Opening Whisper
I don't think the Nasdaq 100 (NDX) has been this flat for 3 weeks in a row since December 2004. It seems that the Christmas rally may be over. For some reason this song came to my mind as I am watching the markets tread water today, and ever since the first of December.
Where have all the flowers gone?
Long time passing
Where have all the flowers gone?
Long time ago
Where have all the flowers gone?
Girls have picked them every one
When will they ever learn? When will they ever learn?.....
Listen here: http://www.niehs.nih.gov/kids/lyrics/flowrsgone.htm
One of Peter, Paul and Mary's famous songs. Words and music by Pete Seeger.
Where have all the buyers gone? For that matter, where have all the sellers gone? What "kind" of resistance are we seeing here? I don't think that the resistance is from the index price levels themselves. Certainly the Dow Industrials should not be inhibited just because of the big round 11,000 number. There must be something else troubling this market. But what? Earnings going forward? Mutual fund flows? Interest rates? Debt?
We are trend followers and not trend predictors. We can't buy and sell the news. We can only profit from price movement. And right now it's NOT MOVING! We will likely see a move soon to break out of the flat channel that the Nasdaq 100 is in currently.
Many of our subscribers have told me that they are in cash waiting for the next move. That's not a bad idea. We may see a little more buying before year end. My only hesitation to the buy side is that any break to the upside may be a false breakout. If they ring the Dow 11,000 bell on or before December 30 th, that bell may signal the top. The selling may then begin in earnest in the early days of January. Why should Dow 11,000 be the bell ringer? No reason at all other than this market is acting very flakey and without conviction. A deja-vu Christmas rally and selling into January?
"When will they ever learn? When will they ever learn?"
What Is The Current Market Sentiment?
The market has no new trend other than the bullish trend from mid-October. Sentiment has clearly moved to the extreme bullish side. Investors' Intelligence bullish - bearish divergence has not been at this bullish extreme since the first week in August and that extreme was a sell signal.
The CBOE Total Put/Call Ratio weekly chart below is confirming a short-term top.
2 Year Weekly - CBOE Total Put/Call Ratio ($CPC)
The November 2005 low in the CPC (bearish) has been fighting the seasonal year-end rally. It's kind of like sending Christmas cards to friends. In most cases, it's just expected. So the November/December rally happens just because it's expected. But some expectations can end badly as they did in January 2005.
Both VIX and CPC are closer to bullish sell signal extremes than they are to bearish buy signal extremes (in a contrarian view).
The weekly VIX chart below shows just how quickly bullishness has accelerated into options since mid-October. You don't have to guess or predict to believe that these low VIX readings are usually the signal to sell the markets.
2 Year Weekly - VIX Volatility Ratio ($VIX)
MARKETS SELL OFF IN JANUARY!!! Do you remember how the markets closed out 2004 and started 2005? The selling was significant in January. Will it be a repeat performance in early 2006? We are nearing a potential inflection point in the market. Your subscription to the Listener could help you prepare for the next market "whispering". This report is only a partial weekly report without trading signals, stops and trading instructions for the week ahead. Market Listener Trader subscriptions are now available on our website: Go to www.MarketListener.com and click on "Subscribe". Market Listener Traders get complete reports and trading signals. Email alerts and timely website updates for Members are generated based on market conditions. Subscribers also get Mutual Fund Restricted Trader signals for those who have mutual fund frequent trading penalty fees and trade timing restrictions. Subscribe today and become a Market Listener. |
Our Trading System - What The Numbers Are Telling Us
{The Listener Trading System Model and signals are only available to subscribers.}
The markets played out almost exactly like last year during the 3 rd Friday of December when the NDX was down on the day. NDX was down 0.77% on the day and down 0.23% on the week. SPX was up 0.63% on the week.
If the analogy to last year holds, then the final nine trading sessions of the year will be characterized by rising prices on dramatically lower volume. Placing a bullish bet at this point might be in accordance with the trend since mid-October, but it would have a lot of risk should the low-volume day/swing-traders decide to exit early. The long side does not appear to have much value at this point.
6 Month Daily Nasdaq Summation Index
The Nasdaq Summation Index ($NASI) has been a good indicator signal for the NDX. If you pull up a $NASI chart of December 2004, you will see that it dipped to signal an early exit before the January 2005 sell-off. We are possibly seeing similar action in the NASI chart above.
Trend Compliance: The NDX market looks to be making a slow-motion roll-over. This sure does feel like December 2004 all over again.
1 Year - NDX ZigZag (5%)
The Markets Are Whispering - Are You Listening?
Market Listener Trader Signals & Results |
| CURRENT RESULTS | ||
| 33.9% | 8.7% | 38.5% |
| YTD | 6 Month | 12 Month |
(Updated as of Dec. 16)
| Recent Signal | Slo. Stoch. (fast) | StochRSI (fast) | CCI (fast) | MACD (Variable) | Trigger Inputs Proprietary or Other | ML Signal 3 |
| --- | --- | --- | Recent | Signals | Not | Shown |
| Oct 31, 2005 | Buy | Buy | Buy | Sell | Cash Stop | Cash |
| Oct 28, 2005 | Sell | Sell | - | Sell | Sell | |
| Oct 19, 2005 | Sell | Buy | - | Sell | Cash Stop | Cash |
| Oct 05, 2005 | Sell | Sell | Sell | Sell | Sell (100%) | |
| Sep 30, 2005 | Sell | Buy | - | Sell | Sell (50%) | |
| Sep 15, 2005 | Sell | Sell | - | Buy | Sell | |
| Sep 14, 2005 | Sell | Sell | - | Buy | Cash Stop | Cash |
| Sep 07, 2005 | Buy | Buy | Sell | Buy (mod.) | Buy | |
| Sep 06, 2005 | Buy | Buy | Sell | Neutral | Cash Stop | Cash |
| Aug 08, 2005 | Buy- | Buy | Buy | Buy | Sell | |
| Aug 04, 2005 | Buy | Buy | Buy | Buy | Cash Stop | Cash |
| July 08, 2005 | Sell | Buy | Buy | Buy | Buy | |
| June 24, 2005 | Sell | Sell | Sell | Buy- | Cash Stop | Cash |
| May 13, 2005 | Buy | Buy | Buy | Sell++ | Buy | |
| May 06, 2005 | Buy | Buy | Buy | Sell+ | Cash Stop | Cash |
| Feb 11, 2005 | Sell | Sell | Sell | Sell | Sell | |
| Feb 04, 2005 | Sell | Cash | Sell | Sell | Cash Stop | Cash |
| Jan 14, 2005 | Sell | Sell | Sell | Buy | Sell | |
 | ||||||
| Dec 31, 2004 | Buy | Buy | Buy | Sell | Proprietary | Cash |
| Oct 15, 2004 | Buy | Buy | Sell | Buy | Buy | |
| Oct 08, 2004 | Buy | Buy | Buy | Buy | Cash Stop | Cash |
| Oct 01, 2004 | Buy | Buy | Buy | Buy | Buy | |
| Sep 24, 2004 | Buy | Buy | Buy | Buy | Cash Stop | Cash |
| Aug 20, 2004 | Sell | Buy | Buy | Sell+ | Buy | |
| Jul 16, 2004 | Sell | Sell | Sell | Sell | Sell | |
| Jul 02, 2004 | Buy | Sell | Buy | Buy | Cash Stop | Cash |
| May 14, 2004 | Sell | Sell | Sell | Sell | Proprietary | Buy |
| Apr 30, 2004 | Sell | Sell | Sell | Sell | Cash Stop | Cash |
We want to wish you all a very Merry Christmas and a great and prosperous New Year. As we close out 2005, we want to take this time to thank all of our readers and subscribers. Our interaction with you this past year has been most appreciated. We are looking forward to making next year even better. - Greg |
Listen To What He Says
KJV Luke 2:7-14 And she brought forth her firstborn son, and wrapped him in swaddling clothes, and laid him in a manger; because there was no room for them in the inn. And there were in the same country shepherds abiding in the field, keeping watch over their flock by night. And, lo, the angel of the Lord came upon them, and the glory of the Lord shone round about them: and they were sore afraid. And the angel said unto them, Fear not: for, behold, I bring you good tidings of great joy, which shall be to all people.
For unto you is born this day in the city of David a Saviour, which is Christ the Lord. And this shall be a sign unto you; Ye shall find the babe wrapped in swaddling clothes, lying in a manger.
And suddenly there was with the angel a multitude of the heavenly host praising God, and saying, Glory to God in the highest, and on earth peace, good will toward men.
I am working on the art of listening and hope that you are also.
Best Profits,
