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Interesting Chart Patterns To Monitor In Coming Days...

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  • Here is something I posted elsewhere earlier, sharing here for my AGET friends....
    Marc Rinehart Tuesday, May 23, 2006, 9:10AM-- We finally see a pre-market a positive open that looks like it won't fade completely into a negative zone again before the day ends! I think we will hold up today. I said yesterday I had a feeling the market would start to stablize before we enter the Memorial Day holiday weekend but thought it might happen by Wednesday or Thursday. Maybe it is just a short-lived position-squaring rally starting? After such a harsh decline the last couple weeks, any rally is most welcomed now, but if I could pick the very best behavior I would like to see right now-- it would be just to have a period of stability before a major holiday weekend. We need something where we do not rally too strongly now-- not yet-- but we do not decline too much more. (Technically, our overall markets still has room to decline some more and yet still remain healthy longer-term.) If we stablize or drop just a little more in the next couple weeks, I can see by mid-June, we have improved odds a bigger sustainable bigger rally could actually start to develop again. I am afraid right now, if the overall market rallies strongly the next few days, or couple of weeks, it will end up petering out again, leading to a continuation of the recent harsh decline.

    At this point we just have to have a wait-and-see attitude. It is times like this were we technically need the market to reveal its 'true' intentions at this point. I still have mixed feelings. As a longer-term type of trader I really would like to get some better, safer buy setups to develop. (I was getting excited because they were getting closer and closer to being where I would like to see my setups located at-- but to be honest, those buy setups I am watching for just have not yet hit my entry ranges.) Hence, I am still not convinced the total picture is here, nor am I comfortable establishing new position trades yet.

    Yes, aggressive short-term or day traders can benefit from current oversold conditions, and maybe today's overall strength, BUT how long will it last before the masses try to get short again, or finally get an opportunity to cover some positions they couldn't get out earlier? Don't get me wrong, I still want to get long the market more than short. I just want to enter under my safer terms and not under the current markets highly minipulative feeling terms.

    On a different note, I have to admit to being a little bit surprised to see the NY metals futures markets up strongly again overnight. The energy futures contracts holding up here wasn't a surprise, metals were a surprise. NY energy showed hints a potential short-term change-in-bias was building yesterday afternoon, the NY Unleaded Gas contract in particular. This makes sense because traditionally the summer driving season kicks off around this time of the year, and the demand for gasoline hasn't hit its peak seasonality speaking. When I look at individual energy stocks many of their longer-term trends got beat up and are very oversold. They are due for a short-term bounce. Again, I still have concerns. Is this is the best time to establish new longer-term buy and hold positions in this sector as well? Do we just aggressively do quick trades for the over sold condition bounce up? When I look at many of the leading energy related individual stocks longer-term, a lot show key supports getting close, but not really tested. Are these corrections completed? Is it time to rotate back into this area? Aggressive swing traders probably can today. Postion traders may still have some reasons to remain cautious s little while longer.

    Bottomline Quick Summation: If energy and metals take off and go higher again from here, the market inflation fears continue to grow and market pressure continues to remain. It is only time we end up selling off again. However, if the energy and metals futures markets could only be allowed to weaken some more-- particularly NY HG copper or NY crude-- I could honestly can see a scenario where world stock markets benefit, and a return of a powerful and sustainable longer-term type of rally is not a crazy idea. I can even see as we get closer to the fall/winter months areas like Nasdaq or tech related stocks picking up more interest as investments as well. After 6 years of cyclical lows in the 'tech' sector-- it may be building for better days as well. Much of this is contigent on metals and energy pulling back somemore at this time. If not, consistantly trading these markets successfully remains a difficult proposition.
    Marc

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    • Can someone let me know what factors to look for to confirm that a market has made a bottom.

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      • Hi Kosmic

        Kosmic:

        I think you ought to check your charts right now....especially your hourly charts if you have them. I think that there is a better than even chance that we may have put in the bottom already.

