When I look at the last 11 months of downtrend on the [[SPY]] , it looks like a down trend that is not even thinking about putting in a bottom.
Notice the Death Cross, which occurred back in December. Two great posts I wrote about the event are Bulls Get Banded, and The Death Cross. Both of these posts have comments sections that are rich, with my favorite featuring the triumph of my Technical Analysis Machine over Fly’s time macheene. Its all there, from 8 months ago. Check it out.
Anyway, so yeah, the SPY is in a long downtrend, with what looks like another triangle consolidation forming. I guess the easy bet is that it breaks down from this pattern for new lows. Back in February, I wrote an article about the triangles that were forming then: Triangles Developing: Nasdaq, Dow, and SPY. Be sure to read the last paragraph of the article for yet another triumph of the Technical Analysis Machine.
In the above chart, a couple of items to note:
The volume has been higher on moves up and lower on pullbacks, since July’s low. Also, the SPY is still above a near-term uptrend line, and has not yet made a lower high, or lower low.
Also, I’ve never tested the Chaikin Money Flow, so I don’t really know if it works or not, but I’ve been sort of watching it, as it might be a good complement to the RSI indicator. Read more about Chaikin Money Flow here: Chaikin Money Flow. What amazed me about the index between December and February was that the CMF was barely negative. Of course, in June, the CMF shows the bottom falling out. Also, I want to highlight the positive divergence between the CMF and price. The CMF bottoms a couple weeks before the SPY.
I’m still leaning long. I am looking for a trip to 130.00 on the SPY, or the 50 day average before re-evaluating. The market may have other plans, and if it does break down here, I will stop out of most of my breakout positions.
I apologize for the egregious use of the bold function. What can I say? I’ve been reading too much of Alpha.
I agree, Wood. But I think the 200 DMA will offer greater resistance than the 50. Therefore, I’m looking for more around 133 before the downtrend resumes. The market is laughing at bad news right now. It wants to trap as many bulls in it’s gay net as possible.
This post is world class gibberish.
Oh, and one more thing. Money Flow analysis is gay… Unlike the RSI and MACD, which are egregiously straight.
Junk, believe it or not, I just ran a quick, rudimentary test with CMF and it seems to have a clear edge. Actually, I’m almost shocked at the results.
Yes, but is it robust? As robust as the Dumbocrat lead Congress’ monopoly on stupidity? Let me check my own backtest…..
…..
…..
Yup. Still gay…
Hey Junk, I’m good, but not a miracle worker. Give me a bit to work on it, and I’ll tell you if its robust or not. Initially, its definitely not a dud!
I eagerly await your conclusion so I can make some windfall profits of my own. Without having to resort to Fly’s retarted time masheen.
Retarded, that is…
I happen to think bold is cool, and “egregious” is overused.
“Egregious,” by supplementary definition, can never become “overused.”
Like lawyers spawning more lawyers, it’s creation in a sentence warrants additional usage.
Only the word “fuck” and it’s derivatives rivals it in versatility.
__
I hate to bring this up again, but I have to, “the Don’t think buy gold” post gave us the truth about prices. They follow a random walk. Prices dont care about RS1 RS2 or whatever. My professional opinion is that U.S.A is done lowering rates, lower rates were the engine of the deprecciation of the dollar, now that engine is turned off. The most likely scenarios is that dollar index will strenght, sending gold lower. Dont take it personnal like you did before, its just a comment.
Cheers mate.
Mexican,
As the Gold post stated, RSI(2) has a 70 percent win rate, that’s not random.
Also, if stocks were truly random, trends wouldn’t exist.
Wood;
I don’t like to tell people what I use to trade but since I have much respect for you as a person. OBV seems to be working in this downturn. Exit/Entry ETC. I use it with other indicaters however. You got to love the Mexican. There is a thing called the Random Walk Index.
It measures whether a security’s price movement can be attributed to randomness or to a statistically signiticant trend. As I said it just isn’t that simple!!
Mexican, you have been presented with the opportunity to read and explore quantitative evidence that stock prices do not follow a random walk. You choose to ignore this.
Secondly, I have never read, nor have I written that “prices care about a RSI reading.” Those are your words, and they represent your lunacy. Only an lunatic would believe that a price, which has no consciousness, would care about an RSI reading, which also has no consciousness.
Thirdly, you continue to prove your lunacy when you write this: “My professional opinion is that U.S.A is done lowering rates, lower rates were the engine of the deprecciation of the dollar, now that engine is turned off. The most likely scenarios is that dollar index will strenght, sending gold lower.”
LMFAO…Mexican….now why would gold go lower? Why would the dollar strengthen? THEY ALL FOLLOW A RANDOM WALK! REMEMBER?
So, in one comment you have attributed consciousness to an inanimate object, then made in argument, and then disproved your own argument! That is a truly astounding demonstration of your intellect Mexican! Way to Go!
Wood
You can play with my words as much as you want , I really dont care.
Touche’ mexican. Well played.
Nice call on VRUS Shed!
Wood:
Have you ever looked into Float Analysis. Last year I started looking into it. I could use some insite. I think it is snake oil. So does Charles Kirk. I am going to look at it again. I don’t feel I gave it a chance. Go to Float.Analysis.Com for basic information if you are interested.
Gwar, VRUS was Danny’s initial call, but then it made my breakout screen.
BPOE- I’ll check out the OBV and the Float Anal.
Mexican;
Random Walk THEORY. I repeat [THEORY] does not appply to both Fundamental and Technical Analysis. I repeat [ANALYSIS]. If you put Random Walk in the place of God it means the same thing. Most Random Walk people are teachers and can’t trade worth shit. It is like this; charts and fundamental analysis don’t always work but the fact that 18% of the traders use charts and other traders use fundamental analysis etc. If you know the percentages being used you have an edge. Its takes a little work but you can figure out the percentages on quit a few stocks that are traded. Then adjust you analysis to stocks with high percentages.
Yep, I thought I saw a pennant wedgie thingamabob the other day too. 🙂