Warning Signs 01 (Oct 08 - Feb 15)

[winston]

Hindenburg Omen

Markets are beset with talk of an "Hindenburg Omen" - named for the 1937 disaster that befell a German airship.

It represents a set of signals on the New York Stock Exchange, including 52-week levels, moving averages and daily transactions.

The pointers are supposedly to stocks susceptible to sell-offs.

The omen holds we'll see a big downturn in US stocks within 40 days if various factors are in place, like most are now.

But it has failed to come true before, like in 2010 with the Fed's quantitative easing.


Source: Dr. Check, The Standard HK

[winston]

Nasdaq 100 fell 80% last time this took place! Different this time? by Chris Kimble

Penny stock volume as a percentage of Nasdaq volume became a very large percentage back in Feb of 2000, reflecting that a high level of speculative trading was taking place. In the next few years the Nasdaq 100 lost over 80% of its value!

Recently Penny stock volume as a percentage of Nasdaq volume took a very sharp increase, surpassing the highest level ever, which took back in 2000 at the Dot.com highs!

Is this the holy grail of indicators? No!

I do feel investors should be aware of this, especially when Margin debt levels are at levels only seen one other time in history, which happened to be at the same time Penny stock volume hit highs back in 2000!!! (See debt levels here)

Will it be different this time? I suspect it will! Even if its one third of the issue it was last time, that might be enough for a few investors!

http://blog.kimblechartingsolutions.com ... this-time/

[winston]

Equities Outside US Are Sending A Message

For those of us who follow global asset classes, it has been evident for quarters on end that majority of the world's stock markets peaked in 2011.

And what is even more interesting, unlike the United States stock market recovery to new highs, the rest of the world has not been that fortunate.

It is worth noting that cumulatively, equity markets outside of the US have not yet bettered their May 2011 peak.

http://theshortsideoflong.blogspot.com/ ... ssage.html

[kennynah]

to me...a warning sign.. is when everybody wants to buy....

talked to a friend... everytime, he tells me he picks up stock... and another, hardly a player...ask me can buy stocks now or not

[iam802]

to me...a warning sign.. is when everybody wants to buy....

talked to a friend... everytime, he tells me he picks up stock... and another, hardly a player...ask me can buy stocks now or not

K, can buy now or not?

[Chinaman]

to me...a warning sign.. is when everybody wants to buy....

talked to a friend... everytime, he tells me he picks up stock... and another, hardly a player...ask me can buy stocks now or not

K, can buy now or not?

for me......sell in june, come back in september..market will chiong by then, hehe tikum only lar.
Actually, I m standing-by if dip further (below 3k) ready to go-in.

[kennynah]

K, can buy now or not?

wah brudder.... dont ask me man.. hahaha... i always end up telling people the wrong thing...so, i learn to keep my mouth shut..

ask Winston, the guru... maybe he may have some advice for us...

as for me... 1609 Moving Average support ... i just follow the technicals... BUY to trade... then, hope the support dont break come Thurs....

[kennynah]

for me......sell in june, come back in september..market will chiong by then, hehe tikum only lar.
Actually, I m standing-by if dip further (below 3k) ready to go-in.

good idea

[winston]

Equity Put-Call Ratio Plummets by Pater Tenebrarum

If This Is not a Data Glitch, it Is Remarkable

We regularly go through a number of market data, and yesterday something caught our eye.

The CBOE equity put-call volume ratio appears to have plunged to one of its lowest one day readings in history.

Unless this is a data glitch (we don't want to rule the possibility out just yet), this is a quite noteworthy development, especially as it happened concurrently with a rather weak market bounce, against a dubious technical backdrop.

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The CBOE equity put-call ratio plunges to 0.34 – we know off the cuff that this is one of the lowest one day readings ever – click to enlarge.

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A longer term weekly chart shows that such a low reading has definitely not been seen in the recent past:

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Even the very enthusiastic early 2011 low in the ratio was higher than yesterday's – click to enlarge.

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The caveat is that such extremely skewed readings can sometimes be the result of a single very large trade and we don't know at this point whether one of those has taken place. We usually try not to over-analyze such data though – it is what it is.

In order to see whether corroboration from related indicators was available, we also took a look at the ISE sentiment index, which measures a call-put ratio of newly opened positions (i.e., exclusively 'buy to open' positions) on the ISE options exchange. Contrary to the normally employed put-call ratio, very high numbers show excessive optimism and conversely, very low index numbers indicate excessive pessimism. The advantage of the ISE index is that large institutional option writers are not skewing its readings.

The ISE sentiment index seems to confirm that short term optimism about the stock market has spiked among option traders. Here is the chart – the current one day reading is among the highest recorded in recent years. The ten day average is still below previous extreme values, which is no doubt a result of recent market weakness. What is noteworthy is the swiftness with which opinion has changed. That is normally not a good sign in the context of a weak looking market.

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The ISE sentiment index (a call-put ratio of newly opened positions). The one day ratio has jumped by a full 89 points to 172 – click to enlarge.

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Conclusion:

As noted above, unless these readings are not the result of a data glitch, they are noteworthy. There is still the possibility of an outlier trade skewing the data, but this seems actually less likely in view of the ISE index reading. If the data can be taken at face value, they represent a negative signal for the stock market.


http://www.acting-man.com/?p=25632

[winston]

LACK OF DIRECTION

Outflows from stock funds in the past three weeks may be another sign that investors are growing wary of U.S. stocks.

Investors have pulled $15.3 billion out of stock funds in the past three weeks, the most over any comparable stretch since August 2011. About $3 billion was pulled from the SPDR S&P 500 ETF Trust, which tracks the S&P 500, marking the largest outflows from any exchange-traded fund in the weekly period ended Sept. 4.

Those outflows suggest investors are "concerned about the future direction of equity markets," said Jeff Tjornehoj, head of Americas research at Lipper.

"Our sense is just that money is moving onto the sidelines" said Temple of Pioneer Investments.


Source: Reuters