Wednesday, October 31, 2012

Open for business

Drifting; Poll results

After two days of unplanned vacation (for those not in the path of Sandy) we're back to work trying to guess which way the market wants to go.  The charts are looking a little healthier to me in the short term.  The RumWave chart is still a no-go so any positions that get entered must still be regarded as a gamble.

Today's Scores.. still a lot of green:

TSP gameplan:  G fund.

For the poll question I had open asking what you thought the biggest obstacle to the market is.. the majority of you said "Earnings" followed by "Fiscal Cliff."

GOOD LUCK TOMORROW.. Happy Halloween!

Monday, October 29, 2012

Good luck, north east US!

Market closed today

Not much to write today with the market being closed.  Good luck to all RumWavers being effected by Sandy!

Sunday, October 28, 2012

Ready to jump?

Bias is to the upside

On Friday the market flailed around a lot, closing ever so slightly positive.  On my charts I see some signs that we are setting up for a temporary move higher.  By temporary, I'm talking only a few days, maybe a week.  The RumWave would support such a move.  However, any plays to capitalize on this potential move are nothing more than gambles and are quite risky.  The RumWave chart is still no where near a buy signal.  For your nest egg, no-trades are better than bad trades.  If you want to play around with small positions to keep things interesting, have a good time and don't play with more money than you would be willing to flush down the toilet.

Daily scores:
The score chart is showing some rounding at the bottom.  In the past this has predicated small moves (couple hundred DJIA points) to the upside.

TSP Gameplan:  G Fund.  The lack of flexibility in TSP is prohibitive to capturing gains on short term moves so keep the powder dry, so to speak.  TSP does seem like it will work well with RumWave signals, so I'd wait until we get a good indication.

Questions, comments?  Email me:

Thursday, October 25, 2012

Your guess is as good as mine

No man's land

I was quite hopeful at 430 am (CST) when the futures were showing positive signs.  I was even more hopeful on my drive to work while listening to CNBC on satellite radio.  I was super optimistic and feeling good about things when I stepped to fly my sortie.  Then, when I had landed 1.5 hours later and got a chance to check the markets we were seeing what has been all too typical lately.  A nice pop at the open, only to be smacked down by the bears through the close of the European Markets.  Frustrating, but there's nothing we can do about it.  The bottom line is that I can make a reasonable case for moving higher from here and a reasonable case for moving lower from here.  For that reason, I'm in a holding pattern for my RumWave type investments.  I am, however, in a bullish "gamble" trade for a small position in a small cap index fund.  Hopefully I don't get crushed!

Today's scores:

TSP Gameplan:  G Fund for longer term investors.


Questions, comments?  Email me:

Wednesday, October 24, 2012

Approaching next support level, 13k

13000 DJIA = important support level

Today's market action was mostly sideways ending the day in a small loss.  My calculated scores continue to be at extremely low levels, indicating an oversold market with the potential to snap higher.  However, the RumWave chart is not giving a buy signal so I'm not really sure how much lower the market will go before we turn around.  The next notable level of support will be at 13k on the Dow.  It is both an emotional level of support (nice big round number) and a Fib retracment level (+- 20 points depending on how you draw the lines.)

Today's scores:

Overall, if you want to gamble on the market and hope for a pop based on the oversold levels realize that is is a gamble and you might as well be betting on football games.  If you want to play the RumWave method, continue holding and wait for a more confident opportunity.


Tuesday, October 23, 2012

Next support 13k

Drama Queen

Well, a 230 point selloff was not what I expected.  It seemed a little excessive to me and the decline dropped my scores off the chart to the low side.  However, a RumWave buy signal was not created (and its not even close to one).  So, I'm holding tight for a while longer.  It looks like the next level of support for the DJIA is in the vicinity of 13000.

Daily scores:

I have to think that some kind of bounce is probable tomorrow.  Even though I don't have a medium term buy signal from the RumWave I think the bullish "spring" is once again compressed and ready to be unleashed when the market does decide to go.  It is fairly rare that all three of my scores are green, and the Score Total is the lowest I've ever calculated.  Remember, this is all "reversion to the mean" type stuff so the gravity is to the upside in this case.


