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Post by uncleharley on Feb 19, 2023 19:40:04 GMT
I place a lot of weight in the market future direction based on "BEHAVIOR" measurements...such as degree of short selling; amount of money on sidelines; opinions as to direction of market, dollar flows into asset classes like stocks, etc. From R48s post
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Post by Deleted on Feb 19, 2023 20:25:41 GMT
I wonder of there is a correlation between people's long-term bullish or bearish perspective and their current thinking. Certain people appear to post choices that favor bearish forecasts, and others bullish forecasts. Some may have "put their money where their thinking is" to appropriate a phrase. Which could impact their viewpoint too. In this thread, it seems that Karen, marpro and mnfish are more bearish. And UH, myself and eddy seem more bullish. A few seem on the fence: Archer, Chahta, Bobfi, Fearchar. Part of it may be the timing that people are anticipating, a month vs. EOY. Apologies, If I read anyone wrong. Respectfully, nobody, there's a third group -- some of us try not to express predictions at all. We have observations, not opinions. Even the most adroit market analysts express their outlooks at the peril of unknowable EVENTS. The farther out and more confident the prediction, the greater the risk. We are willing to be BRIEFLY on the wrong side of any big market movement and we readily accept losses -- so long as they are kept small. So to that end we try to be nimble enough to observe how the ground is shifting RIGHT NOW rather than stating what we believe we cannot reliably know. The tools we use are technical indicators consistently applied to the lowest beta trading assets we can find. I believe there's an unholy connection between personal vanity and confident market predictions. Color me suspicious. "…..the financial press isn’t in the business of supplying useful information; it’s in the business of feeding people’s lust for predictions. “You keep buying the magazine regardless of how the forecasts turn out,” Wellington says, “and they’ll keep supplying the forecasts.” --Evolution of an Investor (lfadvisors.com)I agree wholeheartedly with the idea of "observations", subject to continual change. Regarding the financial media (and all media), they are in the business of telling the masses what they demand to hear. Real news and journalism has been forced to take a backseat to pandering. The majority doesn't want their notions challenged, they prefer affirmation, even false affirmation. If they don't get it, they tune out entirely. The national outlets are fully aware, and do what they have to and can to get and keep viewers. Majority rules, possibly to everyone's detriment.
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Post by Fearchar on Feb 19, 2023 20:31:59 GMT
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Post by newtecher on Feb 19, 2023 20:37:49 GMT
I place a lot of weight in the market future direction based on "BEHAVIOR" measurements...such as degree of short selling; amount of money on sidelines; opinions as to direction of market, dollar flows into asset classes like stocks, etc. From R48s post I see. Well most of these are not easy to access so hard to know which data sources you could actually use to conclude about the extreme sentiment right now. Weekly flows into US equity are published by ICI as well as Lipper and Reuters. The US equity fund outflows peaked in December and have now returned to approximately zero (see chart 2 at www.yardeni.com/pub/ecoindiciwk.pdf). Not sure how you could judge the amount of money on the sidelines or short selling. Short selling interest on is easy to look up forindividual stocks but not the entire market. Perhaps R48 can comment on where he gets the data.
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Post by Deleted on Feb 19, 2023 20:42:16 GMT
Wall of worry... the good news is the Fed WILL PIVOT if fhit hits the san. The bad news is the Fed will keep nudging rates higher if consumer remains strong. Wildcards such as China, Russia and such could throw a monkey wrench. I am neither bullish nor bearish. Noted. And the conflicting nature of the information, plus the FEDs stated mandate need to be considered at all times. I suspect they would accept inflation in the low 3s and full employment, if given the opportunity. But, the labor tightness is a fly in the ointment. With everyone who wants to work, working, and subsequent rising wages, it may be very hard to contain inflation without increasing supply and productivity and keeping up with (or exceeding demand). Meaning they may find that they have no choice but to force unemployment down everyone's throat. I hope that we can continue to onshore and raise productivity and entice more workers back into the picture. “Today’s (2/3/23) jobs report is almost too good to be true,” wrote Julia Pollak, chief economist at ZipRecruiter. “Like $20 bills on the sidewalk and free lunches, falling inflation paired with falling unemployment is the stuff of economics fiction.” On an anecdotal note, I am aware of a few lower wage, service-industry job-seekers looking for work and not getting callbacks. Which seems to fly in the face of the current narrative. Conversely, I am aware of several large companies seeking white-collar tech workers.
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Post by marpro on Feb 19, 2023 20:56:03 GMT
The cash flowing into $SPX is shown below from Stock Charts. Since the beginning of 2023, there is a huge cash flowing into the market, except for a small dip in early Feb. There is some resistance recently. No one knows about the future.
