S&P 500 Goes Positive

The final piece of the topping puzzle could be falling into place today, as the S&P 500 did have more money on the positive side than the negative side today without the assistance of the $200 million man. The numbers for the S&P 500 so far this week:

Monday: 106.47 positive/129.85 negative

Tuesday: 108.68/130.20

Wednesday: 122.03/119.61

Before I even saw these numbers today, I was thinking to myself how I was going to write in my blog that I really had to see the S&P 500 number go positive before we have that final high. And now it has gone positive. And I don't think the $200 million man is involved here at all, unless he has had a long-term position on the down side that he has suddenly moved to the up side. But still, I think today's numbers represents longer-term money, not the usual $200 million man moving around daily stuff.

So maybe another week or two as the S&P 500 numbers dance on the positive side? Everything else I would look at is in place. We have the most important Nasdaq 100 at numbers higher than I've ever seen before. We have the Dow hitting its highest positive/negative numbers for the year this past week at 1.48, this in a set of funds there there is almost always more money on the negative side than the positive, for whatever reason. We have the Russell 2000 at its highest positive/negative number for the year of 2.96 this past week, this in a set of funds where more money is usually on the negative side.

So my best guess is one final run-up as the year starts, but then that's it. Probably a couple weeks. But I could be wrong. We could reach that final high any day.

Rob

No Change in My Position

As we continue to drift up, you might think I'm rethinking my position that we are at or near a very, very important top. Nope. I've watched these numbers for too long. We are either there right now, or we might be going up still further for another week or two or more. There is still one thing that makes me think we need to go up more before we reach that final top, and that is the still negative overall tone in the S&P 500, home of the $200 million man, who only seems to be moving around about $70 million these days.

The positive/negative numbers for the past week in the S&P 500:

Monday, 12/20: 103.59/127.07

Tuesday, 12/21: 106.05/182.08

Wednesday, 12/22: 104.10/186.67

Thursday, 12/23: 173.65/116.87

So you can see he was on the negative side on Tuesday and Wednesday and then switched to the positive side on Thursday. But if you take his money away, there still seems to be more money on the negative side than the positive, like on Monday. And I still think it's likely that the $200 million man parked some money on the negative side several months back, and he has been getting out of some of that position in the last couple weeks, but he's still there. I'm just speculating, but it does seem like there has to be more money on the positive side than on the negative before we reach that major top. And I don't mean like on Thursday, where the $200MM has obviously moved about $70 million to the positive side.

Everything else says we're there at the top. The Nasdaq 100 keeps cruising along at multiples way higher than anything I've ever seen before. It went above 5.00 again this past week. The Nasdaq 100 numbers for the past two weeks, this number being the positive money divided by the negative money equals:

5.01, 5.55***, 5.56***, 3.97, 4.65, 4.28, 5.44, 4.47, 4.52

With 5.55 and 5.56 being the highest numbers ever. But we came close again this past week.

I don't mention the Dow and Russell numbers much because they're not as consistent, but I do watch them. And the Dow, which is usually a negative number, has been going in and out of positive territory the past several weeks. And the Russell, also usually negative, has been positive for a couple weeks now, reaching its highest number of the year this past Wednesday of 2.96, with the previous high being 2.71, which happened on April 22, which was within a day or two of the previous important high in the stock market.

So except for the S&P 500 numbers, everything says we're there. I could be wrong, but I do think that number has to go solidly positive before we reach that high. So I think a little more on the up side. But since we're already at record volume multiple numbers, and since we are still perched on that right shoulder of the giant head and shoulders stretching from 2000 to the present, any more movement up just makes a crash scenario more likely, I think. But we'll see what happens. The first of the year is obviously a very interesting time because so many people make once-a-year decisions on their 401(k) money. That could also include the $200 million man.

Rob

Are We There Yet?

What, we're still going up?? Gee, everything sounds so wonderful. I guess I must be totally wrong about everything. Actually, I remain totally confident that I am totally correct, even though this balloon is taking longer to explode than I figured. And the fact that it's going on so long I think increases the odds that the next move down will be a super-large move down.

The all-important Nasdaq 100 number has climbed to a new high number, marching past the old high of 5.03 back on November 5. Again, this is taking the volume number of the money in the fund that tracks the movement of the Nasdaq 100 times two on the positive side and dividing it by the money that's in the inverse Nasdaq 100 fund. So it's money on the positive side versus money on the negative side. What I have found is that the stock market moves up on doubt, usually, except when it's in topping mode as it is now. This number was at 2.69 when we had the market high in 2007. It climbed up to even high numbers at the two other important highs we had this year, up around 4.10 both times. And now it's gone completely bonkers on this third time up.

The numbers for the past two weeks for the Nasdaq 100 (I missed the volume number on 12/10):

3.96, 4.55, 4.49, 4.65, ?, 5.01, 5.55***, 5.56***, 3.97, 4.65

Where the asterisks denote a new all-time high number, ever, that I've been watching these numbers, which goes back to the early 2000s.

One thing that makes me think we still have a little more to go is the S&P 500 numbers, which, when you take away the short-term movements of the $200 million man, remain slightly negative. And I still think part of the money that has remain parked on the negative side has been a longer-term move by the $200 million man, where I think he parked maybe half his money on the negative side a couple months ago and now he's finally starting to throw in the towel.

The positive/negative numbers for the S&P 500 for the past two weeks:

Monday, 12/6: 81.74/208.27 ($200 MM obviously on the negative side)

Tuesday, 12/7: 79.87/141.32 (and he gets out of that negative position)

Wednesday, 12/8: 79.13/146.11

Thursday, 12/9: 78.49/121.60 (someone is getting out of their negative position a little, probably the $200MM)

Friday, 12/10: (Forgot to get volume data!)

Monday, 12/13: 82.87/178.89 (he jumps back in on the negative side, but we keep going up)

Tuesday, 12/14: 141.21/117.10 (now he jumps to the positive side, and he actually wins a little here as we continue up ... he only wins when we're in topping mode)

Wednesday, 12/15: 160.52/114.09 (still more positive, and we do finally have a down day)

Thursday, 12/16: 100.30/114.11 (now he's totally out with his short-term money, but I still suspect that's him keeping the negative money larger than the positive money, since the entire rest of the market, everything I watch, is extremely positive, although he is slowly but surely throwing in the towel)

Friday, 12/17: 100.97/126.30 (more negative)

So these S&P 500 numbers make me think there might be some more "crashing up" before we reach that final high. Or maybe not. We could certainly be at that high right now. As I say, I think the market has to extinguish this guy on the negative side before we get the final high.

We could get something on Monday that would probably knock this guy out of the negative position once and for all. I don't talk about it much, but I do also watch the movement of the biotech ... I'm forgetting the word, where they take all the biotech stocks and track the movement of that number. Anyway, biotech seems to frequently presage what's going to happen in the rest of the market by a day or two. Frequently, certainly not always. And on Friday, biotech was up over 7% in a single day. So don't be surprised if the market as a whole has a gargantuan up day on Monday, 12/20. Or the message could be that biotech just had to get to a new high for the year, which it did with that giant up day, and that's it, end of up story.

I still believe you should be totally out of the stock market. And I still believe I can tell you when to get back in. It will be when that Nasdaq 100 number finally goes negative, and then some.

Rob

Another Inflection Point

A few days ago I was saying we were at an inflection point, and we slipped by that one to the up side. We're kind of on the same inflection point here in that most of the market has rallied up almost exactly, eerily, to its previous high for the year, which for most of the market was in early November. The Nasdaq 100 has gone slightly higher than its previous high. The positive/negative number for the Nasdaq 100, after reaching its all-time high that I've ever seen of 5.03 on November 5, did drop after that as we had a bit of a decline that went on for a few days, but now is getting back up near that record high again.

