Weekly MSW Swing Update 8/21/09

The weekly scan of the ETF's came up with 17 new buy signals, and 14 new short signals. Over all, it has a total of 122 buy signals, and 38 total short signals, extremely bullish, that brainless software is!
Over all, it seems to love any thing with the word "Emerging" in it, or "International", some charts of interest include DMM, as it think's that housing is going to continue to decline in value. It like's TIP's, which goes along with rising oil, ALTHOUGH, I will admit, I haven't figured out if it mean's it's inflationary if the PRICE of the bond goes up, or if the bond decline's, meaning investor's want more yield protection from inflation, I'll have to get off my ass and check that out.
I'm really surprised that it hate's UYM, as that showed up on the money flow list for the sector's in the earlier post, BUT, it saw some thing it doesn't like about it this week. I have a chart of VBK up, the Vanguard small cap growth fund, as it seem's to hate a lot of the small and mid cap funds the last week, with new short's on RFV, DSG, and JKJ, besides UYM, it hate's SLX, the steel index, maybe that's what's dragging the UYM down. It also seem's to hate a few commodity funds, although it's bullish on Moo Cows, UBC, wooooo hoooooo!


I shouldn't even have bothered with the daily scan, as it has only 4 new buys, and 6 new short's. Over all, it has a total of 32 buy signals, and 45 total short signals, slightly bearish, but over all, not very interested in the daily charts.
In keeping with it's lack of interest in the small and mid cap funds on the weekly chart, it hate's the Russell 2000, with a buy on SSK and a short on RRY. In keeping with the lousy housing theme, it want's to short ICF.
It want's to short International big caps, by buying the DPK, which would make for a pair's trade, as you would buy this fund, and then buy any thing with "Emerging" in it's title, like EEM, just a thought.



The weekly scan of the Russell 1000 came up with 11 new buy's, and 15 new short signals. Over all, it's on a total of 188 buy signals, and only 49 total short signals, very bullishly inclined.
Some of the semi interesting charts (I'm not wild about any of them) are MXIM, as it has a nice little base that it could break out over. GENZ may have finally stopped it's free fall, although it does have an over head down trend line that it will have to contend with, at about 56.
Obviously, the software doesn't read the bloggers, as it hates AAPL, don't ask me why, I don't have the foggiest idea, other than it saw some thing this last week, that it doesn't like. Shorting CY make's perfect sense, as it hate's the solar's, and I guess CY has a big position in STP.


The daily scan of the Russell 1000 came up with five new buys and 11 new shorts, over all it is on 37 buy signals, and 70 short signals, two to one on the short side, BUT, the bottom line is that, that's not very many TOTAL signals, meaning the software is pretty bored with the market.
The charts that interest me, are STZ, as I'm ALWAYS interested in booze, wooooo hooooo! My goodness, is FLSR getting it's aaaaaaasssss kicked, or what??!!! There's a guy who appear's on Taking Stock, on Bloomberg TV, who has been spot on with the solar stocks, as I guess there is huge inventory world wide on the silicon wafers, and he's been saying to short them. Of course, if oil continues on it's march back to 150, the solar's are going to be back in favor, with a vengeance.
I can't figure out why it hate's Service Corp, as I thought everyone was dying to get into that thing!!!!! (Hey, look, it's been three fricking hours, and I'm tired and have a headache, that's the best I could do, hahahahaha) Anyway, my personal opinion is that this is going to be a hot stock, as they will be a major component of the Obama death squads, after they pass the health care bill, against our wish's of course, as the Nazi End of Life panels, will be picking us Baby Boomers off left and right.
By the way, the software is TOTALLY screwed up, as that's not the symbol for Service Corp any more, it's actually SCI.
I also think it's spot on with trying to short CXW, as the gentle folks in Sacramento are using their typical black mail play on John Q public, by threatening to release all the criminals in the state (other than the majority of them in the State legislature of course), unless they continue to pad the politician's pocket's, Waxman is especially at the fore front, as he need's his ungodly perk's to keep up on his payments on his Beverly Hills mansion, which of course, bring's up his comparison with the Beverly Hillbillies, but that's another story.

