Saturday Review’s recording and transcript (for 1/10/15)

Here”s the recording for this weekend”s Saturday Review, and the chat that took place during it (no timestamps available). The recording”s transcript has been added, too.

https://roddavid10.mitel-nhwc.com/join/tybtbvx

c d: hi
Mark Glezer: gm
M K: morning
M K: for as much as i”m fundamentally bearish…. “its a bull market stupid”
c d: great overvioew tks
Rod David: ; )
Mark Glezer: Rod, any way to reduce freeze time for the chartroom intraday that is make it more stable? Coincidentally this usually happens at the pivotal points
M K: 2250
M K: =)
tom power: FEYE
tom power: SHW
M K: RY
M K: KR
M K: IMKTA
M K: SFM
tom power: OK THX
M K: wow
M K: thats going on my short list
M K: same story as all the other stocks tha tlook like this
M K: slowly LBOing themselves
M K: i ahve a list of companies like that
M K: that i will eventually short the heck out of
M K: as soon as their charts stop looking like rockets
M K: i have a coupel in my stock requests
M K: M
M K: PCLN
tom power: thx
M K: CCAT
Mark Glezer: CPLP, CS, MS, AAPL
M K: CAT
M K: this has been a great short… i was too small in size though…
M K: ok i”ll cover some on a close above 68
M K: the argumetn for grocers is the drop in oil
M K: but paying 20-25x for 3% margins
M K: stupifies me
M K: but then again
M K: i”ve lost a bunch on AMZN so what do i know
M K: IRM
M K: SFM : breakout
M K: was my question
Mark Glezer: CPLP, CS, MS, AAPL
Mark Glezer: oil mover
Mark Glezer: above 8:30 ?
Mark Glezer: 8.30 – all good?
Mark Glezer: k
M K: XLY XRT IBB and have a good weekend
Mark Glezer: CPLP – downside – 6 & 4.90 right?
Mark Glezer: do u think MS not holding 36 support would mean ES may not be setting new highs ?
M K: BKX/SPX relative performance peaked in mid 2003 and tried a run at the high early 2014 and haver been weak ever since
Mark Glezer: CPLP – could u pls restate the downside targets – 6 & 4.90 right?
Mark Glezer: k
M K: oh sorry i forgot about ULTA… stil lneed to wait for 120 (prior highs) as a sell signal? or could a close under 25 be a more aggressive entry?
M K: 23?
M K: look at the volume on that avoiding of the sell signal
M K: got stopped out of that 300 short
M K: the next day
M K: oh i”m going to do it again
M K: not complaining
M K: just providing color
M K: would you lower the sell signal
M K: ok
M K: cool
M K: ok
M K: gotcha
M K: understoood
Mark Glezer: thx much!
M K: oh quick thing
Mark Glezer: Freeze time reduction Q?
tom power: thank you
Mark Glezer: freezes up randomly
Mark Glezer: at times
Mark Glezer: it was around 2031 pos divergence for instance
Mark Glezer: yep
Mark Glezer: very bad timing :)
Mark Glezer: great weekend thx!

Morning. It is Saturday. Time for the Saturday review. Hope everyone had a great night, had a great week. The market did. Alright let’s get to it because we’ve got a lot to talk about it.

Starting with where we are in the scheme of things. This is called a trading range. Maybe that trading range becomes basing and in the context of, as we back out further and further away view, longer and longer back, (1:02______) has data as far back so go to the daily. We had some pretty rough rides here in the last few weeks, the last few months included, but just to keep everything in perspective, this is still an uptrend. Maybe warning sign across the bow. Not that it has to be offset by some sort of an o-thrill of the channel, just to initialize or counterbalance the overthrow, the underthrow I guess, but it’s often done. New highs are not off the table. Despite the breadth and the severity, the aggression and substantiality, that is, of these seemingly more and more constant downdrafts, downdrafts in size, we cannot yet discount the potential for new highs.

