Bill Cara’s Blog for Oct 22, 2012
CTA Trading Desk Morning Report
[7:00am ET] Good morning.
There were an awful lot of negative opinions in my mailbox today. Don’t fully understand why. I am standing by my views expressed Sunday morning in the WIR, and I can see that Europe’s banks and miners are doing well this morning.
This was an interesting article by Reuters today in which the sentiment among wealthy clients is that the typical risk-averse portfolio manager is being shunned by wealthy clients who want them to be more aggressive.
Actually all I think has happened is that clients want index-beating results and that doing so has meant being quick to get in on break-outs and quick to get out on break-downs, which of course is a tactic of computer-based momentum oriented traders — the very thing that those same clients deplored five years ago.
The problem with the latter, as I see it, is that regulators are far too slow to catch the manipulations of long/short trading syndicates. Today there are bull and bear raids that have been executed with military precision complete with paid for media coverage, and the regulators appear clueless to such shenanigans.
Good morning, Geoff here.
The downward pressure that the US Dollar’s rally has exerted on stocks and commodities should be released this week or next. This is healthy behavior because sentiment must be reset and a decline does just that. Truth be told, I would like to see; recent support levels fail, markets drop, sentiment and technical indicators work towards oversold and then I would be more comfortable getting long. We shall see if continued poor earnings can create that environment.
We are bullish stocks and commodities but saw the near term weakness and have lightened up on positions. Once time OR price works off the overbought conditions, a market rise will be easier. This weakness is corresponding to strength in the Dollar that needed to happen also. The stars are starting to align for the bulls, but one last shake out may be in the cards this week or next.
Gold chart with expectations (working beautifully) first posted on October 12th:
The e-mails that Bill received regarding the market are exactly what I am talking about with regards to sentiment. This time of year, people get nervous about getting caught in a down draft, which I understand. What they are missing in their analysis is time.
As you can see in both the Daily and Weekly SPX charts below, we are in the timing band for tradable bottoms in both time series with the more important one being the Weekly because we can expect a multi-month run that should be very profitable.
It is going to get real exciting, real fast.
Have a great trading day!
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
|Symbol||Name||Last Trade||Change||Related Info|
||7.97 (0.36%)||Components, Chart, More|
||6.50 (0.27%)||Components, Chart, More|
||8.09 (0.23%)||Components, Chart, More|
||0.50 (0.01%)||Components, Chart, More|
||1.03 (0.31%)||Components, Chart, More|
|^OSEAX||OSE All Share||493.61
||0.95 (0.19%)||Components, Chart, More|
||2.63 (0.80%)||Components, Chart, More|
||8.33 (0.12%)||Components, Chart, More|
||5.41 (0.09%)||Components, Chart, More|
||1.46 (0.15%)||Chart, More|
||12.05 (0.83%)||Chart, More|
|GD.AT||Athex Composite Share Price Index||893.60
||22.96 (2.64%)||Chart, More|
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.