Thursday, January 3, 2008

01.03.08 - Strong Cumulative Tick

Strong factory orders certainly helped off-set yesterday's backward looking ISM report on the same topic. Same with jobless claims. Economic reports are so contradictory, inconsistent and noisy these days -- probably more signs of the potential inflection point we are all by now anecdotally aware of, but confusing nonetheless and undoubtedly injecting a significant uncertainty risk premium into pricing and a source of feedback volatility.

The Cumulative Tick looks constructive at the mid-day. This is usually a good sign of dependable strength through the day. It may help to break through the pivot point about here. We are technically oversold and still in a typically bullish period in-spite of all the hemming.

UPDATE I: One more thought, consider hedging towards the close today in the event of a sell off ahead of tomorrow's jobs data. Also, hard to know how the political caucuses will play in the days ahead. Anti-business rhetoric is a growing theme, and that can't help stocks.

2:30PM CST UPDATE II: Hope you read the first update earlier this morning... What was the tip? Just intuition based on the recent environment. However, you may have subsequently noted that:

  • There was no relative strength among the leaders;
  • The Russel struggled all day long;
  • The VWAP (Correction: Tick) became erratic;
  • The A-D line started to trail off; and,
  • VWAP started to trend negative.

If the market sells off much harder, I'll think about going-long the overnight. Otherwise I'll sit tight.

3:50PM CST UPDATE III: Interesting comment on Bloomberg just now; did anyone notice how the VIX declined today? I admit I missed it until I heard it in the background... Hmm...



Bill aka NO DooDahs! said...

Off-topic for your post.

Interesting poll results on your sidebar. 42% predicting a down year, and 68% predicting a year that is below average. I know the count isn't very large, but from what I've seen, this is a typical result. By and large, the internet consumer of stock market analysis is bearish. Since only about 22-28% of calendar years lose money, and since the average gain in a calendar year is in your second from top range, with only 29% of respondents looking for a year that is average or above average, they are embarrassingly bearish.

How are YOU planning to use your poll results? Contrarianism? Or just entertainment?

Jeff Pietsch CFA, Esq said...

Bill, from a pedantic standpoint, I find the mild bell shape interesting and possibly instructive vis-a-vis the split environment we find ourselves in. Otherwise... pure entertainment! This is a new site, and although hits are picking up, I'd like to foster more interaction. You're an old pro, any suggestions? Email me at jgpietsch @! Best, Jeff

Bill aka NO DooDahs! said...

Ah, if you want tons of traffic, you need to do what I say and not what I do!

* lots of posts. Multiple posts during the day, even if the posts are nothing but links to others' work with extending quotes of it, ending in "what say ye?" Look at Beary Ritholz and that Panzner Financial Biblical Disaster guy for examples.

* some of the posts should be completely off topic, but in no way related to politics. Pictures of good-looking women, wine reviews, music reviews, all play well.

* many of the posts should be linkfests. If you do regular linkfests, you'll get a lot of hits.

* web customers like a bearish, scare the heck out of you attitude. Scare 'em, then offer them a solution that only YOU know about.

* bearishness sells better if it's based on esoteric cycles or on macroeconomic gibberish

* hyperactive, thrill-seeking trading. Lots of announced trade ideas during the day and during the week, preferably with some day trades thrown in.

* never, or at least, exceeding rarely, should you specifically criticize anyone - unless they are a permabull.

Check the listings at 26econ or InstantBull, go down the rankings from most popular to least, and you'll see a congregation of the above factors at the top of the list, with most of them having 2 or more of those characteristics. What I've listed will work to drive traffic, but it may not be in your character to do.

Also, check the 26econ survey of bloggers, the results will reassure you that low traffic is par for the course in this genre of blogging.

Jeff Pietsch CFA, Esq said...

Hilarious, I think I'll pass, but thanks for the late night laugh!