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Post by fishingrod on Feb 19, 2023 21:14:27 GMT
Wall of worry... the good news is the Fed WILL PIVOT if fhit hits the san. The bad news is the Fed will keep nudging rates higher if consumer remains strong. Wildcards such as China, Russia and such could throw a monkey wrench. I am neither bullish nor bearish. Noted. And the conflicting nature of the information, plus the FEDs stated mandate need to be considered at all times. I suspect they would accept inflation in the low 3s and full employment, if given the opportunity. But, the labor tightness is a fly in the ointment. With everyone who wants to work, working, and subsequent rising wages, it may be very hard to contain inflation without increasing supply and productivity and keeping up with (or exceeding demand). Meaning they may find that they have no choice but to force unemployment down everyone's throat. I hope that we can continue to onshore and raise productivity and entice more workers back into the picture. “Today’s (2/3/23) jobs report is almost too good to be true,” wrote Julia Pollak, chief economist at ZipRecruiter. “Like $20 bills on the sidewalk and free lunches, falling inflation paired with falling unemployment is the stuff of economics fiction.” On an anecdotal note, I am aware of a few lower wage, service-industry job-seekers looking for work and not getting callbacks. Which seems to fly in the face of the current narrative. Conversely, I am aware of several large companies seeking white-collar tech workers.
Sticking with my confirmation bias. I think you are correct. Unemployment is the culprit and will have to be accepted as a side effect of the FED plan. It must happen.
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Post by archer on Feb 19, 2023 21:37:40 GMT
I'm wondering if anyone can explain how money flows are used as market predictors. It seems to me that when money flows into the market or any sector/industry, it immediately creates an abundance of buyers vs sellers which immediately or almost immediately would increase the price. So what does money flow tell you that price action does not?
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Post by marpro on Feb 19, 2023 22:12:09 GMT
I'm wondering if anyone can explain how money flows are used as market predictors. It seems to me that when money flows into the market or any sector/industry, it immediately creates an abundance of buyers vs sellers which immediately or almost immediately would increase the price. So what does money flow tell you that price action does not? Cash flow index is another confirmation, one way or other, besides the price swing. Price swing provides a range. Money flow index shows the trend. I tend to buy, when this is negative or close to zero. PDI has similar cash flow index. In spite of the price decline, cash is still flowing into PDI because people are still buying, even though the sellers exceed the buyers recently.
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Post by newtecher on Feb 19, 2023 22:41:23 GMT
I'm wondering if anyone can explain how money flows are used as market predictors. It seems to me that when money flows into the market or any sector/industry, it immediately creates an abundance of buyers vs sellers which immediately or almost immediately would increase the price. So what does money flow tell you that price action does not? Cash flow index is another confirmation, one way or other, besides the price swing. Price swing provides a range. Money flow index shows the trend. I tend to buy, when this is negative or close to zero. PDI has similar cash flow index. In spite of the price decline, cash is still flowing into PDI because people are still buying, even though the sellers exceed the buyers recently. Money flow index is technical indicator based on a mathematical formula that combines prices and volumes. It has nothing to do with money flows into mutual funds. There are no flows in or out of CEFs like PDI since for every buyer there must be seller (I am ignoring tender offers and secondary issues, which are rare). Same thing for individual stocks and bonds. For mutual funds and ETFs, there can be net outflows and they can be somewhat useful as an indicator of retail sentiment. When retail investors (who are the majority of mutual fund holders) decide to sell, these equities or other securities are sold by mutual funds to institutional buyers, who do not use mutual funds as much (pension funds, endowments, foundations, and private accounts of wealthy individuals). These institutional investors hold stocks directly and mathematically always must absorb the supply of stocks during periods of mutual fund outflows.
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Post by retiredat48 on Feb 20, 2023 1:59:22 GMT
I currently have a tv linked to laptop showing my granddaughter on Youtube playing violin for the Duke Symphony Orchestra. On my right is the Daytona 500 auto race (muted). In the center is my laptop showing this BB forum.
Some of you have asked for details on types of SENTIMENT INDICATORS, and their levels now. However I am time-challenged due personal matters, and can only spend a few minutes a day on forums. So sorry, can't provide this now.
But some points. From memory it was Barron's who stated the sentiment indicators are at all-time negative (thus good for market direction upward).
From google (Yogi used to provide this), the AAII investment club index of sentiment showed bullish low for year in Jan at 28.4%; peaked at 37.5% 2/8/23. Bearish peaked in Jan at 36.7%,,,and low of 25% at 2/8/23. See, exactly wrong. A good contrarian indicator.
One indicator of mine is the number of posters on investment forums who are negative as to the future market direction. I observe that a large majority of posters are currently negative, ranging from having caution, to all out, waiting for things to become more clearer. This is where the saying "the market climbs a wall of worry" comes from.
