Friday, August 28, 2009

Toppy Friday



To me the top lies around here somewhere... The index has lots of big resistance in these areas...and they're not just any resistance, we're talking about resistances made in the brink of financial chaos last year.... they should act as a curtain of iron.

The fact the index rallied just a bit over the 38.2% Fibonacci mark at 1013 (the minimum target required), the fact that optimist is very very high with DSI making a higher reading than in 2007 where it made its all time high at 88%. Last week we had a reading of 90%.

The waning of momentum is perish that the rally is losing strength.

Also regarding time, the rally is now approaching the 6 month target posted back in March
If we take October 2007 top and March bottom we had 73 weeks from top to bottom in March.

A Fibonacci 38.2% correction would be a rally of 28 weeks, putting a target in September 20th-23th as a time window for a top. Although wave structure is more important than time relationships, but these help us figure where a top may lay in. These same methods indicated a time window for a bottom back in March in the 9th-12th day of that month. We know how the story ended.

With this I am now with a full short mindset. I'm starting to scale in, and will add on rips of any kind.
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26 comments:

  1. Michael EckertAugust 28, 2009 at 5:54 PM

    Hey there, Sal, we miss you in the CiL. Hope everything is going good for you!!

    ReplyDelete
  2. AnonymousAugust 28, 2009 at 6:30 PM

    Hey Sal,

    Thanks for the updates...here is something that Hhasis wrote up in CAPS blog (http://caps.fool.com/Blogs/ViewPost.aspx?bpid=250234&t=01006588721862014774)...about asia..

    Also, can you give some insight as to what ways you are going in with a short mindset? what types of instruments...thanks man...

    also, i have been giving your blog link to folks at CIL...thanks

    nyc (N)

    ReplyDelete
  3. SalvadorAugust 28, 2009 at 10:47 PM

    Hi Michael... I'm sorry I haven't been to Lounge lately but, whenever I go there at night it's closed... and when you guys are active, I'm not available to be there...

    ReplyDelete
  4. SalvadorAugust 28, 2009 at 10:50 PM

    nyc, what i use for short instruments probably don't suit you...

    I use forex market in order to short currencies against the dollar, and I use the futures market to short the S&P index. Once the trend establishes i intend to short stocks thru CFD's...

    I guess what you can use there is Options, but I'm not the person to advise you there since I have no idea how to deal with options...

    Buying S&P 500 March 2010 puts i think... with a strike price around 700 can easily make a 1000% return if indeed we go to 700... but again i dont know much about options

    ReplyDelete
  5. AlexanderAugust 28, 2009 at 11:04 PM

    Hi Sal

    IMO, the top is likely in.

    As said, I believe 666 could be retested before year's end.

    I live through the tech 200 crazyness, and today's disconnect between reality and the market is as large as back then.

    alexander

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  6. SalvadorAugust 29, 2009 at 1:29 AM

    Alexander I agree...

    The sentiment indicators provided by EWI say the same... bullishness actually is at a all time high... there are 90% bulls, the highest reading ever recorded on that sentiment indicator. The wave structure looks fairly complete or just a little leg higher... Time relationships are also very close.

    We have September ahead of us which is the worst month for stocks, we have a phi turn date as well...

    I guess we'll find it the following weeks... :)

    ReplyDelete
  7. AlexanderAugust 29, 2009 at 8:58 AM

    Sal

    What is "phi turn"?

    ReplyDelete
  8. SalvadorAugust 29, 2009 at 3:50 PM

    See here:

    http://www.safehaven.com/article-4602.htm

    ReplyDelete
  9. AnonymousAugust 31, 2009 at 1:08 PM

    Thanks Sal. Good luck to you man.

    Also, will this be the place/blog to look for any India updates whenever you have anything to write about?

    Thanks,

    NYC (N)

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  10. AnonymousAugust 31, 2009 at 9:32 PM

    I think the same. Salvador should enlight us with what's happenning to India :)

    Regards
    JAPO.

    ReplyDelete
  11. SalvadorSeptember 1, 2009 at 4:46 AM

    Ok guys... I'll do an India post tomorrow

    ReplyDelete
  12. AnonymousSeptember 1, 2009 at 2:05 PM

    Thank you Sal!

    For all you India Investors; especially in the USA - how are you investing in India for long term?

    I have noticed that IFN (http://www.etfconnect.com/select/fundpages/global.asp?MFID=10498)is sucking it up; especially since July 9th, 2009. It is down 1.26%.

    Meanwhile, EPI (http://www.etfconnect.com/select/fundpages/etf_funds.asp?MFID=184447) is up almost 20% in same period.

    This is really frustrating. Would appreciate any response to my rants above and any suggestions as well.

    Thank you,
    NYC (N)

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  13. AnonymousSeptember 1, 2009 at 8:08 PM

    Thanks Salvador. Some months ago you claimed India to be already bull. Will be nice to read what you have to say now about it.

    I'm long in India through the INR (Lyxor MSCI India) ETF.


    Regards,
    JAPO.

    ReplyDelete
  14. AnonymousSeptember 1, 2009 at 9:46 PM

    Thanks for sharing Japo.

    I would really love to know peoples thoughts / analysis on IFN, EPI, and IIF. I had all three evenly; got out of IIF because it was upsetting me; and I am thinking about getting half out of IFN and pouring it into EPI or something else if someone can suggest. The reason I am thinking this was explained above in my comments comparing EPI and IFN. Good Luck to everyone!

    NYC (N)

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  15. SalvadorSeptember 2, 2009 at 3:56 PM

    NYC probably some of those funds are not index related. It can be an Indian fund and the manager allocates the capital where he thinks are the best opportunities hence the disparaty between the 2...