        Good luck

        Jim

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        • Posted elsewhere earlier today, sharing with my AGET friends....

          Thursday Pre-market, 1 June 2006, 9:17am-- Just as I predicted should happen, and the Fed minutes are now revealing-- the potential for more interest rate increases is high, and I still don't think the overall market concensus has totally factored in its investment equation this concern. If we get more interest rate increases this summer, the market is not going to be happy. On a better note, we finally are seeing overnight a bigger profit-taking pullback in the NY metals. I have been saying we should be monitoring for this to happen. Now IF we can ever get NY crude to drop below $68, collectively we start to have more incentive to monitor for a potential eventual bigger rebound this summer in our weakened indices. While a basing pattern is building for a smaller rebound, to see the potential for a larger more sustainable rebound some other conditions need to improve, in my humble opinion. One more thing: watch the next couple days for "window dressing" as we enter a new month of trading. After a few days of window dressing what will the market do then?

          Friday, May 19, 2006, 9:30AM-- I think this morning's weakness in the NY metals improves my odds in saying now I think a long overdue, wave 4 pullback in NY Metals is in progress. Their current lows are not in place. My earlier suggestion being patient and hold off on new postions until we saw evidence of a deeper pullback in progress, now seems like a wiser comment. (see previous post comments below) I cannot begin to suggest how to take advantage of this weakness because it is way too complicated for me to help out and follow-up in a timely manner, but I can tell you if you are a longer term player, you have to continue to be patient for that entry. We are not close the those bottoms, in my humble opinion. If I can identify a safe place to longer-term support area when it gets there, I will share this observation if it can help. - marc
          Additional follow-up comments...
          Originally posted by MR - Posted: Wed, 05-17-2006 11:41 AM
          Everything may still be under pressure today. Energy and metal corrections are still very vulnerable to more corrections if they break their key short term support parameters.
          Originally posted by MR - Posted: Monday, May-15-2006 10:31 AM
          If you wanted to get into things like metals, or energies, start monitoring the weekly charts to setup any future trade. They will give you a better perspective while this group pulls back. For what it is worth, NY metals have been notorious for profit-taking harshly, only to eventually recovering. Hence, I am inclined to be patient before buying into this weakness. The weekly charts will give you a better perspective.
          My reply...
          Originally posted by MR - Posted: Saturday, 05-13-2006 01:58 PM
          It depends on how you trade, longer or short-term. I am very interested in trying to define safer entries for short-term ideas, or places to add to existing positions in metals for longer-term positioning. With weakness at the end of last week, I think we are finally getting the pullback some of us can appreciate. We now monitor the next 2-3 weeks to better define timing and price entry ideas, if things develop as we would like to see. Eventually the higher futures prices, if they can stay sustained higher, will draw back up some of the stronger and even lagging weaker metal stocks. If I see anything more specific will try to share if it can help.
          Someone asked this question....
          Originally posted by kosmicmisfit - Posted: Saturday, 05-13-2006 12:01 PM These stocks (GRZ, EXP, TMY, PAAS, SLW,CDE) look ripe for a picking. What do you think???
          Marc Rinehart 1:11 PM, Tuesday, 18 April 2006-- For what it is worth, I wanted to share an observation....

