PREDICTIONS

[bryanmcn]

Oct 11, 2008

Read to the end to hear my prediction.

Believe it or not I have made some money trading ETF's (17% on HGD and 30% on HED) since Oct 4th. Thank you Victor and SSP. I wish I had known about these back in June. I sold them yesterday because I don't want to be stuck unable to trade on Monday (Thanksgiving) if the market rally's.

This is a wash out. There is panic selling and the shorts are now in control. Washouts (like in '87) end with the shorts having to cover their positions. Tipical corrections run their course at the 50% retracement level. We are very close to that. The Dow has support (ok ... it was 6 years ago) between 7500 and 8500. 

Commodities and markets are all WAAAAY under their moving averages. THEY WILL REBOUND.

We are in a down trend and momentum is strong but there is no fundamental logic to this much of a decline. This is ALL PYCHOLOGICAL!! (of course 80% of market moves are pychological).

So.... my prediction. Within a week or so  (before Oct 24th) we will see a HUGE bounce. In the DOW, possible a 1200 point day. When it starts to move up, it will ROCKET up, possibly to 10,000. Think about it. The DOW has had 7 straight days of losses. 7 trading days ago it was over 10,000. Now its at 8500. It HAS to correct. The shorts will have to cover and the buyers will jump in.

This correction must be corrected.

[bryanmcn]

Is HAD.to the Canadian ETF for the DOW?

[Victor]

Bryan, good on ya!  Wish I'd done the same!!

I concur on your prediction, unless Monday continues the decline.  Otherwise the bounce should come, and I'm thinking 25-30% as an index target (pick your index).  With a weak economy I'm guessing the rally is not sustainable.

The HAD is agricultural commodities.  Not sure how the mix is done, probably using somebody's index.

Cheers,

Victor

[garilou]

Pretty good prediction Bryan!

Maybe it was not quite 1200 points, but what happened Monday came much earlier as you predicted! Let's see how it looks like on October 24th!
You wrote:

This is ALL PYCHOLOGICAL!! (of course 80% of market moves are pychological).

PYCHOLOGICAL: was that a typo or a joke?

But you are right, and psychologically, investors are fundamentally optimistic. The notion that the "market is always right" or that it is rational might not be totally wrong, but in the long term only.

So sure the correction must be corrected.
I guess Tuesday, the TSX will follow, as are the Asian markets doing at this time!
The jump we saw might be a first reversal signal, but I think it will need some time to become a real bull trend.
Do not forget it happened after the US government, as they say, "nationalized" the markets!
So now, want it or not, can afford it or not, all Americans are "investing" in the markets!

There will be many ups and downs coming. (That's my prediction, I am not an optimistic)
Because apart investors, there are consumers, and they are the ones who will make the companies do well or not.
But the last weeks markets have created real undervalues, and even if they do less good profits, there is room for higher stock prices.

There will be many ups and downs coming. (That's my prediction, I am not an optimistic)

Let's wait and see when the empty SSP portfolios will start to fill up again 

The shorts covering was probably a good part of that "unusual gap up", and I got caught be my not covering my short on IBM 

You certainly did the right thing in short term trading! And short term trading should still stay the rule for a few weeks

Happy for you,

Louise

[bryanmcn]

I should add ...

Overall the markets have strong downward momentum. Mondays rebound is short term. I wish it had of been a little less extreme. Its hard for most swing investors like us to take advantage of these gaps and violent daily moves.

I don't see this as a reversal but for many its an opportunity to gain back some losses and get out.

Looks like a dead cat bounce to me.



Don't forget to vote!

[garilou]

Bryan,

Well I think we both predicted well.
This was a short term, artificially produced, rebound.

I loved your "Looks like a dead cat bounce to me."

The great Guru ( Cramer) wrote today:
Shorts Got Booted Out of Paradise


Probably many did cover their shorts, some maybe were forced out of them.
I told you I thought that part of yesterday's huge bound was probably due to shorts being covered.

