Chart of Charts 101009

This is quick and dirty.   Watch out for the crossover...It may not line up correctly on earlier dates.  The message of the crossover for now is bullish.

For interpretation of other chart elements, please refer to prior posts on Chart of Charts.

Bottom line?  Don't be large size Bull or Bear right now, unless you have large tolerance for pain --seriously--and then buying longer term puts may be in order for the 5% of the investing crowd who can financially and emotionally take the pain.  And keep in mind...you can't be a contrarian just by being wrong.

Once this market drops 8% in a day...puts will become very expensive.

Flu View from the CDC

pretty self explanatory.   This flu has killed more kids this year already than in an average year, and the flu season proper has not even started.  Just a thought....we need young people and workers to support the aging population...what if 10% of the young people were wiped out?   Not a prediction, just saying.   The medical system could be way overloaded. 

DOBA and QQQQ Charts

The clip was My Cousin Vinny shall be used to help introduce the term DOBA.  Please review this, as you will need to be familiar with the term in order to understand the accuracy level of the following charts.

Also, keep in mind with Mole of Evil Speculator going on yet another vacation, and DavidDT of Trading to Win, also going on vacation,  there is little doubt in my mind that primary 2 is in imminent range of completion.

http://www.bing.com/videos/search?q=my+cousin+vinny&docid=1270159704458&FORM=VIRE3

But really, when I was searching for My Cousin Vinny, I was thinking of a different clip, useful in demonstrating a confluence of events also in relation to Marisa Tomei's biological clock ticking (not to be confused with tick charts).

http://www.bing.com/videos/search?q=my+cousin+vinny+biological+clock&docid=1076177076414&mid=222A941320CB578A64BA222A941320CB578A64BA&FORM=VIVR2
Please review.  And then take a look a the charts below and in your best Vinny accent, ask yourself....if there any other possible trendline or point of resitance that we could pile on to the QQQQ at this time!!!!

XLF and Poll Results

To say that this market is "tiresome" is an incredible understatement.  Faced with horrific fundamentals, statistics (aka lies), and false confidence, we should still be prepared to accept any level of market absurdity.

Patterns aren't working.   EW isn't working.  Fundamentals aren't working. 

A dozen active blog participants have disappeared.

Right at this point my intention was to flatten all of my accounts.  Remove all positions to cash, and just wait to come back in when some type of clarity has presented itself. 

I have reached the tipping point.  Enough is Enough.  This absurditiy is too tiring, too time wasting.   Creating too much of a disrespect for my fellow humans who acts as greater fool lemmings.   To have an understanding of this market is to embrace the absurditiy of the human condition, and to be not that pleased with it.

And for all these reasons, I am not flattening my accounts.  Primarily short with some long commodities and PM plays.   Long USD (effectively same as short equities), via calls on UUP.

Everyone and his brother expects 1120 target on SPX, and 1987

While we are all foxused on getting to 1120, good to review some history.

In 1987 Germany started raising their interest rates, and US responded by threatening a weak dollar (allowing US to easily sell goods to other countries, and hard to buy goods from other countries).  After spouting off by the US, the next day was the big 22% of 1987.

This week, Australia decided to raise rates.  

Seems to be a lot of focus on geopolitical events right now, and saber rattling in the media.   Also seems like the buck could be used as a punishment tool for Iran.   They want out of the buck....OK, let them sell into an abyss.  then when they have taken a hit and got out of the buck, then rally up the buck, punishing Iran.

Shorted ORLY today.  First new short in several weeks.

http://books.google.com.au/books?id=KJs1WDN54wEC&pg=RA1-PA187&lpg=RA1-PA187&dq=James+Baker%27s+comments+us+dollar+Deutsche+Mark+1987+crash&source=bl&ots=o7l3WzlSEa&sig=jjnWrB7C2vg_JtCnU1uGPe4KwMI&hl=en&ei=FavMSs-OA8eAkQWP6N3iBA&sa=X&oi=book_result&ct=result&resnum=2#v=onepage&q=James%20Baker%27s%20comments%20us%20dollar%20Deutsche%20Mark%201987%20crash&f=false

ES Road Map and Small Boat of Charts

Graphic Sector Indicator

Dr. Brett posted this link to another site, and I am immediately putting in on my list of permanent indicators. Lets hope this quant guy keeps it free.

http://www.verticalsolutions.com/forecasts.html

Bears are Fighting Amongst Themselves And Aussies Raise Rates and...