          I noticed last summer when energy prices continued to trend moved people got worried about higher energy prices leading to inflation or ultimately slowing down the economy... but the market acted well for a period of time and continued to work higher, primarily because mutual fund money might have been moving out of one segment into the hotter sectors of the markets. Eventually greed turned to fear when hurricanes and rumors, ect, ended up putting more fear and uncertainty back into reality, and that is when the market topped out during August. Since that time the market has been more erratic than normal. The last few months it has grown more weird and unpredictable. We may be repeating this pattern established late last spring, early summer where select very hot groups-- Energy, metals, very hot commodities or segments of economy-- construction, ethanol production, railroads, metals, energy stocks, etc, etc, may actually continue to outperform. If you are in the right groups you may end up fearing this markets less, and grow greedy as your profits quickly accumulate... and if you remain nimble, flexible, very short-term oriented, monitoring more closely and protect positions very closely... you might actually benefit more from this very weird market. The only difference this time from last year, as I am seeing it, I think in a couple months when the Federal government lagging indicator reports start to filter current facts, real strong inflation fears are going to definitely hit. That I think what could ultimately happen here is something we have not experienced in this generation, since the 1970's. Real inflation fears and much higher gas prices finally stretching our pocketbooks in a more painful way... then these rumors or uncertainty, a new hurricane season fear returning, current tensions like in Nigeria, mideast tensions, Iraq and Iran, ect, etc... the market will once again finally stall out what is currently trending. I am just not sensing real pain or real deep panic in the the people driving around in our country, or around the world people once again seem to be experiencing greater wealth accumulation than every before. I think things are heating up... literally and figuratively... and it is not time yet for our market or theirs to top or peter out.

          This is just my personal opinion, an observation is all. I haven't stopped trading these markets... ... I have just made quicker adjustments in my trading to compensate for higher risk and rapidly changing market conditions. Am doing smaller positions, trailing tighter stops and willing to take profits quicker, if needed. Am being a little more disciplined in entries; watching for the very best, lowest possible risk entries first... maybe adding a little more of my own technical analysis to gain greater confidence in a setup signal. Am jumping in quicker when waves of buying happen, but equally pulling out just as quick if faltering or pullback conditions show up... things like that. It really has helped my trading thinking this way. I am once again keeping control of my emotions which means I am ultimately making better decisions and my ability to trade successfully has improved again.
          Marc

          Comment


          • Posted earlier elsewhere, showing for AGET friends....
            Marc Rinehart 8:54AM, Thursday, June 15, 2006-- It actually looks like the market wants to show it can have a rebound day after a nice close yesterday. . . .
            As far as I can see, we are still appear in near-term down trends, but at some point we really do need some kind of a rally to generate some new sell setups.

            Also, options expire very soon this week. That can play a role in this rebound, but it can also create anomolies in price movement behavior
            that can be tricky to trade if you are not nimble. . . .

            -marc
            Marc

            Comment


            • Posted elsewhere, but sharing with my AGET friends...

              Posted 3:40PM, Tuesday, June 20, 2006 by Marc Rinehart
              . . . . When I reflect upon what this could mean, imply, or lead up to in the near-term, I cannot help but think it reflects real market concerns of interest rate uncertainty and the fear our economy will not experience a "soft landing" once rate increases stop. Next weeks US Federal Reserve meeting is, without a doubt, a very critical time for our markets, overseas, and elsewhere. The world is looking at our large US economy for new direction, particularly as many of their stock markets are currently in somewhat 'free fall' corrections.

              Right now the world desperately wants signs of peace in the Mideast, evidence inflation fears are abating, hopes interest rates are stabilizing here in the US, and to some degree some stability again happens in the major world currencies.

              One way or another, I think, next week signifies the potential of a big stock market move in potentially either direction. Markets are vastly oversold and seeking evidence of (potential) bottoms building, yet fears of recent hard pullbacks being nothing more than a bear market in progress are very real and widespread among both longer-term investor and near-term/short-term trading communities.

              I don't know how things are going to turn out, but I do know whatever happens, I think it will be very quick and potentially very powerful. We have to be prepared to move in either direction with a trading plan.

              We can identify some quick trades currently, but . . . . Risks of taking and holding those newer trades are building somewhat too.

              Unless you are a very good day-trader, I think patience is needed right now. I am taking advantage of this time to get caught up on other things, and reflecting, developing some ideas for a new trading plan for the rest of this summer. How and what to trade if a big rally starts after the Fed meeting; or, what will you do if the opposite happens? I am thinking about things like that. We have approximately 5 to 8 trading days to think about such things and develop some sort of a trading action plan.