The positive/negative numbers for the Nasdaq 100 since that record high on November 5 have been:

5.03, 4.76, 4.57, 4.87, 4.38, 4.58, 4.45, 3.79, 3.66, 3.34, 2.75, 3.22, 3.37, 4.42, 4.00, 4.12, 4.57, 3.93, 4.41, 4.54

So this could be it, that November 5-ish was the high, we rallied back up, and now most of the market will head down. Or, just as likely, we go spurting up here for one final very strong rally of a week or two to really kill those who are shorting the market and get them out so then the market can go down. I had said earlier I thought it was a 60% chance that the high came in on November 5. I'll lower that to 50% chance that the high is in, 50% chance for one more strong rally of a week or two. The reason I have increased the chances for another rally is the numbers on the S&P 500 are still fairly negative, although the negative money did go down a bit. The numbers for the past week:

Monday: 74.28 positive/173.28 negative

Tuesday: 169.90/171.25

Wednesday: 89.44/131.95

Thursday: 96.29/130.75

Friday: 79.72/130.45

So you can see the money on the negative side was in the low 170s, as it had been for several weeks, staying almost exactly the same. Then it falls to the low 130s on Wednesday and stays almost exactly at the same number for Thursday and Friday. I had mentioned before that I am wondering more and more whether the $200 million man didn't park half of his money on the negative side and then played with the other half positive or negative, whichever he wanted to lose at. I remember telling Jeri back near the low in July that I felt like parking some of my money on the negative side because I know where all of this is going to end up. Fortunately I didn't do that. But that might be exactly what the $200 million man did. If so, he finally started to crack on that idea this past week. And also if so, I really think the market needs to get totally rid of him on the down side before it can move down like it wants to. So that's why I suspect one more strong spurt up, designed to get rid of this guy and those like him. On the other hand, as I said, it is ominous that we have rallied almost exactly to recent highs, which means this could be it right here. So that's why I say 50/50 at this inflection point.

But either way, I am not even a teeny bit changing my position that we are at or near a very important high, which will lead to a decline lasting quite a while, at least several months. And the possibility will never go away that we are at the jumping off point for the worst economic decline in history. That is based simply on the head-and-shoulders pattern stretching from 2000 to the present. But then to see the positive/negative numbers go up to numbers almost twice what we saw at the highs in 2007 makes me think that horrible possibility is more likely. You've been warned.

Rob

Inflection Point Next Couple Days

I still believe we are at or very near a very important high which will lead to a strong decline lasting at least a few months. We could have seen that high in early November, or we might power up here to one more final high. I think the next couple market days, meaning Monday and Tuesday, will tell the tale. If we're going to power up to a final high, I think that has to commence immediately. Any kind of down days, looking more at the final numbers for the day than the intraday stuff, will make me believe the final high is in. My own guess, just for fun, is that 60% chance we've seen the final high, 40% chance we'll rally up to one more final high.

I will note that at the final all-time high back in 2007, most of the market reached its final high, but the Nasdaq 100 kept going up for like a week while the rest of the market started down. So I'm curious to see if something like that happens here. If not the Nasdaq 100 stepping out from the others, maybe the Russell 2000.

I will also note that the $200 million man appears to be out of the market for nearly two weeks now. I thought it was very interesting that we had the large down day this past Tuesday on a day when there was no movement really all through my numbers. That makes me think something is up, either we're about to shoot up or down. That's just something I've noticed in the past. We'll see if it applies here.

The all-important Nasdaq 100 numbers got down as low as 2.75 last week Friday. The numbers since then:

2.75, 3.22, 3.37, 4.42, 4.00

So it didn't take long for this relative volume number to get back up over four times the money on the positive side versus money on the negative side, which would be the highest number I've ever seen, except that we went higher earlier this month, up to the highest ever number of 5.03 on November 5, within one market day of the final market high, so far.

As I said at the beginning, a strong decline most definitely has started or will soon start. The big problem is the potential for this decline to be one of the largest steps down in history, thanks to it being what some people affectionately call the "third wave down," which could try to undo decades of growth in the stock market real quickly. That potential is most definitely there. Most definitely.

Rob

I Still Say We're At or Near a Top

Wow, two weeks without a post, after I said I'd try and post daily as we search for this important high. I just got super-busy with work. I'll keep trying, since I still believe I'm absolutely correct. And I think it's an important concept, which is that the markets move in the opposite direction of the money flow, both long and short term. I am attempting to show this with the use of two funds involving the Nasdaq 100 and two funds involving the S&P 500. The Nasdaq 100 funds I believe do an uncanny job of demonstrating the long-term concept. And the S&P 500, particularly the movements of what is apparently one person who I call the $200 million man, I believe do an uncanny job of demonstrating the short-term concept.

I'll leave out exactly which funds I'm looking at from this blog. But what they are is a Nasdaq 100 fund that moves twice whatever the Nasdaq 100 moves, in the same direction. And then there is a mirror fund that pays twice of the opposite of what the Nasdaq 100 moves. So if the Nasdaq 100 went up 1% today, this negative fund would be down 2%. And if the Nasdaq 100 went down 1% today, this negative fund would go up 2%. So these funds move a large amount many days. And what they do is they force your hand like nothing else in the market. You may believe you have your money in the correct direction, but when you lose 10% or more in a few days, you'll probably fold and take your losses, unless you're really sure of yourself.

But what I just happened to notice years ago, as far as the Nasdaq 100 funds, is that they would steadily rise to a certain number, which would come at or near an important market top, and then they turn around and steadily drop, with rallies along the way of course, down to a certain number, which comes at or near an important bottom. Those low numbers have been pretty consistently around even money, positive versus negative, or as much as one to two times as much money on the negative side. The high numbers have been rising now, especially through this past year. At the last two important highs, back in January and then in April of this year, the Nasdaq 100 numbers got up to around 4.1, meaning 4.1 times as much money on the positive side as on the negative side. This number only got up to around 2.6 at the all-time high in 2007. And now, over the past several weeks, it's climbed up to even higher numbers, with a high of 5.03 on November 5, which came in the same day as most of the market reached its most recent high and one day before the high so far in the Nasdaq.

Then we had a modest decline, where the Nasdaq 100 number actually got down to 2.75 this past Friday. Here are the numbers for the Nasdaq 100 for the month of November so far. Again, this is dividing the larger number, which is always the positive fund number in this case, by the smaller number, or the negative fund volume number.

11/1 - 3.86
11/2 - 4.40 (new all-time record)
11/3 - 4.56 (new all-time record)
11/4 - 4.84 (new all-time record)
11/5 - 5.03 (new all-time record)
11/8 - 4.76 (high in the Nasdaq 100)
11/9 - 4.57
11/10 - 4.87
11/11 - 4.38
11/12 - 4.58
11/15 - 4.45
11/16 - 3.79
11/17 - 3.66
11/18 - 3.34
11/19 - 2.75
11/22 - 3.22

So I'm going to give it a 60% chance that we have seen that final high I've been looking for around November 5, right as we were reaching an all-time high of people having money in the positive money fund relative to people who had money in the negative fund.

And I'll say a 40% chance that this rally of the past few days will keep going to a new high. But if it does, I'm almost positive that that will be the final high.

