Home > Daily Reading on the Financial Markets, Financial Ponzi, investing, Stock Market > Daily Reading on the Financial Markets: 12/24/11

Daily Reading on the Financial Markets: 12/24/11

I don’t expect to post tomorrow… so let me say, Merry Christmas and Happy Holidays!  Thanks to all of you who stop by now and again to see what’s posted.  Hopefully I find some decent reading material for you from time to time.

Scot Paltrow from Reuters on the rampant fraud and robo-signing practices of Big Banks, and the utter lack of prosecution by their enablers, errr, our “protectors”, i.e. law enforcement.  Barry Ritholtz comments on the article.

Tom Lauricella at WSJ points out that economic optimism is reaching (dangerously?) bullish levels.

Ace technical analyst Christ Kimble notes that both the S&P and VIX are test supporting/resistance.

My own article from SA noting how the VIX has collapsed while other markets are still flashing caution signs.

Doug Short’s updated charts for the ECRI Growth Index, which ticked slightly downward in its December 23 release.

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  1. December 24, 2011 at 11:45 am

    Hi Dave,

    I just want to say that I love your blog. Very insightful. Together with Chris KImble, I might be set for a long time.

    On another note, it looks like the S & P broke above its trendline off of the July 2011 highs, but looks to be right on its resistance trendline coming off of its April highs. Is one of these trendlines no longer valid?

    Has the S & P officially broken above resistance or do we have to be sure that the resistance line now can act as support? Probably the best confirmation would come from confirmation that a new upward trendline has formed. Any ideas?

    I am new to trend trading/analysis, but I find it simply fascinating.

    This year I used a simple system. I followed CCI, Wm%R, and Bollinger Bands to mark my exit and entry points. Also MACD would usually confirm move. On stockcharts, When CCI and Wm%R were brown I would buy once they just started turning up and then I would sell if they entered the green area and then crossed below the threshold. This means that I entered positions on 6 occasions this year and then exited 5 times YTD. I keep things simple by buying SPY on uptrends and TLT during downtrends.

    I am looking for more knowledge that I can add to my system. Trendlines are my next item.

    Thanks,
    Aaron

  2. December 24, 2011 at 11:46 am

    P.S. Your link to the Tom Lauricella send me to Chris Kimble’s site

  3. December 26, 2011 at 8:39 pm

    Aaron,

    Thanks for taking the time to comment and your kind words. The Lauricella link should now be fixed. As for Friday’s action, I agree that the S&P did close above the trendline. My tendency is to give it a little room for confirmation. So the behavior on Monday and Tuesday is pretty key. If it goes up another 10 points, then I would tend to view it as a breakout and the next stop in my mind would be the 1320-1340 area. If it pulls back under the trendline within the next day or two, I would tend to view the violation as an aberration. I’ll also be watching for confirmation from the currency & credit markets that equities can continue to rally. TLT started to break down on Friday, which is typically bullish for equities. On the other hand, VIX held strong on Friday as equities rallied. Tuesday should be interesting.

    Chris Kimble is fantastic. If ever he and I disagree, make sure you take his advice, not mine! I like your idea of using CCI, Wm%R and Bollinger Bands along with MACD to provide additional confirmation.

    I hope you had a Happy Holiday weekend, and hopefully 2012 is kind you!

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