Looking at October’s overthrow, underthrow, looking at that in the context of an uptrending channel, a channel that was returned to, a channel who’s uptrending support has now held a couple of tests in December and in January, except the reward for this should be fresh highs. New highs would not be out of context but also would not be required, but it would be pretty soon if it would be at all. It would be pretty soon because let’s look back to this channel, just this portion that I have identified. Here’s a touchback in October of 2013. Next touch that creates the uptrending support of the channels back in February of 2014. The touches in April. July. These are months and months apart. Still a deviation from the norm for there to be tests of the channels uptrending support in December and then just a few weeks later in January. Forgetting the volatile. That volatility is the bigger picture now. That volatility reflects play in the market with that a resignation that it is able to accept without falling to pieces. That is also a reflection of the integrity. If there weren’t that kind of integrity in the market, it would not be able to accept this kind of quick retracement back down to December’s low and bounce.

Maybe it has bounced. These things aren’t always known in advance. Believe it or not, we don’t actually predict the future. What we hear from the process of elimination is the process of elimination based on historical outcomes matching up current cross actions to those templates is narrowed down the likelier resolutions. We are still on the cusp right now on whether the likelier resolution at this current point in the uptrending channel is to resume the decline that started at the beginning of the year. Whether it is produce a fresh high and resume the rally, whether it is back to the upper end of the uptrending channel or through it, to overthrow it, counterbalancing the under throwback in October. Not necessarily to the same degree. Just the same behavior. But we are in the crossroads right now that will help to narrow down those templates.

So, here in a shorter term perspective just back to December’s low, there is December’s low off of the tie where the rally had just lost all steam. Worked its way back up to a fresh high and December’s high into the end of the year, but again, losing all steam, we even had two almost consecutive sessions, two sell signals. The first one being the first session that had developed exclusively above all prior intraday highs for the rally indicating the lack, and that is without buyers getting traction for the upper, indicating the lack of sponsorship when sponsorship was waning and finally gets back to try extending the rally. It tried extending and putting in other such sell signal, another session above all prior intraday highs. It was not the first for the rally. But that, too, did not gain traction for the upper. It’s a big price to pay, and paid pretty quickly.

Now we are at a crossroads where there was potential for this drop in January. The New Year’s drop to have extended down, there was potential for it to correct first. Nothing is a straight line and in fact, January’s new year drop could have bottomed to 2040 and by not bottoming at 2040, put in its next target at 94 and 84, basically 8375, met at Tuesday’s at the same day as 94 was met and 94 held to support through the post. Clear bottoming signal. We had it that afternoon. We had it the next day. The bounce potential to resume that decline without much delay would have been initially out of 2022 or 2029. Having met and it was really 2022, 2023. Having that 2022 at Wednesday’s peak. Probably, if that was not enough to restart the decline, we are going to blow through 2029 to 2044 and get about 2052, but the highest calculable bounce for the whole up leg, the week’s rally being just a correction. Just a temporary rally, avoiding new highs, resuming the decline, at least retest the low was 2052. Could have been 2022 or 44. All those having been avoided by being recovered. 2052 had to be it, and intraday as we get within spitting distance and identify a room for noise around it, 2055.50 and 2058.25, each of which were touched and each of which held as high during the timing window that they were touched.

So, 2052, those being a function of 2052, 2052 held. So did 2055.50 and 5825. Would have been more bearish or at least from the process of elimination, there would have been one less possibility of recovery if 2052 had been rejected to close as well and it wasn’t. The next day, we pretty much plunged through the open, through the morning. That was yesterday. That might seem to be retrospectively evidenced that 2052 did hold. It’s not. 2052 having been recovered through the close could have created a strong tether to allow that pullback, not to gain traction. Not to be destructive, to be recovered. In fact, there was a knee jerk reaction to news. It was not exactly the initial knee jerk reaction to the employment situation report. The employment situation report did initially produce a surge to a fresh high. It was maintained in the open so the open actually gapped up a little.

Post open, immediately price action was down. So, if it was a reaction, it was the post open immediate reaction to news. That can be dismissed. In retrospect, it can be dismissed. It does not have to be but remember reviewing with the process of elimination of how previous patterns, similar patterns, have tended to resolve not all of them but this is one inch has become a rule. Knee jerk reaction but credible for predicting future direction if not counterpredictive. More so that price action, that knee jerk reaction, negative knee jerk reaction to the news was isolated to the one timing window. There is the open into the 10:15 by its timing window. When the bias signal is generated. That is the market telling us what it wants to be when it grows up for the day and bias environment hunted down exclusively, entirely to 1130 right when the bias environment starts collapsing. The rest of the day sideways. You could either characterize this as flat to higher.

