Bullish Information

[Jim Nickerson]

Re: Bullish Information Re: Richard Russell

I suppose what I post either here or in the Bearish thread is someway related to my own estimate of the market.

There has been no many bearish articles in the past month, I'm tired of seeing them.

I'm not stuck on anything Russell writes as approaching what may be the coming reality, but one thing about Russell is he seems to stick rather much to interpretation of the data from the market as he often says one should in effect "listen to the market." The market "knows" everything.

Friday 8/24 he wrote:

C, BAC, LEH, WFC, and JPM were all on the most active list and all were up -- bullish.

The VIX was down 1.90 to 20.72 and clearly has topped out. Bullish.

CONCLUSION-- The market action today was excellent with the single exception of volume which could have been higher. Of course, you always like stocks rising on expanding volume. My take on volume is that most people are skeptical of this market's rise and are therefore holding back. They can't believe that the market can advance in the face of bad news. Sure reminds me of 1957.

Upside over downside volume was very bullish as was the PTI action. My PTI never turned bearish on all the recent weakness. That didn't appear rationale at the time, but as I've said so often, "my PTI is smarter than I am."

I agree with Russell about the poor volume. Friday's NYSE volume was 6.1 on a scale of 0-100 dating back to 4/5/04, and the week's volume 19.2 on same scale and period. It's possible Russell's explanation suffices to account for the poor volume: "My take on volume is that most people are skeptical of this market's rise and are therefore holding back."

8/17/07 was a +90% up day on the NYSE in volume and points, and thus a -Paul Desmond buy signal as I chose to interpret it. Friday, just passed, was +96% up in points and +84% up in volume--thus a rather strong day, but not meeting the definition of Desmond for "panic buying." Incidentally, Desmond never mentioned the importance of high volume as to it offering any additional validity to his 90% up day buy signals.

Russell's PTI--Primary Trend Indicator--is his proprietary indicator so no one knows what it measures. I have to take Russell's assessment that its remaining bullish during the recent pull-back seems important.

Russell has mentioned a number of times over recent weeks that there is something about the current market's behavior that reminds him of 1957, and I don't recall he has opined as to why this is so. As well as I can tell from old charts, the DJI went up and topped in August and then dropped precipitously into October, 1957--spurred in part by the launch of Sputnik--I remember that, but at 16 was paying no attention to the markets. According to http://indexes.dowjones.com/mdsidx/i...=1950#dowdiary a recession was in effect after the DJI topped and continued for 9 months.

So I conclude Russell is interpreting the recent market action off the lows of 8/16 as bullish, but at the same time he refers to a market that topped out in the same monthly time-frame in 1957, and that was a very significant top.

[Jim Nickerson]

Re: Bullish Information Re. Richard Russell

http://ww1.dowtheoryletters.com/ Subscription required.

Using stocharts.com $BPNYA Russell comments on 8/22/07

Take a look at the chart below, if you will. It's a daily chart of the Bullish Percentage (BP) of the stocks on the NYSE. This is a very basic but little watched study. I check it every day.

On July 19 the BP was 70.77%. In other words, seven out of every ten stocks on the NYSE were in bull trends. From there the percentage deteriorated. By August 1 the BP has declined to 47.71%. By August 10 the BP was 41.93%. August 15 it was 37.31%. The plunge continued. The low was struck on August 16 at 30.99%.

August 17 and the BP reversed to the upside to 36.51%. August 20 at 37.26%. And yesterday, August 21, the BP advanced to 38.10%. [Today it was 40.89.]

So yes, the study is on the rise -- as of yesterday, 38 out of every 100 stocks on the NYSE were in bullish trends. Now what I'm watching is whether the August 16 low of 30.99% was the bottom or whether the BP is going to sink even lower. Because if August 16's low of 30.99% holds, that would be extremely significant -- and bullish. I'll be monitoring this study day by day with great interest. Of course, the bullish signal will come if the BP rallies above 50%. At over 50%, the market see-saw tips to the upside -- and that's a huge plus.

He goes on with his analysis

I'm now fixated on whether the stock market on August 16 might have discounted the worst that can be seen ahead -- or whether the market will be heading lower -- possibly into the September-October-November framework. Normally, when the stock market tops out in mid-year (in the current case in July) the decline tends to carry on into the fourth quarter. And I believe that's the general expectation among the traders and professionals at this point.

But it doesn't have to happen that way. For instance, my PTI has been holding stubbornly in bullish territory, and frankly, I'm as surprised by the PTI's action as you are. And other studies that I've talked about remains bullish. So we'll take it day by day and keep an open mind. As I've said so often, we're dealing with the stock market's reaction to a slew of rotten news. And so far, I'd have to call the stock market's action -- just plain bullish.