Then we have the short-term movements of the markets explained beautifully by the positive and negative funds relating to the S&P 500, particulary the movements of the $200 million man. Actually, he seems to be only throwing around about $100 million these days at most. But I will go back to Thursday, November 4, and show how the movements of this guy from positive to negative or out altogether lines up with the movements of the market, in the opposite direction.

11/4 - 79.21 positive/223.47 negative (and this fund goes up over 4% because the S&P 500 shot up over 2% on this day)

11/5 - 83.34/219.53 (he keeps his money on the negative side, and this fund goes up another 1%)

11/8 - 145.75/157.86 (ah, he switches to the positive side, and we have a modest down day, down a half a percent)

11/9 - 172.14/126.85 (looks like he adds to his positive position, or maybe it's just others moving from negative to positive, and we have a fairly large down day, down 1.8%)

11/10 - 82.35/132.85 (he gets out of his positive position, out of the market, and we have basically a flat day, up 0.2%)

11/11 - 166.42/127.61 (he gets back into his positive position, and we have another basically flat day, down 0.2% - I'm surprised it wasn't much worse)

11/12 - 169.70/128.65 (he keeps his positive position, and this time the market zaps him, down almost 3%)

11/15 - 83.89/144.07 (he gets out totally, and we have a flat day, down 0.2%, enticing him back in ...)

11/16 - 165.47/167.77 (he jumps back into the positive side and gets zapped again, down 3-1/2% this time)

11/17 - 103.27/174.57 (so he's back out, and I can tell you he's been out since, and we've been rallying ever since, this day basically flat)

11/18 - 74.71/177.20 (still out, maybe some flight from the positive fund from other people, and we had our giant up day of last Thursday up, this fund being up 3-1/2%, without our friend)

11/19 - 74.92/177.91 (still out, basically a flat day, up 0.2%)

11/22 - 78.52/172./44 (still out, down a teeny bit, 0.3%)

I am wondering about the fairly large negative presence that doesn't seem to change in quite a few weeks. And you'll note that the $200 million isn't throwing around nearly as much money as he was a while ago. So I'm wondering if perhaps he didn't lay down some money in like a semi-permanent negative position. I wonder if the market has to lower this negative number before it can really move down, which it would go by powering up and forcing the people with their money on the negative side to get out.

My position remains that we have seen or are at or very near an important high, possibly a very, very important high, especially when you look at how high the Nasdaq 100 number got earlier this month at a record-shattering 5.03.

Rob

The Balloon Expands Some More

First I'll just mention for comic relief that the $200 million man did jump into the market today after being out for a couple weeks. Of course he jumped in on the wrong side, going half in on the negative side, and of course he got killed by this giant up day. I'm pretty sure he'll be out of that position tomorrow.

But in more important news, the numbers on the Nasdaq 100 continue to climb to numbers never seen before by me. Again, what I'm doing is dividing the larger number of the positive and negative funds by the smaller number. In the case of the Nasdaq 100, this number is almost always positive except at final important lows.

I'll mention again, short term, the final high number of comparing positive to negative generally comes after the final high. In other words, we have the high, then a decline, then we start up again, and that's when people really jump on the bandwagon. Short-term stuff frequently matches up with longer-term stuff.

What has happened longer term is we had our final market high in 2007, with a positive/negative reading at that time of "only" 2.69. Then we had our decline. Now we've climbed back up, forming our long-term right shoulder, and, just like short-term stuff, the numbers are jumping off the charts as people anticipate a climb back to the previous all-time highs and beyond. And so we form the head and shoulders, while the actual high positive/negative number actually comes in on the right shoulder.

So here are the rather amazing numbers in the Nasdaq 100 for the last two weeks:

3.78, 3.44, 4.02, 3.94, 3.94, 4.20*, 3.86, 4.40*, 4.56*, 4.84*

where the asterisk denotes a new all-time high number that I've ever seen.

And I'll just keep saying it. I can definitely say we are at or within days of a very important high. I can't use these numbers to tell you just how important. I can say that once we start down, we will continue down long term until we reach a negative enough number to stop it, which I'm assuming will be a red number. But with us perched on the right shoulder of the long-term head and shoulders that has run from 2000 to the present, looking down into the abyss, we most definitely could be about to start the largest move down in stock market history.

I will say that we do usually get some strong up-and-down action at important highs. Any day here could be the final high. But what I'm looking for is a strong move down of a day or two, then a just as strong move back up to higher highs, and I suspect that will be the final high, although we may come down and try to get up again. All of the above forming a head and shoulders. But again, any day here could be it.

Rob

Nasdaq 100 Hits New All-Time High Optimism Number

I've been watching these volume numbers closely for five or six years now, kind of noticing them for a few years before that. And I do believe that on Friday the Nasdaq 100 numbers got up to the highest number ever when you divide the positive volume by the negative volume. The positive/negative numbers on Friday were: 219.66/52.33. When you divide that out, you get 4.20. This is the most positive number I've ever seen, meaning there are more traders in on the positive side versus traders on the negative side than there has ever been in the last five or six years. This is why we are reaching a major top. It appears that this top is going to roughly coincide with the election. So no matter who wins in the election, when we start down, people will look around and see the top was around the same time as the election and say we're going down because of the election. Democrats will blame the Republicans, Republicans will blame the Democrats, Tea Partiers will blame Democrats and Republicans. I hope I'm showing that the true reason we are about to head down is because everyone has piled on on the positive side.

The Nasdaq 100 numbers for the past seven trading days:

2.59, 3.78, 3.44, 4.02, 3.94, 3.94, 4.20

Nasdaq 100 Holds Steady at 3.94

The Nasdaq 100 numbers remained steady today, still most definitely in topping mode. The last ten market days, oldest to today's:



2.46, 2.13, 2.85, 2.89, 2.59, 3.78, 3.44, 4.02, 3.94, 3.94



And it crept up a little more today. Again, clear topping behavior. I can 100% guarantee you that we are at or near an important top. What will happen with my numbers at an important top is that the switch will be flipped, as I think of it. What I mean is, we will start down, and we will continue down until we reach whatever number it needs to reach, probably down 1.00 or into negative numbers. Obviously on the way down we will pass by the same numbers we passed by on the way up, such as numbers like 1.50, 2.50, or whatever. Before, those numbers enabled us to continue going up. Now, since the switch will have been flipped and we're going down, those same numbers will enable us to continue down. I hope that makes sense, but it probably doesn't.

Another thing I was wondering if it would happen here like it did at the top in 2007 is, in 2007 at the final high most of the market had its final high and started down while the Nasdaq 100, the traders' darling, continued up for maybe a week or a week and a half before it marked the beginning of the move down with a monster down day. While my gut feeling is we still have a week or two until the final top, that final top could be in the Nasdaq 100 alone, as I'll note that in the last three days, most of the market has been going down while the Nasdaq 100 has continued up each day to new highs for the year each day.

Again, we are at or within days of an important high. I can say that with absolute certainty. Whether it's the final high before a market collapse, I can't say. But it is a distinct possibility just because of where we are in the long-term picture.

Rob

Nasdaq Falls Back a Little

The Nasdaq 100 was slightly less positive today, but only slightly. The Nasdaq numbers for last week and so far this week:

2.13, 2.85, 2.89, 2.59, 3.78, 3.44, 4.02, 3.94

Again, I have to stress that the high could have already come in with numbers like this. However, in my humble opinion, which could certainly be wrong, I'm going to go by time and say there's still a week or two until the final high, probably two. Who knows, maybe this final epic high will go up to numbers we've never seen before, like up to 5.0 or more. Who knows. But time-wise, like I said, probably a week or two, just judging from what's happened in the past as far as the time from when we first went above 3.0 to the final high.

