Clusters Update - February 7, 2012

[Billy]

Nothing really changed, while money flows keep pointing to lartge players supporting the markets.
Billy

[nickola.pazderic]

Having lost much money last year in TBT, I'm very sensitive to the current anomalous behavior:



Bonds down? Equities down? I've read the bond market is correct 90% of the time. If so, the current large player accumulation patterns are most telling, I would bet:

[nickola.pazderic]

It is very interesting that the put/call ratio has decreased from approximately 2.5 to .8 since yesterday.

Ernst, can you comment?



Here I mark where a down gap-fill might mark a reversal along the ascending 10 DMA. This is crystal ball territory.

[davidallison@gmail.com]

Pascal,

The message on the RT GDX saying "The short signal in 2.39 days would not be triggered due to low volatility" Does this mean, if MF closes below MF=0 minus porosity, the robot will not call for a short the next day?

I was looking back at January 25th when we had the strong bounce in GDX. Below is 5 day snap shot starting on the Jan 19th. I remember the strong bounce on the 19th exactly at MF=O. Also on the 25th when MF was approaching zero, was the huge rally. If the short is not in the cards, then it sure looks like going long as MF approached zero, with a stop at MF = 0 minus porosity, would be of interest.

BTW, I'm still short, GDX with a plan to cover if MF > 1.

Dave

[Pascal]

Pascal,

The message on the RT GDX saying "The short signal in 2.39 days would not be triggered due to low volatility" Does this mean, if MF closes below MF=0 minus porosity, the robot will not call for a short the next day?

I was looking back at January 25th when we had the strong bounce in GDX. Below is 5 day snap shot starting on the Jan 19th. I remember the strong bounce on the 19th exactly at MF=O. Also on the 25th when MF was approaching zero, was the huge rally. If the short is not in the cards, then it sure looks like going long as MF approached zero, with a stop at MF = 0 minus porosity, would be of interest.

BTW, I'm still short, GDX with a plan to cover if MF > 1.

Dave

This message means that as of today, we are still more than two days from crossing below the 0 level, where a short signal would be produced. However, the ATR as of today is very low. This indicates that the move back down to 0 is not due to real selling, but most probably to the fact the the indicator is an oscillator that naturally comes back top 0. This is not a sign that we need to short. hence, if we fall below zero on a low ATR, the probability that we'll move back up rather fast is high. In such a condition, you'd better be prepared to buy.

Of course, we will know it better when we are closer to the zero level.



Pascal