Weekly Sector Look

Looking at the Money Stream surge over the past week, the XLB surged to the top of the list, with energy making a new showing, in the form of the XLE, and health care is continuing to show strength, with the XLV coming in fourth. The DIA and SPY showed a lot of money flow, as we just loooooooooooovvveee Da Market, woooooo hooooo! Unlike last week, NO sector's showed negative money flow, although I find it VERWY interesting, that financials continue to be a laggard, with three of the bottom five being the XLF, IYG and IYF.
I have a chart of the Q's up for a couple of reason's, one is that they are lagging the two senior index's a little in money flowing in, as Da Boyz seem to be finding more interesting toy's to play with. They just barely broke out to new high's yesterday, while their brethern the DIA and SPY both made clean break's to new highs, for the current rally. The Q's did get over their funk on the TSV indicator, that's the middle indicator, as they finally broke out over that down trend line

yesterday. I also find it interesting, that the TSV just barely touched the zero line, and then turned up.

I circled the bullish engulfing bar on wednesday, as the whole stinking market put on the same bar. BZ, http://bzbtrader.blogspot.com/ , has a "system" based on this, I'm not sure how well it test's out, but I circled the only other bullish engulfing bar on the chart, way over to the left, that was in May, and led to some decent gain's in the next week. I also point out two bar's in the middle of the chart, in July, I should have circled the one on the left, as that was an engulfing bar as well, it's just that it's so narrow it's hard to see. The reason that I pointed the one out to the right of that bar, is that the "tail" engulfed the prior bar, I bring this up because one of my favorite individual's, Larry Levine, use's engulfing bar's for his day trading in the future's, and he swear's by them. One of his rule's though, is that he usually like's to see the "body", engulf the prior bar, rather than just the "tail", he think's that a better signal. Regardless, those two bar's led to some whopping gains.

One of the "things" I do, is to take the ETF that's leading in money flow, and take a look at the "components" in it, and see who's getting the action, in the individual stocks. EEE had the greatest surge this past week, but it's a penny stock, and not for me, ALTHOUGH, that's not to say it won't be a hundred buck's in the next week, any thing's possible in this stupid market.

I have a chart of MOS up, because, well, for one thing, I KNOW what it is, and I follow it. Another thing, is that most of the 64 stocks in the sector look almost the same as this, although there is a ton of them actually breaking out to new high's, rather than lagging slightly, like MOS is. The thing I find interesting about it, is that it's obvious that 55 is acting as huge resistance, as it's tested it four time's, almost EXACTLY in fact, and then fallen back. Now, the obvious idea, is that if it can break 55, it's going to take off like crazy, as the weekly chart look's pretty decent, and if it can get over 60, it's going back to 80 pretty fast. The only fly in the ointment I see, is that it actually made a lower low five day's ago, IE, it was a lower low than the first low it made, after pulling back off the first test of 55 on the first trading day of August. It could be setting up a rare pattern that Bulkowshi call's a right angled and decsending broadening chart, http://thepatternsite.com/rabfd.html , which he say's is a terrible pattern. That's why I would only be interested in this thing, if it can break over 55, with a nice volume spike to go with it.

HAHAHAHA, GOD I LOVE THIS STUFF

I wasn't going to say any thing tonight, but I just had to, I was laughing so hard, I'll have the MSW up over the weekend.
I get up this morning, and some where in my bleary eyed 4:30am first cup of Joe, I heard my first bull of the day yakking about the 1 Tttttttrrrrriiillllion dollar's sitting on the side lines, getting their 3% off the ten year T bill's, and screaming to themselves about missing the 50% rally, and that, that money will ALL HAVE TO come into this market, bidding up equities, trying to play catch up for the year.
Later in the morning, I heard another bull say the exact same thing, accept NOW, it was up to 2 ttttrrrillion on the side lines.
Later in the afternoon, another bull, but NOW, it's up to 3 ttttttrrrilllion.
The capper came a few minutes ago, when I had CNBC on in the back ground, with their CNBC Report's on, and THIS bull said, it was FOUR TTTTTRRRRIILLLION sitting on the side line's, HAHAHAHAHAHAHAHAHAHAHA, I'm telling ya, I wouldn't even REMOTELY think about doing this shit I do, if these people weren't so fricking entertaining!!!!!!!!!
Not one, NOT ONE of them, kind of casually mentioned, that the market's are still down 14% over the last year, 36% from a year ago June, and 50 fricking percent, from two year's ago. During this same time, over the last year, the TLT is up 14%, with dividends.

