Large Players Must Show Their Hand Now - June 28, 2011

[ATTACH]9044[/ATTACH]

End of month/quarter/semester windows-dressing tactics consist mostly of dropping the worst stocks of the periods that are left in the portfolio managers’ holdings and buying the strongest stocks to replace them. This is just an illusion trick about true performance of course, but retail investors are excited to see new “hot” stocks in the fund’s report and feel comforted by the lack of laggards’ holdings when reviewing.

In IBD’s Accumulation/Distribution ratings, when the windows-dressing is underway, you expect to see a growing percentage of stocks both in the best “A” rating and in the worst “E” rating. This is exactly what is happening right now. The current market strength is certainly artificial in some ways, but it presents a short term opportunity for the bulls.

[ATTACH=CONFIG]9043[/ATTACH]

The true volume-weighted Accumulation/Distribution is actually under a net slight decline compared to market strength, not exactly a positive sign for the longer term.

[ATTACH=CONFIG]9045[/ATTACH]

We are beginning to see some increase in the percentage of stocks entering accumulation stages, but a new uptrend can only be confirmed if we see a sharp increase in the number of stocks breaking out in strong mark-up stage.

[ATTACH=CONFIG]9042[/ATTACH]

IWM showed some relative strength weakness yesterday and it is likely linked to the rebalancing of the index that took place on Friday’s close. Leading component stocks that weighted the most have been reduced in weight, while laggard stocks have been over-weighted. This distortion will progressively be digested over time and should not impact much the robot’s statistics. It could even boost the index in case of a “junk off the bottom” rally once windows-dressing season is done.

From a multi-pivot perspective, the easy progress for the week seems to be over. A very strong resistance cluster is awaiting starting 0.59% above yesterday’s close at daily R1 (81.03). Only one or two very strong days with a lot of large players support could break that cluster above the 50-day moving average (82.14). They may be tempted to do so, because if the breakout is successful, the next cluster resistances will be symbolic compared to the fresh support clusters. This would help them greatly in pushing prices up when earnings season starts in July, with the easiest to beat expectations since April 2009 according to Bespoke Invest. However, the current progress so far is still too slow for the robot to raise its trailing stop for its initial position. In case of weakness, like on all previous days, the key support level remains around QS1 (79.32) on a daily close basis.

[ATTACH=CONFIG]9046[/ATTACH]


The GDX robot remains in a very weak long position that is much hindered by the resistance/support clusters imbalance.
Billy

[ATTACH=CONFIG]9041[/ATTACH]

Dear Billy,

I know it's been said many times before, but these posts are nothing less than fantastic. I have learned more from your daily, pivot clusters posts than I probably care to admit - it feels as if curtain of the great OZ has been pulled back (I am trying to do my best impression of a sponge as I can). Reading your morning posts and then watching the indexes moves as the large players do their work is nothing less than fascinating.

Your (and Pascal and the rest of the EV team) efforts are very much appreciated!
Harry

[QUOTE=Harry;14035]Dear Billy,

I know it's been said many times before, but these posts are nothing less than fantastic. I have learned more from your daily, pivot clusters posts than I probably care to admit - it feels as if curtain of the great OZ has been pulled back (I am trying to do my best impression of a sponge as I can). Reading your morning posts and then watching the indexes moves as the large players do their work is nothing less than fascinating.

Your (and Pascal and the rest of the EV team) efforts are very much appreciated!
Harry[/QUOTE]

Harry, you're most welcome. I am probably not an excellent teacher or theorician but at least I can show you what I'm looking at and how it works day after day. It's the practical way and I believe it is the only way one can be trained.
Your learning curve will mostly depend on the personal focus that you put during the day on floor levels and I'm glad to see that some like you are getting it perfectly!
Best regards,
Billy

[QUOTE=]The GDX robot remains in a very weak long position that is much hindered by the resistance/support clusters imbalance.
[/QUOTE]

Billy,

First, could you please explain what you mean by R/S clusters [U][I][B]imbalance[/B][/I][/U]. I'm not sure I see what you are saying. I need your eyeglasses [lol]

Second, I was wondering if these postings on IWM and GDX will be available only to pay customers? Right now I am under the impression that only the comments attached to the robot section will be for paid customers.
Regards,

Pierre

[QUOTE=Pierre Brodeur;14044]Billy,

First, could you please explain what you mean by R/S clusters [U][I][B]imbalance[/B][/I][/U]. I'm not sure I see what you are saying. I need your eyeglasses [lol]

Second, I was wondering if these postings on IWM and GDX will be available only to pay customers? Right now I am under the impression that only the comments attached to the robot section will be for paid customers.
Regards,

Pierre[/QUOTE]

Pierre, I mean the greater strength proportion of resistance clusters over the support clusters, not only today but since day 1 of the initial GDX trade. In comparison, IWM is alternating daily its support/resistance clusters proportional strengths and strong resistance clusters have seen a tendency to be easily penetrated compared to GDX.

