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August 11, 2010 – Comments (17)

Not a long post here, just showing you an update on my risk chart. For an explanation,
-- see: You say goodbye and I say hello, Another look at an old friend: Risk
    (or on Caps: http://caps.fool.com/Blogs/you-say-goodbye-and-i-say/411027)
-- and: A look at an old friend: Risk
    (or on Caps: http://caps.fool.com/Blogs/a-look-at-an-old-friend-risk/392209)

The reason why I am bringing this up now is that (surprise, surprise) I think we have a turning point here. But what is compelling about this turning point is that the last several weeks the Russell has been seriously lagging the Dow. This is what the 2 links above describe and what the chart below measures. For some charts looking at the behavior of each index, check out this post: Avast!



ENLARGE

17 Comments – Post Your Own

#1) On August 11, 2010 at 3:44 PM, anchak (99.84) wrote:

Ah you can depend on Binve - on observing things like this!

 Yeah it showed up on one of my indicators too.....

 

BTW - I think you may be a tad too bearish- althought mainitaining that stance thru October wont be too injurious to your health methinks!

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#2) On August 11, 2010 at 3:57 PM, binve (< 20) wrote:

anchak ,

Hey AC!! How are you man!

>>Ah you can depend on Binve - on observing things like this! Yeah it showed up on one of my indicators too.....

Thanks man!

>>BTW - I think you may be a tad too bearish-

You know me :)

>>althought mainitaining that stance thru October wont be too injurious to your health methinks!

I agree! I think at the very least (if the more bullish options are still in play) we get a substantial correction first.

Take care my friend!..

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#3) On August 11, 2010 at 3:57 PM, binve (< 20) wrote:

anchak ,

Hey AC!! How are you man!

>>Ah you can depend on Binve - on observing things like this! Yeah it showed up on one of my indicators too.....

Thanks man!

>>BTW - I think you may be a tad too bearish-

You know me :)

>>althought mainitaining that stance thru October wont be too injurious to your health methinks!

I agree! I think at the very least (if the more bullish options are still in play) we get a substantial correction first.

Take care my friend!..

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#4) On August 11, 2010 at 8:51 PM, blesto (31.90) wrote:

Love the charts and that you busted above 20!

Yep, October will be a telling month. If we are in a true recovery then the market may continue to rally thru the end of 2010. If not, then I think a steady decline, but no dropping off a cliff.(Maybe for some companies.)  Save that for 2011.

I'm obviously not a market predicting expert, but my gut is telling me there will be buying opportunities in 2011.

And you can't forget the binve > or < 20 indicator.  :-P

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#5) On August 11, 2010 at 9:26 PM, Starfirenv (< 20) wrote:

Usual rec for the B-Man. Link to MT+A. I'm tellin' you. Nothing like some good T+A. Regards

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#6) On August 11, 2010 at 11:10 PM, binve (< 20) wrote:

blesto ,

Hey man!

>>Yep, October will be a telling month. If we are in a true recovery then the market may continue to rally thru the end of 2010. If not, then I think a steady decline, but no dropping off a cliff.(Maybe for some companies.)  Save that for 2011.

I agree that both Oct will be a telling month, and that we will not get a "crash" in 2011. Here is my projection. It is a little out of date (the projection shifts to the right by about a month), but you can see what I mean. I think this market wants to retest the support at 850-900, and I highly doubt it breaks it this year: http://marketthoughtsandanalysis.blogspot.com/2010/06/update-on-large-count.html

>>I'm obviously not a market predicting expert, but my gut is telling me there will be buying opportunities in 2011.

I very much agree. If we get down to 900 in the way that I think, then I will cover some of my shorts and hedge long. I will probably even go net long. That is in my trading account. I am already net long in my major porfolios (gold, silver, GSMs, commodities, etc.)

>>And you can't forget the binve > or < 20 indicator.  :-P

LOL! Exactly. Most people can make serious money by just watching my score! ... except me :( .... :)

Thanks!

Starfirenv ,

Hey Starfire! Thanks man!

>>Link to MT+A. I'm tellin' you. Nothing like some good T+A

LOL!!!

That's what binve is all about .... chart porn :)..

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#7) On August 11, 2010 at 11:14 PM, goalie37 (91.57) wrote:

I hope you bears are right.  I'm going to be able to make some real life purchases in a couple weeks.  Get me some cheap prices.  :)

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#8) On August 11, 2010 at 11:31 PM, binve (< 20) wrote:

goalie37 ,

We'll see :)

>>Get me some cheap prices.  :)

I have a feeling you will get those :)..

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#9) On August 12, 2010 at 10:45 AM, outoffocus (22.89) wrote:

Looks like SLW had a great quarter. It looks like analysts raised their estimates.

 *pops champagne*

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#10) On August 12, 2010 at 10:47 AM, binve (< 20) wrote:

outoffocus,

BEEEE-U-TIFUL!!!! :) ..