Well not me!
I held to my shorts! I got quite a (paper) loss on IBM yesterday, a very smaller one today. It's a hold!
Shorted the US TD Bank (my bank - it's a shame) yesterday, had a few cold sweats this morning, but now I'm almost back to where I was Monday night. But this won't be a long hold I think.


Cheers,

Louise

PS. And once I started to be reassured, I did go and vote!

[bryanmcn]

I recently came across this site that offers daily technical commentaries.

http://www.iepstein.com/ExternalApps/Full/FuturesTV/IndexReviewVideo.aspx

I have noticed that he is usually a bit wishy washy about where the markets are going but not yesterday (Nov 13). He clearly is sending a message. COVER YOUR SHORTS! He's not saying to go long but says that Nov 15th is a very important day and explains why so its a good time to be in cash until then.

Interesting to note that he called a bottom at mid day when this video was shot and the markets shot up after that. 

[garilou]

Hi Bryan,

I went to the link you gave, (thank you), and watched both Epstein's videos (13 and 14 Nov). (I agree with your "wishy washy"): what he says seems to make sense, but I think he is a little too much on the charts, and not looking at the whole picture.
I find the guy somewhat pretentious, but that's OK, the guy has something to sell.

But let's come to the point of covering the shorts.

I have covered all my shorts between 3 and 5 days ago, and I regretted it, because, although I had real good gain on IBM, it could have been so much bigger, had I waited.
Remember in my previous post, I had said IBM was a "hold" (meant a short position hold)?
Well I did not hold long enough.
I shorted it twice and still bite my fingers that I did repeat it a 3rd time.

For another one, I had a really small gain, which also could have been much higher if I had waited 2 hours more: I had placed my orders late at night, woke up to late in the morning: in the moment I wanted to modify my limit buy order, it was already filled.
Well, no one ever got poor by cashing small gains.

I never have big "baskets" at the same time.

[It reminds me of a friend, xx years ago, who was a repent less  "Don Giovanni".
I asked him once: "Seducing so many girls does not bring you into problems sometimes?", and he said: "Many, yes, but never more then one at a time  !"]

Now I am long on 2 stocks in my RRSP that, day after day, made for one small, for the other big, "paper" gains.
I think they are both at their (short term) top. I'm going to get rid of them on Monday.
On the first one, it will be a pitiful gain, (if not a loss) and for the other one that is an Income trust, an 12% gain in 5 days in such a bear market... risky: lots of people who bought it before me will take their gains, not waiting for the next monthly dividend (17% / 12).
I'll re buy it a day or 2 before the ex-dividend, it's is still technically terribly bullish on the long run, so I'll see till then.

But you know me!

Sure this summer was a benediction for me, but bear or bull markets, I always short.

Maybe because people say it's so dangerous, I have developed a skill and some techniques.
I win more then 85% of the times, and my losses are very small amounts, as compared to my gains, except for one big one this year: trusted too much analysts, and forgot for a moment that bad results are already priced in the stock when they come out in the open. That "thing" managed to trigger my stop (placed pretty high), 2 days after I shorted it, and as you know, when your stock hits the stop, it goes to market! Got really mad at my-self, because I had not spent the research time that I usually take before shorting (or buying).

But my "track record" is so much better on shorts as on long positions.

So yes I am at cash a lot now, and I feel really bad.

If Epstein pretends the technique that he has developed will be his legacy when "he's long gone", where I found nothing so revolutionary, I guess I should publish my shorting techniques  .

Maybe I am as pretentious as Mr Epstein :-) .

And you, where are you? Still on the sideline?

SSP is doing not too bad in the moment.
I am experiencing "on paper" to apply exactly their re-allocation technique: there is much more to do if one trades a little bit between the "Buy" and "Sell" orders": this is no time to think long term, even in UPMv2.
I have never traded so much before as this year! (My income tax report will need pages! Because I did do much trading in my RRSP)

It was nice to hear from you again,

Louise

[bryanmcn]

I'm long on a couple of ETF's and will probably sell in a day or so.

[garilou]

I'm long on a couple of ETF's and will probably sell in a day or so.

 

May I ask which ones?