              And finally one more thing to reflect on...energy prices are still terribly important to watch this summer. If NY crude, for example, can trade below and stay below $68, and maybe go as low as $64 a barrel, I think this will really help our markets stabilize for July/August. I would be better prepared to get net Long if I see that happening. The metals market prices have backed off, energy has not. Once energy does, there will be less concern about future Fed actions and interest rates for at least a few months or more.

              Well, that is my . . . "tea leaves" read on things. If the picture becomes clearer in the near future, I will make sure to add more comments when appropriate.

              Best wishes, and I truly hope this is helpful to someone out there... sincerely, Marc
              Marc

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              • A Get Question

                Since this forum seems to be active and there are some examples of A Get trades, I thought I would ask this question here.

                In A Get, I heard something about that after a Wave 4 is complete and the security hits the MOB (Wave 5), its almost 100% true that it will come back to the Wave 4 level at some point? Any thoughts on that as well as how have people traded with this?

                Comment


                • Re: A Get Question

                  No, this is not a 100% correct statement. It may seem that way, but I don't believe it is true the majority of the time.

                  As for the second question, Advanced GET has been on the market place since 1988, so common sense might suggest over the years "a lot of people" have traded with AGET methodologies or tools.

                  To get more complete answers, click here and re-post your questions. I think current employees might chine in quicker there with answers. Thanks
                  Originally posted by esp01094391
                  Since this forum seems to be active and there are some examples of A Get trades, I thought I would ask this question here.

                  In A Get, I heard something about that after a Wave 4 is complete and the security hits the MOB (Wave 5), its almost 100% true that it will come back to the Wave 4 level at some point? Any thoughts on that as well as how have people traded with this?
                  Marc

                  Comment


                  • Posted elsewhere first... sharing with my AGET friends....
                    Marc Rinehart] 12:30PM, Tuesday, June 27, 2006--

                    . . . . I am quiet right now because I been reflecting market conditions and trying to figure out how to trade the next big move? For example, what happens if the Fed raises interest rates this week more than what market consensus anticipates?

                    I have had this real fear-- this time-- the Fed raises interest rates a half a percent instead of the usual quarter percent. Reason why? Well, if I were in the new Fed chairman's shoes, it is what I would vote for. (I had the same fear last increase and then the Fed minutes showed it was actually being discussed. A lot of people were surprised to see that in the minutes too.)

                    Back in April most people didn't expect interest rate hikes to continue this summer. Most thought the Fed would pause for a period of months. I wasn't so sure, and still am not convinced.... unless the Fed might jack a rate increase higher, sooner, then try to pause? That is the only way people will grow more conservative in their spending, when they start to worry about losing their jobs and a possible slowdown in our US economy. (I mean at over $70 a barrel you cannot get people to start buying more fuel efficient vehicles and get their SUV 'tanks' (gas hogs) off the road! Plus, with the Federal government spending huge amounts of money to finance a war and rebuild parts of hurricane damaged areas, at this rate, maybe only $100 per barrel oil is going to slow the economy down?)

                    As a hard working, frugal consumer I am growing tired of seeing our debt load increase while at the same time our normally healthy disposable income just not there anymore no matter how frugal we try to be. It is not cheap living in today's society. I don't care what experts or statisticians say, inflationary fears are a real concern for those of us paying the bills!

                    So, as much as I absolutely hate to say this-- I think the new Fed chairman has no other choice but to raise interest rates higher and-- as I said it a month or two ago, and will say it again-- I don't think the market is going to take kindly to this new paradigm.

                    That is what I am really thinking about. How do you trade this kind of market? I thought we had until Thursday to think about this, but now am wondering to myself if maybe today's US market weakness is the beginning of what I thought might very well end up happening Thursday afternoon... we would hear the announcement and then see a continuation of the recent down market start again?

                    Either way, I am still waiting until then before I trade again.