Monday, October 22, 2012

Support level held

Support held, jaw dropping rally to end the day

Today I was fortunate enough to be watching my charts as the markets went into their final hour.  The DJIA held in the vicinity of the 13,250 target I wrote in my last post and then went into full throttle to go from -80ish to slightly positive on the day.  Now we need a good follow through day tomorrow to convince me that the recent decline will stay above that 13,250 target for a while.

Today's scores:


TSP Gameplan:  Still in the G fund for a bit longer.

Saturday, October 20, 2012

Target 13,250 DJIA

DJIA meeting 5 independent support levels

Friday the market took it on the chin, with the DJIA slashing away 200 points.  I was stopped out of all my DJIA long positions at break-even.  The RumWave chart was at a very specific resistance point mid week and indeed bounced to the downside.  

Now the DJIA is meeting a cluster of 5 independent support levels: (1) the 50 day simple moving average (SMA) (2) a historical level of resistance / support at 13,300 dating back to May of this year (3) a potential completion of an A-B-C Elliot Wave pattern in the vicinity of 13,250 (4) a 23.6% Fib retracement at approximately 13,260, and (5) a specific support level on the RumWave chart.

I'd venture to guess that most chart readers subscribe to at least one of the above reasons as a possible level of support for the market to bounce off of.  If you combine all of the people who believe in any one of the methods then multiply that by the 5 methods you have some significant market moving power, my friend.  

Pictures for your viewing pleasure:
The scores above took a breather, but the overall score total is still pretty low.  

 The yellow line shows the level of support / resistance in the vicinity of 13,300.

Above is a closer look at that level of resistance, along with a dashed yellow line showing the 50 day SMA.  the last red candle is hovering on top of both of these support levels.

 The chart above is a 4 hr chart of the DJIA.  Note the downward slope of the MACD as well as the space remaining to move lower on the Slow Stochastic and the CCI.

THE BOTTOM LINE:  I would not be surprised at continued selling Monday to finish out the Slow Stochastics and CCI indicators.  I think this downside impulse will end in the vicinity of 13,250 (a bold statement, I don't usually do this).  If I see signs of a change in trend at that point, I'll look to get back into long positions.


Questions or comments?  Email me: 

Thursday, October 18, 2012

Sideways is good

Lack of a big decline is good

I think the above title could be filed under, "thanks, master of the obvious" but there is a bit more to it than it initially may seem.  As the market made a huge move upward a few days ago it created a lot of room between it and it's short term moving averages.  More delta between them (or vertical turning room, if you think of it that way) equals a stronger gravity back toward those short term averages.  The last two days the market has resisted that gravity and only moved sideways, correcting slowing back to the already ascending moving averages.  This is a bullish sign, in my view, because the bears have not been able to mass an attack that sent the DJIA lower. 

Here are today's scores:

I am still holding my long positions with stops at my break even point.  


Wednesday, October 17, 2012

Take a breather, champ

Sideways today, slightly down tomorrow?

The market action today was fairly non-eventful.  Sideways action dominated most of the day, but the slow stochastic on the 4 hour chart reached very high levels.  Interestingly, the EUR/USD had a rip your face off rally the last 24 hours or so with almost no impact on our market.  Kind of strange if you ask me.  I'm still in my long positions with stops at my break even points.

Today's scores:

You'll probably notice that the 4 hour score turned red today.  This suggests that the path of least resistance is down or sideways the next few days to get it back to lower levels.

TSP GAMEPLAN:  Hold.  If you are in the C fund or S fund, stay there.  If you are in the G fund stay there while we wait out a short term giveback.

Questions or comments?  Email me:


Tuesday, October 16, 2012

Signs of strength, but pullback probable

Success so far, pullback probable                        New Poll ------------>

We have enjoyed a nice market pop the last two days, as I predicted over the weekend.. I'm just sayin'.  However, the RumWave chart is meeting a specific resistance point.  Looking back at short term market bottoms over the last 4 years, most of them have bounced off this RumWave resistance point to the downside.  Sometimes the market makes a new low while other times it doesn't.  What I'm getting at is that we should expect a little giveback tomorrow.  For that reason I sent out an email to my friends recommending they adjust their stops to accommodate their individual risk tolerance.  I personally set my stops to my entry points, meaning the worst I should do is break even if there is some kind of large collapse.  If my stops don't get triggered I'll just ride the wave higher.  Good times!

Today's scores:

In the score chart above we can see that the 4 hr chart turned a burned orange (go Texas), indicating that we are overbought.  The Daily chart is also turned orange.  The RumWave is still green which supports the concept that a small pullback is probable while the longer term (talking 20 trading days) still looks to be intact... for now.

Today I noticed a bullish divergence on the 1 hr DJIA chart (yellow lines).  This is a sign of strength in this particular wave, but do take notice that the slow stochastic is at high levels and is about to cross.. a sign of very short term change in direction.

TSP GAMEPLAN:  If you are in the C or S fund, stay there.  If you are not, stay in the G fund for a little bit.

Questions, comments?  Email me:

Monday, October 15, 2012

Bullish positions established

Moved into bullish positions

Today appears to be the start of the newest wave.  This morning I moved into my 3x DJIA ETF as the market was moving higher.  I was able to eek out a .67% profit, which is better than nothing.  I suspect the rally will last for a week or two, but I'm skeptical of the ability to break out into new highs. 

My positions are backed up with a stop on this order.  I'm not usually a fan of using stops, but I think it is warranted here.  

Daily scores:

TSP gameplan:  Move into C or S fund for the next couple weeks.  After that, we will go back to the G fund.

Questions, comments?  Email me:


Bullish intraday update

I moved into bullish positions this morning. I think we will prob fade into the close a little.

Sunday, October 14, 2012

Compressed market

The "spring" doesn't get much more compressed than this

When I review my daily scoreing system, I think of it as an indicator of how compressed or extended the market is.  Green numbers indicate a compressed spring while red numbers indicate an over extended spring.  The lower my scores get, the more compressed the market is.  Currently the scores are all in the green and the overall score is the lowest I've ever seen it.  This is telling me that when the market does go, it is going to rip everyone'e faces off for a short time.

Now the question is, when will the spring be uncaged?  That is where the RumWave chart (that I don't post) comes in.  It has a particular knack for predicting the change in direction.  Currently it is very very close to meeting my criteria to indicate a change in direction is upon us.  In fact, it is so close that it could almost be considered within it's notional margin of error.  Also, there are a couple things on it that lead me to believe the rally will start Monday.  If we get a decline, the criteria for a short term market bottom will, in all likelihood,  be met.  If we get a pop, then it will likely be the start of the short term rally, and the bottom will have been Friday.

Here's the problem: I think this upcoming rally could be the last "death throw" of this longer term impulse higher.  The daily and weekly charts are showing some significant signs of weakness and a "common sense" Elliot wave count looks to be complete.  (I know there are lots of complicated EW concepts out there, but I like to keep things simple).

All this said, when I do get long (buy a bullish position) I plan to use a trailing stop.  I'm not usually a fan of them but I think it is warranted in this particular case.

Scores and Charts:

The Slow Stochastic on the chart above is at extremely low levels.

Previous bearish divergences (yellow lines) led to very low Bollinger, RSI, and CCI scores.

TSP GAMEPLAN:  Stay in the G fund for now, wait until the green light on this blog.  Then, for the subsuquent 1-2 weeks a position in the C or S funds should be profitable.  Plan will be to move back to the G fund after that.

Questions, comments?  Email me:


Thursday, October 11, 2012

Stayed neutral today

I'm not convinced yet

Today the DJIA shot up at the open like I expected it might, but then retraced the entire rest of the day to close slightly negative.  Going  into the European market close (1030 CST) I was strongly considering going into a bullish position.  However, the market started to show some weakness and I decided to stay out.  Also, the RumWave chart has not met my "buy" criteria.  

Today's scores:

The scores above are screaming for a rip-your-face-off rally, which is making it very difficult for me to stay out.  During the day today I reviewed my RumWave chart signals back to 2008 and re-convinced myself that the right thing to do is trust my signals and wait for my "buy" criteria to be met.  Discipline and faith are two rarities when it comes to stock trading but it has proven to be the pillars of success when it comes to RumWave trading.

TSP Gameplan:  100% G fund, ready to move into C fund soon.


Questions or comments?  Email me:

Wednesday, October 10, 2012

Glad we got out when we did

So, that was a good call

My decision to get out of my 3x long DJIA ETF was a good one.  So far it has saved me a little more than 5% of downside.  Now I'm waiting for a buy signal, but I'm still a little nervous.  This is because of all the bearish divergences I'm seeing on the longer term charts (I'm talking about charts looking back over the last year.)  We are also starting to hear a lot of negative comm from the news outlets about the market and an expected horrific earnings season.  There have, indeed, been a lot of pre-announcements of bad earnings, but that just leaves the door wide open for some "unexpected" beats propelling the market higher, for better or worse.

Here are the daily scores:

All three of my calculated scores turned some shade of green today.  Previously this indicated that we are due for a bullish reversal of direction.  However, I will heed my own advice and wait for my established buy signal before getting into a long position.  That could happen tomorrow, but we'll have to wait and see.  If I do decide to jump in during the day tomorrow, I'll post an intraday update.

TSP GAMEPLAN:  100% G fund, but ready to move into C fund soon


Questions or comments?  Email me: 

Tuesday, October 9, 2012

All cash for now

Bearish feast

Today we saw a market under bearish pressure.  When I started my most recent bullish position, I noted that it was a risky and somewhat uncertain trade based on a "weak" buy signal.  The RumWave chart had never met the criteria to buy, it was more of a hunch and a desire to not miss out in case the market took off.  Now that weak buy signal has been confirmed as invalid.  Today I moved into an all cash position (at break even on the trade) as I await the next signal.  The market ended the day somewhat oversold, so we probably won't see a big gap down tomorrow at the open.  More likely would be a "dead cat bounce."

The scores above are at astonishingly low levels for the RumWave score, but my "buy criteria"  has not been met on the RumWave chart.  

FAIR WARNING: There is a significant bearish divergence on the DJIA daily chart that some of my favorite bloggers are not yet talking about (makes me wonder if I'm the crazy one).  The last two market peaks made higher highs (albeit only very slightly higher) while the RSI, Slow Stochastic, and MACD have made lower highs.  Previously this predicted large market sell offs by a few days to a few weeks.  I suspect the market may make one more attempt to break out to new highs before such a sell off occurs.

TSP GAMEPLAN:  100% G fund.  Get your ship in the harbor for a while (sts).   

Questions or comments?  Email me: 


Intraday update

I closed my bullish positions at break even. I am not in any short positions, and don't plan to be for now. Neutral.

Monday, October 8, 2012


Ready to take profits at a moment's notice

Today's market action presented a gap lower at the open and a struggle to end the day slightly negative on the DJIA.  I have changed the stoplight to the "light red" color because I'm seeing some things that I don't really like.  First, there are some bearish divergences out there that no-one seems to be talking about yet, but they have my attention.  Second, some of the Elliot Wave counters have us at a potential inflection point.  Third, my daily and 4 hour scores are still quite high.  Finally, the RumWave chart is in a bit of no-man's land.  It favors a move to the upside, but leaves the door open for a violent move to the downside.  The bottom line is that this market smells a little fishy to me, and I'm suspect of it.  A down day tomorrow (afternoon, that's when I like to make my decisions) would likely be all I need to elect to secure whatever profits I have and get into cash for a while.. at least until I can get a better read on what will happen.

Today's scores:

No change to TSP yet.. 75% C Fund, 25% S fund


Questions or comments?  Email me:

Saturday, October 6, 2012

Moving to "Hold" status

Closing the "buying window"

Friday's market action gave us a large pop at the open and then faded throughout the day.  During the last few minutes the market did make a nice move up breaking the downward trajectory and keeping the DJIA in the positive for the day.  I think that is a good sign of bullish interest, however I think the time to buy into this rally has past.  I am now in a "hold" mentality because the 4hr and daily scores are quite high.  

Today's scores:

You can see in the scores above that the daily chart score (top row) and 4 hour chart score (middle row) are in the red.  This is telling me that the market has moved up to levels that are fairly high in relation to their recent past.  That is why I don't want to start new bullish positions.  The combined score total (small standalone row) is still being balanced out by the RumWave chart score.  The picture below shows a compressed view of all of my scores (June '12 to today) for your reference.

In the above chart, note the RumWave score.  It is still really, really low.  Meanwhile, the 4 hour score is relatively high, but not at all-time highs.  Regular readers may remember that I think of the RumWave as a "lie  detector" for the market.  Right now, it looks like the truth data is leaning toward the bullish side.