About this forum, yes, it will be open only to subscribers of the two robots. This is a "bonus" to the service and both robots will be discussed together, so that one can also discuss allocation and comparison. Sunscribers to only one robot will have only access to Pascal's relevant robot comments.

Billy

Hi Billy,

Do you trade both robots or just the IWM Robot? How are you allocating yourself?

As you've alluded to before, I sometimes find the movement of GDX very random and hard to understand, even in light of pivot-based and other support/resistance clusters. Perhaps this is because few professionals trade it, based on what you've mentioned.

[QUOTE=aly;14053]Hi Billy,

Do you trade both robots or just the IWM Robot? How are you allocating yourself?

As you've alluded to before, I sometimes find the movement of GDX very random and hard to understand, even in light of pivot-based and other support/resistance clusters. Perhaps this is because few professionals trade it, based on what you've mentioned.[/QUOTE]

aly,

Pascal is trading heavily both robots. I mostly trade TNA and TZA, based on the IWM robot signals, but I can take up to 25% of my portfolio on selective strong buy GDX robot signals. TNA and TZA is not well suited to everybody, since an IWM drawdown of 10% can easily turn into 33% or more with TNA/TZA. I refer to 10% because it was the maximum drawdown of IWM in the backtest when using a fail-safe stop in case of volatility extremes.

You are correct, GDX is an amateurish instrument mostly driven by emotional investors who don't care at all about pivots and floor levels. Market makers tend to follow the crowd instead of leading. When they get short on inventories, they simply manufacture a huge gap up or down to panic the same crowd into reversing their position. On those occurences, multi-pivot do matter for a few days. Here the precious metals sector MF is much more effective than my own pivot methodology for exceptional returns. But the optimal trailing stop risk management is the same for both robots.
Billy
Billy

Billy; Your A&E chart using the IBD data spurred me to look at the Russell 2000 in HGSI as many of us are following the IWM Robot. The changes yesterday to today are interesting.

6/27; A: 4.88%, B: 16.74%, C: 32.08%, D: 37.88%, E: 8.42%
6/28; A: 7.14%, B:19.27%, C: 31.88%, D: 35.27%, E: 6.44%
There was a A-E crossover today.
Change
A: +46.31%
B: +15.11%
C: -0.62%
D: -6.89%
E: -23.51%

Attached are the %AD pie charts which make a lovely visual.
Best regards,
Robert

[ATTACH=CONFIG]9050[/ATTACH][ATTACH=CONFIG]9051[/ATTACH]

Hi Billy, I'm a new member and inexperienced. I have a dumb question, what do MPP, YPP, WPP, WR2, QPP, QS1, WS1, MS1 represent. I assume some multiple pivot points or???? Do you have a recommendation where I can learn about these things??

thx, buzzman

[QUOTE=buzzman;14056]Hi Billy, I'm a new member and inexperienced. I have a dumb question, what do MPP, YPP, WPP, WR2, QPP, QS1, WS1, MS1 represent. I assume some multiple pivot points or???? Do you have a recommendation where I can learn about these things??

thx, buzzman[/QUOTE]

Yes, I also apologize and would like to know more about some education on the terminology used in the forum too.

[QUOTE=canucck ;14058]Yes, I also apologize and would like to know more about some education on the terminology used in the forum too.[/QUOTE]

There's no need to apologize. Please refer to my introduction (initial post) here:
[url]http://www.effectivevolume.com/showthread.php?3453-Tutorial-Intro-Path-Of-Least-Resistance[/url]

Billy

[QUOTE=brrim;14055]Billy; Your A&E chart using the IBD data spurred me to look at the Russell 2000 in HGSI as many of us are following the IWM Robot. The changes yesterday to today are interesting.

