 |
TigerSoft and Peerless Nightly Hotline (C) 2007 William Schmidt, Ph.D Book-Mark This Address 7/27/2007 Sell S9/S12 work in progress ================== Peerless: 1928-1966 Track Record of Major Peerless Signals Earlier Peerless-DJIA charts 7 Paths To Making 25+%/Yr Using TigerSoft New - Tiger-Blog: Humor and Political Economy ---------> ALWAYS Refresh THIS PAGE <----------- New Study 5/15/2007 - WHAT PREDICTS STOCKS UP MORE THAN 40% IN LAST MONTH? |
Operative Major signal(s) - Sell S9 and Sell S12.
Today's
decline after early gains is bearish... A close below 13200 would be an "S10".
Do not treat the quick return
today back to support as anything more than a continuation
of the fourth test.
There has to be 4-4 days at a minimum between tests for them to
be counted. The B2
signal shouwn yesterday was not correct. It only appeared in
the bullish mode. After
an S9 it is best to shift back to trading range mode or bearish
mode if there have been 3 or
more earlier S9/S12 clusters in the last 6-8 months
without an intervening DJI decline
of more than 10%.
More
later tonight.
The DJI has now tagged the lower band, but the simultaneous combination of these major
signals usually bring a
breaking of the Lower Band. A 10% decline from the highs is the least
one would normally
expect. Since, we have not had a 10% Decline in 51 Months, there is a
potential for an immense
amount of profit-taking. That usually does not happen, though until
the 200 day mvg. avg. is
violated. And we are still way above that level, But add in the
expectation that Democrats
wll roll back Bush's Capital Gains' Tax Cuts, and you can see that
the market has become very
vulnerable.
Buy on the Fifth Test of Horizontal
Support even without a Major Buy
The DJI has tested for the fourth time the horizontal support just above 13200. A fifth
successful test, especially
if the P-Indicator improves, would be bullish enough to buy
even without a major Buy
signal. See the study I
just did. Today's rally is
being fueled
by traders and those covering
their short sales. Though there is a minor Buy B2 now on the
Peerless chart using the
"Trading Range" mode, I think it would be better for all but the
nimblest of traders to wait
for a better buying opportunity and see if the DJI will hold the
next test of 13200.
The DJI rose 92. All the key
internal strength indicators improved today. There were 900
more stocks up than down on
the NYSE. This is impressive, given how bearish such numbers
were last week. New
lows, however, swamped new highs: 176 to 14 on the
NYSE. The speed
of the decline last week shows very likely there is a significant re-adjustment
taking place. This is not a
healthy market. The speed with which the new low numbers
exceeded th new highs so soon
after the DJI was making all-time highs is rare, but a very
bearish signal. (Years
ago there was an article in Barrons that showed how bearish this was.
Does anyone remember it? Or
the author's name.
The DJI has now reached a 4 times
tested support level at 13200. Either a knifing down
through this support or a
delayed violation will add quickly to the selling pressures.
A little rebound is being
attempted, but it may simply only delay a further decline.
NASDAQ
The NASDAQ has also come to its key support, a line that has been
tested on 7 previous occasions.
Support like this if violated
usually produces another quick leg down. The SP-500 chart shows this
support has already been
broken. (Note we did not get good volume numbers on Friday from Dial
Data.) The Accumulation
Index is still quite positive as the NASDAQ has tagged its optimized
lower band. If the
Tiger "RELDJI" Indicator were positive now, we would be getting another
Nasdaq Buy B8, as in June 2006 and
March 2007. That would be enough to cause us to switch
to the bullish side, but using
32000 as the key boundry or pivot point to watch and use. Closing prices
have to be used to judeg if that
level has hel or is violated.
So far, In these circumstances, I would
disregard the Buy B2 and the very short-term
Buys from the QQQQ, SOX, BBH
and HHH. A small recovery for another day is possible,
but the S9/S12 trumps these
minor buys. True, the FED may try to shore up the market
by letting 2-year rates fall.
They usually intervene to protect big banks and brokerages.
But, there is too much
profit-taking here, as well as a profound weakness in financing, retail
and housing stocks. Credit is
being tightened up. It will be much harder to make big purchases.
If Crude Oil should surpass $80,
and it is only 3 points away, or the dollar should turnvery weak,
I would think we will see
much more selling, as interest rates would then have to be raised
for the Treasury to borrow
sufficient funds to pay the current government deficit. Watch also
for news that OPEC will take
payments in currencies other than US dollars. That has been
a mainstay for the dollar
since Opec's founding.
Combination S9/S12
The combination of
S9-S12 signals is more bearish than the appearance of just an S9 or S12.
Consider just those
cases where they occurred near or at an all-time high and the market quickly
headed down at least
5%, as has just happened.
January 1973 - 18 month bear market started,
May 87 S9/S12 declined only to lower
band. DJI was down 15% in 2 months.
October 87 S9/S12 -33%, far below lower band.
October 89 S9/S12 to below lower band and intra-day down 10%.
July 90 S9/S12 needed to break support. Then went below lower band and down 20%.
July 1998 S9/S12 briefly up and then went down 20%.
August S9/S12 after support failures broke below lower band to -13% below high.
Only in one case did the DJI stop at the lower band. In the other six cases cases
the DJI fell
below the lower band within a
month. Two of these six produced declines of 10% and 13%,
More commonly the DJI was
down 15 or more within 2 months.
|
Current DJI and Peerless Signals On 4 previous occasions the 13200 support held. If it is broken on a closing basis, a minimum downside objective 900 points lower can be calculated by taking the maximum height of prices (14100-13200) from the point of breakdown. That would take us back to the March lows. That seems like the probably scenario.    |
|
Peerless Major Sell Signals Send Shock Wave to All Markets On May 5th 2006 Peerless gave an "S9". The DJI fell back only 6%. But stocks around the world fell sharply. Even the very strong Chinese market was hit. CHN fell from 36 to 26 in a month, It is unwise to dismiss the S9/S12 now a strictly American affair. See bottom of Tiger Blog for 7/29. CHN 1905-1906.  |
================================================================================
Real Estate -
Home Building - REITs: Charts in Decline
The lower band price target has been quickly met
here. Home Building and many bank stocks
are in a
free-fall. Interest rates are likely to go up and the dollar will most certainly
weaken
further. The Iraq
was will have squandered a trillion dollars when the dust clears. Now the
Guardian (UK) reports there
is a new White House tilt to attack Iran. Watch crude oil. If an
a new Cheney/Bush war
upon Iran is coming, crude oil will start moving up quickly. It is up
3.5 points in the last
2 days. It is less than a point from its high closing of a year ago.
12 month lows by a
significent sector of the market. This affects consumer buying.
US Real Estate ETF - now a 12 month low.
| Homebuilding stocks were again very weak. Here is the
Tiger Index of 30 of them. A bounce might occur. But there is no indication yet that it will could rise more than 3% to 4%, and the additional downside potential is much more than that. Tiger Index of 30 Home Building Stocks  ------------------------------------------- REITs VNQ ----------------------------------------  |
|
NASDAQ - New Sell S2 The NASDAQ's Accumulation Index and "RELDJI" are positive. . But the DJI leads the market in these cases. It is now back to a rising support line that has held on 5 previous tests. A close much lower on Monday would break this support and, at a minimum, means a decline to 2500. The 2350-2400 level seems a more likely target given the rapidity of the decline. The fact that the Accumulation Index remains positive does make the probability quite high that we should see a sharp rebound up next week, but it is not clear from what level. 
.. .. .. |
OVERSEAS'
MARKETS
You will still want to
appreciate how strong the overseas markets are now.
The Tiger Index of foreign
ETFs is not only rising at a 43% annualized clip, but it is
also breaking above all upper
resistance lines. It is entering what is most
likely an upside blow-off
phase. The VWO - Vanguard Emerging Markets
Fund - looks particularly
strong, showing a perfect AI/200 score of 200 and
very high levels of
Accumulation. All the earlier signs of enormously high
Accumulation in so many ETFs
were "right on the money!" European markets
are now showing bearish
divergences, with their Accumulation Index negative
even as they make new
highs. One reason the DJI-30 stocks are doing so well
is because more than 1/2
of their profits are now coming from overseas operations.
---- Tiger Index of
53 Foreign ETFs ---
Strongest Foreign ETFs since
7/17 Sell
------------------------------------------------------------
CHN
China Fund +6%
GCH
Greater China Fund +3%
GRR
Asia Tigers 0%
Weakest Foreign ETFs since 7/17 Sell
-8% TRF (Templeton Russia),
-8%
JOF Japan OTC
-8%
EZA - South Africa
-8%
EWZ Brazil
-8%
EWW Mexico
-8%
EWQ France
-8%
EWG Germany
-8%
EWD Sweden
=====================================================================================
Why Is The Overall Market Giving A Sell Signal?
What will upset and stop the rally? Crude Oil is on the rampage again. It is
still well
over 70. It
has formed an inverted continuation head and shoulders pattern.. That
acts as a tax on
the whole economy and brings inflation, thus giving the FED the
excuse they need
to raise rates. Perhaps, the Bush Administration is planning an attack on
Iran.
Crude Oil and Natural
Gas: The move past is 70 is bullish. A
challenge of $78
seems next. Watch Light
Crude (CL1620) below. Its rise above its recovery peak of
November
and above its (black) 200-day
ma is bullish for it, but somewhat bearish for the general market.
Watch it
closely. It is on a new Buy and has broken out above its
10-month downtrendline. It may
complete an inverted head and
shoulders bottom Keep this in mind.
Light Crude - CL1620 = Perpetual Contract
The Euro made a 12 months' new high. The British
Pound has already
broken out. We will be watching to see if the British
raise their short-term
rates. That will put additional pressure on the
Federal Reserve Chairman to
do the same. And that would hurt certain
groups, especially housing and consumer
finance.
=============================================================
-
Summer Rally? How does the
market behave behave from June 22nd
for the next two months when it has already had a big gain in the first part of the
year, as in
2007? The new book I am writing gives us the answer for the DJI-30 back to
1915.
There were 25 cases when the DJI-30 rose steadily in the first 5 months
of the year and was up more than 12%. In 7 (28%) cases, the DJI rose steadily
for the rest of the year. In the other 72 cases, tops that brought declines of more
than 10% followed before the end of the year. Consider how often these tops
took place in the subsequent months of June through December. July is, by
far, the most likely month to see a major top.
June 1950, 1954
July 1919, 1933, 1943, 1975, 1986, 1997,
1998 (and 1990.)
August 1987, 1999
September 1955, 1967, 1976
October 1922, 1927, 1989
November 1925, 1935
December
A
top in July is the most likely scenario for 2007, but there is a 28% chance,
based on these case, that there will be no significant top. Using Peerless
will give us the best read on the market as time goes by this summer. Nearly
all the significant tops were called by Peerless as they were occurring or
soon before or afterwards..
-------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
Global Bull Market is Now Very Over-Extended
Early 2003 Now
Gain
Mexico IPC
6000
30000 + 400%
Indonesia Jakarta Composite 400
2000 +400%
Brazil Bovespa
10000 50000
+400%
Turkey ISE National 100 10000
47500
+375%
India BSE30
3000 14000
+ 367%
Chile IPSA Index
800
3200 +300%
Sri Lanka All Share
700
2600
+ 264%
Sweden Stockholm
30 450
1250
+175%
Given
how far up the markets are above big support and how long it has been since there was a
major correction, plus the bearishness of years ending in
"7", it should pay to do some selling.
Table FALLS IN YEARS ENDING
IN "7"
1837 Panic
......
1887 September 19 (-2.24%)
& October 12 (-2.29%)
1897 September 21 (-3.95%)
& October 12 (-3.90%)
1907 Declined
whole year from 90 to 55 in November 37% decline.
Major banking panic October 22.