The other hilarious item, is that CNBC is spending most of their time, gearing up to get their DOW 10,000 hat's on, AGAIN, hhhmmmmm, let me see, wasn't it TEN YEAR's ago, that CNBC had their last DOW 10,000 party???????
SIGH!!

Barry Me!

Yesterday, I couldn't even spell Inwestor, now, I are one! The object in question could be spelled "T", don't ask me why, I have no explanation.
Anyway, I'm heading down to Wally World tomorrow, to load up on hand basket's, after reading Barry Rosen's latest "free" (the magic word) update, enjoy.


August/September Cyclical OverviewBy Barry Rosen

We are entering a time window where deflation will dominate as most of the friendly and positive inflation cycles are over except for one minor one due around Sept. 10-11. An important 2.5-year cycle is approaching and it tends to create trouble, fear and instability when it shifts between Sept. 1 and Oct. 4. The CRB tends to fall during this time window and stocks do not do particularly well. Also, September is usually a down month for the stock market and investors are already exiting. Crude oil and metals do not do particularly great during this cycle. Our original work focused on Sept. 17 for lows but it could easily bleed into the following week and maybe after Sept. 29 before it becomes more stable.

The current 7-year cycle for the United States that began in Dec. 2008 and runs through 2015 has its best analogue in 1979-80 time window. This larger cycle also coincided with the 29-year cycle that also begins in September. In 1979-80, interest rates were sharply higher with gold, Russia invaded Afghanistan, Saddam Hussein assumed the presidency of Iraq, and the Iranian hostage crisis and many other messy problems occurred. The worst part of the cycle was toward the end of the period, which is the equivalent of the year 2015 this time. Still, some of the messier parts of that year were also connected with the 29.5-year cycle that first began in Nov. 1979 and its equivalent start date this time is the Sept.-Oct. 2009 period. We are particularly worried about the health of the U.S. with over the next two years and the Swine Flu may not be a joke this time. We also sense that the March-May 2010 period is more heavily correlated with the mess in late 1979-1980. The projected top of gold in Jan. 2010 and the sharp rise in interest rates also correlates well with the earlier period.

That major run-up that caused the top of crude oil in 2009 is connected with a rare cycle that is repeating again into Oct. 9 and that certainly will lead to another major run-up in crude of about $20-25 from late September into mid-October. It may be caused by hurricane season or by violence in the Middle East and both are up during that cycle. Some of it will be softened by a few other cycles but metals, oil and stocks should recover from their September slides into the middle of October.
This same crude cycle will be amplified by a larger cycle for the US between Aug. 26 into about Halloween and it seems that is filled with violence, fear and possible terrorism. Obama's cycles also suggest particular problems Sept. 5-10, 2009 and let's hope that he is protected but if an external crisis does not hit him, a major internal one will.

We had mentioned the wildfire cycles were strong in August and California is already getting hit and it may be that they will intensify into the first few weeks of October.

A key cycle that peaks Aug. 25-26 is connected with earthquakes as well as a crisis in debt. We last saw this cycle Sept. 21, 2007. During that key time window, the first confirmed deaths resulted from the Myanmar military's crackdown on weeks-long anti-government protests. Buddhist monks were arrested and Internet access was cut off. Also a Thai jetliner crashed about 1 week before that and a major typhoon hit China. In the T-note market, a major swing low occurred 1 day before the peak of the cycle.

Our biggest concern is another 29-year cycle that hits exactly Sept. 26 and the same cycle impacts the United States during the last few week of October. The signature of this cycle is economic recession/depression energy and we are wondering if sometime during the next months, whether we will have enough bank failures to break the FDIC. We are not expecting bank runs but it will certainly cause a mess in all the financial markets and probably affect the markets over the next 6 months.

The FDIC insures 8,246 institutions, with $13.5 trillion in assets. As of late July, 64 banks have failed this year -- the most since 1992 -- costing the FDIC $12.5 billion. At the end of Q1, the agency was already asking for emergency funding.

Moreover, banks charged off almost $40 billion in bad loans in the last two quarters alone. And the number of non-current loans -- loans where payments are not being kept up -- is soaring. Together, these measures indicate the potential for more big failures and more big bailouts ahead.

