tag:blogger.com,1999:blog-828330400342145978.post5318374088863606086..comments2023-06-07T09:01:34.925-04:00Comments on Coca's Nuts: Market UpdateCocameisterhttp://www.blogger.com/profile/11521527048878256556noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-828330400342145978.post-3782544993216377732008-10-20T21:40:00.000-04:002008-10-20T21:40:00.000-04:00Elquid,Check out Stocktiger.com as well for free t...Elquid,<BR/><BR/>Check out Stocktiger.com as well for free technical analysis videos every night. <BR/><BR/>He's got some good market recap tonight and also gives breakout candidates for the next day.Cocameisterhttps://www.blogger.com/profile/11521527048878256556noreply@blogger.comtag:blogger.com,1999:blog-828330400342145978.post-66417226517110682052008-10-20T14:50:00.000-04:002008-10-20T14:50:00.000-04:00Anonymous,If this blog is so boring and annoying a...Anonymous,<BR/><BR/>If this blog is so boring and annoying and liberal, then stop reading it!! <BR/><BR/>Don't you have anything better to do?Cocameisterhttps://www.blogger.com/profile/11521527048878256556noreply@blogger.comtag:blogger.com,1999:blog-828330400342145978.post-43366375812782813732008-10-20T14:30:00.000-04:002008-10-20T14:30:00.000-04:00i hope you fools give the same amount of attention...i hope you fools give the same amount of attention to your jobs that you give to this boring blog. elsquid, COCOA does NOT = GOD. i mean, really :(Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-828330400342145978.post-90437072951175617502008-10-19T12:52:00.000-04:002008-10-19T12:52:00.000-04:00Elsquid,FWIW, Tim Knight, master technician made a...Elsquid,<BR/><BR/>FWIW, Tim Knight, master technician made a post this morning that agrees with my take. Check it out:<BR/><BR/>http://slopeofhope.com/2008/10/symmetrical_triangle.htmCocameisterhttps://www.blogger.com/profile/11521527048878256556noreply@blogger.comtag:blogger.com,1999:blog-828330400342145978.post-54560614349223680172008-10-19T02:54:00.000-04:002008-10-19T02:54:00.000-04:00Hi Elsquid, Great questions. First, regarding the ...Hi Elsquid, <BR/><BR/>Great questions. <BR/><BR/>First, regarding the triangle and how it plays out...that is simply what I have learned from following the folks on the websites I mentioned. I don't have the actual data in front of me, but I've heard more than one technical analysis expert say that the triangles usually resolve about 2/3rds of the way in. If it keeps going to the end (rare), then something strange was happening. If you start regularly following the websites, you will learn about a whole host of patterns, including bull and bear flags, ascending triangles, descending triangles, bullish wedges, bearish wedges, etc. Also, one of the most important (and profitable) patterns to learn is the volatility "squeeze" leading to a breakout. It really is fascinating stuff. <BR/><BR/>Regarding your second comment, I completely agree with you. In fact, I may just do what you suggested, but with a slight modification. I will place a multicontingent order that goes like this: If SPX last < 885 and then if SPX last > 895 then buy SSO. Now, for some reason Fidelity doesn't let this trade go through, even though the order screen lets me enter exactly what I said. So, what I would have to do is find the equivalent levels on SSO and say "if SSO last < 28 then trigger a limit buy order if SSO >= 28.5. Why do this instead? Well, this way you only buy the SSO (or S&P) after it hits support and starts coming back up. If you place the order your way, it probably will work, but if scenario C plays out, you will have a wasted trade, as your trade will trigger and then your stop will trigger, and all you have done is locked in a loss. By doing it my way, you only buy once the market shows that scenario A or B are playing out and thus the risk of making a losing trade is less. <BR/><BR/>Regarding the limit sell once the trade is placed, again it is a very viable strategy, but if the market decides it wants to bust through the resistance this time you will lose the upside gains. Instead, I prefer placing a trailing stop order so that I lock in profits but continue to reap from the upside momentum if that's what the market Gods have in store. <BR/><BR/>I hope this helps.Cocameisterhttps://www.blogger.com/profile/11521527048878256556noreply@blogger.comtag:blogger.com,1999:blog-828330400342145978.post-62659157287934072602008-10-18T22:52:00.000-04:002008-10-18T22:52:00.000-04:00one more question (just went back and read your co...one more question (just went back and read your comments from friday afternoon - didn't see them before):<BR/><BR/>if we are in the range of support at 880-900 and resistance at 984, what keeps you from putting in a buy order at 900 (or so), a sell stop at 875, and a limit sell at 980? what is the risk to riding this margin within the "converging triangle"?elsquidhttps://www.blogger.com/profile/12182003199046515965noreply@blogger.comtag:blogger.com,1999:blog-828330400342145978.post-82757656415837295462008-10-18T22:37:00.000-04:002008-10-18T22:37:00.000-04:00wow. some seriously sobering stuff. i actually thi...wow. some seriously sobering stuff. i actually think this is pretty good for those our age with steady incomes (over the long term, a great buying opportunity for these next couple years or however long this lasts). i really feel for those who are nearing retirement though, i think this is just devastating for them.