[bryanmcn]

HSU.to and HXU.to

[garilou]

Bryan,

About HSU and HXU

Please do not take it as an intrusion!
Anyway, you said you were going to  sell in a day or so.
The day should be tomorrow... well, today Nov 17th.
I'm testing my predictions!

HSU

Closed Friday at 7.31.
At short, medium and long term, it looks like SELL.
(OK you can find that anywhere)
My own very short term prediction, is that although HSU seems to stay comfortably between its resistance and its support, unless it is pushed up by the crazy market we experience these days, I think HSU will swing between a
High at 7.63 and a
Low  at 6.80.
With the 7.47% drop it took Friday, it has broken it's previous support: the High could be early in the trading hours,depending on the general move of the market, but it will probably close pretty near from my Low prediction.
So if you were not even a day trader, just an hour trader, I'd say look what is does at the opening to decide whether you hold another day or not.
But since you are not such a trader...



HXU
Closed Friday at 11.94
My predictions are about the same as for HSU, with a
High at 12.37 and a
Low  at 11.42

Just testing....
And if I am pretty close... you give me an applaud 

Louise

[garilou]

Hi Bryan, (and who ever else reads these posts)

Coming back to the Epstein's videos you that you gave us the link to, and where in my reply, I said:
"I think he is a little too much on the charts, and not looking at the whole picture."   
By the whole picture, I meant the global economic situation, and not only the stock market.

Well I should also have said: "if he looks at the charts, he looks at them from too close."
He was talking of a triple bottom, did not say that the market was starting an upward trend, but urged investors to cover their shorts.
But all what he showed, with his moving averages and Bollingers bands etc. was built on a charts covering only the past 3 months, not even!

I never make a trade without looking first at a weekly chart. that gives a much broader "picture"
Then only I look, (for the timing) at the opposite, the closing data and the intraday chart.

Now if you look at a longer time period, mainly on a weekly chart (this one is form Stockcharts.com, and shows the NYSE NHNL (New Highs New Lows), you see no sign of any "triple bottom":
Let a monkey pick 10 stocks and short them for a few weeks, you'll be rich!

So SSP is still pretty good at finding stocks with some upward trend!

Louise   

[garilou]

Hi Bryan,

I think I was pretty right, when I said that Epstein looked at the charts from too close.
It was certainly to early to cry "Cover your shorts!"

We are not "out of the woods" (translated from French, don't know it this is used in English but I guess you'll understand.

Now that even the credit cards start to limit the credits, it might force the American to limit their debts, but if the American economy absolutely needs that the Americans spend a lot of money in order to grow, I think we are getting into a vicious circle.

I was terribly wrong on my daily HIGH - LOW predictions for your HSU and HXU, but I guess this did not prevent you from selling them!

My only long positions in my RRSP are  really good protective things, but I can't say they bring a lot of money in: XSB and XGB. They go up when everything goes down and reverse.
But since I have nothing else that could go down... I think I'll get rid of them and place everything in my TD B164 that brings it's steady 3% (yearly) with a drip every month.
This fund is really fast to change to cash if ever I need it. I had sold some when I thought I was going to jump into one of SSP's portfolios, but I think it'll take a while until the DOWN Market timing signal will turn to green...

Else I'm always into shorting, had a good ride on AAPL today, tomorrow, I think I'll short VISA.

But today, I have covered to most stupid short I've ever done in my life!
This would be a fun new topic: "The most stupid move you've done". I think this one would win the first price 

The always pessimistic,

Louise   

[bryanmcn]

Dec 2, 2008

Each time the DOW or TSX come off a recent low they have been making lower highs. The highs made 2 days ago were no exception. Then they make lower lows. And the ones made around Nov 21st were no exception. Whats interesting about the low that the DOW made was that it was at a long term resistance point (Around 7500).

If the DOW breaks significantly below 7500 then LOOK OUT BELOW! If it recovers and heads to higher ground without challenging that low then it is heading for a higher high and the down trend will have been broken.

I think the DOW and the TSX will both reverse and head for higher highs before the week ends.  IMHO