In addition, the banking crisis has severely depleted the FDIC's reserves, which have dwindled from almost $60 billion last fall to only about $13 billion in early August, a 16-year low. And these depleted reserves are stretched impossibly thin, with the FDIC covering each dollar on deposit with a trivial 2/10ths of a penny.

Translating this to best trades suggests being short stocks until at least late September if not longer and expecting that the dollar will have big trouble in October as crude and metals and foreign currencies come back to life from September lows. Until then they are looking like decent shorts. At publication, all these markets are showing signs of being ready to crack. We think the energy for the crack will heighten the last week of August and continue much of September.

Again, all of this is a wake-up call if people are willing to look. The bailout package has been smoke and mirrors. The banks still have lots of bad loans on their books that will be exposed if they ever liquidate those with a loss. The bailout package has helped the stock market but that is about to end for a while unless there is a decent recovery for a few weeks in early October. Metals should go through deflation. T-notes have been rallying nicely lately but appear ready for another setback at end of August. The dollar may continue to benefit in September as crude and gold fall but then may be in trouble for new lows from late September into mid-October.

Real Estate: This winter into early spring, real estate may come out of basement for a brief period. We have mentioned that real estate has an important 18.5-year cycle that points to a bottom into 2014-5 but often 3-5 years into the cycle, there is a bounce for a year and that may happen soon. Otherwise we are not sure what will help it. That bounce could be suffocated if we have rapidly rising interest rates next spring as oil and metals and all commodities shoot up between March-June 2010.

So put on your helmets and get ready for the fall. I really cannot find too many bright spots except for people who want to be long the dollar.


Geeze, as if Barry wasn't enough, Sysin FORCED me to read Karl Denninger, http://market-ticker.denninger.net/ , YIKE's, I'm going to pick up DOUBLE the hand basket's I usually get!!

Just a late side note, but, I haven't been commenting on the daily action much, and I probably WON'T do it much in the future, but I have to admit, that the open this morning was just about the biggest crock of shit I have seen in some fricking time, can you spell PPT!!!???? Geeze, give me a fricking break! It hasn't taken the Obama Banana team that long to figure out how to manipulate the markets, ROACH's!

Dump Day Notes

As you might imagine, today has kind of invalidated a lot of the MSW scan from this weekend. What I'm doing, is posting the MSW updated scan from today, based on the "7 Day Moves" profile, or Swing trades. This is just the focus list's, no charts, the top list is the EFT scan, with the first column being the daily scan, and the next two the weekly scan, the second list is the Russell 1000, with the first two colums being the weekly scan, and the last column the daily scan (don't ask me why in the hell I reversed them, I was scractching my ass, but I thought it was my nose, so that should explain it).

You can't see the entire list (naturally, hahahahahahaha, master of the obvious I guess), but what's happening is the MSW is stopping out on a lot of the long trades, and going neutral on them, and then, of course, it's putting on a lot of "confirmed short" signal's, on the new short signal's issued this weekend, IE, it had a new short, and the move today has "confirmed" the signal, which basically is a new signal in and of itself.

My personal opinion, is that I'm NOT going hog wild short right here, we will "possibly" (that's a disclaimer of course, any thing inside quotes) continue down another day or two, but I anticipate a stabilization for expiration on friday. BZ did a study once, http://bzbtrader.blogspot.com/ , or maybe it was some one else that he quoted, that showed that we "usually" reach the stablization point for the week on wednesday, meaning if some one were to want to do a quick call write to pick up some change on friday, the best day to do it is on wednesday.

Besides, "IF", we go down some more, this will only be the first pull back in the recent rally, and I've alway's believed the first pull back is buyable. ALSO, my MAIN shorting idea will come, on a retest of the recent highs, IE, I want to see us try to rally back up, and then FAIL to take out the old high's, and THEN turn back down.

Anyway, just some quick idea's, I'll be my usual busy self the rest of the week, IE, probably no more post's, good luck to you.

Hmmmmmm, speaking of BZ, I notice he's on the run with the "systems" again, HELL, I'm still working off the Q's KOP and Popper's, hahahahahahahahahahaha, sigh, more work to do, trying to catch up to the latest "stuff", sigh!