BATS:DIA   SPDR DOW JONES INDUSTRIAL AVERAGE ETF
1176 23 9
This is a purely technical guesstimate for how the market will advance given the pschological, sentiment, monetary, economic environment as I analyze it. The waves are just guesses based on market reactions to visible support and resistance levels. I "saved" this yesterday with the DIA             at 128 and now with the market back up to 129.70, it appears that the support level down at 124-120 appears solid and it shouldn't be tested for at least another 10 weeks.

The important element of this chart is the amount of time that has been spent prior to the breakout rally. The more time and accumulation, the bigger and longer lasting the rally. All the while, even though VIX             has been low indicating complacency, equity mutual fund outflows have been strong which continues to show fear. Now that we are one day into earnings reporting season and the trend is positive.

Cheers. Technical Tim April 12, 2012 3:59PM EST

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timwest PRO
4 years ago
It looks like the market is doing what it knows how to do best - to move in such a way to confuse as many people as possible. The level of certainty seems rather high now that the market is going down, but all it has done is to come back to a key level of support where there are 26+ weeks of time where there is "value" in the market. T-Bonds and fixed income investments are at extremely high levels and enormous wealth is built up in the bond market, but it is hiding in that market, fearful that the economy will forever decline and sputter. If the economy does have an upturn, then bonds decline dramatically and stocks advance dramatically. What risk do you want to have in your portfolio? That is the important question. The market has really suffered in the eyes of foreign investors because the Dollar has declined lately also. This adds fuel to the fire in the selloff, but what has also sold off is crude oil and that creates support. When Oil goes up, stocks are soon to follow that signal and head down (and vice-versa, Oil-down, stocks-soon up).
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timwest PRO timwest
4 years ago
The market has held the support level listed and is lifting strongly this morning despite the 10AM release of weakening consumer confidence. The market has likely built a tremendous amount of cash and has absorbed the mutual fund liquidations and momentum trader selling. The heavy level of insider buying is a positive as well as the overall valuation of the market in terms of earnings and dividend yields might just provide enough support to slowly win over the reluctant bulls. Remember the stock market is just a voting machine, not a weighing machine. The weight of stocks is determined by the underlying sales, earnings and dividends of the companies so that over time, the weight of the dividends paid out to you as a shareholder will yield a hefty return that far exceeds the return of buying and holding US Gov't bonds or other "principal risk-free" instruments.
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dimes timwest
4 years ago
by the the way I like your charts and your knowledge of intermarket analysis. I am not trying to disagree with you just wanted your opinion on it. Using Bond, currency, stocks, and commodities and intermarket analysis has really been the bread and butter of my trading approach.
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dimes timwest
4 years ago
How you doing Tim it is my experience with oil is that it is a leading indicator of a Rising stock market the more oil being used the stronger the economy. Your absolutely right eventually when the cost of oil rises it adds pressure on stocks and they fall. Since oil has been falling it is signaling a weaker economy and stocks followed.I guess were saying the same thing except I think at times when a market turns up oil usually leads.
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timwest PRO dimes
4 years ago
Overall, there are many ways to use oil to forecast the equity market. I've found that after large drops in oil that the stock market has great rallies. I used a great chart of this to demonstrate it to hundreds of people at presentations I have given over the past decade. Take a look at oil prices on a weekly chart going back to 1985 and look for the pattern in that time frame. Thanks for your comments, insights and questions. Perhaps I'll post a chart of what I am talking about here at Tradingview.
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dimes timwest
4 years ago
I Agree 100% Tim and I just wanted to make sure for my sake that we were coming to the same conclusion. I also love using oil/crude with a spx/usd chart and put them on a chart with the major oil producing(exporter) countries.Some of my most profitable trades Have been on some lesser traded pairs like the swedish nok, the mxn peso and a few others. Correlations With the s&p and the risk currencies are remarkable to me and do not know why more people do not use these as tools.
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dimes timwest
4 years ago
Any time the s&p and risk currencies diverge has given good warning signs to tighten up your risk. Just some thoughts I am relatively new at intermaket work and get really excited to talk about it. I know none of these relationships stay this way for ever and I am just sharing my thoughts and would appreciate some feed back. I really appreciate the Help.
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timwest PRO dimes
4 years ago
Feel free to post your thoughts and charts here so we can track some of your ideas. I have used intermarket analysis since 1988 so I've been at it for awhile. What is most important with any technique is that you are comfortable with the analysis and understand what the risk/reward implication is. Once you figure yourself out and what works for you, then you can make a nice living at trading. If you don't know what motivates you, how much risk you are taking, and how to deal with the losses that inevitably come from any risk-taking enterprise, then you will be weakest when the opportunities to make money are the greatest. Keep a journal of your trades. Attempt to persuade others of your idea so you can test the "thesis" and see if it makes sense before you take the trade, while the trade is on and after the trade is over. Learn yourself and keep learning everything you can. Cheers to you. Tim
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timwest PRO
4 years ago
This forecast is still on track. The fears in Europe are clearly keeping investors on the sidelines. The news out of China ignited an early rally which faded on concerns of Spanish banks. Remember, the price of crude oil was well over $100 and is now in the low $80's, a significant drop of 20% in the last quarter. This is an extremely supportive event. As soon as Obama sheds some light on his ideas for future tax policy and investment incentives, then the market could gain ground quickly. June 11, 2012 1:27PM EST 125.37 last.
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timwest PRO timwest
4 years ago
This forecast is still on-track and as you can see today, the news can drive prices up very quickly. Note that support held at 124-120 and also note that oil prices are low, which builds the bullish case over time. Lower oil prices generally translates into higher profits. The long term relationship between oil and stock prices suggests this to be true to me.
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timwest PRO
4 years ago
This forecast is still on track as of July 18th. The overall nervousness is palpable everywhere I go. Here are a list of the worries that are brought up in conversations: the elections, tax rates, the fiscal "CLIFF" from forced budgetary Gov't spending cutbacks, weakening earnings growth, poor economic reports (below estimates), powerlessness of the Fed, weak employment picture, Eurozone troubles, pundits forecasts for another bad bear market. Couple these comments with short term traders being "short S&P futures" and you have a situation where you have to ask yourself, who is left to sell? You do need sellers to drive the price at the margin down. Without sellers, the market can just sit and bobble around at this price for awhile until tensions are removed and those buyers (who are sitting in cash) move back into equities over time. This is the reason the market just muddles along. The biggest support for the market comes from the fact that oil prices dropped from 110 down to 80. Falling oil prices are a good harbinger of rising equity prices in the 3-9 months that follow a 20% drop. If someone wants to do that data crunching, it would be interesting to see the exact numbers. Cheers. Technical Tim Wed, 11:38AM EST July 18, 2012
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timwest PRO timwest
4 years ago
Here is the link for futures positions in the S&P http://nowandfutures.com/images/cot/SP.png
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timwest PRO
4 years ago
The market is still treading along the projected path from this forecast nearly 4 months ago.
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timwest PRO
4 years ago
This forecast is still grinding it out... trying to catch up to the more bullish forecast I laid out five months ago. Probably when we get the election behind us, then with some certainty about Gov't policy to deal with our fundamental deficit, together with spurring and incentivizing growth, there could be a bit more optimism by the time January rolls around.
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timwest PRO
4 years ago
Still going along track from 5 months ago...
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timwest PRO
3 years ago
It's time to make a new projection - this one has expired. Only 7 "likes" out of 794 views?
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timwest PRO
3 years ago
Ok. Now it is really time to make a new prediction. This recent rally has almost caught up to the projection from 8 months ago. The current rally is almost reminiscent of the 1987 launch in January, leading to a 22% gain by August of 1987. This rally has so many pluses and minus, that I would view choppy action going as the most likely outcome. Steady gains, followed by sharp reactions to shake out the weak longs. I view the downside risk as 10% and the upside potential at 5% from here (Feb 1st, 2013). Let me design another forecast... Cheers. Tim 11:49AM EST, Feb 1, 2013
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