The $200 million man is still half-in on the positive side, which is not good short term.

If I were your financial advisor, I would have you totally out of the equities market right now. I don't care if we go a little higher in a final blow-off top. This is extremely dangerous territory. So if you got out, how would you get back in? The answer is, when we eventually start down, which will be soon, we will go down until the Nasdaq 100 number gets down to at least even money, and probably until it goes negative. So I think my numbers can tell you approximately when to get back in. And I believe this time the market has the general population trained to the point where it's going to stay in this time and not jump out, and down we go.

I hope I'm wrong.

Rob

Hate to Tell You ... Nasdaq 100 Hits 4.02

Well, that was fast. The Nasdaq 100 numbers for today are:

210.87 on the positive side
52.44 on the negative side

which unfortunately equals 4.02 when you divide it out. I've been looking for a move above 4.0 to mark the high coming in, but this seems a bit quick to me, since we spent several weeks in the 3.0 to 4.0 range on the last couple important highs. I suspect there is a week or two left until the final high, but it's most definitely possible that we are at that high right now.

The $200 million man got out of his half-in on the down side position and moved to half-in on the positive side in the S&P 500, yielding a basically flat day today.

So as I've been saying, I can promise you an important high, either right now or within a week or two. The important high we had in mid-January led to a decline of one month to a low in mid-February. The important high we had in mid-April led to a decline of two and a half months to a low around July 1. So I'm sure this decline will last at least a month or two. But with where we are in the long-term head-and-shoulders pattern, which is poised on the right shoulder, looking down in the abyss, this is potentially one of the most important highs ever, coming right up. Or maybe not. Maybe it will just be another move down to the same general area and then yet another move up. I wouldn't count on it.

Rob

He's In on the Down Side

I'm going to try my best to do this blog daily as we climb to this important high. We'll see if I'm able to. I would estimate two to three weeks to this important high. There is a distinct possibility that it's two to three weeks to one of the most important highs of our economic lives. We are looking for the Nasdaq 100 to go above 4.0, meaning there is four times as much money on the positive side as on the negative side. I believe that will mark the final high.

The Nasdaq numbers for the past week plus today:

2.13, 2.85, 2.89, 2.59, 3.78, 3.44

So it appears that the Nasdaq 100 is going to stay above 3.0, and it's still going up. This is absolutely classic topping behavior. What happened at the last two important highs was we got up over 3.0, and then it stayed above 3.0 for two to three weeks, finally getting up over 4.0, which came two days after the final high. I'm expecting the same pattern here since everything is happening exactly the same as the last two highs.

So when we start heading down, the headlines will all say that investors have lost confidence. It's actually the exact opposite of that, as I think my Nasdaq 100 numbers show. Everyone piled on, leaving no new buyers.

On the humorous side, the $200 million man continues to be almost always wrong. He has been out of the market the past couple weeks, except for one day, last Tuesday, where he jumped in on the positive side. Of course that was the only down day of the past week and a half for the S&P 500. Today he went half in on the negative side, and we had an up day, although not that big of an up day. I'll betcha we get that big up day in the next day or two if he stays in that position. If this guy ever starts winning on the up side, that's another topping sign, which may or may not happen here.

Rob

Shocking Move by the Nasdaq 100

When I started this blog, I figured it would be mainly talking about the comical adventures of the $200 million man and probably not so much the Nasdaq 100 because the Nasdaq 100 numbers really only become relevant when you're coming to an important or an important low, and I didn't think those would come up too often. But as it turns out, we are most definitely coming to an important high, and it could be the most important high of our lives.

I've been looking to see if the Nasdaq 100 numbers would get up to 4 times the money on the positive side versus money on the negative side. That's where we got up to at the last two important highs. And I was also watching how we seemed to be doing a good job of retracing the market pattern that we traced out leading up to the final high of 2007. Continuing to trace out that pattern would put us at or near a high right now. The Nasdaq 100 numbers have been over 2.0 and staying there for several weeks now, but I was wondering if those numbers would start to approach 4.0 real quickly here. And they have, as of Friday. I was shocked to see the number go from 2.59 on Thursday all the way to 3.78 on Friday!! So we're basically there.

I usually just show the result of dividing the larger number, almost always positive, by the smaller number when talking about the Nasdaq 100 because that's what's really important, and there usually isn't big jumps in the numbers day to day. The numbers for the past week were:

2.13, 2.85, 2.89, 2.59, 3.78

I'll show you what the actual numbers were for the above numbers to show what a jump we had on Friday:

Monday: 149.85 on the positive side
70.25 on the negative side

Tuesday: 154.89/54.30 (some giving up on the short side)

Wednesday: 154.91/53.64

Thursday: 143.38/55.27

Friday: 203.63/53.94

As you can see, a tremendous jump on the positive side on Friday. I believe the reason for the surge of interest on the positive side is that the Nasdaq 100 reached new highs for the year last Friday and Monday, and that's just what a lot of people wait for to be convinced that a rally is for real, to go to new highs. So the market does whatever it takes to convince them.

The $200 million man has been mainly out of the market, allowing us to continue up. Our one large down day this past week was the one day he jumped in on the positive side, but then he jumped back out.

Based on how things went back in March and April when we were reaching the last important high, we probably still have two or three weeks to go before the final high. I'm saying that because back then we went over 3.0 and then it was several weeks before we went over 4.0, to the final high number of 4.06, which actually came two days AFTER the final high.

I didn't want to get into advice on this blog. But it's all so clear to me, I have to say that I think any of you reading this should sell every stock you own in the coming couple weeks. I can guarantee you a strong move down is coming. The real fear, why I would suggest selling all of your stocks, is that there is a very good chance that this is the final high before the incredible ugliness of the third wave down begins. As always, I hope and pray I look totally stupid on this.

Rob

Definitely in Topping Mode

I remain very concerned that we are coming to a final top, leading to some awful, awful economic times. I continue to hope I look like an idiot on this. First we have the incredibly horrible looking head-and-shoulders pattern that we have traced out over the last ten years. (See below.)




Just from I've learned about charting from Jerry Favors and others, if we start shooting down, we're probably going at least down to that row of up-and-down moves that happened around the '70s, when the Dow was anywhere from 575 to 1000.

So with that in mind, I'm watching out for a major top, mainly by watching my Nasdaq 100 fund numbers. And unfortunately, that major top is forming, pretty much no doubt about it. Remember, the numbers I will be talking about here is taking the larger number and dividing it by the smaller number to get a quotient. There is almost always more money on the up side than the down side with the Nasdaq 100 funds, so this number is almost always positive. When it gets above 2.0, you're into the danger zone short term, where you are likely to get some down action in the markets, the number will drop, and you can continue up. When it gets above 2.0 and stays there, you are building to an important top.

The Nasdaq 100 number has been above 2.0 now every day since September 21 except for two brief drops below 2.0.

The numbers for this past week in the Nasdaq 100:

1.88, 2.30, 2.54, 2.05, 2.46

2.46 is very high, and it came on a day when the Nasdaq 100 shot up a huge amount when the rest of the market was flat or down a little. The Nasdaq 100 itself was up 2-1/2 %, meaning this fund was up 5% on Friday. Definitely topping behavior.

So the question is, how far up will this number go before we reach that final high? This number topped out at 2.69 at the highs in 2007. But the bar has since been raised so that it got above 4.0 at the last two important highs. So I'm speculating that that's where we're headed here.

I can say we are reaching an important high that will lead to some sort of substantial pullback. I can't say for sure this will be a final high before all hell breaks loose to the down side in the markets. But since we do have a head-and-shoulders like we've never seen before, stretching for an entire decade, and we are right on the edge of the right shoulder, coming to some sort of important top, this could be it. God, I hope I look stupid on this.

Rob

Crash Starting in a Few Weeks?

I've been busy, and sick, so I got way behind on this blog. We are continuing to trace out a pattern last seen as we climbed to the final high in 2007. That final high in 2007 came at the end of October, I believe. And I think there's a good chance that will happen here as well. I read an article saying the same thing I've heard many times, how October can be a tough month for stocks. And that if we can just make it through October, we can look forward to the Santa Claus rally. When I read an article like that, I figure there's a good chance we'll have a high at the end of October. We'll see.

We still have our solid head and shoulders pattern that I fear will lead to economic disaster real soon. You may have heard that the leader of Iran was saying the end of capitalism was near. I definitely believe he had economic advisors who recognize something as basic as a head and shoulders pattern telling him that it was indeed possible that the U.S. stock market was about to totally crash. Maybe enough people will doubt the market because of that, thus making us continue up.

However, that's not what's happening. The all-important Nasdaq numbers are now well above 2.00 and staying there, getting up to 2.52, 2.41 and 2.60 at the end of September. It's been above 2.00 for 11 straight market days now. We would normally be falling with numbers like that ... unless we were climbing to a final important high. Since the Nasdaq numbers got up to an amazing 4.10 at both of the last major two highs, I think there's a good chance that that is the target for this most important final high. So we still have to climb into the 3's and then the final move up to 4, which I suspect will be it. This final rally could be quite dazzling as we shoot up, discarding die-hard short sellers along the way.

I took a depo recently in a divorce case. It was the depo of the financial advisor to the husband and wife before and at the time of the divorce. The wife had a new boyfriend who was an economist who was saying the market was going to continue lower than the lows of March 2009, so she somehow got control of some funds and sold everything, much to the dismay of the husband, who wanted to stay the course, as the financial advisor was strongly suggesting. So lots of talk at the depo about if they had just stayed the course instead of getting out, how much more money they'd have right now. The witness talked about holding seminars around the time of the market turmoil, counseling the attendees to stay the course. Anybody who got out feels totally stupid. Anybody who stayed in feels very smart. Guess what's going to happen this next time around.

Wish I had time to go through the antics of the $200 million man. I can show how his actions or inactions explain every single up and down move for weeks, except for one day, a giant up day that came within a day or two of the most recent important low. As of Friday, he is out of the market.

I don't mention the Dow up and down funds much because they don't always follow this inverse pattern that I'm talking about. I mainly watch the Dow funds to see if it ever goes positive, meaning more money in the positive Dow fund than in the negative Dow fund. There is almost always more money on the down side than the up side, except at important highs. You'll only see more money on the positive side a couple times a year, the last time being at the high at the end of April. Since then, it's been negative, until this past Friday, October 8, when it went positive. So I think we're either at that final high or two or three weeks away at the most. And all I can say is, I hope and pray I'm wrong about what might follow.

Rob

Crash Starting in a Week or Two?

Hate to tell you, but it could happen. I have had a wave of work recently and don't have time to lay it out here like I'd sure like to. But we are still tracing out the exact same pattern that we did leading up to the final high in 2007. Shockingly similar. And if things continue to be shockingly similar, we would reach the final high in a week or two.

Wish I could go on, but I'm out of time. I obviously hope I'm dead wrong on this.

Rob

He Gets Out Totally

I believe the $200 million man is now out of the market, up or down. We continue to drift up. He's thinking, like I am and others, we've been going up for quite a while, the market seems tired, we're due for a down move. But that's how these rallies keep going, is thinking like that. Everything is still relatively negative. In fact, I don't talk about the Russell 2000 much because it's kind of inconsistent, but I will say that the Russell reached its most negative point of the year on Friday, with 18.66 on the positive side and 48.82 on the negative side. So even though we've been going up and up, people aren't buying it yet, which I think will send us even higher, for now.

If any of you looked at that link I had on a past post which sent you to the chart of the Dow from 1900 to present, you might have noticed a little ad in the corner of the page from some guy advertising his market software, and he was predicting the selling would start on September 30. Just looking at how long it took to reach the high when looking at what happened back in 2007, comparing it to the similar pattern I was talking about in a recent post, if we were to continue to follow that pattern, I have to say that he might have something in that September 30 prediction. I wonder what he based it on. I still watch the Bradley, although it hasn't worked well at all since the bear market started, but we do have a Bradley date on November 1. Interesting.

The $200 million man did get totally out as of Friday. The numbers for the past week in the S&P 500, which is what he exclusively plays:

Monday: 65.42/258.77

Tuesday: 68.32/253.94

Wednesday: 67.05/205.54

Thursday: 154.87/186.65

Friday: 66.28/193.48


The Nasdaq 100 numbers were getting a little high earlier in the week last week, but finished the week more negative, which is good for continuing the rally. The numbers for the past week:

1.63, 1.93, 1.83, 1.38, 1.51

Rob

He Switches to Half In on the Up Side

The $200 million man today switched to what appears to be a half-in position on the up side. The market will want to get rid of him before it moves up further. So unless he gets out of that position quickly, I would expect some sort of down activity coming up. On the positive side, the Nasdaq got more negative today, which is good for continuing this rally.

The S&P 500 so far this week:

Monday: 65.42/258.77

Tuesday: 68.32/253.94

Wednesday: 67.05/205.54

Today (Thursday): 154.87/186.65


The Nasdaq 100 numbers so far this week:

1.63, 1.93, 1.83, 1.38

Rob

Remains Half In on the Down Side

Flat to slightly down day today for most of the market. I was thinking the $200 million man might have gotten out of his half-in down position. But he's still there. So I'm mildly surprised that we didn't continue to move up, at least a little.

The S&P 500, yesterday and today:

Yesterday: 65.42/258.77

Today: 68.32/253.94

There was a bit of a move to the positive side in the Nasdaq 100 today. We went from 1.63 yesterday to 1.93 today. If this is a strong rally where we're going to go all the way to the highs in positive volume numbers, then eventually we have to get up to 2.00, then up to 3.00, and finally up over 4.00. So we would have to pass 1.93 somewhere along the way. But this seems a bit fast to get up near 2.00.

So the $200 million man made a little bit of money today as the S&P 500 went down a teeny bit. Will that embolden him to up the ante on the down side?

Rob

He's Still Half In on the Down Side

The $200 million man remained in his half-in on the down side position today, and we had a strong up day. The numbers in the S&P 500 for last week and today:

Tuesday: 67.66/172.26 (he's on the sidelines)

Wednesday: 61.93/179.68 (still on the sidelines)

Thursday: 65.09/174.54 (still on the sidelines)

Friday: 63.98/270.26 (he sees that the market seems tired, been going up for a while, so he goes half in on the down side ... we continue up)

Today, Monday: 65.42/258.77 (he remains half in on the down side, although he doesn't seem to have as much money ... strong up day)

So what do you think? Will today's strong up day scare him off, possibly yielding a down day on Tuesday? Or does he stay in on the down side and we continue up? Or maybe he goes all in, figuring you can only go up so far so fast? Nah, probably not.

The Nasdaq 100 for the past week and today, again dividing the larger number, which is the positive number, by the smaller number, which is almost always the negative number:

1.47, 1.66, 1.62, 1.55, 1.63

I would think this number would have to get up over 2.00 at a bare minimum before a top. And could we rally all the way up to the highest volume numbers that we had at the highs earlier this year, which was around 4.10, before this rally dies and we could be in for some awful times? I think there's a good chance of that, since I think there's a good chance we will rally right up to those previous market highs from earlier this year. But I'm just speculating, as usual. I definitely wish I knew the answer to that question.