<BR/><BR/>as you recommend, i will be waiting for the market to define itself before taking any further action. <BR/><BR/>one question for you: why doesn't the pattern keep going until the triangle closes? or at least more than the one upside chance and the two downside chances?elsquidhttps://www.blogger.com/profile/12182003199046515965noreply@blogger.comtag:blogger.com,1999:blog-828330400342145978.post-37903121627166783842008-10-18T11:48:00.000-04:002008-10-18T11:48:00.000-04:00Comstock Partners, Inc.Market Now Fairly Valued--B...Comstock Partners, Inc.<BR/>Market Now Fairly Valued--But Not Cheap<BR/><BR/><BR/>October 16, 2008<BR/><BR/><BR/><BR/>For the first time since we started writing these comments in early 2000 the market has declined to levels where it is reasonably valued on all five of our major parameters-not cheap, mind you, but reasonable. This does not mean that the market can't decline significantly to bargain levels as it has done at a number of past bear market bottoms. In fact there's a good chance that it does exactly that. But it does mean that forecasting a much lower market is no longer the layup it was at far higher levels. Based on data provided by Ned Davis Research, we note the following. <BR/><BR/>As we stated in last week's comment, we advised you to view the article on the right side of our home page, "Limbo, Limbo, How Low Can it Go?" in order to see the overvaluation of the stock market. Well, since the market dropped so much since early Thursday when we wrote the comment, things have changed. If you now view the charts, we would advise you to plug in the latest values of the various indicies that are displayed by NDR research. The charts on "Limbo, Limbo" show the market at still extreme valuations in every metric except price to book value. However, if you plug in the latest values of each of the indicies displayed (S&P 500, DJIA, and S&P Industrials) you will see that all the metrics have fallen to normal or close to normal valuations. The NDR charts that we use cannot be updated to show the latest valuations so you have to use the latest market indices' prices to adjust the valuations. The S&P 500 and the Dow are easy to find the latest prices for, and the S&P Industrials are displayed in Barron's each week (last weekend it ended at 1118). <BR/><BR/>On reported (GAAP) earnings, the metric we prefer, the S&P 500 is now selling at 15.9 times trailing 12-month earnings compared to a an 82-year average of 16. At a number of past bottoms the index has troughed at P/E multiples between six and ten.<BR/><BR/>The Dow Jones price-to-dividend ratio has dropped to 26 (yielding 3.85%) compared to a 93-year average of 27.2. Note, however, that on numerous occasions the ratio has bottomed at less than 17.<BR/><BR/>The S&P Industrials price-to-cash flow ratio has declined to 8, compared to a 50-year average of 9.6. It's significant ,though, that the ratio lingered between 4 and 7.5 for the 7 years between 1947 and 1954, and for 12 years between 1974 and 1986..<BR/><BR/>The S&P price-to-sales ratio recently dropped to 0.8, compared to a 54-year median of 0.92. The ratio bottomed at 0.38 in 1974 and 0.35 in 1982.<BR/><BR/>Finally, the S&P 500 price-to-book ratio recently fell to 1.5, well below the 30-year norm of 2.4. However, the ratio troughed at slightly below 1.0 in 1982.<BR/><BR/>It is evident from the above-mentioned metrics that the market, for the first time in a long while, is now in a zone of fair valuation, although it is far from cheap. If history is any guide the market can still go a lot lower, and probably will. The credit crisis is the greatest since the depression, while the recession looks as if it will be lengthy and possibly deep. The global authorities have gone to great lengths to avert a financial meltdown through nationalization, massive lending, asset purchases and buying equity. Their actions and statements indicate that they will do anything necessary to avert a systemic breakdown of the financial system, and they will probably succeed, although not without some serious bumps along the way. <BR/><BR/>A serious recession, however, can't be avoided. The economy was slowing perceptibly before the credit crisis, and has now fallen off a cliff into the unknown. We are seeing significant slowdowns or outright declines in consumer spending, employment and production, and this will get worse as the effects of the credit freeze show up in the current quarter and beyond. The market has been so busy reacting to events on the credit front that it has not, until the last few days, paid much attention to the declining economy we see ahead. The fact that the market is now in a fair valuation range means that bear market rallies are more likely and that we will have to be more alert in looking for a cylical bottom. However, we do not sense that the market has yet discounted the potential length and depth of the recession, and history tells us that stocks can still decline significantly from current levels.Cocameisterhttps://www.blogger.com/profile/11521527048878256556noreply@blogger.com