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
Sunday, November 28, 2010
Monday, November 22, 2010
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
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
Thursday, November 4, 2010
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
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
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