Rob

He's Half In on the Down Side

When I refer to "he" in my titles, I'm referring to the $200 million man. Yes, he did go half in on the down side on Friday, and we went up some more. Things continue to be very negative, relatively speaking, so it would appear there is more to this rally. The Russell 2000 was at its most negative point on Friday, relatively speaking. The Nasdaq 100 continues to be fairly negative. And the S&P 500 continues to be negative, and now even more negative with the $200 million man going half in on the down side. So short term, I would expect us to keep rallying.

But ... below is the picture that I had linked you to in my last post. I was able to copy it in. I'm still in a state of shock from seeing this only a few days ago. To me, seeing this, it seals the market's fate. You laugh. Sorry, but that's what I think. The picture:

The classic head and shoulders pattern, otherwise known as the domed house of "three peaks and domed house" fame, stretching from the year 2000 to the present, is inescapable. Three ways I think this can play out:

We could start down any day. The pattern is there. It can go down now if it wants to.

More likely, although I definitely could be wrong, is that we rally for a while here as the market tries to punish the shorts for being right and piling on on the down side. And then the crash commences, after many of the shorts give up and get out of their down positions.

I think a third possibility is that we have an incredibly strong rally here and rally up to higher all-time highs, above 14,000 whatever it was. I say that's a possibility because the market will do whatever it takes to get rid of the shorts before going down, even sometimes breaking out of a classic head and shoulders pattern to go to a higher high on what would be the right shoulder. There is so much negativity right now. Lots and lots of people are looking at that head and shoulders and know what it signifies. So they're saying, hey, I'm going to stay out until we go to higher highs and break up this head and shoulders pattern. And so that's exactly what the market might do, then they all pile on, and that's the final high. Not a likely possibility, but a possibility.

I tried to copy in a couple pictures here, but they ended up at the very top. Just what I thought is an interestingly similar picture. The second picture from the top is this year, 2010, so far. You can see the pattern I have circled, kind of a triple low with the lowest point in the middle. I was thinking that sure looked familiar. So I looked back in my charting, and there it was. That's the picture at the top. That picture at the top is from 2007, and the pattern I have circled came right before the final rise to the final all-time high. So our final high here in 2010 might be coming sooner rather than later, after we finish out this final rally.

But I don't know. All this is just things I'm wondering about. We'll see what happens.

Rob

Scary Picture

Yes, we do appear to be in rally mode, at least for now. This could go on for a while or it could end tomorrow.

The $200 million man has been out of action so far this week. He had been in a down position at the end of last week.

The Nasdaq 100 numbers for the last five market days (dividing positive numbers by negative numbers):

1.41, 1.54, 1.43, 1.47, 1.66

So again, I am wondering if that was an important low that we had this past week or so, when the Nasdaq number got down to near even money, positive versus negative, or whether there is more to go. Obviously some day I'd like to be able to answer that based on these numbers, but I can't say right now.

I do have a very scary picture to pass along. I was wondering what the Dow was looking like in a long-term historical perspective, and I found the perfect chart, going all the way back to 1900. To me, this is an unbelievably scary picture. There it is, in all its glory, the most awful-looking giant head and shoulders you're ever going to see that we have formed since 2000. From all I learned from Jerry Favors, most of the mountain in the chart is going to come crashing down, probably starting very soon. We could go up and rally for a while. But as long as we stay below the all-time Dow high of 14,000-something, the head and shoulders will be intact, ready to explode down. It could start tomorrow, or it could start months from now. I hope and pray that I'm totally, completely, laughably wrong.

That chart is at: http://stockcharts.com/charts/historical/djia1900.html

If a total crash starts, my numbers will be useless, I'm guessing. This will be a pattern-driven thing that's going to play out no matter what the numbers are.

Rob

$200MM Half In on the Down Side

So we had the very large up day yesterday even though the $200 million man had gotten out of his short position for that day, and so he missed what would have been a very large loss. So he was probably feeling lucky. For today, he jumped back in on the short side, half in actually. And we had another nice up day.

So far this week:

Monday: 71.31/181.30 (this is the current market without the $200 million man)

Tuesday: 73.23/245.91 (he puts a little money in on the down side, turns out to be a flat day)

Wednesday: 66.83/168.19 (he gets back out, and we have a huge up day ... yes, this definitely goes against the usual concept, for which there is usually a reason ...)

Today (Thursday): 67.19/275.05

So he's about half in on the down side. What do you suppose he'll do for Friday?

The Nasdaq 100 continues to get more positive, which is fine for now. The past week in the Nasdaq 100 (positive number divided by negative number):

Monday: 1.25

Tuesday: 1.40

Wednesday: 1.41

Today (Thursday): 1.54

So was that the low this past week to the most recent move down? If so, I will be remembering that the Nasdaq 100 got down to 1.04 within days of the low.

Rob

Unexplained Giant Up Day

A very large up day today. So I figured the $200 million man must have gone all in on the down side. He was half in on Tuesday. But no, he actually got out of his down position. So things were back to where they were without him, which is extremely negative, relatively speaking. So I can certainly see us going up. But it does surprise me to see such a large up day when he has just gotten out of a down position. So I have to say I am unsure of this rally just because things don't quite make sense. The Nasdaq 100 was at its least positive reading of the year this past Thursday. And there, I'm a little surprised it didn't go negative before we reach a bottom. But overall, things are certainly negative enough to support a strong rally.

The Nasdaq 100 numbers for the last week and half, dividing largest number by smallest number, so they're all positive because there continues to be more money on the positive side in this fund, as usual, oldest to newest:

1.17, 1.29, 1.36, 1.02, 1.09, 1.25, 1.40, 1.41

Seems to be getting more positive again a bit quickly. But we'll see how this rally goes.

The S&P 500 numbers so far this week:

Monday: 71.31/181.30

Tuesday: 73.23/245.91

Wednesday (today): 66.83/168.19

Rob

$200MM Gets Out of His Down Position ...

... and we go down.

I missed Friday. Sorry. The $200 million man is demonstrating the opposite concept very well these last week. Since last Wednesday:

Wednesday: 65.12/359.15 (he's all in or mostly in on the down side, and we go up)

Thursday: 63.88/184.90 (he gets out of his down position, and we have a down day)

Friday: 57.78/280.94 (gets at least partly back in on the down side, and we go up)

Today (Monday): 71.31/181.30 (he gets out again, and again we go down)

Again, it's always fun to speculate on the psychology. I'm going to guess that he's getting worn out and may just stay out here, which could let us go down.

The Nasdaq 100 got a little more positive the past couple days. Today was 109.34/87.24. You'll recall it was near even money last Thursday. My best guess is still that it must go negative before we reach a bottom. Just guessing though. We'll see what happens.

Rob

Nasdaq 100 Approaches Even Money

Yes, you guessed it. The $200 million man got out of his possibly all-in down position, and so of course we went down. The numbers so far this week for the S&P 500:

Monday: 73.30/222.31

Tuesday: 207.26/223.71

Wednesday: 65.12/359.15

Today (Thursday): 63.88/184.90

I was thinking the negative number had gotten over 200 without the $200 million man having some money in on the down side. But seeing that 184 number for today makes me wonder if he didn't have some money in all along. Maybe not. Maybe the negative number just fell down from the 220s to 184.