    I think IFN is the index tracking ETF, the other 2 are just funds that allocate money in Indian market... I can't say much because I don't have mymoney in those I have in European ETF's...

    ReplyDelete
  16. AnonymousSeptember 2, 2009 at 4:48 PM

    Thanks Sal. But if IFN is the index tracking ETF; why are the daily ups and downs of the SENSEX not reflected in daily IFN ups and downs? That is the frustrating part.

    Is SENSEX down 2.71% since July 9th? because IFN is down 2.71% since July 9th. EPI is up 18% since July 9th.

    This is why I am ready to give up on IFN. Someone have anything to say about this? Sorry about
    b!tch!ng on here; but this damn frustrating; and I dont want to miss the potential crazy India Bull that may happen in next 15 yrs.

    Help! Thanks in advance.

    NYC (N)

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  17. AnonymousSeptember 2, 2009 at 8:43 PM

    I'm in the Lyxor MSCI India (INR ticker in ProRealtime). Are you familiar with this one Salvador?

    You still didn't enlight us with a Sensex analysis. Please Please Pleaaaaaaaaaase :)

    I'm particularly worried with this ETF I'm long, because I think it is reaching the end of a sideways triangle and I can't figure out right now what will be the next direction.

    I would like to share it with you. If you're up to, I can send it.


    Regards,
    JAPO.

    ReplyDelete
  18. AnonymousSeptember 3, 2009 at 1:49 PM

    what do you guys about the Indian Rupee long term? I am assumin if you are a India Bull; you are an Indian Rupee bull as well? or I shouldnt assume that?

    would this be a good play on Indian Rupee if India were to rise?

    http://www.etfconnect.com/select/fundpages/etf_funds.asp?MFID=185079

    At the end of it's investment Objective, it states the following - "Generally, if the Indian rupee strengthens relative to the U.S. dollar, the Index will increase in value."

    Thanks,
    NYC (N)

    ReplyDelete
  19. SalvadorSeptember 3, 2009 at 11:12 PM

    Let me check about the Sensex... 9th July you say?

    ... indeed it is not... index was at 13,700 in July and last night closed at 15,467.

    Maybe you should inquire the company that manages the fund?

    Maybe it has to do with the shares offering they did a time ago you talked me about remember?

    Îf that's the case, and if it works just like any other stock, when there's a new offering of shares your shares get dilluted... maybe it happened as well...

    You should really ask them why such discrepancy

    ReplyDelete
  20. SalvadorSeptember 3, 2009 at 11:16 PM

    The correlation of Indian Rupee and the dollar happens at times, there were during the 90's it was the opposite... during wave structures, there are times 2 assets become correlated somehow... I think that correlation will end, and USD is going to strengthen against Rupee ending that correlation... at least that's what I see from the structure.

    JAPO I really need to put a chart up on India... give me a day since i've been full handed lately... I so wish that days would be 50 hours instead of 24 lol

    ReplyDelete
  21. SalvadorSeptember 3, 2009 at 11:30 PM

    JAPO, that's the same ETF I'm using to accumulate positions.

    ReplyDelete
  22. AnonymousSeptember 4, 2009 at 2:41 AM

    Ok Sal...thanks...

    also, when you do the India chart, will there be comments in the chart to help interpret the chart; movements, timelines, etc?

    Also, if Sal is too busy which I know he is; can anyone here do a chart and provide long term analysis on INP, EPI, and IFN? which one has best prospects? or are charts not useful for index funds/etfs?

    Thanks Sal, and everyone else!

    NYC (N)

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  23. AnonymousSeptember 4, 2009 at 2:48 AM

    by the way - I dumped most of my IFN shares today....I dont care; its a long term India play...it was really annoying me...just by comparing SENSEX from July until today vs IFN, EPI, and INP --- IFN sucked it up...so i took the money from the IFN sale and put it in INP...so now i have EPI and INP equally...Go India.

    link for EPI - http://www.google.com/finance?client=ob&q=NYSE:EPI

    link for INP - http://moneycentral.msn.com/detail/stock_quote?symbol=inp

    NYC (N)

    ReplyDelete
  24. AnonymousSeptember 4, 2009 at 3:09 AM

    sorry guys...but thought this was something India fans would be interested in...I know TA does not pay attention to news (atleast thats my understanding); but here goes:

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPqMpLPYR4Lo

    and then read this

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aez3hWB9QZdo


    thanks

    NYC (N)

    ReplyDelete
  25. SalvadorSeptember 4, 2009 at 5:54 AM

    NYC... have you heard the expression "Bull markets climb walls of worry while bear markets go down the slope of hope?"

    The first news piece only adds to my trust we're in a bull in India.

    The 2nd news piece I agree with them, we may reach around 50,000 pts in some 7 years or so... it's still too early to tell but according to a normal text book structure at that time India may undergo a bear market, retracing the advance.

    Maybe at that time will be some sorth of sideways bear like the 70's in USA. That's applying the rule of alternation into the chart...

    ReplyDelete
  26. AnonymousSeptember 4, 2009 at 7:40 PM

    Yesterday I was a little bit worried with the way INR was going. Today I am more confortable.

    This is because I have two lines drawn in my INR chart: one support trend line and another one resistance trend line. It shapes like a sideways triangle and I think (at least I hope) the next week it will go up in a strong basis (something like what happenned to gold this week!).

    I'm availble to send my chart to you Salvador publish it or just to exchange some ideias :)


    Regards,
    JAPO

    ReplyDelete