Thanksgiving and the World of Elves...
As I am sure you are aware, Elves would prefer that every day either be Christmas or Thanksgiving, so when Thanksgiving actually does come along each year, it is more than embarrassing to see such unabashed gluttony and distended blue bellies as occurs on this holiday. I was able to arouse the chief Elf from his L-tryptophan-induced coma and get a forecast from him, after which, he immediately went back for more leftovers... Here is what he had to say:
"The Bull-to-Bear ratio has jumped to 13-to-1 in favor of the Bears. The red line (Short Sell) is strongly trending higher toward the oversold area. The black line (Composite of Short Sell and Long Buy indicators) has plummeted lower, crossing the red line. This is often a pattern that precedes a move higher in the near-term of the broader market. The S&P 500 (green shaded area) is now trending much lower. Short positions have done well, but caution is advised for further short selling. Now that the black line has crossed from above to below the red line, a bounce back recovery higher in the S&P is becoming more likely. Higher risk long plays are in order. Lowering stops on short plays is advised."
Turner Bull/Bear Forecast
The Turner Bull/Bear Forecast™ provides a one-week directional forecast on the market, with [-5] being the most Bearish and a [+5] being the most Bullish. This is predicated on the ratio of number of new Buy Signals to the number of new Short Sell Signals for the previous week. The assumption is investors are becoming more Bullish the more lopsided the ratio becomes in favor of new Buy Signals; and, the converse is true; the more lopsided the ratio becomes in favor of new Short Sell Signals, the more Bearish investor sentiment.
The Turner CrossOver Oscillator™ provides an indication of the over-bought or over-sold condition of the market. The red line (New Short Sell Signals) shows a technical direction and strength (or lack thereof) of investors to push stock prices lower, triggering new Short Sell Signals. The higher the Short Sell Signals line, the more Bearish the market. The black line (Composite of both Short Sell and Long Buy Signals) is the combined impact of both the new Short Sell Signals and the new Buy Signals and is an indication of the degree of oversold or overbought condition of the market. Buying opportunities exist when the Composite of Signals line is moving higher. The higher this line moves, the more Bullish the market. Market bottoms are represented by a change in direction of the Composite of Signals line from moving lower to moving higher. Market corrections become much more likely when the Composite of Signals line crosses the Short Sell Signals line from below the Short Sell Signals line to above the Short Sell Signals line. The market is represented by the green shaded area.
This cryptic Elfish forecast supports my strategy for the upcoming week. I said as much to the chief Elf, whereupon he harumphed out of the room in true Elf form... although after this Thanksgiving, his 'form' is a bit wider than 'normal'.
My Trading Strategy for the Upcoming Week...
- I am bearish on the broader market for the next 2-3 weeks. However, there is a strong case for a rebound which could come sooner than later.
- I am very near-term bearish on gold, silver and oil.
- Since the forecasts are supporting a fall into a near-term bottom, timing is everything. I like trading covered call weekly's in this environment and will be sending out a number of trades this week to my CycleProphet Trades subscribers along with making a number of similar trades in my managed account portfolios.
- I am currently about 95% cash and plan to get at least 60% invested this week.
A LOT to be Thankful For...
I hope you had a wonderful Thanksgiving and were able to spend some quality time with your family and friends. We had a most wonderful time.
-- Your trying-to-ignore-the-left-overs-and-the-coconut cream pie portfolio manager.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer