Hello Spikers and Spike Members,It is a beautiful sunny day here in the South. Nice 70 degree weather and I just returned from a nice lunch and quick drive by the lake and mountains, topless.A few admin notes…There have been several new videos posted in the Video Vault in the Website Tutorial channel. We have our Honor Roll section fully functional so check out the link. Weekly results will be posted here starting this week. We will no longer post the chart in the Spike comments section. Videos are posted in the Video Vault describing the sections of the website. Please let us know your comments and other features you are most interested in.
We will be featuring a new video on Tracking Spike Performance this weekend!Here is this weeks full results.
I will be featuring a new video this weekend on tracking Spike Trade Performance.Ross wins Gold with his 14+% gain while Mike M gets the Silver and Sid takes the Bronze medal!The group again gained over 1% this week pushing the YTD gain to 5.31%!! This is an amazing gain considering the conditions we have to navigate. Think about this for a minute folks.19 Traders take their entire account and make a bet on Sunday before the market opens. They must keep money management in check, yet make picks over time that will produce a gain. They are locked into their pick and their direction for the entire week. They get to change entry, exits, or scratch the pick for the week, but they get one chance, one direction, bet it all!! It is similar to Roulette and betting it on Red or Black. The only difference is you have 19 traders that do their due diligence each weekend trying to find an edge. Some win, some loose. As a collective group, they are beating the pants off the market! Sorry to bolster guys and gals, but this is amazing!!! My hats off to you all! The money management has been exceptional.
Unbelievable!! The Index P/C ratio has stayed below 1 almost all day. As you can see no intraday bounce has lasted more than a couple of minutes. As I type the ratio is .97 and only has bounced above 1, one time today. This occurred at 11am NY time just as we got the largest bounce of the day. That bounced produced a P/C ratio below 1 again and we dropped to new lows.
Right from the open the Index Put Call ratio dropped below 1. As you can see the market dropped its morning gains quickly.
The markets headed down early and continued their descent throughout the day. More worries about tomorrow mornings unemployment report and more talks of GM’s potential to enter bankruptcy helped push the markets lower. By the end of the day the major indices were trading at levels not seen since 1996.Financials was sold aggressively again today as Citi traded below $1. WFC was down almost 16% for the day. JPM was down 14% for the day. It was a very bad day for financials. Tomorrow morning we get the Employment report. Consensus expectations call for nonfarm payrolls to fall by 648,000 and the unemployment rate to rise to 7.9%.
Well, the ratio dropped below one quickly this morning and you see what we got, more selling. This ratio has been spot on most of the time during this bear market. When we drop below 1, it pays to NOT be a buyer as we drop 200 points on the DOW.We are sitting at .92 now.
This is an excerpt from The Big Picture.com:Thomas Lee, US Equity Strategy at JPMorgan writes: “Believe or not, retracing 12-year lows for the Dow is an incredibly rare event. Besides the retest of 1997 lows seen on Monday, this has only happened two other times, on April 8, 1932, and December 6, 1974.”Given the rarity of the event, it is worth taking a closer look at the past instances: The 12 year low in 1932 was ~three months before the end of the bear market. In 1974, it was exactly the low for that bear market.Dan Greenhaus of Miller Tabak adds, in both cases, “the economy continued contracting beyond the bear market bottoms; this is typical of recessions. Unemployment continued rising and GDP remained weak. The 1974 Bear market ended in December, but GDP contracted even in the Q1 1975 at a 4.7% clip
Dow Jones Industrial Average snapped a five-day losing spell, rising 150 points after a market rally in China spurred by hopes for a new economic stimulus package in that country. All sectors were green for the exception of the bank sector. The S&P 500 Index climbed back above 700. The ADP nonfarm payroll report is calling for a drop of 627,000 in private payrolls. The employment report is this Friday.The ISM non-manufacturing index fell to a 41.6 level. Friday’s unemployment index may not be as disappointing as many believe it will. With the very oversold condition of the markets, an unemployment number that is better than expected may provide for good rally. The business activity index was down by 4.4 points from January’s rating. It was 40.2. New orders also fell. On the plus side the numbers were higher than they were in November and December. We have been expecting a rally with the markets being so oversold. Today we got it. We need more of them in the coming weeks. The question now is whether or not we have more upside from here. The good thing is the Index Put Call ratio did NOT drop below 1 during today’s rally. This indicates that traders did not rush out and embrace this rally too quick. The percent of up volume moving average recently dropped below 40%, it sits at 42% and has room to move up. A reading of over 55% becomes overbought. The McClellan Oscillator has a bullish divergence in play and continues to be oversold. If intraday supports can hold this may lead to more upside as shorts go to cover. The shorts seem to have gotten a bit relaxed as selling rallies have become the norm and no rally has lasted for more than a day or two. The key will Thursday and Friday and holding up thru the employment number.
The Index Put Call ratio is acting a bit different in todays rally. It is actually staying above 1 and recently has increased a bit. It is at 1.25 as I write indicating many traders are NOT trusting this upmove. The other day we saw it drop to .73 on the rally and that rally failed by end of day. If I see any changes I will make a post.