Bill, some time ago (2004 or 2005) I read that the University of Michigan Sentiment survey was sold to large trading firms in advance of its release. Does anyone know if this practice was stopped?

If it wasn't, then I might suspect that those "in the know" might have been pushing a market ramp during the past few days in order to distribute their holdings in advance of this number...

ECRI weekly leading index (WLI) growth rate just in at -1.4%, which is quite a drop from last week's -0.4%. These are the first two negative readings this year and imply a continuing of the economic slowdown through the end of the year or early next year. A string of negative values lasting a few months would imply that a recession is on our doorstep. Stay tuned.

If we are entering a slowdown period, which is evidenced by the $tnx, then won't we experience deflation as inventories are offloaded? I notice a spike down in inflation on the ECRI Fig corresponding to recessions. The spike won't go as far this time given the relative stagflation.. but nonetheless, is it plausible that relatively speaking, we're leaving the inflationary part of the business cycle.. thus accomodating lower dollar and lower gold?

it's funny you say that, claude. i was just looking at a long term monthly chart on the TNX trying to figure out if it was giving away clues on direction of yields coming up.

i read where there is a record long position in the ten year note according to the commitment of traders data. the long position is held by the specs, not the commercials so when that turns, it'll turn hard. i wouldn't want to be long the ten year right now.

short term, a bunch of the gold stocks look like they might be kind of oversold by tuesday or so of next week.

market-wise, it feels like we have all the earmarks of a day where the current portion of this rally stalls out - transports down, naz staying red, a friday where flush longs want to take stuff off the table so they can go to the beach in peace. i'm still wary of pushes to the upside here over the next couple of days but i think the easier trade coming up is the short trade.

Ford to cut 4th Q production by 21% of last years 4th Q production citing foreign competition among other things. Bet those workers would like to see a lower $usd.

The US Treasury will see lower tax receipts from this type of action and if a lower $usd will help, well...why not?

Bottom line, inflation and deflation are intertwined, buy gold.

this may seem stupid, perhaps borderline touchy feely group hug type of sharing but it's a slow friday afternoon in august.

if anybody has time, what are the two or three technical indicators that you use the most? what indicators do you need for your trading?

my top two are r.s.i. and stochastics. i use others but they're the top two.

if you're interested, thanks. i'd love to learn something today while i watch my puts and feel the constant threat of time decay.

Top 2 indictors?

I have to agree since I am short-term I also use RSI(paying particular attention to intermarket divergences - eg: the OIX is diverging but S&P isn't etc...) and I also use the stoch...

I have also been experimenting with this combo:

Pring KST
and PLDOT

I use 4 different settings for the Pring KST.
If all four KST's give a go-ahead AND the PLDOT is rising - I use this as a signal to carry a day trade (or continue with a position trade) overnight. Otherwise I close the day trade.

tradesman

see...now it wasn't so hard to share a little bit, was it?

are the pring kst and pldot propietary or can i look at them somewhere out in the blogosphere?

thx

mtzion:

Although I use RSI, here are some other tools helping me through this waiting period for the Year of the Metals to look skyward:

1. Actual experienced price factors encountered i.e.highs/lows of stocks owned and followed since May 10, 2006 as a piece of the puzzle to buy or sell.

2. For gold/GLD: when it drops over $10 and settles briefly I buy considering this a dip.

Not very scientific but I'm holding my own since the BEAR began.

cnote, i agree. price points are really important. points at which the security has previously reversed direction and how the security reacts each time it encounters those price levels. i definitely pay a lot of attention to these points and particuarly what kind of field position stochastics and r.s.i. are when these points are approached.

thx

sure...

here's a link for KST
http://www.pring.com/kstformulas.htm

I set up a short term KST and a long term KST. Then I create another 2 indicators which are the same as the 2 above but I offset them by 1 - giving a total of four indicators.

Rather then plot them on charts (as there would be too many lines) - I just plot horizontal bars giving them one colour if above 0 and another if below. If all four bars are above 0 (the same colour) - the momentum is up across multuple time frames - and likely to continue the next day.

It's basically just an "ROC combo" to look at the momentum back across different time periods.

--

As for the PLDOT - I should have clarified - I don't use the system - just one component of it:
a 3-day simple moving average of (H+L+C)

--

All this is discretionary of course... but it builds my confidence in staying with a trade.

---

Market has a pesky bullishness about it today.
Perhaps the bulls have used up all their bullets?

-- tradesman

.. in my last post the PLDOT moving average should have read

(H+L+C) / 3

NOT (H+L+C)

.. tradesman

tradesman,

i'm going to take a look at those indicators.

on the market, yeah. somedays, you reach a point in the afternoon where if they haven't cracked it one way, they're going to crack it the other.

we lost our intraday overbought on the hourly charts and the market didn't give up much ground but the daily stochastics i use say we're in a topping out area. i intend to add to puts but i am probably going to wait until monday.

the trouble with anticipating a turn is that overbought can stay overbought longer than i think, especially after coming off of a hard sell-off.

Mtzion,

I think risk/reward favors the short side but will wait until upside momentum deteriorates.

Buy weakness and sell strength but selling into momentum is risky.

khan, you're right. it's a mistake i make a lot. i jump the gun. i can think it's overbought all i want but price and time are funny things.

Regarding the original topic, the consumer confidence poll, it seems to be a fairly meaningless number when compared to actual consumer behavior. I don't know why anyone makes a big deal of it. It's just one more data point in a largely random stream of questionable "information."