But the big news for today is that the Nasdaq 100 numbers got down to very near even money today. The numbers for today were 98.98/97.28. I am still guessing that we need to go negative though before we reach the bottom, probably several days to a week at least of negative numbers being larger than the positive numbers, before we reach the final low.

We are obviously retesting the lows from early July. It's interesting to see how people set up for it. If we break through the lows, one would think there could be a quick but huge move down. But if the lows hold, there would probably be a monstrous move up. So not even up to 100 on either the up side or down side. People are obviously stepping aside to see what happens. Will we continue to get more negative, which should give us a low fairly quickly? Or will there be some traders trying to jump in here on the up side, which would delay reaching the low?

I'll talk about it more as we go along, but we could be setting up for the infamous three peaks and domed house finale, with the recent up and down stuff from the past couple months is the three peaks, which would be followed by a final rally to possibly new highs, which would be the final high. It is interesting that the final part of the three peaks part of the pattern is a drop down below the previous few lows of the three peaks, and then the final rally begins. With the Nasdaq 100 being pretty much at even money here, possibly very near going negative, which it would surely do with a final quick move down here, I could definitely see a long, strong rally starting soon. It just seems like there's too much negativity right now to have that giant move down. But this paragraph is pure speculation.

Rob

$200MM Switches to Down Side

Yesterday, the $200 million man was half in on the up side. Today he switched to what I believe is about half in on the down side. Again, it's such a large number on the down side that I would normally believe he is all in. But in this case, I think this number was extremely large without him. So I think he's just half in. S&P 500 numbers so far this week:

Monday: 73.30/222.31

Tuesday: 207.26/223.71

Today (Wednesday): 65.12/359.15

And we managed a small gain after being down early. Hate to say it, but I would have expected a much larger up day with this big of a negative number. This is like a week or two ago, where we had similar numbers on the down side and did go up, but not any huge up days. I'm still wondering if we have to have the Nasdaq 100 go negative before we reach an important low. The Nasdaq 100 numbers so far this week:

Monday: 115.48/98.74

Tuesday: 114.60/88.92

Today: 117.99/86.57

So the Nasdaq is holding steady, which is not good if we need to go negative before reaching a bottom. The question is, what will it take to get the red number larger than the green number? How far down do we have to go? Notice that even though Tuesday was a fairly large down day, the positive number actually ticked slightly higher for today. So yesterday's fairly large down day didn't scare anyone in this fund. What will it take to scare them?

Rob

Horrible Possibilities

Oh, dear, dear, dear. I hate to think what we could be on the brink of here. I hope I'm wrong, I hope, I hope, I hope.

The Nasdaq 100 was slightly more positive today thanks to some people getting out of their negative positions. But basically the same. Yesterday was a positive 1.17, probably the lowest number of the year, and today was a positive 1.29. Still extremely low. And still we continue down. I believe more and more that that number has to go negative, at least, before we reach a bottom.

And wouldn't you know it, the $200 million man jumped in on the positive side today, half in. The S&P numbers for yesterday and today:

Yesterday: 73.30/222.31

Today: 207.26/223.71

I think we are ready for a giant move down anyway, and now we have him in there on the positive side too. Not looking good at all.

Rob

Severe Weather WARNING

Yes, this is a severe weather warning, not a watch. That means severe weather has actually been sighted.

I remain very concerned here. The numbers were as negative as ever today and yet we still continued down. As I said in an earlier post, when the majority is winning, you are generally getting near a high or low. In this case, the majority is definitely on the down side and yet they're winning. Unfortunately, this is looking to be a very, very important low we're searching for. In which case, I think the Nasdaq 100 numbers have to go negative before we see the final low of this move down. The Nasdaq numbers for the past week and today:

Last week Monday: 126.92 positive/73.94 negative = 1.72

Last week Tuesday: 133.57/78.83 = 1.69

Last week Wednesday: 131.45/84.90 = 1.55

Last week Thursday: 114.93/96.88 = 1.19 (wow ... extremely low)

Last week Friday: 121.44/91.94 = 1.32

Today: 115.48/98.74 = 1.17

So again, wow, extremely low final number today, but we still went down. Although we're within shouting distance of going negative, I'm afraid this could take two or three weeks to get down into negative territory and stay there for a couple days. Or maybe I'm wrong in thinking this is a powerful move down that will keep going down until the Nasdaq 100 numbers go negative. With this low of a Nasdaq 100 number, and with the Dow, S&P and Russell also extremely, extremely negative, there is plenty of gas to blast upwards. (But why didn't it happen the last few days?) We'll see what happens!

Rob

Friday, August 20, 2010

The numbers were pretty much the same today as they were yesterday. I still think the $200 million man is totally out of action right now and the S&P 500 just has a very negative number right now. The numbers again for yesterday and today in the S&P 500:

Yesterday: 74.02/210.80

Today: 78.87/210.34

This is not the most negative of the year or even close because the $200 million man isn't in on the down side. But I'll bet this is the most negative it's been without him involved.

The Nasdaq 100 numbers are still very negative, relatively speaking. Yesterday's quotient number was 1.19, today it was 1.32 on the positive side.

So everything is very negative, and yet ... we still were flat to slightly down. Just wondering, not predicting, but this does make me wonder if the move down is unfinished. Obviously, if you have the highest numbers at the market high and the lowest numbers at the lows, you have to have all the numbers in between. So even though the numbers are relatively negative, if there is more to go, it does make sense, unfortunately. Remember that the numbers in the Nasdaq 100 did actually go negative at the 2009 lows. So if this is a move down like that one, we still have a ways to go. Although we did get close to even money yesterday, so hopefully it wouldn't be a long ways, at least in terms of time.

We'll see what happens next week. I am concerned as this week ends. There are some extremely ugly possibilities here. But that's probably a good sign, that I'm concerned. Right?

Rob

Thursday, August 19, 2010

A large down day. Not what I expected with the $200 million all in on the down side the last two days. I figured he would stay there at least one more day. But he didn't.

This week's numbers so far for the S&P:

Monday: 177.68/247.81

Tuesday: 70.91/347.23

Wednesday: 64.98/347.39

and today: 74.02/210.80

So he got back out. And actually, looking at these numbers reminds me that he was possibly not all in. I'm used to seeing anything over 300 be all in. But this negative number is so high without him even being in, you see it's 210 today which I think is without him, that he might have been only half in or two-thirds in. But whatever. You see that he got out of his short position, and you see what the market did. I say it's related.

The big news is how negative the Nasdaq 100 went today. The Nasdaq 100 numbers for this week so far:

1.72, 1.69, 1.55, 1.19

Today's positive/negative numbers that yielded that 1.19 number were: 114.93/96.88

First of all, it's abnormal for the numbers to move strongly more negative and have a strong down day on that same day. But I think it's very good to see this number getting down to even money. All along on this recent decline, the one thing that wasn't looking like we had reached a low was the Nasdaq number never really got too low. But this is extremely low.

Hey, $200 million man, looks like we're going down. Better get back in there on the down side!

Rob

Wednesday, August 18, 2010

Today's pretty flat day had me worried that the $200 million man had gotten out of his all-in short position. But no, he's still there, still all in. I would definitely have expected a large up day with him all in on the down side. Two possibilities, I think. One, and I have seen this before, it's just building up for a large move up in the next day or two. Or, two, it really wants to go down bad and him being all in on the down side was the only thing that kept the market afloat. We'll see what happens tomorrow. I didn't see anything today that would make him want to change his position. The S&P 500 has still failed to cross an apparent important threshold. In fact, he's probably out looking for a loan so he can increase his down position.

