Martenson: The Coming Rout

[EJ]

Re: Martenson: The Coming Rout

Thanks for the swift reply on-point EJ.
Good to hear a rational counter argument.

It appears the The Big One has been canceled. Japan is one of those countries whose people, like the people of the US, that one can go broke shorting. The governments are another matter.

I am a huge fan of Asian cities, and Hong Kong is one my favorites. It makes NYC look like a sleepy hick town. I miss the thrill of landing among the skyscrapers right on Victoria Harbor back in the days before the new airport was built outside the city. But the efficiency of the newer airport, such as the 10 minute total time required to get through passport check and security, makes US airports like Kennedy in NY look positively 3rd world. More than 30 years of bad economic malfeasance by both political parties of the US really shows here.

At Hong Kong airport on my way to Taipei. With fewer meetings there I will have more time to report.

[Minion]

Re: Martenson: The Coming Rout

Greetings, Itulipers.

Here is the outlook from a pure trading standpoint. US Stocks have breached their trend line and are in retrace. Look at how it played out over the past year.....


Market Waves.JPG

[jpetr48]

Re: Martenson: The Coming Rout

Thanks for this chart.
Thank you Minion. Are you saying a correction like last year is close by?

My best guess which is all we can do in this world, >50% probability we will have a retest of last weeks low and maybe a lower low this week- followed by a nice rebound retest of last high
Other than that a correction like last year is still months off.

[FRED]

Re: Martenson: The Coming Rout

Greetings, Itulipers.

Here is the outlook from a pure trading standpoint. US Stocks have breached their trend line and are in retrace. Look at how it played out over the past year.....


[ATTACH=CONFIG]3811[/ATTACH]

The chart by itself is meaningless. Unless you can point to postings that document each sell and buy indicated and the theory behind each, then the chart means nothing.

[Minion]

Re: Martenson: The Coming Rout

The chart by itself is meaningless. Unless you can point to postings that document each sell and buy indicated and the theory behind each, then the chart means nothing.

..... to you, perhaps. To emotionless traders (and yes, I do mean automations, as many exist in the market), the pattern is clear.

However, I'm not here to claim glory for past postings, but to highlight the pattern that has played out before, which is in the early stages again.

[flintlock]

Re: Martenson: The Coming Rout

Someday when your done giving your money away, you'll realize that the market is always right. This is not the same thing as the Efficient Market Hypothesis.
I'd elaberate but it'd waste both our time and my patience as you're not yet ready to learn.

??????????????

Why the hostility? All I was saying is that the market may seem irrational to people at times, but its THEY who are. If anything I was agreeing with you.

[Minion]

Re: Martenson: The Coming Rout

The chart by itself is meaningless. Unless you can point to postings that document each sell and buy indicated and the theory behind each, then the chart means nothing.

Here is the longer term look at the same technique. Breakouts would have gotten you in / out of the market at very opportune times indeed.

The difference between an economist and a trader is the economist asks why, the traders asks how...... to extract profit (or prevent losses) from the resulting disturbance.

market waves 2.JPG

[FRED]

Re: Martenson: The Coming Rout

Here is the longer term look at the same technique. Breakouts would have gotten you in / out of the market at very opportune times indeed.

The difference between an economist and a trader is the economist asks why, the traders asks how...... to extract profit (or prevent losses) from the resulting disturbance.

[ATTACH=CONFIG]3812[/ATTACH]

I call bullshit. I don't see the references to the pages where the calls were made before event, only after. In also smell spam.

[Minion]

Re: Martenson: The Coming Rout

I call bullshit. I don't see the references to the pages where the calls were made before event, only after. In also smell spam.

It's called backtesting a trading system. This post will serve as my first call, in public, as to what will happen next:

The major indices will continue down for the next two weeks, minimum, unless the trend line drawn above the latest correction is breached.

I take your response as a compliment of the highest order - one only to be received by taking a stance contrary the beacons of the financial establishment who trust conventional analysis.

Another way of saying it: if everyone did this, it wouldn't work any more. Traders (the precious minority who win consistently), by definition must stand alone, against the crowd.

And I say sell the retracement with both hands!

[Master Shake]

Re: Martenson: The Coming Rout

It's called backtesting a trading system. This post will serve as my first call, in public, as to what will happen next:

The major indices will continue down for the next two weeks, minimum, unless the trend line drawn above the latest correction is breached.

I take your response as a compliment of the highest order - one only to be received by taking a stance contrary the beacons of the financial establishment who trust conventional analysis.

Another way of saying it: if everyone did this, it wouldn't work any more. Traders (the precious minority who win consistently), by definition must stand alone, against the crowd.

And I say sell the retracement with both hands!

Please don't let Fred or anyone else bully you into leaving. Additional investing information is always appreciated. Just don't start talking about astrology or endtimes.

[jpetr48]

Re: Martenson: The Coming Rout

Minion - A retracement and retest of prior low will provide greater rebound and strength. If we break below 1240-1250 then watch out below. Next support will be around 1100 which will give us a 15- 20% correction.

Are you saying market is setup for 20-30% correction? My point and figure charting says your call for a significant correction is off. Besides looking at charting, I suggest you look at sentiment and macro factors. A study done by sentimenttrader.com shows spy performance after 50 day low with six month high during bull market is - 3.5%, though 2 went well beyond loss of 3.5%. Your scenario is a low probability scenario. His backtesting is to 1997. How about yours?

[Minion]

Re: Martenson: The Coming Rout

The beauty of the markets is that I can disagree with you, and you can disagree with me. We take our positions. The market moves. One of us wins.

By the way, I've already spent months looking at sentiment, oscillators, capital flow potential (this is the big driver), etc. etc. Most analysts can't trade.

[jpetr48]

Re: Martenson: The Coming Rout

Best to you

BTW- I am not a short term trader- 50% cash, precious metals (GLD, CEF), energy and high income producing assets.
Know your audience

[LargoWinch]

Re: Martenson: The Coming Rout

I call bullshit.

Exactly. Let me pull out any chart and add some colored dots on it: one color for bottoms and one color for tops and provide all the internets with "a forecast"?

Bwah, forget this, I have better things to do.

[charliebrown]

Re: Martenson: The Coming Rout

you can enlighten me. I'm always interested in hearing others points of view.

I think Warren buffet would argue with you.
I do not grant him diety status that most do but he does have his points.
Why was it that EJ was able to warn people out of internet stocks?
Why was it that people were buying pets.com when the company lost money on every sale?
Why do people say the markets are driven by fear and greed?
Why did EWJ tank last week, and bounce right back?

I think that over the long term stocks are driven by fundamentals. When valuations are way out of whack with fundamentals, at some point they will correct. I have not been great at timing this and have had my lunch eaten, on shorting several times, as I found out that an over-valued stock can become more over-valued.
I now use fundamental analysis to tweak asset allocation instead of shorting.

I don't know who said it first, but I believe that stocks valuation should be driven by the present value of future cashflows availble to investors. I know this is a very hard thing to predict, but one can use historical norms to get a handle on it.

Thanks.
CB