Friday, March 30, 2012

Structural Update - March 30, 2012

Over the last 2 weeks, market has been going sideways but no sell signal was generated. After analyzing the data, and the fact that we are in the later half of the turn window, it seems like we are about to start rallying for the next week or two.

Following chart shows the immediate market structure and highlights the fact that we have almost completed second wave down (of the last rally phase). This will be followed by a powerful rally. In case, market (SP500) manages to decline below 1380, then it would mean that we have already topped for the intermediate term.

In the broader scheme of things, market is in the later stages of the uptrend, which could last for another 2-3 weeks. Furthermore, right now the optimism is not very elevated to signal an immediate market collapse.


  1. Thanks Naqvi, The top half of your analysis seems to show a greater probability that the market will rally strong into earnings, and the bottom half is saying that there is a greater probablilty that after we get into earnings, the rally may start to stumble. The thing I wonder is that the rally since October has been so strong that shouldn't the summer pullback be pretty violent? Any insights anyone?


  2. Brad - if you are like me (from what I read, you are probably a bit more thoughtful than me), you have been doing as much research as possible...investing in various TA (technical analysis) sites and learning as much as possible how past performance dictates future action. When you finally take a moment to look at things, you find out that the market may go up, or it may go down. All this analysis means nothing with so much "created money" in the background. The fact that you (and I) have missed this entire rally (a huge rally at that) leaves little room for error if you try and enter now. How 2012 ends higher than 1400 on the S&P I have no idea, so it looks like I am chasing fumes if I enter to the long side....however, entering the short side is a fools game with all of this market manipulation. Plus, with all of the HFT's out there and the computers with their "algo's", they are looking to push out anyone on any kind of news, so unless you buy and check back in months, there is almost no way to hold for any length of time with any type of intellectual thesis.
    Until the Fed, ECB, Japan and all the other world banks stop printing money, I am not going to be involved. This may take a few years. I have since started buying real estate (San Francisco area has some incredible deals) and have left the markets in my rear view mirror. My days have been happier, my nights full of restful sleep and the stress has finally subsided. Not being part of this last rally felt like I let my family down by not increasing my portfolio, but it turns out that was an unfair burden I placed on myself considering how much corruption and BS goes into this market. Did you realize the unemployment report every Thursday has been revised higher every single week for at least the last 12 months? Every single week?! That is just not fair when anything can be changed and revised higher without any accountability. Not a place I want my money. -Mike


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