                    PS-- One Caveat: If I am totally wrong with the above said assumptions, then look out... Thursday afternoon and into Friday will see a big rally in those stocks vastly oversold.
                    Marc

                    Comment


                    • 3:00PM Tuesday, June 27, 2006- FWIW, I changed my mind about waiting until Thursday to trade, and decided to buy 5 QQQSK 37 Puts just to practice trading options again. No big deal either way, but wanted the practice.
                      Marc

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                      • Hi Marc!!

                        Hi Marc!

                        Couldn't agree more with your 12:30 post. I'm approaching 6 figures this year for my kids tuition bills....man, you talk about inflation.

                        As an aside, I've noted that there's supposed to be alot of pessimism out there as evidenced by the AAII, Investor Intelligence, and ISE Sentiment poll numbers (this should be bullish). But I've noted a funny thing...call it anecdotal evidence. Alot of friends I talk to are telling me they are holding their fully invested positions. So maybe we traders are scared out of our minds, but the buy and hold ilk (i.e. those creamed in 2000) aren't close to giving up. That is scary given their track record. Maybe they will be right this time, but I sure have my doubts.

                        Best of luck on the puts!!!!

                        Regards,

                        Jim

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                        • Hi Jim,

                          Good to hear from you again. Yes, college is an 'inflation' thing. Man, that is discouraging to hear your six figure college expense. ... Ours is just starting and it looks like the next 12 years or more we will be footing college bills now. (3 kids) I remember complaining back in 1978 having to pay $350 for a tuition bill... boy to be back in those prices!

                          Yes, there is a lot riding on this next Fed meeting. You know, after watching markets for about 20 years, these sure have been some of the toughest markets ever seen during this time. Strange times we are living in right now. Everything is so complex, and it makes the markets really tough to trade.

                          Hey, talk to you soon. Gotta get back to the markets... Good luck to you too!

                          Marc
                          Marc

                          Comment


                          • One way or another, I think, next week signifies the potential of a big stock market move in potentially either direction. Markets are vastly oversold and seeking evidence of (potential) bottoms building, yet fears of recent hard pullbacks being nothing more than a bear market in progress are very real and widespread among both longer-term investor and near-term/short-term trading communities.
                            One Caveat: If I am wrong... Thursday afternoon and into Friday will see a big rally in those stocks vastly oversold.
                            6:30PM, Thursday, June 29, 2006-- People from around the world had their eye glued to what the Federal Reserve committee was going to do with interest rates. Once again they were not disappointed. Our market opened up on good news the US economy is moving at a very strong clip, higher than expected. The stock market did back off a little bit before the 2:15 PM (NY time) Fed announcement.

                            I said in earlier posts I expected a big move either direction once the FED announcement. We were not surprised to see a big move follow the last part of trading today. While I lost a little money on my Puts ('just in case' insurance), I am actually very happy to see many of the key supports I have been monitoring hold up. If they didn't, I think things could have gotten messier more to the downside because the market was at a critical juncture.

                            We just have to be a little careful with totally new positions placed here now because a long holiday weekend is at hand, where many people will be leaving soon for extended holiday vacations. The market is open part of the day Monday so we do have a couple more trading days before the July 4th holiday arrives on Tuesday, and people have been dying for some trading action, so maybe these next couple trading days could be more active then in past pre-holiday trading days?

                            There is lots of fund money out there waiting to be put to work. I think we will see some more of that money re-enter the markets now once we get our next good pullback, particularly if this pullback happens sooner rather than later. (Eventually, the higher energy prices will once again cap off any further huge rallies, so we will continue to monitor those relationships, just in case.) For now the higher risk pressure is dissipating.
                            Marc

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                            • The only position I have currently are 10 July 37 puts taken last week as 'insurance' and to help me practice trading options.
                              Marc

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                              • I read always your post.
                                Thank you for your time.

                                Regards
                                Sergio
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