BREAK OUT UNDONE
Not sure who turned on the sell signal, but the markets have turned south as the DJIA has rapidly lost 50 points and the SPX is right back under the 1280 level.
Art Cashin didn't give much help as he noted the 90 day MA was an important inflection point and as usual volume wasn't high enough to give any confirmation. I have been listening to Art for years and he is very good, but I don't think he has ever said something like "volume is high today therefore we can tell a lot from this move."
I hope the 150 sell signal on the OIH and the overbought readings on the XLE were noted as the oils have sold off fairly hard this afternoon.
Also, curious to see if the bulls can come back in the last half hour and bring us back, for if not, its the same old trading range(lol).
Art Cashin didn't give much help as he noted the 90 day MA was an important inflection point and as usual volume wasn't high enough to give any confirmation. I have been listening to Art for years and he is very good, but I don't think he has ever said something like "volume is high today therefore we can tell a lot from this move."
I hope the 150 sell signal on the OIH and the overbought readings on the XLE were noted as the oils have sold off fairly hard this afternoon.
Also, curious to see if the bulls can come back in the last half hour and bring us back, for if not, its the same old trading range(lol).
posted by DAVID at
3:21 PM
8 Comments:
I think the bull's mantra has been 'live today, for we may die tomorrow'. bring on the next rate hike...
Shark - Where/How do you listen to Art Cashin? I am alwas interested in new viewpoints/ideas. Do he podcast? Thanks - BigBill
Despite Dr. Brett's missive to the contrary I still believe the last hour tells a lot. Maybe not as much as it once did but it does have something to say.
Yesterday the three sisters (Q's, DIA, SPY) finished with a white candle in the last hour and they did so again today. That doesn't always mean an up day on the morrow but it usually does (60 -80%) and when it doesn't it usually results in a sideways walk.
VIX stayed benign too. Barring some bad earnings report I think we might actually have a bit of a follow- through tomorrow. Who knows. Not me. I'm in cash by 4 P.M. every day so I could care less.
I think old Art is very Wiley and likes to set bear traps.
-jjc
On another topic:
Thanks for the EMA tip John.
Consider:
EMA vs SMA; EMA tracks better that is a given (smaller effective integration window). The question is where is the line drawn in the sand that people make decisions on. I believe (even though it makes me feel very uneasy) that there is a great deal of folk lore that drives these things. The folk lore works mainly because everyone follows it. The big boys exploit the crowd's belief in these things; driving the pattern and then fading it when it suits them.
-jjc.
BigBill- Art is on CNBC AROUND 230 just about every day. That is Eastern time PM
John,
For what it is worth I think your right about tomorrow; Unfortunately I'm very short ER2 and I'm expecting to take major heat.
An interesting thing to look at is buying in the futures market ES, ER2, at 4:00 - 5:00 am EST.
Given Dr Brett's background interest and favorite trading vehicle I suspect he has come across a better tell.
-jjc
I watch the futures right up to the open every day. I've found a better tell is either the DAX or FTSI (I prefer the FTSI and Dr. Brett prefers the DAX). I haven't done a correlation in a couple of years but it (FTSI) was running about .87 back then.
I used SMA for years and now trade exclusively using the EMA. That's because I've gone from swing trading to day trading. I need that edge for fast entry and exit and I don't get it from the SMAs. I think for swing or longer term trading the SMA is probably just fine but if your software gives you EMA's why not use them?
John,
Sorry. I was not clear, I like the EMA also (it tracks better and it makes sense to weight recent past higher), however for filtering trades in particular markets I use SMA. The filter(s) attempt to match market states to the current as determined by particular SMA slopes and position with respect to price. The technique works quite well with some trades (Connors mean reversion techniques for example)
I don't mean to preach,just explain myself. You have been at this game longer than I and I am grateful for the tip.
thanks
--jjc
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