Friday, 24 October 2008

Nikkei to Cash, Gold Bearish

Sheesh. Hope you survived the week in one piece! We're just 100 points on the S&P 500 from the Oct. 2002 low of 777. Amazing. Below that, support is sketchy on the charts. Mark Arbeter, chief technician at S&P's Equity Research, just wrote in a note that there's a support line off the 1932 lows - that's right, 1932! - around 600 to 700. His colleague, Sam Stovall, chief investment strategist at their shop, says when the S&P 500 has retraced over 61.8 percent of the prior bull, the full giveback was 96 to 119 percent, with an average of 110 percent in the five instances since 1929. That would equate to a move to 700 on the S&P 500 - though the small sample size doesn't give us much validity statistically speaking.

My latest signals table is now updated with the latest data based on this afternoon's Commitments of Traders report, which my trading setups are all built around. New signals: Nikkei goes from bearish to cash, and gold goes to bearish. Please note that my new Black Swan Risk-Control Rule is now in effect for all my trading setups based on the Commitments of Traders data issued weekly by the U.S. Commodity Futures Trading Commission. (See my "How It Works" page for details.) Trading new signals will resume Nov. 17. Have a good weekend.

TAGS: S&P 500, gold, Nikkei, COT, Commitments of Traders, derivatives, Black Swans, market timing, trading system development, CFTC, Commodity Futures Trading Commission, COTs Timer, out-of-sample testing, walk-around testing

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