When I started posting a decade plus ago, I thought the posters would be pretty shrewd and would be right (correct) in their handling sentiment. However, not so. Posters are simply a reflection of the market. Most are incorrect at major market turns. I may be wrong also, but I FORCE MYSELF to go contrarian against the majority sentiment.
An example is the VIX index, which contains some sentiment aspects. Simple...VIX below 20 and down to 15, be in an exit posture; VIX above 35 or more, be buying/accumulating. But everytime it occurs, it seems the world is ending, or stocks are going up forever. It requires being contrarian to ones feelings; not an easy thing to do.
R48
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Post by newtecher on Feb 20, 2023 3:24:48 GMT
I currently have a tv linked to laptop showing my granddaughter on Youtube playing violin for the Duke Symphony Orchestra. On my right is the Daytona 500 auto race (muted). In the center is my laptop showing this BB forum. Some of you have asked for details on types of SENTIMENT INDICATORS, and their levels now. However I am time-challenged due personal matters, and can only spend a few minutes a day on forums. So sorry, can't provide this now. But some points. From memory it was Barron's who stated the sentiment indicators are at all-time negative (thus good for market direction upward). From google (Yogi used to provide this), the AAII investment club index of sentiment showed bullish low for year in Jan at 28.4%; peaked at 37.5% 2/8/23. Bearish peaked in Jan at 36.7%,,,and low of 25% at 2/8/23. See, exactly wrong. A good contrarian indicator. One indicator of mine is the number of posters on investment forums who are negative as to the future market direction. I observe that a large majority of posters are currently negative, ranging from having caution, to all out, waiting for things to become more clearer. This is where the saying "the market climbs a wall of worry" comes from. When I started posting a decade plus ago, I thought the posters would be pretty shrewd and would be right (correct) in their handling sentiment. However, not so. Posters are simply a reflection of the market. Most are incorrect at major market turns. I may be wrong also, but I FORCE MYSELF to go contrarian against the majority sentiment. An example is the VIX index, which contains some sentiment aspects. Simple...VIX below 20 and down to 15, be in an exit posture; VIX above 35 or more, be buying/accumulating. But everytime it occurs, it seems the world is ending, or stocks are going up forever. It requires being contrarian to ones feelings; not an easy thing to do. R48 Thank you! I linked to Yogi's AAII survey results above. They were most bearish in Oct 2022, not in 2023. VIX is a good one to watch, I agree. That said, it has mostly been below 20 recently. So nothing I would call a bearish sentiment, let alone extreme bearishness. EDIT: By the way, the stock market opinions on this thread are also decidedly mixed rather than bearish, as @theycallmenobody summarized above.
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Post by steadyeddy on Feb 20, 2023 13:56:04 GMT
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Post by marpro on Feb 20, 2023 15:27:18 GMT
VIX's chart. It took a sharp turn up last week and has edged up slightly. Look at SAR. It could be a temporary for now. But, the cash flow index does not indicate any bearishness, but there is certainly resistance on the upward move. Clearly, the market will be range-bound for some more time. schrts.co/BvIEXxTG
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Post by Chahta on Feb 20, 2023 16:35:52 GMT
Pretty sure YBB refers to AAII as a contrarian indicator.
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Post by uncleharley on Feb 20, 2023 18:43:53 GMT
Pretty sure YBB refers to AAII as a contrarian indicator. Yes, when it runs to extremes. Of course nuetral is nuetral which is where it is now. VIX is also nuetral on the intermediate term weekly chart.
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Post by steadyeddy on Feb 20, 2023 21:22:08 GMT
Pretty sure YBB refers to AAII as a contrarian indicator. It sure is a contrarian indicator. All the market makers typically take the opposite position to that of individual investors - and guess who drives the markets? 😉
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Post by marpro on Feb 20, 2023 21:26:01 GMT
“All the market makers typically take the opposite position…”
+1. LOL. That is the way to suck you (the main street) into the market. Look at the media. “Specialists,” “Analysts,” and “Experts” etc. all have opinions and fill up the pages.
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Post by Fearchar on Feb 20, 2023 23:24:10 GMT
JP Morgan is now talking about "no landing"...
Thought of the week U.S. retail sales rebounded sharply in January, exceeding expectations, and signaling that the American consumer continues to spend. After consecutivemonths of decline into the end of 2022, nominal retail sales jumped by 3% m/min January. Although seasonal factors and the largest cost-of-living adjustment to Social Security since 1981may have played a role in this surge, the increase in sales was broad-based, as shown in the chart of the week. Vehicle sales were the largest contributor to growth, and food services – a proxy for services spending — rose by 7.2%, the most since March 2021. With growth better than expected and inflation proving to be sticky, markets have gravitated toward a new narrative of “no landing."
