|
#1
|
|||
|
|||
Dow Theory Confirmed SELL signal today
As I have said in the past that I am not a big proponent of the Dow Theory(IMO I feel it is WAAAAY too late of a signal)
There have been many posters discussing the DOW THEORY of late.......and with todays avalanche type close (after attempting to once again rally) a SELL SIGNAL was confirmed as NEW lows in the DJ Industrials and Transports were BOTH confirmed simultaneously Any thoughts guys? Stephen |
#2
|
|||
|
|||
Re: Dow Theory Confirmed SELL signal today
awesome theory when you know to sell when everything is just begining to look cheap. All im gonna say is I wish bought more sp puts back in october. I sold them though and am gonna rebuy before the next fed meeting as I really feel they will not cut rates. When that happens get ready for 300 pt drop. Ill either do it the day before the meeting or into the next rally.
|
#3
|
|||
|
|||
Re: Dow Theory Confirmed SELL signal today
If its a sell theory today, thats hilarious. Wouldn't that put your net gain for the year at 0%?
|
#4
|
|||
|
|||
Re: Dow Theory Confirmed SELL signal today
Year ain't over yet. A short position may pay off nicely by Dec 31.
|
#5
|
|||
|
|||
Re: Dow Theory Confirmed SELL signal today
[ QUOTE ]
If its a sell theory today, thats hilarious. Wouldn't that put your net gain for the year at 0%? [/ QUOTE ] As of now YES....and thats why IMO I feel the Dow Theory is WAAAAAY too late of a signal.But I also wouldnt be surprised to see some parabolic short covering RALLY into the New Year either at some time in the next few weeks......for more reasons than one [img]/images/graemlins/smirk.gif[/img] Stephen |
#6
|
|||
|
|||
Re: Dow Theory Confirmed SELL signal today
[ QUOTE ]
If its a sell theory today, thats hilarious. Wouldn't that put your net gain for the year at 0%? [/ QUOTE ] The sell signal is more for insurance so that you don't get caught in a sharp downturn. In the 1929 Crash, most of the "experts" thought the first 15% drop was just a correction. When all was said and done, the dow dropped 89%. The people who didn't get wiped out were the ones who set an arbitrary sell point, and got out before the real carnage. |
#7
|
|||
|
|||
Re: Dow Theory Confirmed SELL signal today
[ QUOTE ]
[ QUOTE ] If its a sell theory today, thats hilarious. Wouldn't that put your net gain for the year at 0%? [/ QUOTE ] The sell signal is more for insurance so that you don't get caught in a sharp downturn. In the 1929 Crash, most of the "experts" thought the first 15% drop was just a correction. When all was said and done, the dow dropped 89%. The people who didn't get wiped out were the ones who set an arbitrary sell point, and got out before the real carnage. [/ QUOTE ] There was ONE major distinction from 1929- present time though.....as back then you could buy stocks with 10% down. With many market participants being 90% MARGINED..... the severity/intensity of the crash was inevitable SF |
#8
|
|||
|
|||
Re: Dow Theory Confirmed SELL signal today
[ QUOTE ]
If its a sell theory today, thats hilarious. Wouldn't that put your net gain for the year at 0%? [/ QUOTE ] don't forget to factor in the devaluation of the dollar. anyone in the sp500 has lost 10% in purchasing power YTD. |
#9
|
|||
|
|||
Re: Dow Theory Confirmed SELL signal today
[ QUOTE ]
awesome theory when you know to sell when everything is just begining to look cheap. All im gonna say is I wish bought more sp puts back in october. I sold them though and am gonna rebuy before the next fed meeting as I really feel they will not cut rates. When that happens get ready for 300 pt drop. Ill either do it the day before the meeting or into the next rally. [/ QUOTE ] i've learned something in these past few attempts at guaging the fed. do not underestimate the fed's willingness to cut rates. inflation expectations have been well anchored and the fed i think will continue to test them. id expect a cut and further expect the fed to (arguably justifiably) state the reason as tightening credit conditions and the likely ensuing hit to consumer spending. exports = 12% GDP. spending = 70%GDP. so a 10% drop in spending hurts more than a 50% increase in exports helps. many studies estimate the following relationships: a $100 fall in financial welath reduces consumer spending $3-$5 and acts very quickly (no lag, same quarter affect) a $100 fall in housing prices reduces consumer spending $4-$9 and takes a long time to work through the system (long lag) basically this means that housing will be a significant drag on the economy in all likelihood while at the same time, falling asset values could hurt spending even more which could produce a 10% overall drop in spending, which would in effect take at least a full point off of GDP. given all that i'd thinkt he fed could justify further cuts. Barron |
#10
|
|||
|
|||
Re: Dow Theory Confirmed SELL signal today
Could be. I doubt it helps much of anything. The pop will likely be short-lived, as people do their tax-loss selling into it. Shorts that have been covering are looking for a pop to reload into.
|
|
|