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#11) On August 12, 2010 at 1:57 PM, rexlove (99.44) wrote:

I dont know binve. When I look at these charts I dont see much when looking at the ratio. In some cases if you were to buy equities when the ratio is high the market went up. In other cases if you bought when the ratio was low the market went up too. What is this supposed to prove?

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#12) On August 12, 2010 at 2:42 PM, binve (< 20) wrote:

rexlove ,

The ratio, all by itself, proves nor disproves anything. But combined with leading macro indicators: http://caps.fool.com/Blogs/john-hussman-recession/413455, http://caps.fool.com/Blogs/is-officer-1bdi-losing-an-eye/417202, http://caps.fool.com/Blogs/rear-view-looks-fine-but-the/419517, http://caps.fool.com/Blogs/what-is-the-consumer-metrics/427662, then this  is a troubling development indeed.

On the other hand, I may just be a complete idiot wasting everybody's time..

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#13) On August 13, 2010 at 3:10 AM, DarthMaul09 (29.77) wrote:

I was a little disappointed in the market's delayed response to the generally stellar financial reports of the miners.  If these companies had been selling hamburgers, shoes or tee shirts the stock prices would have likely gone through the roof.  But because they mine and sell gold, which has had a significant price rise for the last 10 years, they didn't appear to be worthy of similar treatment.  Only when oil prices had falling and few other stocks stated hopefull outlooks did the miners get any interest.  SLW was an excellent example of this on Tuesday when it sold off even though it was easy to predict that it would blow away its earning estimates.

By the way, congrat on breaking the 20 barrier.  You'll probably be back at AllStar status by new year 2011.

My hope is that the market gets tired of speculating and starts investing in companies with value, good profits and stable dividends.  Unfortunately, the exodus of small investors who might invest in this way leaves the big money managers trading for quick profits by short squeezing and rapid stock manipulations.

For a number of reasons including the upcoming elections, tax changes and companies looking to maximize their profits in 2010 at the expense of 2011, I believe that the expected Sept/Oct sell off will be real and intense.  If the miners get taken down again, then I'll buy more shares because they create money that can't be devalued like fiat currencies.

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#14) On August 13, 2010 at 9:22 AM, binve (< 20) wrote:

DarthMaul09,

Hey man!

>>I was a little disappointed in the market's delayed response to the generally stellar financial reports of the miners.  If these companies had been selling hamburgers, shoes or tee shirts the stock prices would have likely gone through the roof.  But because they mine and sell gold, which has had a significant price rise for the last 10 years, they didn't appear to be worthy of similar treatment.  Only when oil prices had falling and few other stocks stated hopefull outlooks did the miners get any interest.  SLW was an excellent example of this on Tuesday when it sold off even though it was easy to predict that it would blow away its earning estimates.

I totally agree. But one theory as to why is that we are ready to start a major downwave in the market (I think that is likely). So I think GSMs will be reward by correcting very little / not at all / maybe gaining if my gold counts based on strength and seasonality are correct, while the rest of the market corrects a great deal. Possible scenario at any rate..

>>By the way, congrat on breaking the 20 barrier.  You'll probably be back at AllStar status by new year 2011.

Thanks man! I hope so :)

>>My hope is that the market gets tired of speculating and starts investing in companies with value, good profits and stable dividends.  Unfortunately, the exodus of small investors who might invest in this way leaves the big money managers trading for quick profits by short squeezing and rapid stock manipulations.

Yeah, the conspicuous absence of real investors in this market is disconcerting for the rally. I do think it will be a stock pickers market for some time (which is not my strength, I just like picking strong GSMs :) ), but I think the broad market will correct signficantly for the next few months.

>> If the miners get taken down again, then I'll buy more shares because they create money that can't be devalued like fiat currencies.

Amen to that! Oct-Dec 2008 was a gift and I took advantage heavily. I will do so again if I get the chance :) Thanks!..

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#15) On August 13, 2010 at 9:44 AM, outoffocus (22.89) wrote:

Despite stellar earnings and raised analyst estimates (the lowest estimate is higher than the current price) SLW seems to have solid resistence at $20.  What are your thoughts on that my techie friend?

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#16) On August 13, 2010 at 10:08 AM, binve (< 20) wrote:

outoffocus ,

>>SLW seems to have solid resistence at $20.  What are your thoughts on that my techie friend?

Completely agreed. If you recall our conversation a few months ago back in May in this post (comments #3 and #4) http://caps.fool.com/blogs/not-sustainable/385216, I was calling for support at that line.

We definitely have that. Here is a quick chart to illustrate what I am talking about:



ENLARGE

Thanks!..

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#17) On August 13, 2010 at 10:11 AM, binve (< 20) wrote:

So while there is resistance at $20, it is very short lived (all time time). We have *much* stronger support at $17. I think SLW is destined for more blue sky territory based on macro, fundamentals, and these techicals. It is basing right above this new strong support which is very bullish IMO.

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