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Post by steadyeddy on Feb 21, 2023 0:33:30 GMT
“All the market makers typically take the opposite position…” +1. LOL. That is the way to suck you (the main street) into the market. Look at the media. “Specialists,” “Analysts,” and “Experts” etc. all have opinions and fill up the pages. Market makers (now just a few because of payment for order flow - which enables commission free trading) have all the data they need as to what the individuals are doing with their trading. Citadel covers nearly 40% of all trading - and just a few others make the list of majors. No wonder the market can be more easily manipulated NOW than before.
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Post by marpro on Feb 21, 2023 17:19:17 GMT
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Post by uncleharley on Feb 21, 2023 18:05:44 GMT
It looks like you linked the same press release twice. He seems to be saying that liquidity will dry up and the market will collapse. Corrections are to be expected. Todays activity looks like the S&P has slipped beyond a consolidation pattern and into a bearish correction. We shall see how big a correction it is. The lunch crowd seems to be buying the dip but we have a ways to go to the close. The 200 DEMA is at 3950 for the S&P 500.
Part 2; There is a confluence of support indicators consisting of a pivot point, the golden cross, the 200 dema, and some short term trading volume at the 3950/3970 level on the S&P 500. We should find some market strength there. A bounce would keep us in a consolidation pattern.
PT 3; Trendline support has also developed at the above mentioned level. I think I'll get another bag of popcorn while I wait for the Cavalry.
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Post by retiredat48 on Feb 21, 2023 19:49:59 GMT
uncleharley,..." 3050/3970". We could drive a truck through this range. You mean 3950/3970 or 3850/3970?
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Post by marpro on Feb 21, 2023 19:54:07 GMT
It looks like you linked the same press release twice. He seems to be saying that liquidity will dry up and the market will collapse. Corrections are to be expected. Todays activity looks like the S&P has slipped beyond a consolidation pattern and into a bearish correction. We shall see how big a correction it is. The lunch crowd seems to be buying the dip but we have a ways to go to the close. The 200 DEMA is at 3950 for the S&P 500. Part 2; There is a confluence of support indicators consisting of a pivot point, the golden cross, the 200 dema, and some short term trading volume at the 3050/3970 level on the S&P 500. We should find some market strength there. A bounce would keep us in a consolidation pattern. PT 3; Trendline support has also developed at the above mentioned level. I think I'll get another bag of popcorn while I wait for the Cavalry. I do not buy it either but, I just posted it. However, I expect the market to be range bound until the FED is done with, and there is a chorus. Right now, there are people with both sides of their mouth. If that is the case, it will be range bound. I am not selling or buying today.
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Post by uncleharley on Feb 21, 2023 20:16:34 GMT
uncleharley ,..." 3050/3970". We could drive a truck through this range. You mean 3950/3970 or 3850/3970? OOPS!!!! 3950!
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Post by uncleharley on Feb 21, 2023 20:19:08 GMT
The first wave of cavalry arrived at 3995. Now lets see if this is a rerun of Custers Last Stand or are we back at the races. For now, the S&P is in a consolidation pattern.
Trading volume began to pick up about 15 minutes ago. We should have a strong close. Pass the popcorn please.
That was a very disappointing close, but we remain in a consolidation pattern.
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Post by Deleted on Feb 21, 2023 21:43:49 GMT
It looks like you linked the same press release twice. He seems to be saying that liquidity will dry up and the market will collapse. Corrections are to be expected. Todays activity looks like the S&P has slipped beyond a consolidation pattern and into a bearish correction. We shall see how big a correction it is. The lunch crowd seems to be buying the dip but we have a ways to go to the close. The 200 DEMA is at 3950 for the S&P 500. Part 2; There is a confluence of support indicators consisting of a pivot point, the golden cross, the 200 dema, and some short term trading volume at the 3950/3970 level on the S&P 500. We should find some market strength there. A bounce would keep us in a consolidation pattern. PT 3; Trendline support has also developed at the above mentioned level. I think I'll get another bag of popcorn while I wait for the Cavalry. Yes, and Mike Wilson has been saying very similar things for quite a while. Not that he is wrong, but he has a rep for bearishness. Please keep posting the relevant indicators, as you see them and find time. I am sure that I am not the only one that finds them useful.
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Post by uncleharley on Feb 22, 2023 14:22:26 GMT
Well, that was a hard landing to a correction of a rally. The near future for the S&P looks like a trading range from 3990 to 4650. Don't get seasick.
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Post by Fearchar on Feb 22, 2023 14:42:31 GMT
You may call me a bear too, I thinking we will dip below 3850 and could get as low as 3750.
Mike Wilson has been kicking around 3,000, which impresses me as unlikely.
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Post by Fearchar on Feb 22, 2023 14:48:46 GMT
Notice too, that rates on BBB bonds are climbing over last 2 weeks. That is not good and reinforces my bearish outlook.
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