 Above is a 4 hour chart of the DJIA.  I find two things interesting.  First, the slow stochastic red line is at very high levels.  Second, the MACD is showing a bullish crossover (small red circle) and is starting to print green bars.  This seems to indicate that the slow stochastic may ride at these higher levels for a little while as the MACD continues on a positive slope.

 Finally, above is a DJIA daily chart.  There isn't much that I find particularly remarkable about it.  All of the oscillators are at mid range and the MACD is approaching a bullish crossover.

Ultimately, all of this data leads me to believe that there is still more upside to this rally, but I don't think the market is set up to explode to the upside.   More likely, it will be some kind of a "melt up" type move with small ups and small downs along the way.

TSP GAMEPLAN:  No change.  75% C fund, 25% S fund.


Questions or comments?  Email me: 

Thursday, October 4, 2012


Bulls are in charge

The market is starting a new move to new highs.  It may not be a straight shot up, but I think "up" is the direction the market wants to go for the next little while.  My levereged DJIA ETF made a 1.8% gain today which was nice.  Hopefully we continue the trend tomorrow!  A big "jobs" number is due out tomorrow.  If it is even a little better than expected I think the market will jump on the news.  

The scores:

The 4 hour DJIA chart score (middle row of numbers) turned red today.  They are not at super high levels, but it suggests that the ultra short term market (1 or 2 days) is getting a little overbought.  The "score total" number (bottom row of numbers) is still in the green.  It is being balanced out by the RumWave score and suggests that there is still plenty of room to run on this wave over the next 10-20 business days.

TSP gameplan:  75% C fund, 25% S fund


Wednesday, October 3, 2012

Any time now..

Just waiting..

This will be a quick post.. debates on in a minute.  Not much to speak of on the market today, but the RumWave score on the chart below is very very low.  Any bit of good news could uncoil the spring, even the debate I guess!

Here's a new segment of the blog, the TSP (Thrift Savings Plan, for military readers mostly) position recommendation:  75% C fund, 25% S fund.  Plan to keep it there for the next 10 -20 business days or so.  When it looks like the wave has reached a top we will move into the G fund for safety.


Tuesday, October 2, 2012

Consolidating a base for bulls

The pop is getting closer

Today the market opened higher, then wandered lower and spent a lot of the day moving sideways after that, only to run up into the close.  It seems to me that the market is moving sideways consolidating before another move higher.  The RumWave chart is getting closer to my preferred "buy" signal.  Another down day tomorrow would likely put us at or near a strong rebound point, but the market could definitely take off from here.  For the purposes of the scoreboard I will begin tracking the RumWave score from today until I give a sell recommendation, as today was the day I sent an email out to my friends giving my recommendation to buy an index tracking ETF of their choice (I play a 3x leveraged DJIA ETF), so long as they were willing to accept the increased risk of this trade.   I intend to hold the position for about 10-20 business days.

The daily scores:

About the only thing holding the overall market back seems to be the small caps.  If they would find a bottom I think we would be off to the races.  The scores on my chart (above) are showing a lot of green, but that pesky DJIA Daily Chart score (top row of numbers) is still a little troublesome.  We'll see what kind of catalyst ends up being the match that lights the bucket of gasoline that the bulls have been amassing. 


Questions or comments about the blog?  Email me: 

Monday, October 1, 2012


It's not pretty, but I'm bullish now

The initial pop in today's market action was a very impressive showing by the bulls.  It surpassed the head and shoulders pattern I described yesterday so I've thrown that out.  The only thing that still concerns me is that the small caps are still declining.  Of my various indicators and oscillators and my own market measurement system most of them are giving relatively bullish signals for the next 10-20 trading days.  I've been a little hesitant, but now I am in most of my long positions.  At some point, I have to give in to common sense and say that it may not be perfect, but the market has bounced off these levels before, and it looks like it is trying to again.

This is not the safest prediction I've made and if you are a buyer here you need to have a strong risk appetite.  If you are concerned about protecting yourself against short term losses, then this move might not be for you.  Again, this isn't a perfect bottom, but it is good enough for me.

Today's scores:

Questions, comments?  Email me: