Not bear, not bull. December 13th, 2010.

Today starts bull but ends bear.

IPC

Still strong but could enter in a side chanel.

Standard and Poor's

Today looking for new highs but with divergences and contradictions.
Many reversal candles.

And very oberbought. (Bear signals).

Put to Call ratio. Too low. 

I know, it failed a lot recently, but look a the pattern when CPC and CPCE are too low for many days in a row. Very bear signal, still latent.

VIX. ¿A bearish pattern? 

See the chart. Is the history repeating?

Lows of 52 weeks. A little crazy?

Indicates a bottom, but this not sound logical to me.
Do you feel safe in a market with this kind of indicators?

Seasonality 

- Dow Jones 48%
- Standard and Poor's 43%
- Nasdaq 38%
-- Tomorrow slightly bearish.

- Tomorrow, also, Federal Open Market Committee wich is traditionally bull.
-- But if red, this will be a very bearish signal, and possible a turning point.

Conclusions

- The shor-term and mid-term trends are up.
- Still pending the Dow break of the 11,450 level and resolve the "Flag".
-- Many bear signals still valid.
- The market is in bull territory and the conditions for a consistent up trend (Rally)are given. I'm optimistic (bull) for the year end.

-- While the liquidity continues flowing in the market will continue up. But bother me so many bear signals should mean something.
- I dont feel safe and comfortable, I maintain liquidity, very rare movements of the market. Maybe will not fall but maybe not go anywhere. Tomorrow my feeling is neutral but becomes short-term bear.


IPC Sandard and Poors Dow Jones

Bull Friday. December 10, 2010.

Today the markets were bull.

1. Thirth consecutive day the SPX closes above 1,228.

2. Nasdaq 100 break the 2,200 level, convincingly.

Today Bull Friday:

But persist many bear signals:

a) Put to Call Ratio too low, many days in a row.

b) Dow can't breake the 11,450 level and don't resolve the flag.

c) Many divergences.

d) Signals of a possible top.

e) The volume has been moderate.

IPC

- Stable day without many changes.

- I'm optimistic about the year close:

-- Target level 39,500

-- Support 37,000

- Still in overbought, that produces the profit take and corrections, maybe not over.

Standard and Poor's

- Resolve up the ascending triangle. Target 1,245.

- 3th day in a row that close above 1,228. Very bull signal.

Nasdaq 100

- Break the 2,200 leve convincingly.

Dow Jones

- Caution. Can't break the resistance and the Flag is not resolve.

- Normaly Dow leads SPX in breaks, the actual situation is unusual.

- These can mean something. Stay alert.

VIX.

- When VIX and SPX closes in green both, the next day probably will be a red candle.

- The VIX continues searching the low band of Bolliger, when touch it the up trend will have a pause (correction?)

- A formation named Broadening Bottoms is forming. Is bullish 53% of the time. But if broke down, it will take the VIX to very unusual low levels.

Liquidity

¿Why the market continues up, despite all the bear signals?

- The Liquidity Flows is positive. And this override many other indicators, like divergences. While the liquidity continues flowing in the market will continue up.

- Next the chart from Stocktiming showing a very bull landscape:

CPC

- I will not repeat the same (If CPC <= 0.80 probably red candle tomorrow) 

- I note what happened when several consecutive days, remains very low. Both the CPC and the CPCE, where the effect is clearer. [This to me is a bear sign, that I do not discard] 

 Seasonality 

 - Standard and Poor's 48% 

- Nasdaq 61% 

- Monday is statistically neutral. (Sunday I will have the update for this number for dicember 13th, 2010)

- The next week is statistically neutral. But is "Triple Witching" that turn it bull. (This week is statistically bear and closes up). 

 "Bear Monday": 

 Conclusions 

 - The shor-term and mid-term trends are up. 

- The SPX and Nasdaq 100 confirm their respective breaks. Still pending: 

 -- Dow break the 11,450 level and resolve the "Flag". 

-- Many bear signals still valid. 

 - The market is in bull territory and the conditions for a consistent up trend (Rally)are given. I'm optimistic (bull) for the year end. 

 - For monday slightly bear. (VIX, CPC and Bear Monday) 

-- While the liquidity continues flowing in the market will continue up. But bother me so many bear signals should mean something.

IPC Sandard and Poors Dow Jones

Today a boring session. December 9, 2010.

Today the markets were bull. But a weak and lazy bull.

IPC

- Profit take continues today.

- Bank of México reports inflation better than expected. (4.32% year forcast).

- The issuing companies are close to technicals resistances, and the market is extremly oversold. That causes the profit take.

Mixed signals in the US market.

- Tomorrow observe, they shoul align and trend in the same direction. 

Standard and Poor's (SPX)

- Today an ascending triangle forming. Tomorrow will resolve (bear or bull). 

- Today confirm the break of the 1,228 level. But unconvincig. 

Dow Jones (DJI)

- Maybe a Flag is forming. Bullish formation (54% of the time). 

- Resistance in 11,450, still far away. 

Nasdaq 100

- The break is not clear. Unconvincing. 

VIX

- In the hard way, down. 

- Is easier for the VIX to go up than down. And also has more space. 

- Look for the VIX:VXV marking a possible high. 

CPC

- When CPC <= 0.80 the next day more probable a red candle. 

- Yes, I know, recently has failed a lot. But observe what happen when many "green lines" consecutives. (For me a bear signal). 

- The efect of the "green lines" is more evident in the CPCE

Fiancial sector. 

Bank Index. 

- Accomplish techincal target.

- Very bull today, helped by AIG. 

- The SPX cant go too far without the bank's. Today SPX has foundation to contruct his Rally.

- Remember the financial sector is underperforming the overall market. 

But be carefully look to this chart of Bespoke: 

AIG 

- ¡What a candle today! (+12.7%)

- Will pullback tomorrow? AIG is a surprise box, previous days looks weak but with the announced of the preapay to the goberment shot up. [That doesn't happen with Citigroup]

Seasonality

- Dow Jones                57%

- Standard and Poor's  48%

- Nasdaq                     43%

-- Tomorrow neutral day (slightly bearish)

* This week is statistically bear. 

Conclusions

- The short-term and mid-term trends are up.

- The SPX validate the break of the 1,228 level, but unconvincing, so be careful. Wait until confirmation:

-- Dow close over 11,450 and the resolve of the "flag".

-- Nasdaq 100 close over 2,200 but in a convincing way. 

-- SPX resolve of the ascending triangle. 

--- Observe increase in volume

- We aren't in a Rally until confirmation. I'm optimistic about late december.

- Mi short-term sentiment is bear [So many bear signals should mean something]. For tomorrow I am neutral. 

-- Conjecture: If tomorrow opens with an up GAP, could break the triangle up and this should take the SPX to 1.246.

IPC Sandard and Poors Dow Jones

Report. December 8, 2010.

Today the markets were bull.

IPC

- Today a pause in the up trend. Profit take.
- Support in 37,000 points.
- Very bull and strong, but in overbought.
- If the IPC is ahead the SPX, is predicting a correction?

Bear signals in the US markets. 

VIX

- Today VIX rebound up. This is bad for bulls.
-- For VIX is hard to go down because is low.
- Over the support, maybe yesterday broke was in false.
- VIX:VXV says: maybe we are in a top. Look the image:

CPC

- To low again. And many times in a row.
-- If CPC <= 0.80 then the next day probably a red candle.
-- See what happen when this occours:

CPCE validates the above sentences.

The SPX broke the 1,228 level. But: 
- try two times.
- broke in the last candles.
- yesteday a fake break.
- breake without impulse and force.

Dow Jones

- Far away from break the resistance.
- Normaly Dow leads SPX, now is diferent?

Nasdaq 100

- Could not make the break in all the day. Consider that is the bullish index in the US market.

52 weeks highs. More bear signals

- The next image says more than thousand words

Seasonality

- Dow Jones                 52%
- Standard and Poor's   48%
- Nasdaq                      43%
-- Tomorrow neutral day.


Conclusions

- The short-term and mid-term trends are up.
- The SPX broke the 1,228 level, but without force and volume, so be careful. Wait until confirmation:
-- SPX close again over 1,228.
-- Dow close over 11,450.
-- Nasdaq 100 close over 2,200.
--- Look volume
- We aren't in a Rally until confirmation. I'm optimistic about late december.

- Mi short-term sentiment is bear, for tomorrow I'm neutral. [So many bear signals should mean something]


IPC Sandard and Poors Dow Jones

Opinion. Economy. December 8, 2010.

Somebody explain to me!

America has always been proud of its free market economy and its "invisible hand." One of its greatest exponents is Milton Friedman. His postulates indicate:

- What the government do, he does wrong. [I think it is evident and correct].

- Hence the less government and the less intervention, better (mainly in economic subjects).

- The least possible taxes. The state dont need it because is small and dont do much?

- This is how the concepts of "free market" and "invisible hand" appears, where the search of personal good would also achieve the collective good.

- Important note, the role of government is to preserve the state: rule of law, sovereignty over the territory, protection of citizens, to exercise justice and taxation. [In this sense, it is obvious that, in Mexico the state no longer exists, there is no control of the territory, can not protect its citizens, no justice, rule of law and is even losing the monopoly of taxation]

Alan Greenspan, free market advocate, in the midle of the crisis said something like: I always believed in the pursuit of personal good and free market, and worked. But the crisis of 2008, proved I was wrong.

Ok, in the capitalist ring, on the other corner is John Maynard Keynes, whose economic contributions are credited to the recovery from the crisis of the 30's.

And what Mr. Keynes proposes?

- A low participatory state in times of stability but an active and a participatory state in the economy in times of crisis. A state regulator and controller of economic activities to avoid collapse. A state with the strong institutions, enough to intervene decisively and quickly in the economy.

- In summary, a more participatory and much larger state than the free market.

If Greenspan accepted that the "free market" was not working, then we go with Keynes. And that's more or less what the U.S. did.

We have goverment buying U.S. banks (and Mexicans: "Obamanex"), insurance companies, automotive companies, etc. printing money at an accelerated pace (QE1, QE2), low rates (cheap money), reducing taxes, etc.

Everything perfect right?

Everything the government does have a cost.

- So if "do much" "spend "a lot". If I spend "a lot" I should increase my income.

- EU is "doing much"  -spending a lot- but, also reducing their income -lower taxes-. (So far so good). How the government is going to pay for all this? What programs are going to cut, what programs will reduce, and so on.?

The trouble is that there is nothing of this, the government has initiated programs that involve more spending, not cuts to reduce the spending but the income. This means one thing: MORE DEBT.

And how do you intend to pay that debt? For a person or a State being in debt is not good, nor bring anything good. Examples: Greece, Dubai, Ireland, etc. And nobody says how to fix the problem, the current prescription is: "more debt." And so where does it lead?

Here is a very serious structural imbalance.

Prologue: When a financial bubble exploits, there is always another bubble forming. The last was the subprime bubble. Now what next?

- Is it gold? as a refuge of currencies unsubstantiated and real value.

Today bears win. Report, December 7, 2010.

The day was dominated by the bears. Observe:

IPC

- The IPC don't stop climbing. Very strong. 

- When try to correct appear buy. 

Bearish signals for tomorrow in the US market. 

Remember the IPC is bullish than the SPX. But follows it's movements. 

VIX

- Is hard to continue falling. Searching the lower band of Bollinger. 

- Two reversal candles in a row. 

- If the VIX start climbing is bad signal for the bulls. 

CPC

- Too low. If CPC <= 0.08 the next day 14 out of 20 times closes in red. 

- Many days low in a row. 

- CPCE very low (<= 0.50) and confirms the red candle tomorrow. 

Standard and Poor's

- Today a false brake. Still out of bulls territory (beyond 1,228 in SPX). 

- Very bear signal. 

Dow Jones

- Rebound in previous high. Not a bull signal. 

Seasonality

- Dow Jones                   52%
- Standard and Poor's     52%

- Nasdaq                        48%

-- Neutral day

- This week is bearish. 

High's of 52 weeks. ¿Are near a high? 

- This analysis is not conclusive, but not ignore it. There are likely to be at a maximum and approaches a correction. Consider:
a) The market can not brake the resistance.
b) The VIX has plenty of space up and down is going to be hard, is already at very low levels.
c) Overbought in the indexes.
d) The "madness" in the options (See CPC)
e) This week seasonality is friendly with the Bears.
Could it be?

Conclusions 

- We are out of bulls territory (beyond 1,228 of the SPX)
- The short-term trend and de mid-term trend are up.
- The bull territory is beyond 1,228 (SPX) and bear territory is beyond 1,173 (SPX). A breakdown is needed.
-- If SPX breaks the 1,228 then the technical target is 1,335.

- Slightly bearish for tomorrow

IPC Sandard and Poors Dow Jones

IPC ¿Ahead of SPX? December 6, 2010.

IPC

- Today the IPC register a new hirtorical high.
- The IPC detached from U.S. markets and presents a significant rise.
- "The Mexican market is ahead? This would be a very bull signal.
- "The Mexican market is moving independently of the U.S.? I doubt it, but it is a possibility.
- Today's move very bull. Tomorrow validation is needed, if so, the IPC is showing "muscle".

Tomorrow very bear signals for US markets. 

1. For VIX is easier to go up than to go down. VIX up means SPX down.

2. CPC is very low. When CPC<=0.80 then tomorrow probably a red candle.

3. Seasonality for tomorrow is very bear:
- Dow Jones                  38%
- Standard and Poor's    33%
- Nasdaq                       33%
(% of years with green candle).

-- This week is the bearest of december.

4. Standard and Poor's cant break the important resistant in 1,228 points.
-- Bull territory is beyond 1,228. Otherwise the SPX can go down.

Conclusions 

- The short-term trend and mid-term trend are up.
- The bull territory is beyond 1,228 (SPX) and bear territory is beyond 1,173 (SPX). A breakdown is needed.
-- If SPX breaks the 1,228 then the technical target is 1,335.
- There are possibilities of Santa rally (not confirmed yet).

- Tomorrow I'm bearish.
- I hold no long or short positions overnight.

IPC Sandard and Poors Dow Jones

Update. Gold. December 6, 2010.

In previous post  I had said that gold could be developing a technical formation know as Shoulder Head Shoulder. It resolution is generally bearish. Showed signs of a possible significant correction in the gold price, today in a upward rally.

However, the right shoulder has taken a long time to complete and has reached very high prices. In such a way that training is no longer valid.

With this "break" of the SHS training the uptrend is strengthened. Will reach the $1,500? Some think so. That would be 6% above its current level, in line with the likely rise in the SPX.

Exceeding the $ 1,425 level, we can say that gold is back to rally.

Is gold the new bubble?

The next ETF's follows the price of gold:

- IShares IAU

- SPDR GLD

Although there are many more alternatives to invest in gold. Even to have it physically, under your own custody.

Gold IAU GLD iShares SPDR

New Start. Decision Point. December 6, 2010.

The market faces significant resistance, the SPX (Standard and Poor's 500) has to overcome the 1,228 to stand at bull terriotory.

For Bears the break level is 1,173. (Today looks very far).

As soon as the SPX is completing a technical formation, which have generally a bullish resolution: Cup with Handle.

- It is confirmed by breaking the 1.228 points, preferably with volume.

- If it works, the technical objective is 1,335 (+9%) and 1,443 if we are optimistic -most popular target-. (I favor the first target).

For the IPC (Indice de Precios y Cotizaciones, Quotes and Price Index, mexico's principal index) the implications are:

- Mexico is cataloged in emerging countries group (China and Brazil are currently the world's economic engine.) The Mexico is overweight to international investors involved in emerging markets.

- Then, Mexico has shown great strength and a very bull mood. Very resistant to corrections and very optimistic about the up movements.

So, being conservative and considering the momentum that would give the SPX if you reach his target:

- The CPI would have a target of 39.500 (+5.6%)

Note, these are technical objectives, does not mean to be achieved this year. However, since December 13 the picture is very bull.

IPC Sandard and Poors Dow Jones

CLARIFICATION. December 6, 2010

For a technical error the analyzer blog was not working properly and I was reported that there were no visit to my site. Why continue publishing if no one read? On the other hand my other blog visitors increased substantially. But, as I said, it was a mistake. That was fixed yesterday and from today I return to this blog.

I had mentioned that the Mexican market depends directly on the U.S. market, especially the Standard and Poor's 500, but is not a mirror. Although consistent with the trends, the magnitudes of these are different. During 2010 has been much more profitable Mexican market.

In this blog I will try to give international investors a view of the Mexican market from the perspective of a Mexican investor operating in Mexico. Furthermore, as stated in the previous paragraph, there will be some analysis of the NYSE index. Eventually there will be analysis of Mexican securities and other emerging markets.

clarification