---------------------- My own study starts
in 1915 -----------------------------------
1917 Early
June peak at 99.... Bottom in December at 66 ... 33%
decline.
Tip-off was well-tested support failure at 88 in August
...........................................................................................................................................
1927 Peak on 10/4 at 200... Fell to 181 on 10/24... 9.5%
decline
Tip-off was OBV NC at upper band.
Tip off was Accum.Index was negative at upper band
.....................................................................................................................................................
1937 Peak was at 190 on 8/16 ... Fell to 113.6 on 11/24 October
18 ...40% decline
Tip-off was OBV NC at upper 3% band..
Tip off was Accum.Index was <+.05 at upper 3% band.
.....................................................................................................................................................
1947 Peak was at 184 on 2/11... Fell to 163.60 on May 20.
...10.9% decline
Tip-off was small head and shoulders top with neckline break at 181 on 2/20
DJI made a 3-month high which was not confirmed by A/D Line
......................................................................................................................................................
1957 Peak was at 521 on 7/12... Fell to 419.80 on October 22.
...19.4% decline
Classic "Sell S9" at upper 3.0% band.
"Sell 12": Tip off was Accum.Index was <+.05 at upper 3% band.
Credit crunch. Sputnik
.....................................................................................................................................................
1967 Peak was at
943 on 9/25... Fell to 826 on March
22. ...12.4% decline
"Sell 12": Tip off was Accum.Index was <+.03 at upper 2.8% band.
Tip-off was head and shoulders top with neckline break at 918 on 10/13
.....................................................................................................................................................
1977 On-going bear
market which did not bottom until March 1978...
In 6/22 DJI reached 2.5% upper band at 926. ...19.0% decline
......................................................................................................................................................
1987 Peak was at 2702
on 8/26... Fell to 1739 on October
19. ...35.6% decline
10/1 at 2639 "Sell 12": Tip off was Accum.Index was <0 at upper 2.8% band.
10/2 at 2640 Classic "Sell S9" at upper 2.6% band. Hit 1739 on 10.19 34.1% decline
......................................................................................................................................................
1997 Peak was at 8015.5
on 10/1... Fell to7498 on 10/28 6.5% decline
"Sell 12": Tip off was Accum.Index was <0 at upper 2.5% band.
......................................................................................................................................................
2007 ???? DJI is
now at upper 0.8% band with Accumulation negative.
A 10% Correction in the DJI Remains over-due
Because it has been so long since
there has been a serious round of
profit-taking - more than 50 months since there was a 10% correction in
DJI-30 -
we should be careful. Buying the highest AI/200 stocks is one solution.
Their
massive insider-inspired buying usually means there are ready buyers on any
weakness...
Interest rates are apparently going to go
up. We can see this in the weak
utilities (they remain the weakest group in the Fidelity Sector funds for the
last month), the steep recent decline in Housing Stocks (See the Tiger
Housing Stocks'
Index below) and the weakness until the middle of this past week in Gold and
the
EURO (Higher interest rates hurt them, as they make the dollar
strengthen.)
Crude Oil has completed a very bullish inverted head
and shoulders pattern.
if the neckline in its chart below is taken out, it will make inflation much worse
and make it easier for the FEDs to justify higher rates as they struggle to get
foreigners to fund the massive US debt.
Sharp rises in interest rates can occasionally bring a 10%
decline without
a major Peerless Sell. That was true in early 1994, in 1976 and also
mid-1975.
The chart of 1975 is shown immediately below. The breaking of the long
unviolated
NYSE A/D Line uptrend brought about a 10% correction that last 2-3 months
then.
In that case, the turning negative of the P-Indicator and the Accumulation
Index were bearish signs. That is true now.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
=============================================================================
NYSE New Highs
It is important for the bulls that the number of new highs be at high levels. This means stocks are
running after a breakout. Otherwise, we would see bearish false breakouts. These acts as bull-traps
and create bearish conditions. As long as New Lows stay under 50, the market has little risk.
Watch the NYSE New Highs (NH) below. Watch to see the trend of these numbers. Thus,
new Lows made a 3 month high, just one day after the DJI made a new high closing.
NYSE NHs New Lows
-------------- --------------|
7/31 11 160
7/30 14 176
7/27 8 221
7/26 11 503 (correct?)
7/25 18 215
7/24 12 232
7/23 81 78
7/20 34 74
7/19 112 65
7/18 45 80
7/17 72 52
7/16 82 30
7/13 154 31
7/12 185 42
7/11 48 42
7/10 30 56
7/9 156 16
7/6 161 15
7/5 120 19
7/3 102 12
7/2 112 12
6/29 52 25
6/28 54 11
6/27 34 34
6/26 19 72
6/25 18 35
6/22 36 41
6/21 79 31
6/20 49 26
6/19 125 15
6/18 140 16
6/15 247 9
6/14 154 16
6/13 69 14
6/12 15 100
6/11 31 24
6/8 28 25
6/7 3 73
6/6 25 22
6/5 112 31
6/4 297 9
6/1 274 12
5/31 210 11
5/30 169 7
5/29 96 16
5/25 52 5
5/24 19 20
5/23 101 12
5/22 189 11
5/21 242 6
5/18 190 12
5/17 125 18
5/16 129 13
5/15 93 25
5/14 87 21
5/11 92 10
5/10 45 20
5/9 210 3
5/8 113 8
5/7 202 10
5/4 205 9
5/3 152 3
5/2 150 4
4/30 67 17
4/27 127 12
4/26 177 11
4/25 301 5
4/24 125 7
4/23 187 7
4/20 213 3
4/19 63 7
4/18 133 5
4/17 238 10
4/16 329 7
4/13 164 6
4/12 124 8
(Source:http://dynamic.nasdaq.com/asp/52weekshilow.asp?exchange=NYSE&status=HI)
-----------------------------------------------------------------------------------------------------------
Gold and Silver
Gold Stocks Index (XAU)
XAU is on a new Sell. but it broke out marinally above the 150 level
that has stopped 8 different XAU rallies in the last 2 years. A lot of upwards
monetum is likely to come into gold and silver stocks. Of course, the FED
could upset things by suddenly raising interest rates. But even this would
not likley stop the up-move that we should now expect, provided the breakout
extends itself. With the dollar is so weak, there is a very rral chance that the Fed
will be forced to do this, to keep attracting foreign funds. So watch the EURO
especially closely. S9/S12 signals do drop gold and silver prices in 2/3 of their cases
since 1985. Sharp rises in gold ofter are harbingers of an intermediate-term top..
FIDELITY SECTOR FUNDS' PERFORMANCE 7/31/2007
Performance since 7/17 (Sell).
---------------------------------------
Recent Month's Gain Biggest Holdings
Strongest
FSAGX Gold +4% NEM, ABX, IAG, GG, GFI, AZS (also MGD?)
At 3 earlier peaks' resistance. Watch for potential breakout.
FSESX Energy +2% SLB, HAL, NOV, RIG, WFT, BHI, GSF, SII, CAM, NE
Weakest
FSVLX Home Finance -14%
FSRBX Banking -9%
FSCPX Insurance -9%
FIDSX Financial -9%
FSAVX Automotive -8%
FSUTX Utilities -8%
FSPFX Paper/Forest -8%
FSLBX Brokerages -8%
FSHOX Housing -7%
FSRPX Retailing -7%
FSCPX Consumer -7%
============= After 7/30 seasonality ==================
Since 1965, the DJI has risen
36% after the next 3 trading days.
46% after the next 5 trading days.
49% after the next 10 trading days.
56% after the next 21-trading.
49% after the next two months.
===============================================================
----
Weak Stocks - 7/26/2007
Please consider getting Tiger Soft and Power-Ranker to Find these stocks
each night or subscribe to the Full Hotline including Stock Recommendations
for Tiger Software.
Bearish Stocks but dated 7/26/07 - Use Tiger Soft to see more bearish stocks.
-
-
-
-
-
-
--
--
--
---
-
-
--
-