Ian Woodward's Investing Blog

Archive for July, 2011

Stock Market: Euphoria or Precipice

Thursday, July 28th, 2011

Although the deadline is August 2 for the Debt Ceiling resolution, I suggest the Market will be anticipating the outcome before then and probably by tomorrow.  I should remind you that a month ago the market was sitting on top of the world, and here we are a month later on the verge of a precipice.  The hour is late, and the House vote has not yet happened, so we are down to just one day:

I felt you would like to know what Euphoria and Precipice means in %B Terms so that you can judge where we sit:

I must remind you that the Market is currently in Correction as shown by the usual yardsticks we use for %B:

It’s finger biting time, and either you roll the dice and take a chance or you make up your mind to protect your portfolio.  Volatility as usual will be key to watch and as you can already see the VIX is pointing towards a new spike.  It’s Your Call.

Best Regards, Ian.


Stock Market: Don’t Bother They’re Here

Wednesday, July 27th, 2011

It’s time to laugh at this idiocy as the Nation’s blood boils.  401-K’s will soon become 401-Kegs at this rate.

I know the next slide has a lot to digest, but I wanted to get this whole mumbo jumbo down to one chart, as the market has of its own wish given us a Symmetrical Chart Pattern the likes of which I certainly haven’t seen before.  So staying with the “Send in the Clowns” Theme of my last couple of blogs, here is MY READING of what the MARKET is NOW telling us.  I have been wrong before and I will be wrong again, so enjoy it for what it is worth:

Best Regards…Oh, by the way, great to have Ron back safe and sound after a memorable vacation.



Stock Market: High Road or Low Road Tomorrow?

Sunday, July 24th, 2011

The Stock Market has been very tolerant so far of all the Debt Ceiling debate, and although great Earnings Reports last week from the likes of GOOG, IBM and AAPL have helped to keep it pointed upwards, time is running out and we may be in for harder times to come.

The KISS Approach I have taught you with the Thin Blue Pencil Line confirms that we are still on the High Road Scenario:

Once more the VIX quietened down to a reasonably safe territory, having done a jittery dance to 21 the previous week:

…And the Chief Canary, AAPL, has been chirping its way to Hog Heaven and knocking on the door of breaking above 400:

…But, all bets are off for tomorrow as the Futures Market already seems to be signaling a rough ride.  We may end up with Perfect Symmetry:

Keep your Powder Dry and be ready to work in whatever direction the Market takes.  Let’s hope it doesn’t eventually end below 1250…-8%!

Best Regards, Ian.

Stock Market: Wishful Thinking Made It So!

Tuesday, July 19th, 2011

Yesterday, I wound up my Blog Note by saying that given the major drop in the Market, it was most unlikely that the Nasdaq could gain 60 points to reverse the bad day and would you believe it, it happened!  Wonders Never Cease!

…And here are the reasons why with courtesy of, and compliments to, MarketWatch in their bulletins this morning:

Here is the updated Chart of the Nasdaq showing the 60 point rise:

With Earnings the hot subject right now, it seems the Canaries are all we have to watch…Now that’s Wishful Thinking:

For those who follow the AAPL Food Chain, here is the list as best as I can tell and their performance today:

Best Regards, Ian.

Stock Market Spooked: Send in the Clowns!

Monday, July 18th, 2011

It seems we had our first shot across the bow with the Market getting a trifle spooked by the stonewalling on the Debt Ceiling Debate.  However, although the Indexes took a -1% hit today, the Volume did not show panic buttons were pushed as yet, so it might just be a pullback.  On the other hand it may be a taste of things to come if the “monkeying around” doesn’t come to an end within the next ten days:

My good friend and associate Ron picked a good time to have a bit of R&R as the Market yin-yangs back and forth between 2700 and 2800 of late:

So let’s turn to our “Go To Clues” for where things stand with the Canaries and the VIX relative to the Nasdaq in the next few charts.  Overall the Canaries have held up reasonably well except for today when both NFLX and AMZN took hits, along with the new-comer LNKD.  AAPL was by far the strongest of the bunch and headed for New High Territory despite the Market sell off:

It is really not surprising that these Leaders are pausing to refresh as we all know a general rule of thumb is that a Stage breakout will usually last for about 22% to 25% Gain in 4 to 6 weeks when it is reasonable to expect a “Pause to Refresh” which is exactly what BIDU and NFLX have done.  Although AMZN has not dropped significantly, both it and NFLX have broken their short term trend-line to the upside, with NFLX dropping an alarming 14%…presumably in reaction to the recent price hikes they have announced which has caused some form of an uproar.  As you would expect these stocks have risen and fallen in concert with the Nasdaq, so there is nothing unusual yet other than profit taking and cooling off from an explosive rise.

So let’s turn our attention to the VIX, and I give you a new view which my good friend Bob Meagher produced for us to track the Kahuna Force and %B change in Real Time using the Think or Swim (TOS) software…good stuff!

Let’s look at the 20-day view of the Cup and handle and breakout of the VIX above the Down-trend-line, otherwise known as the 405 Freeway, with the strategy to watch for where the three Road Scenario is unfolds very easily.  Any push up from here will soon put the Bears in complete control:

…And finally, let’s compare the VIX with the Nasdaq on the same view, where I suggest that the Nasdaq has to get above 2825 to turn the corner.  Sixty points up in a hurry is not very likely unless there is some blockbuster news to the upside:

Net-net:  No alarm bells yet, but waiting for the other shoe to drop in the midst of the Earnings Reports, so its not surprising the movement is more news driven at this stage.  The next ten days will tell us whether we survive another debacle or head down into the mire.  Best to sit tight and wait it out.

Best Regards, Ian.





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