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fib_1618

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Reply with quote  #1 

Picked up near the close:

TNA at 37.00
BGU at 48.50
DDM at 38.35

I'm expecting (initially) a one or two day hold.

Fib



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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

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doc

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Reply with quote  #2 
Hi Fib,

Hard to argue with that. Would you please comment on the significance (if any) for the intermediate (2-6wks) and longer term of NAMO posting the lowest low in the last 11 yrs except for Oct 08 and NYMO doing the same except for after 9/11 and Oct 08 + March 09?

Bottom line: with such low readings, is this:

1. Likely a fantastic buying op in a bull market at huge oversold readings, or
2. Likely a fantastic buying op for a dead cat bounce, but looking to build a nice divergent bottom in the next 1-3 weeks with lower price lows and higher MCO's, or
3. Holy mackerel! Someone just punched this rally in the solar plexus. Stay away from longs for awhile except for playing for a dead cat bounce.

Thanks,  Doc
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fib_1618

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Reply with quote  #3 
Quote:
Hard to argue with that.

Thursday update...inside range day on many indices is suggesting an up close for Friday, so I'm holding the current position and will be watching the action closely.

Quote:
Would you please comment on the significance (if any) for the intermediate (2-6wks) and longer term of NAMO posting the lowest low in the last 11 yrs except for Oct 08 and NYMO doing the same except for after 9/11 and Oct 08 + March 09?

Hi Doc

Well...the significance really depends on the context between the dates mentioned as it directly relates to the A/D line itself. As far as the current NAMO is concerned, the simple answer is that as long as the exception, the 10/08 MCO low holds, this would seem to be a normal correction in a vigorous uptrend. However, with that said, this new extreme in the NAMO was so deep that it does suggest that a new "flag" has been created. This would then instruct us to look for some sort of divergent bottom in relation to the price lows made during the summer months in the next 4-6 weeks. It should also be noted that this extreme in the NAMO concurrently occurred right as the NASDAQ MCSUM was breaking its intermediate trend line support connecting the December and March lows, so it's not too surprising at all that we got the push that we did on Wednesday as it would take something dramatic to break the longevity of this same trend.

As far as the NYMO is concerned, what we're seeing here is a downside resolution to 2 weeks of going nowhere fast. This unwinding process was triggered last Friday with the appropriate follow through of this kind of pent up energy earlier this week. The big difference though between the two markets is that unlike the NASDAQ MCSUM, the NYSE MCSUM is still quite a bit of distance away from its December to March rising bottoms line. In fact, we have a reading today on the NYSE MCSUM of +693, so we're likely to see any reflex rallies from yesterday's lows to be more concentrated with the primary markets as opposed to the secondaries since the NASDAQ MCSUM is already below its zero line. The other thing that's important here in all of this is that the NAAD is now on a "Get Set" sell signal after the last couple of days of sell off while the the NYAD is in a corrective bullish configuration (no less above its trend line from the March lows).

So...to answer you question, I would say that all of the answers you've provided would be the correct ones depending on which marketplace you're looking at. The other thing that might answer what may be going on right now is that the last couple days of sell off "feel like" something cyclical is controlling the action such as the 9 month cycle. Taking this one step further, and if we look upon last March's bottom as part of this same cyclical process, then the next nesting of this cycle should occur in early December. Given the transverse history of the MCO of being either above or below its zero line for 4-6 weeks at a time, and the MCSUM's natural tendency to relax back to neutral (the zero line), this would certainly compliment this cyclical idea as something that needs our attention.

For now, let's keep an eye on the NYSE MCSUM support zone that I outlined in last weeks cumulative charts to see what kind of bounce (or consolidation) we get. From that we should get a better idea of what to expect during the month of November, and hopefully position ourselves correctly for whatever trend develops later on.

Fib






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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

"An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan

"What we see depends mainly on what we look for" - John Lubbock

"The eye sees only what the mind is ready to comprehend" - Henri Bergson

“Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977

"You know the very powerful and the very stupid have one thing in common - they don't alter their views to fit the facts, they alter the facts to fit their views (which can be uncomfortable if you happen to be one of the facts that needs altering)" - Dr. Who - 1977

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fib_1618

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Reply with quote  #4 

OK...I've decided to close out the positions and stand aside at 11:57.

TNA at 36.75 (Loss)
BGU at 48.68 (Gain)
DDM at 38.57 (Gain)

Probably a close the gap play and reverse, but I don't like the action to stay around.

We'll see how things look later on.

Fib


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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

"An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan

"What we see depends mainly on what we look for" - John Lubbock

"The eye sees only what the mind is ready to comprehend" - Henri Bergson

“Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977

"You know the very powerful and the very stupid have one thing in common - they don't alter their views to fit the facts, they alter the facts to fit their views (which can be uncomfortable if you happen to be one of the facts that needs altering)" - Dr. Who - 1977

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