Comments on: The Annotated S&P http://www.ritholtz.com/blog/2009/08/the-annotated-sp/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 15:29:45 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: bdg123 http://www.ritholtz.com/blog/2009/08/the-annotated-sp/comment-page-1/#comment-208345 bdg123 Mon, 24 Aug 2009 22:02:44 +0000 http://www.ritholtz.com/blog/?p=36347#comment-208345 You cannot consistently make money by looking at a chart. Nor can you consistently make money by using MACD or any other simple tool. That the market was so oversold that every single stock was below its 200 day moving average was not the reason why the market rallied. It rallied because fundamentals changed very substantially. If they had not, your analysis would have been wrong and the market would have trended lower regardless of what the MACD or stocks below the 200 were. I appreciate what you are saying but it is not a method by which someone can consistently make money. Fundamentals are the only proven method one can use to make money. Whether that is economic fundamentals or fundamental analysis of a company's financial statement or business model. And I can assure you that all of this Frankenstein finance we see today that is currently yielding fruit for traders is going to fail miserably before we are out of this. That means most everything anyone used to make money over the last ten years is going to fail with it. You cannot consistently make money by looking at a chart. Nor can you consistently make money by using MACD or any other simple tool. That the market was so oversold that every single stock was below its 200 day moving average was not the reason why the market rallied. It rallied because fundamentals changed very substantially. If they had not, your analysis would have been wrong and the market would have trended lower regardless of what the MACD or stocks below the 200 were.

I appreciate what you are saying but it is not a method by which someone can consistently make money. Fundamentals are the only proven method one can use to make money. Whether that is economic fundamentals or fundamental analysis of a company’s financial statement or business model. And I can assure you that all of this Frankenstein finance we see today that is currently yielding fruit for traders is going to fail miserably before we are out of this. That means most everything anyone used to make money over the last ten years is going to fail with it.

]]> By: SINGER http://www.ritholtz.com/blog/2009/08/the-annotated-sp/comment-page-1/#comment-208302 SINGER Mon, 24 Aug 2009 19:59:58 +0000 http://www.ritholtz.com/blog/?p=36347#comment-208302 @bdg123... I appreciate the feedback and if you notice I state that the chart is interesting because it can support many theories... you wrote: "...In other words, all technical analysis tools used to predict a rally failed with this last collapse. And they failed and they failed and they failed. Because most people using technical analysis have no idea how to analyze fundamentals. The only thing that mattered was understanding fundamentals to anticipate a rally. When everyone kept calling a rally after September of 2008, I wrote that there was no imminent bottom. Then before this March Rally I was writing that the seeds of a major rally were building. I wasn’t using a technical analysis chart to divine the future. I was using fundamentals in both instances. Even for shorter term moves." These link to charts of the S&P when it was at 1495 in June 2007. My theory at that juncture was either we take out the 2000 highs in the S&P 500 decisively or we enter into a huge down move... http://3.bp.blogspot.com/_r47sOI__h_M/RmhSCmcK1CI/AAAAAAAAATM/Sf_vaYK9Yds/s1600-h/closesp.jpg http://2.bp.blogspot.com/_r47sOI__h_M/RmhSCWcK1BI/AAAAAAAAATE/_ql2Ah61Z4M/s1600-h/longsp.jpg Later, the chart still seemed to show the potential for a big move down... http://4.bp.blogspot.com/_r47sOI__h_M/SExukDrx6RI/AAAAAAAAAz4/RJWbep54lPE/s1600-h/DOW+MONTHLY.png In late February 2009, BR posted a chart re: the DJIA... based on the chart it was obvious that a snapback of some kind was imminent, even based on the MACD alone... http://www.ritholtz.com/blog/2009/02/dow-jones-industrial-average-long-term-chart/ Finally, the OIL chart showed clear fromer resistence now support around the $40 level... http://www.ritholtz.com/blog/2008/12/crude-oil-support-at-40/ Obviously, any chart contains the fundamentals to the extent that participants are buying and selling based upon things like earnings outlook and supply/demand of commodities... In my view the technicals and fundamentals are inseparable, not mutually exclusive... No matter what you use, no one can consistently predict the future. That's why I use charts as an idea and theory generator, in order to discuss what the future might hold... @bdg123…

I appreciate the feedback and if you notice I state that the chart is interesting because it can support many theories…

you wrote:

“…In other words, all technical analysis tools used to predict a rally failed with this last collapse. And they failed and they failed and they failed. Because most people using technical analysis have no idea how to analyze fundamentals. The only thing that mattered was understanding fundamentals to anticipate a rally. When everyone kept calling a rally after September of 2008, I wrote that there was no imminent bottom. Then before this March Rally I was writing that the seeds of a major rally were building. I wasn’t using a technical analysis chart to divine the future. I was using fundamentals in both instances. Even for shorter term moves.”