Chart of Charts interim report. As expected, today showed much more bullish patterns than bearish. I did a rough count of bullish candlesticks compared to bearish, and it was about 50 to 10.

Futures overnight were wild. 4000 and 5000 futures on ES being traded per minute...in the middle of the night. This may not be the top, but it certainly could be. I think the wheels are coming off of this cart as it careens downhill carrying a load of fertilizer for those green shoots....

Shorted EUR/USD and Shorted ES (might have nailed the top 1046, stop set at breakeven)





MISH and Denniger (2 Mega Bears) are now having a spat. How many signs of a top do we need to pile on this limping ol' camel's back?

http://globaleconomicanalysis.blogspot.com/

What a combo post title, eh?

First of G20 to raise rates

http://www.news.com.au/business/money/story/0,28323,26172759-5016110,00.html

And a very interesting post on stop hunting. I learned that "they" (probably your broker) were working hard to stop you out, arbitrage your position to the true market value. Saw the effects of it anyway. Here is a good explanation.

http://www.forexfactory.com/showthread.php?p=7237#post7237


Some reviews of Gain Capital for Forex Trading, looks horrendous.

http://www.goforex.net/reviews/gain-capital.htm

Performance of Chart of Charts Signals

Boy this was painful number crunching.

Performance results of index trading based upon MA crossovers of bullish and bearish charts (Chart of Charts).

Certainly not a get rich quick plan, but beats the hell out of calling tops for months on end. Results are based on single leverage index trades.

Annual Rates of Return.

56% for the 5 day MA, 52% for the 10 day, and 37% for the 20 Day.

Keep in mind, this is for a strange year.





I had hoped to improve the chart of charts with another timeframe heatmap, but just ran out of time today. The heatmaps act a little different....I torture the data to extract the truth, although I will not waterboard the data. They provide a feeling by turning volume of charts into a color pattern using some twisted formulas.

Displayed next to a related scatter chart, and another indicator of potential volatility, this is providing me with a decent interpretation of the market.

I am still working on this, but....best trading theory....scale into a trade on a 5 minute heatmap minor signal, ramp up the trade as signal gets hotter, and at crossover (either 5 or 10 minute, choose your poison) you should be at 100% position, then watch for the reverse...if the heat map turns against your position, start scaling out, and by the next crossover you should have reversed the trade completely.

Only at: Use search box in upper left for Chart of Charts

Boatload o' Tickers 100509

These Tickers all have RSI (14) flagged for distribution in the recent past. I have done charts on some of them.

BBBY, BVN, CTSH, GOOG, HDB, IBM, INFY, KSS, PDA, TEF, TGP, UTX, WBK, WFMI

Below List are tickers that have Earnings immediately coming up this week, extremely high P/E, or RSI over 70 as described below in the chart.

Interesting Story...Web Advertising down 5%, GOOG is basically an advertiser, which other internet type companies will take a hit?

http://apnews.excite.com/article/20091005/D9B51MM81.html

Military Strategy, KISS

Bank Failures 1991 and Now

Below is a good read on the 1990's S&L banking crisis. Summary, 1043 lending institutions went belly up, they were holding around $519B in assets, and the tax payer ended up taking a hit of around $150B.


http://www.fdic.gov/bank/analytical/banking/2000dec/brv13n2_2.pdf

Recently failed banks are around 100. They are bigger in size compared to 1990, and in 1990 there was something like 12000 banks, now from memory its about half that.

Failed bank list is one of my permanent links on the right side column of my blog.

http://www.fdic.gov/bank/individual/failed/banklist.html