The "Risk Off" trade in commodities may be reviving but it does not appear the investor class is ready to abandon the safe havens of the U.S. Treasury market.
Chris Kimble at Kimble Charting has been pointing to the long term SPX chart, noting the significant long term trend support line. Here is the chart, starting 1985
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Here is the 5 year chart, again showing the important trend support and resistance lines.
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It is clear that Mr Market has painted himself into a corner.. and until a Breakout or a Breakdown can be described, I believe trading here is merely gambling.
I found this report on the web this morning, offered by Bloomberg BusinessWeek, addressing the lack of accurate financial information and unreported market exposure as a primary cause of the financial crisis. The report can be found here. Thanks and a tip of the hat to Danielle Park at JugglingDynamite.com. It is a little long, but is worth the read.
The Proprietary Momentum Changes Indicators are still on the Buy signal first generated on 4/20, although I do not feel this is the time to chase the market. It has always been my experience that the best gains are established when action is taken when a signal is first generated. I have been staring at charts now since last week, trying to make sense of what is going on in the markets, and the only clear trend that I see is in the debt markets, and especially U.S. Treasuries. I especially like the TLT, which has broken out of the IHS and looks like it wants to go higher. However, it likely that it could retreat back to the neck line at around 93.5.
Still sitting on the sidelines.. Best To Your Trading!
Bill
Stocks are in a very clear up trend. Last week the SPY did no more than dip below the 20 day EMA and has bounced cleanly since. My signals said to get long this morning, which I did.
ReplyDeleteI personally think if you believe your system has a edge, you should trade it rather than letting your discretionary biases get in the way. You can degrade a system with a statistical edge by introducing a random element (such as your own discretion). Just something to be aware of. Good luck!
Rob
ReplyDeleteThanks for your comment... I agree with you. The problem is that in a market that is as choppy as this is..... there is not such thing as "Trend" or "Momentum". My Momentum Changes indicators are designed to catch a direction change in the market.. and they have done a great job of catching a direction change with in a day or 2 of a swing price. But because all of the indicators have varying trailing periodicity, these violent changes do not set up signals that are useful.
Not to worry, we will see a new trending market that we can operate in successfully.
Bill