CONCLUSION-- What did I think of today's action? Here's what I thought of it -- I bought Diamonds (DIA) which is an ETF for the Dow. That should answer your question.

Emphasis is Russell's

[Jim Nickerson]

Re: Bullish Information

http://www.safehaven.com/article-8244.htm

August 22, 2007
Anatomy of a Bottom
by Puru Saxena

Saxena covers seven reasons he/she thinks the markets have put in a bottom last week.

In my view, the above data combined with the prevailing negative sentiment is screaming a "MAJOR BOTTOM". Investors are advised to accumulate major positions in resources (miners, energy stocks, uranium stocks, precious metals stocks) and the emerging markets during this widespread doom and gloom. After some additional consolidation and a re-test of last week's lows the advance should resume.

I tend to agree with Saxena about the possibility of a bottom--whether the places Saxena suggested to invest are best, I don't know. The questions for me are will there be retest of the recent lows, and if this turns out to have been a bottom, how long will the market rally? I don't know.

[Jim Nickerson]

Re: Bullish Information

Jim, I thought you were retired? How can you take a vacation from retirement?

But what I meant about "vacation" was a vacation from itulip, from computers, from the internet. Unplug for a weekend, or at least a day for starters. Maybe go fishing? Somewhere where your cell phone doesn't even get reception.

just a suggestion.

DemonD,

When I was 30, I was a resident. It was not until I was 38 that I first became acquainted with computers--about 1979. I suppose you grew up with computers, and whereas I in my wildest expectations could at most have 34 more years to screw with computers, the internet, and whatever else might evolve, you in your wildest dreams at most may have 70 more years to screw with these same innovations.

When I worked, for most years 12 hour days including reading and preparation for cases to be operated were not uncommon. I figured by the time I had practiced 25 years it equated to 37 for those of my professional ilk who were truly laid-back.

Already, I am retired for 13-14 years and during this time I've done most things I never got to do when I worked--because working to me meant working. Actually there are damned few things now that I enjoy in the way of entertainment or social activity, because I have done all that seemed interesting to me.

What I like about trying to be an investor is the challenge, and that today it is possible to do so without much face-to-face contact with anyone. The internet provides about as much social contact as I desire with a few exceptions. I don't pay attention to investing totally because I have to, but moreso because I do enjoy it.

Don't worry about me and a cell phone because I don't own one and probably never will. Wife has one.

Probably during your lifetime you will have spent much more time screwing with computers than I will have.

Plus if I did not visit iTulip everyday, those days would be days without sunshine, and I would have no potential feel of the what seemingly concerns those who post on iTulip.

[lb]

Re: Bullish Information Re. Another Nickerson observation.

I am on vacation now for 4 weeks with 5 to go. DemonD, 30 is young and I consider you way, way, way ahead of the curve as to where I was at your age. I didn't even know there were curves.

30 is the new 40. My curves keep growing

[DemonD]

Re: Bullish Information

Jim, I thought you were retired? How can you take a vacation from retirement?

But what I meant about "vacation" was a vacation from itulip, from computers, from the internet. Unplug for a weekend, or at least a day for starters. Maybe go fishing? Somewhere where your cell phone doesn't even get reception.

just a suggestion.

[Jim Nickerson]

Re: Bullish Information Re. Another Nickerson observation.

Jim, as a "young guy" (is 30 still young?!?), I don't feel like I've missed the Ka. I think it's probably going on right now, and we've got more to the downside as more and more companies and hedge funds cannot service their debt and margin calls. I've seen too many statements from loan and banking industry people claiming this is the "tip of the iceberg" that I'm inclined to believe what EJ has said... that risk is polluted systemically.

So you can count me among the bearish, with my actions backing up my words.

One more thing jimbo: Take a vacation man! Go outside, ride a bike, take a walk, a hike, get drunk, take your wife to a movie or something. As much as I love learning about money and finance and using this knowledge to increase my personal wealth, it can skew your perspective staying on the computer all day.

Starting a week from today I'll be off-line for a week, I'll be in a place where money - be it gold, paper dollars, numbers in a bank account - have absolutely no value. Now I'm not saying you should join a commune or something, but even the most internet- and tech-loving among us know that we need to unplug ourselves. Even if it is in the self-interest of learning more about finance and the economy. Like maybe you can go to Disneyworld, and just see who's going there nowadays or something. Are there as many Germans in orlando as there were in the Canyons of AZ and UT?

Maybe take some of your increased wealth from t-bills or whatever and buy a super spiffy tent and go camping. Just don't lose sight of the forest because you can't see through the trees!

I am on vacation now for 4 weeks with 5 to go. DemonD, 30 is young and I consider you way, way, way ahead of the curve as to where I was at your age. I didn't even know there were curves.

[DemonD]

Re: Bullish Information Re. Another Nickerson observation.