The reaction down from having closed not under 2052 but under its room for noise that was tested and held 5050 and 5825 on Thursday. The reaction down was relayed the news. It was isolated to single timing window that I’m not at the end of that timing window, but after several timing windows without resuming that reaction down isolated to that timing window. One more thing that happened as that timing window was being created and that is that the bias down didn’t even trigger. The bias up target was tested. The same morning the bias up target was calculated from yesterday’s close and price action through yesterdays close was 2061.75. The high was 2062 and not as a knee jerk reaction but as an afterthought to the knee jerk reaction. That was tested. That was fulfilled and that wasn’t even just through Thursday’s close. That was the same bias up target calculable through Thursday noon. That is a lot of buying pressure satisfied. It was not satisfied or tested at least close enough to the open to qualify. The fact is it was tested and despite testing it and holding it’s test, the bias up signal itself, 5050, was still tested. The bias down signal, the 45, had been tested. All by 10:15.

That triggered a no bias and at 10:30, not until 10:30 was that invalidated by breaking down under their bias down signal. Too late to trigger. Just in time to invalidate so we give those sellers the benefit of the doubt but what they accomplished by 10:30, they were postured to produce it by 10:15 and didn’t so that undermines them. So we have three things that undermine sellers, so that test of 2052 on Thursday. We don’t know really that that necessarily helped. Just because there is a reaction down, the reaction that has to be deep enough to reverse the trend back and that is under 2029. Two irrelevant timing windows if Monday’s open, opening 15 minutes of volatility, is under 2029, probably bias down has actually triggered a few points lower, but just at 2029, is being probed into the open if the bias environment at 11:30 lasted under 2029, that’s where get to speak with a lot more authority based on history and the measurements winding up with the historical templates. That’s when we get to speak with a lot of authority that yes, this was a corrective bounce to this down leg that is now resuming.

Whether that resumption is to actually resume actually taking this big cotton pattern and reverse the trend down or whether it is just to retest this low which really it should not be at this stage of the pattern but in many cases we haven’t been able from the process of elimination get rid of that. That is to get to say we are back in the bearish slump and next week is played from the short side largely or if in fact sellers were just isolated to this one timing window in reaction to news, and even then those sellers were late to the party, we should be back above 2052 pretty much through Monday’s open or at least exiting the bias environment at 11:30 back above 2052 and that is where we get to speak more increasingly to authorities. Still not definitive until the close that this bounce has resumed and if it is resumed at all, it has resumed a lot. The objective being new highs. Not necessarily 2100, something with a 2090 handle. Does that become a big overthrow as well? That is what we also do not know and will not know until we see the character of the next up leg. Whether its intent is just to satisfy buying pressure on a fresh high up at the uptrending channels upper end before reacting. Or whether in fact there is something that could be a lot more productive and overthrow the upper end of the uptrending channel the same way that the lower end was underthrown in October.

I noticed in this morning Barron’s. It comes on Saturday for the following week. There is a column why the stock market will keep climbing after a strong 5-year run. The bull could slow down in 2015. If history is any guide, but it will probably continue to deliver gains over the next five. We all want to get bearish. Just common sense. The endless proxy printing of money. The almost singular buyer or category of buyers being, by intermediary at least, Central Banks. The questionability in some ways and some times of I cannot make data. Seems like there is as price to be paid that keeps the bar tab growing and growing and growing but the bartender keeps serving and serving and serving. Having said all that though, there is nothing new. Just more and more of it. So, don’t be surprised either way of one of these underthrows does catch, does gain traction, so with the hand that we’ve got. We have to play the game with the opponents that are at the table and that has been the pattern. So, be on watch for January’s low to be taken out. That tells us the tide is turning or is another opportunity for the tide to be turning. The new term indication of that would be back under 2029 through Monday morning. Be on watch for the opposite. That hiding crop is not voided, not leveraged, not extended and instead retraced and reversed and if we get out of 2052, again through Monday morning, we are back in rally mode extending the recovery from last week’s lows.