6/27; A: 4.88%, B: 16.74%, C: 32.08%, D: 37.88%, E: 8.42%
6/28; A: 7.14%, B:19.27%, C: 31.88%, D: 35.27%, E: 6.44%
There was a A-E crossover today.
Change
A: +46.31%
B: +15.11%
C: -0.62%
D: -6.89%
E: -23.51%

Attached are the %AD pie charts which make a lovely visual.
Best regards,
Robert
[/QUOTE]

Thank you Robert, very interesting visual chart indeed.
However, I don't have any crossover yet and my percentages are much different.
I cancel from my database all securities that don't have any IBD composite rating. This eliminates all the miscellaneous junk or over 15% of the total IBD database. I also don't require any minimal price or volume like you probably do.
Here's a snapshot of my numbers and a 3D chart for the last 21 trading days.
Billy

[ATTACH=CONFIG]9056[/ATTACH][ATTACH=CONFIG]9057[/ATTACH]

being a new subscriber too, I would suggest that a "subheading" is developed on the site which would include abbreviations of terminologies regularly used on the site. ... Generally we know what LEV, SEV, LPS, LER, TER, AB, UB, etc. stands for... but would nevertheless be great to have them listed in one location.

And apart from that definitions of those key terminologies used would also be of great help ... fx. we may know that when LER>100 accumulation is higher than previous historical accumulation, and that TEV status is basically valued on 4 different statuses: strength average TEV (above and under 50 respectively) and Extention TEV (below -10% and above 10%, respectively), etc. ....but info and definitions are scattered all over and not always easy to access... this includes the search option, Pascals informative and educational pdf files produced since 2009 and recently Pascals 13 June Comments which also (to me) provides new insights and clarity on regularly used terminologies. It would be indeed very helpful if such a tool could be posted and updated on the site.... possible?

thanks for your excellent services...
sorensen

[QUOTE=sesorensen ;14067]being a new subscriber too, I would suggest that a "subheading" is developed on the site which would include abbreviations of terminologies regularly used on the site. ... Generally we know what LEV, SEV, LPS, LER, TER, AB, UB, etc. stands for... but would nevertheless be great to have them listed in one location.

And apart from that definitions of those key terminologies used would also be of great help ... fx. we may know that when LER>100 accumulation is higher than previous historical accumulation, and that TEV status is basically valued on 4 different statuses: strength average TEV (above and under 50 respectively) and Extention TEV (below -10% and above 10%, respectively), etc. ....but info and definitions are scattered all over and not always easy to access... this includes the search option, Pascals informative and educational pdf files produced since 2009 and recently Pascals 13 June Comments which also (to me) provides new insights and clarity on regularly used terminologies. It would be indeed very helpful if such a tool could be posted and updated on the site.... possible?

thanks for your excellent services...
sorensen[/QUOTE]

We take good note of your proposal. Pascal is working hard in deep robot research and implementation of the RT 20DMF to help us all to make even more money safely. I'm afraid your request may languish in the never ending "to do" list. Any volunteer in this group to create such an abbreviation list is most welcome. That's an excellent way to review the content of this website over the long weekend.
Billy

[QUOTE=Billy;14069]We take good note of your proposal. Pascal is working hard in deep robot research and implementation of the RT 20DMF to help us all to make even more money safely. I'm afraid your request may languish in the never ending "to do" list. Any volunteer in this group to create such an abbreviation list is most welcome. That's an excellent way to review the content of this website over the long weekend.
Billy[/QUOTE]

As an essential part of my own learning I wouldn't mind embark on drafting a preliminary list of abbreviations and definitions through the search tool and available documents. If you agree I'll try and have it shipped off to you within a couple of weeks or so for you to assess....
sorensen

[QUOTE=Billy;14060]There's no need to apologize. Please refer to my introduction (initial post) here:
[url]http://www.effectivevolume.com/showthread.php?3453-Tutorial-Intro-Path-Of-Least-Resistance[/url]

Billy[/QUOTE]

Thanks, much appreciated!

[QUOTE=sesorensen ;14071]As an essential part of my own learning I wouldn't mind embark on drafting a preliminary list of abbreviations and definitions through the search tool and available documents. If you agree I'll try and have it shipped off to you within a couple of weeks or so for you to assess....
sorensen[/QUOTE]

Thanks a lot! It is much appreciated. Please send it directly to Pascal.
Billy

Billy; thank you for your very detailed response with the accompanying stats.
Best regards,
Robert