I probably have read iTulip everyday for the last 16 months, and based on "feel" and perhaps poor recollection, I would say in the past week to 10 days there has never been as much bearishness on the site as in this time.

With regard to MM funds there might have been some panic even when there has been no serious evidence of money market funds being in trouble so far.

Some, seemingly young, guys have been worrying they have missed the Ka, and what to do about the Poom? I have "felt" a certain amount of serious worry.

I think there has been a peak--so far--here in bearishness.

Jim, as a "young guy" (is 30 still young?!?), I don't feel like I've missed the Ka. I think it's probably going on right now, and we've got more to the downside as more and more companies and hedge funds cannot service their debt and margin calls. I've seen too many statements from loan and banking industry people claiming this is the "tip of the iceberg" that I'm inclined to believe what EJ has said... that risk is polluted systemically.

So you can count me among the bearish, with my actions backing up my words.

One more thing jimbo: Take a vacation man! Go outside, ride a bike, take a walk, a hike, get drunk, take your wife to a movie or something. As much as I love learning about money and finance and using this knowledge to increase my personal wealth, it can skew your perspective staying on the computer all day.

Starting a week from today I'll be off-line for a week, I'll be in a place where money - be it gold, paper dollars, numbers in a bank account - have absolutely no value. Now I'm not saying you should join a commune or something, but even the most internet- and tech-loving among us know that we need to unplug ourselves. Even if it is in the self-interest of learning more about finance and the economy. Like maybe you can go to Disneyworld, and just see who's going there nowadays or something. Are there as many Germans in orlando as there were in the Canyons of AZ and UT?

Maybe take some of your increased wealth from t-bills or whatever and buy a super spiffy tent and go camping. Just don't lose sight of the forest because you can't see through the trees!

[friendly_jacek]

Re: Bullish Information

duh. i thought the idea was to buy low and sell high. thus if the dow is higher, shouldn't a useful buy/sell indicator be lower? i.e. you want an indicator to tell you to sell as the price gets higher. hulbert apparently admires those "analysts" who downgrade a stock after it's dropped 50%.

HSNSI is a contrarian indicator. Remember, smart money is the opposite of dumb money. 85% of market players are dumb money. HSNSI is the indication where the herd is going. So, if the herd in now extremely selling , smart money should be buying. The only problem is if this is a beginning of big recession, buying may not smart (long term).

[Jim Nickerson]

Re: Bullish Information

duh. i thought the idea was to buy low and sell high. thus if the dow is higher, shouldn't a useful buy/sell indicator be lower? i.e. you want an indicator to tell you to sell as the price gets higher. hulbert apparently admires those "analysts" who downgrade a stock after it's dropped 50%.

I took his point to be that after the recent highs, once the markets fell away from them, there was no persistence of bullishness. It seems to be his opinion that a significant top will be marked by persistent bullishness amongst the newsletter writers even as the markets decline, and since that has not yet occurred, a "final" top still lies ahead.

[jk]

Re: Bullish Information

Yet, despite the HSNSI being so much lower now than then, the Dow Jones Industrial Average is nearly 800 points higher.

duh. i thought the idea was to buy low and sell high. thus if the dow is higher, shouldn't a useful buy/sell indicator be lower? i.e. you want an indicator to tell you to sell as the price gets higher. hulbert apparently admires those "analysts" who downgrade a stock after it's dropped 50%.

[bart]

Re: Bullish Information

Bart, it seems that a week or so ago you expressed some bullish sentiment that the market run-up was not done, and I believe I agreed with you--I have no vague recollection of which thread. Right now I still think the equity market's runs up are not done--how high? I have no idea.

Do you have an opinion?

I do have an opinion of course... :eek: ... and it remains the same. There's still a bounce or two left... but my real answer is that I mostly remain on the side in stock markets. It has more to do with the whipsawing and wild volatility not being compatible with futures and my style than anything else.

Lately I've only been trading yen, soybeans and natural gas... and am only holding a natural gas long right now.

[Jim Nickerson]

Re: Bullish Information

Indeed - it does tend to lead.

Good point, f-j, and very nice confirmation, Bart.

Bart, it seems that a week or so ago you expressed some bullish sentiment that the market run-up was not done, and I believe I agreed with you--I have no vague recollection of which thread. Right now I still think the equity market's runs up are not done--how high? I have no idea.

Do you have an opinion?

[bart]

Re: Bullish Information

Check the shape of Baltic Exchange Dry Index (BDI).
Note, this is a leading and not lagging indicator:
http://www.investmenttools.com/futur..._dry_index.htm

Indeed - it does tend to lead.

[friendly_jacek]

Re: Bullish Information

Check the shape of Baltic Exchange Dry Index (BDI).
Note, this is a leading and not lagging indicator:
http://www.investmenttools.com/futur..._dry_index.htm