out, for me I am very concerned at these new levels and have plethora of following market resistance and support points interpolated with long bond yields:
DOW 7942 LB price 114,05- 012
DOW 7977 LB price 114,14-029
DOW 8069 LB price 115,12-029
DOW 8156 LB price 115, 29- 116,05
Any unsynchronised run of the DOW which does not meet my laddered LB prices is bound to fail- this is my own research and interpolating of these levels is one of the many elementary tools I use in my analysis.
Yesterday and before that some action was taken by Bart and George- before conditions are fully syn chronised , my recommendation was to buy some puts if S&P takes out 918 or 914 on cash it was still at 921 and falling that Bart went long the put within minutes I told him that it is a trap get out of your long put, how did I do that, again when in a dropping market you see key 6 stocks holding on it is a sign of manipulation- S&P futures are traded by banks and institutions for purely hedging purposes- some use it as an speculative tool to make some cash- I use futures to keep close eye on the market- if you know your futures well and your bonds well -youcan be wrong but not for far too long, futures as a trading tool is unadvisable because of the scale of losses in a single limit move but these futures are volatile they kind of harness the market , take this futures game out and excessive valuations can be the order of the day.
Market is combination of many factors and my approach is to open new vistas which are my exclusive way to look at markets- yes many people would look at bond yields and market direction but not many will develop a model every morning to trade within those limits. Markets once known cannot deceive you - once fundamentals are thoroughly known I can assure you that many of you can day trade, regretfully what I have seen so far is too much emphasis on some very narrow area of analysis it is the whole picture which counts, now enjoy and watch how the events unfold.
DOW downward supports are 7824-34 and 7615, I only see this after LB breaks 112,26 we test 7824 on break of 113,04 to 112,26.
SOXx individual components are very hot and INTC TXN MOT LRCX LSI AMD AMAT all have some fundamental charateristics that should make re-test of 402 a possiblity, I would request Nemer to post the upward reistance points of SOXx components, 4 big components can move SOxx decisively. Watch the resistance points being taken out one by one on major components like if INTC and AMAT reaches 115 I will think we may see SOXx at 425 soon, however SOXx can resist falling prices of LB but not below 113,04- if we break this you will se a selling even in tech sector. The uncertainities of LB cannot be under stated and its colinierity with markets a case I am trying to argue. Thanks and have a good day-
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