PESSIMISM IS AT ITS HIGHEST POINT FOR 2012 ACCORDING TO ONE SHORT-TERM INDICATOR
I haven't talked sentiment in awhile mainly due to the fact that it doesn't work during bull markets. I abandoned sentiment surveys, put/call ratios and the like in early January and haven't looked back since. However, these types of short-term surveys of sentiment have some use. The 2 day and 5 day moving averages of the combined put/call ratio hit its highest level of 2012 this week. The market should respond by continuing forward the remainder of this week. It may do it slowly...but it will do it. Remember, if you are a bull, a low volatility, stable advance is ideal. If you are a bear you want shit to hit the fan as much as possible. Not in terms of news events or macro shakeups, but in terms of volatility and sloppy behavior. There has been very little in terms of anything volatile or sloppy taking place in the market in 2012. As long as this landscape remains in place, the advance continues. It is as simple as that. Here is the chart of the put/call with eloquent notes and elegant lines: click chart to...
THE 5 CHARTS THAT HOLD INFLUENCE OVER THE MARKET DURING THE WEEK AHEAD
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HERE IS A VERY SIMPLE WAY TO JUDGE IF THE MARKET IS PREPARING TO TURN INTO A MONSTER OVER THE COMING WEEKS
There are many complicated and drawn out methods of market analysis that attempt to extract profits from either individual stocks or entire indices. A majority of these complicated methods of analysis are nothing more than tools that allow the originators of such work to internally justify an overpriced education and an abundance of hair gel. Perceived genius, while allowing you to have an abundance of swagger around your wife and kids, doesn't play well outside of your own home and often leads to painful lessons in humility shortly thereafter. With that said, I enjoy keeping things as simple as possible so that I can avoid having an inflated ego inside of my home and being constantly humbled "the old country way" outside of my home. It also tends to work better within the structure of the markets. The most simple methods of analysis are often the most profitable. During the coming week there will be a very simple means of judging whether the market is in the mood to unleash Easter bulls or Easter bears as we enter April. In the chart below, I have outlined a phenomenon that I like to describe as fields of green and red clouds. Whenever these fields of green are interrupted by red clouds then it is a sign to be vigilant of a change in character for the market. The chart below has all the details: click chart to...
TODAY’S PRICE ACTION DESERVES A FOLLOW-UP TO THE BLOWOFF TOP IN LGF
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THE NEWEST IN A GROWING LIST OF COMPANIES THAT ARE UNDER HEAVY ACCUMULATION
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3 CHARTS TO KEEP YOU IN PEACE AND NOT IN PIECES DURING THE WEEK AHEAD
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COULD BOND INVESTORS LATE ARRIVAL BE THE CONTRARIAN INDICATOR EVERYONE HAS BEEN SEARCHING FOR?
I discussed in my last post how bond investors are not the smart money on Wall Street, but perhaps quite the opposite. Here is an illustration about their late arrival to rallies over the several months. Namely the October highs in 2011 and now recently. Whether this means that we put in an intermediate term high here is debatable. I surely won't be selling my longs based on this piece of evidence alone. However, it does deserve consideration within your secret box of market indicators and propaganda. click chart to...
THIS IS THE KIND OF STOCK YOU WANT TO BE LONG IN A BULL MARKET
I see traders and investors pointing out stocks on a daily basis that they see as buys for one reason or another. Unfortunately, when you look at a snapshot of the company, in the form of a chart, it looks like a distant cousin of the Addams Family. Scary, pale, without much character and a blank look on its face. That is what I see in many of the names that investors tend to become obsessed with. The obsession is mostly due to one valuation metric or another, a key product or a recommendation. These considerations all seem to trump whether the company looks aesthetically pleasing in terms of price action. It has been my experience that the best investment opportunities come when beauty is offered along with brains. In other words, fundamentals and technicals come together to create a symphony of profit potential. Valuation is damned if the price doesn't line up beautifully to confirm your fundamental homework. The new product that seems so promising is garbage if the price doesn't want to cooperate. An analyst upgrade or a recommendation by your favorite market pundit is a fart in the wind if the stock can't look itself in the mirror due to the horror of its price action. Tonight I discovered a prime example of the type of company that deserves serious consideration within a bull market. The risk is clear. The trend is even more clear. And the strength is crystal. It is a company that deserves to be on the watchlist of short-term traders as the price action and patterns are extremely clean. It is also a company that deserves to be on the watchlist of longer-term investors as these types of trends have some very real potential over the long run. In other words, they don't dissipate overnight. The company is ALLT. It is an Israeli telecom company that does business in Africa, Asia and the Middle East. All the parts of the world that are growing at a breakneck pace, in other words. A nice tight float of 22 million shares. A roughly $600 million market cap. Short interest of less than 2% of the float so you know that the volume we are seeing is not simply demand meeting supply in the form of short sellers invading. I haven't studied the company fundamentally beyond the above mentioned. And I don't need to. Here is the chart: click chart to...