February 20, 2016

What Say You, Market? (the 02/19/2016 Edition)


(Click to enlarge weekly chart of the S&P 500 Index as of yesterday's close)

Not much to say. Support above 1800 for the S&P 500 Index is still holding on a weekly basis (the index closed at 1917). The major resistance above is around 1950 reached 02/01. (To be updated as needed).

February 11, 2016

Update

The S&P is again testing support. If it breaks (this week's close will be key), the Bears will have won and my previous analyses will be good for the dust bin. Today's and tomorrow's sessions should be interesting, to say the least. 1800 is the key level of support for the       S & P 500.

I'll have a more in-depth analysis this weekend.

Trade very very carefully as volatility is reflecting panicky sentiment.

February 10, 2016

What Say You, Market? (the 02/10/2016 Edition)


It looks like the 1810-1830 support band for the S&P 500 has been tested successfully again.
That's the 5th time since April 2014, which reinforces it as support. The Bears have to decisively pierce this 1800-ish support level to have their views vindicated. The onus is on them.
Granted the Bulls have a lot of resistance levels above too (More on this in future posts), but don't let yourself be scared out of your long-term investments by the voices of doom. They're always loudest near significant bottoms.
To add meat to my analysis, I'll make a probabilistic prediction (which should be the only kind of prediction when it comes to markets, as they are dynamic and chaotic): I give the S&P 500 a 65% chance of rebounding from here.
I will of course update this as more data becomes available.
Make sure to do your own due diligence before trading in these treacherous times.

Don't forget that Technical Analysis is a great descriptive tool of the markets but NOT a great predictive tool in the deterministic sense. What it allows you to do in the predictive realm is assign probablities to various scenarios. Markets are never 100% predictable. 

But if a technique allows you to give a given scenario a 70% chance of happening (for example), I say it's a pretty useful one.

February 7, 2016

What Say You, Market? (the 02/07/2016 Edition)


(Click chart above to enlarge: S&P 500 Monthly chart August 1998 - February 8, 2016)

Many market observers have been calling for an impending and imminent stock market crash similar to the ones of 2000-2003 and 2007-2009, They may or may not turn out to be right. Personally, I would give that scenario - i.e. at least a 50% decline of the market from its high - only a 15% chance of happening this year.

Why? Among other things, I see strong support a bit above the 1800 level for the S&P 500 Index (which closed at 1880 this week). That support was tested successfully 4 times: in March 2014, September 2015, July 2015 and more recently in January 2016.

Below that, there is formidable support at around 1600 which was the high reached at the end of the two previous cyclical Bull markets in 2000 and 2007.

I would advise all traders and investors to do their own due diligence before executing any trades. 

Trading can be very dangerous to your financial health.

(to be updated and enriched as more data becomes available)

January 18, 2016

David Bowie, the Picasso of Pop/Rock




           No, this is not Guns and Roses (or any famous Hard Rock/Heavy Metal band of the early 1990s). It's Tin Machine in 1989. Lead singer/songwriter and front man? David Bowie. The Picasso of Pop/Rock. Picasso had his Blue Period, his Rose Period, his Cubist Periods (Analytic and Synthetic), his African Period, his Surrealist Period, his Modern Art Period, etc....
Bowie had his:
- Folk Rock 
- Progressive/Psychedelic Rock
- Glam Rock
- Art/Concept Rock
- Funk
- Soul
- Krautrock/Ambient (Berlin Trilogy)
- Dance/Disco
- Punk Rock
- New Wave
- Pop
- Hard Rock/Heavy metal/Industrial/Alternative Rock
- Drum and Bass/Jungle
- Techno
- Avant-Garde Jazz
periods, with lots of overlapping. And I'm forgetting some. Like Picasso, David Bowie at times pioneered those musical styles, at others was inspired by them, popularized them and cross-pollinated them. I believe the comparison to be apt. What do you think?

          I became a David Bowie fan around 1995, later than most, even if I knew of him before (who didn't) and liked many of his songs. It happened after, for some reason I know forget, I bought both the Space Oddity and Ziggy Stardust albums on the same day.

          After that, I remember buying all his remastered CDs at the various (now-defunct) Tower music stores in New York (Union square, East 4th Street, Broadway and 66th Street) over a period of a few years, then keeping up with his latest output as it came out: Hours, Heathen, Reality. Then being blown away by his return album The Next Day in 2013. Then even more blown away by Blackstar, released on Bowie's 69th birthday, 01/08/2016. Then devastated by his shocking and totally unexpected death two days later. The man knew how to keep a secret and make sure his close entourage do the same. RIP David Bowie. You will be missed but you gave the world enough extraordinary music to satisfy many generations to come.

July 14, 2015

What's Up With China? Not Much.

Here's a helpful and informative article about the recent popping of the Chinese stock market bubble. Its causes, its consequences. I have bought some FXI (the Chinese ETF) recently, thinking the selling was overdone but as my super smart fellow blogger Noah Smith implies, I might have been a little early. Excerpt:
This is what usually happens when people try to prop up share prices. Economist Owen Lamont has studied episodes in which companies resort to various legal actions and market manipulations to keep short sellers from driving down their stock prices. Even when the companies succeed, their share prices usually continue to drift lower. If this is true for a company, it should be similarly true for the Chinese government.  
Many analysts say they think China’s stocks still are overvalued. BlackRock’s global chief investment strategist Russ Koesterich was quoted as saying: “Given the magnitude of the run-up [in Chinese share prices], it is possible that even after a 30 percent correction, we haven’t gotten back to something approaching fair value.” Whether he’s right, he’s certainly expressing a widely held view, and that means that pent-up selling pressure might remain. 
 We shall see.

July 10, 2015

Greece's Depression vs. the Great Depression

One chart is worth a thousand words (courtesy of the New York Times):


Gross domestic product

U.S. 1933
Greece 2013
–26%
–26%
+5%
0
–5
–10
–15
–20
–25
–30
1929
1930
1931
1932
1933
1934
1935
1936
2007
2008
2009
2010
2011
2012
2013
2014
Percentage change in annual G.D.P. since 1929 in the U.S. and since 2007 in Greece