Everything else remains relatively negative. The Nasdaq 100, what I look to for what's happening longer term, has gotten back down to as negative as it's been for a while, after being way too positive a couple weeks ago. The last five quotient numbers for the Nasdaq 100, dividing the larger number by the smaller, which is almost always a positive number for this fund:

1.63, 1.59, 1.72, 1.69, 1.55

That 1.55 number is the lowest number since mid-July. Again, the highest I've ever seen was late last year and early this year at around 4.10, with the lowest number I've ever seen being something like negative 2.0, which came at the March lows of last year. Although even then it was only negative for a few days, if I recall correctly.

The Dow is very near the most negative it's been all year. Russell 2000 is within shouting distance of the most negative it's been all year.

I will note that the futures this Wednesday evening are down a monster number. So it appears the market will at least open way down, if not stay there. Some company must have had bad numbers. So this will be an interesting battle between the negativity I talked about above that I would think would make us go up, versus some bad news.

Rob

Tuesday, August 17, 2010

Strong up day in the markets today. You'll recall yesterday the $200 million man was kind of half in on both the up side and down side. The numbers for the last three market days leading up to today in the S&P 500:

Last Thursday ($200 million man totally out):
83.81
213.10

Last Friday ($200 million man goes half in on the positive side):
210.82
210.72

Yesterday, Monday ($200 million man sells some of his up fund stake and puts it in the down fund, leaving kind of a half in position both up and down)
177.68
247.81

So I see today's large up day, and I know he must have done exactly what he did do, although I was a bit shocked at the extent he did it, until I saw a little news blurb. What did he do? Of course, he got out of his up position totally, and went all in on the down side. This action here is what my blog is all about. Hopefully you will stay tuned and watch as this repeats itself over and over and over. Remember, it's not just the $200 million man. I believe he is just the perfect representative sample of what is happening short term.

And those numbers for today were:
70.91
347.23

This did surprise me. He's always good for a laugh. But I did wonder about the strong negative move. Then I saw a news blurb that I think explains it, and that is there is apparently a strong resistance number in the S&P 500 at 1100. I would bet you anything that that is what the $200 million man was looking at. And what happened today was we had the large up day, but it failed to pierce that 1100 number. So the blurb I was reading had kind of a negative tone, even though it was a big up day, because we had failed to pierce that number.

It's always fun to try and figure out what the $200 million man will do next. Many times just one large up day is all it takes to scare him out of the position. These are double funds. So with the S&P 500 up whatever it was today, a large number, he lost twice that by being in this down fund. But having read the blurb about failing to pierce the 1100 number, I would definitely be willing to bet some money that he will keep that money on the down side tomorrow, leading to a possible giant up day. And if we do get a giant up day, then we've had two large up days in a row, which would make him not want to jump in on the up side because it's moved up so much in just two days, and so the rally continues. This is pure speculation. He can and will change from day to day. We'll see what happens.

The Nasdaq 100 money remained relatively unchanged, which is fairly negative, relatively speaking.

Rob

Monday, August 16, 2010

Kind of bizarre numbers today in the S&P 500. Our $200 million has apparently put money in on both the up side and down side. He had his half-in stake on the positive side yesterday, and now today he took some of that positive money and put it on the negative side. I believe this is one person or entity doing this. Judge for yourself.

The positive/negative numbers in the S&P 500 for the past week plus today, oldest to newest as you go down the list:

89.83/192.25
240.23/190.91
94.72/199.61
83.81/213.10
210.82/210.72

So that was last week. You can see the $200 million man in on the positive side on Tuesday and Friday. Then the numbers for today in the S&P 500: 177.68/247.81. I suppose it's possible that the negative number could jump from 210.72 last Friday to 247.81 today, but I strongly doubt it. That has to be some $200 million man money. And then you can see without the $200 million man, the positive numbers were around 80s to 90s last week. So there is very little chance that it jumped up to 177 today without some $200 million man money. Perhaps he wants to keep his up position, not sell it, but he wants to cover his butt with some negative money for now. I think the market has to get rid of this guy both up and down before we go either direction.

In the all-important Nasdaq 100, the result of dividing the higher number by the lower number for the past week and today is:

2.23, 2.24, 1.93, 1.63, 1.59, 1.72

So we're back down to numbers where we could go up ... or down. I can't tell you which way we're heading. It will be interesting to see the bucking bronco market get rid of the $200 million man in the coming days, both up side and down side.

Rob

Friday, August 13

So Thursday was a modest down day in the markets. How did traders react? Unfortunately, the $200 million man decided this was a good place to put some money in on the up side, so of course we went down some more. The market will need to get rid of him before we can go up. It could have gotten rid of him on Friday. We'll see on Monday.

I will mainly be focusing on two funds, the Xedyr (that's spelled backwards so a search engine won't find it hopefully) Nasdaq 100 x2 funds, regular and inverse, and the S&P 500 x2 funds, regular and inverse. By far the most important fund that I watch is the Nasdaq 100. I believe this gives a great long-term look at what's happening. And then the S&P 500 is interesting on a short-term basis. Watching the $200 million man is very instructive as to what's going on. He represents the common man, me, you. And the $200 million man mainly trades the S&P 500 x2 fund, regular and inverse.

The numbers for the past week for the Nasdaq 100:

Monday: 145.93 in the positive fund
65.51 in the negative fund

145.93 divided by 65.51 = 2.23

Tuesday: 153.48
68.41 = 2.24

Wednesday: 137.07
71.06 = 1.93

Thursday: 126.10
77.59 = 1.63

Friday: 122.14
76.88 = 1.59

So the Nasdaq 100 number is coming down to a more reasonable level, where we could go up again. Anything over 2.0 is getting pretty high. The highest numbers I've ever seen were at the highs last fall and then again early this year, where it got up to around 4.12 both times. The lowest I've seen was at the lows of March of last year, where this fund did finally go negative for a few days. So that's the range that I've seen. If I knew whether we were still going up on the bull market that started in March of last year or whether the highs earlier this year was it and we've started a major move down, I could tell you when we reach that low or high with these numbers. Unfortunately, I don't know whither we go from here. I'm leaning toward up, mainly based on the fact that we are uncannily tracing out the same pattern we did earlier in the year, and that earlier pattern led to a nice long rally, so I'm thinking this one could lead to even longer and stronger rally, although that could lead to the final high. But I certainly could be wrong.

The numbers for the S&P 500 for the past week:

Monday: 89.83
192.25 = 2.14

Tuesday: 240.23
190.91 = 1.26

(So the $200 million man jumps half in on the up side
on Tuesday. It's a mild down day. He jumps back out for Wednesday.)

Wednesday: 94.72
199.61 = 2.11

(A large down day. This surprises me, with the $200 million man not
still on the positive side. And that down side number is getting
shockingly large.)

Thursday: 83.81
213.10 = 2.54

(Wow, over 200 on the down side without the $200 million man
involved. Very, very negative. When I see the majority winning,
as they did on the down side on Wednesday and Thursday, I
have seen this as a sign that we're reaching a low in the past.
We'll see. Unfortunately, we have a problem on Friday.)

Friday: 210.82
210.72 = 1.00

(So even though things are very negative, the $200 million man
decided this was possibly a low and so he went in halfway on the
positive side. And it was a down day. As I said, he has to give
up this position before we can go up, I think. But that could be
Monday.)

To go up for a while, the market needs to keep that guy out of
the positive fund. It does that sometimes just by wearing him
out, to where he just goes to heck with it, I know we're reaching a
low here somewhere, but I'm just going to sit back for a while and
let it get started without me just to make sure.

Rob