MAJOR SELL SIGNAL FLASHING zt from DQ

SAR

http://pragcap.com/
MAJOR SELL SIGNAL FLASHING
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By TPC | Filed in All | Comments (2)

I use a proprietary timing indicator called The Ultimate Indicator. It is purely a risk management tool and helps me to allocate capital appropriately depending on the various risks in the market.  TUI jumped 30% today flashing an official sell signal on the market. Had you been following the indicator during the last year you would have been out of the market during each of the worst drops we experienced. In addition, you would have been in the market prior to each of the 20%+ bear market rallies we experienced. Wondering why I became bullish on March 4th after staying out of the market since last December? Now you know.

At a reading of 41 TUI is now telling us that the market is extremely overbought and abnormally risky on the long side. We’ve rallied 20% in less than two weeks and sentiment has now swung to an uncomfortably bullish position.  Oil is up 32%, financials are up 60%, The National Merrill Bank of United States of America is up 160%, Citi is up 220%, etc.   These are unbelievable figures.  Figures I want to sell into.  A reading over 40 has never resulted in a substantial rally over the following month and has always resulted in a 20% drop during this bear market within the following 3 months.  Statistically speaking I am not betting against it.
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Update (6:55PM EST) - Zero Hedge has some thoughts on the rally today.  Good stuff:

1) FED surprise action begs the question of what do they know that the market doesn’t? So many fear their forecasts for a much weaker economy.

2) FED action is viewed as the last measure. The ability for the FED to do more than this is now a game of how much more to buy. So the over $1 trillion expansion of its balance sheet announced today can be followed by more and more. But the shock and awe effect will be less and less. The last bullet has to be the most accurate and many fear it may miss the mark.

3) Deficits and USD The action of the FED and the stimulus package sparks concerns over how the US will pay for this and what it means for the USD. So the break in the DXY at 85. The risk of a much bigger down turn in the USD is set up by the charts and many fear it will be part of policy. Weaker USD flows out of this action.

4) Inflation This worry seems years away but many will watch for it and trade accordingly. The risk stems from the FED being ahead of deflation and therefore well behind risk of inflation. Being able to discern the difference will be tricky eventually – but it’s a risk that won’t be known until its too late – not unlike reading in the garage with the car on.
18
Mar
MORE HOUSING SUPPLY IS A GOOD THING?
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By TPC | Filed in All | Comments (0)

Yesterday was a curious day. Alcoa and Nucor both released horrendous news and we got news that the supply of housing has increased substantially. The market took all of this in stride and continued to surge higher. There was insane chatter all day about a housing bottom and increased building demand. What is baffling here is that our problems are all founded in housing. How does a build in the supply make matters any better? Well, it doesn’t. This is econ 101. A build in supply is only prolonging the arduous decline in home prices as inventories remain stubbornly high and demand remains low. Despite the largest housing bubble in U.S. history none of the large homebuilders have failed yet. Would you care to know why? Because they are still building homes and making matters worse for the long-term outlook.

源济

SAR

don't know how to attach the chart

qiangge

hhli3

Good. Thanks.

formula

Thank you!

turbotornado

thanks

weigoodone01

Maxie

Despite the largest housing bubble in U.S. history none of the large homebuilders have failed yet.