These link to charts of the S&P when it was at 1495 in June 2007. My theory at that juncture was either we take out the 2000 highs in the S&P 500 decisively or we enter into a huge down move…

http://3.bp.blogspot.com/_r47sOI__h_M/RmhSCmcK1CI/AAAAAAAAATM/Sf_vaYK9Yds/s1600-h/closesp.jpg

http://2.bp.blogspot.com/_r47sOI__h_M/RmhSCWcK1BI/AAAAAAAAATE/_ql2Ah61Z4M/s1600-h/longsp.jpg

Later, the chart still seemed to show the potential for a big move down…

http://4.bp.blogspot.com/_r47sOI__h_M/SExukDrx6RI/AAAAAAAAAz4/RJWbep54lPE/s1600-h/DOW+MONTHLY.png

In late February 2009, BR posted a chart re: the DJIA… based on the chart it was obvious that a snapback of some kind was imminent, even based on the MACD alone…

http://www.ritholtz.com/blog/2009/02/dow-jones-industrial-average-long-term-chart/

Finally, the OIL chart showed clear fromer resistence now support around the $40 level…

http://www.ritholtz.com/blog/2008/12/crude-oil-support-at-40/

Obviously, any chart contains the fundamentals to the extent that participants are buying and selling based upon things like earnings outlook and supply/demand of commodities…

In my view the technicals and fundamentals are inseparable, not mutually exclusive…

No matter what you use, no one can consistently predict the future. That’s why I use charts as an idea and theory generator, in order to discuss what the future might hold…

]]> By: cvienne http://www.ritholtz.com/blog/2009/08/the-annotated-sp/comment-page-1/#comment-208225 cvienne Mon, 24 Aug 2009 16:59:43 +0000 http://www.ritholtz.com/blog/?p=36347#comment-208225 What does this say about the OTHER 43??? I mean, my gosh, think about it... The most manufactured, hyped up, liquified market in history, and your stock STILL can't get above it's MA??? s2bu = It's sucks to be you! What does this say about the OTHER 43???

I mean, my gosh, think about it…

The most manufactured, hyped up, liquified market in history, and your stock STILL can’t get above it’s MA???

s2bu = It’s sucks to be you!

]]> By: bdg123 http://www.ritholtz.com/blog/2009/08/the-annotated-sp/comment-page-1/#comment-208166 bdg123 Mon, 24 Aug 2009 14:45:53 +0000 http://www.ritholtz.com/blog/?p=36347#comment-208166 You know, this is why technical analysis gets a bad name. There is a selective rewrite of history in its analysis. I don't like MACD or other very simple technical tools because in the hands of most people it provides too many false signals. There were many possible MACD momentum upswings before this rally and what of them? We selectively pick what supports our bias? Technical analysis is a self-fulfilling prophecy of fundamentals. In other words, all technical analysis tools used to predict a rally failed with this last collapse. And they failed and they failed and they failed. Because most people using technical analysis have no idea how to analyze fundamentals. The only thing that mattered was understanding fundamentals to anticipate a rally. When everyone kept calling a rally after September of 2008, I wrote that there was no imminent bottom. Then before this March Rally I was writing that the seeds of a major rally were building. I wasn't using a technical analysis chart to divine the future. I was using fundamentals in both instances. Even for shorter term moves. This isn't any reflection of some type of brilliance on my part. It's simply understanding of what drives the economy - money. Fundamentals will drive any future selloff and any future rallies. Just like every other major rally and major selloff. There is a fallacy to be learned from this post. Most people don't really understand what drives the economy and markets. Technical analysis gives those people a simplified window of those factors. A window that is much easier to understand. But one must understand technical analysis always fails at major turning points because fundamentals drastically change in the process. And fundamentals are the major factor driving technicals. The future will not be divined by staring at a chart of stocks above or below their 200 day moving average or of MACD. Instead fundamentals will give us insight into what those self-fulfilling indicators will do. You know, this is why technical analysis gets a bad name. There is a selective rewrite of history in its analysis. I don’t like MACD or other very simple technical tools because in the hands of most people it provides too many false signals. There were many possible MACD momentum upswings before this rally and what of them? We selectively pick what supports our bias?

Technical analysis is a self-fulfilling prophecy of fundamentals. In other words, all technical analysis tools used to predict a rally failed with this last collapse. And they failed and they failed and they failed. Because most people using technical analysis have no idea how to analyze fundamentals. The only thing that mattered was understanding fundamentals to anticipate a rally. When everyone kept calling a rally after September of 2008, I wrote that there was no imminent bottom. Then before this March Rally I was writing that the seeds of a major rally were building. I wasn’t using a technical analysis chart to divine the future. I was using fundamentals in both instances. Even for shorter term moves.

This isn’t any reflection of some type of brilliance on my part. It’s simply understanding of what drives the economy – money. Fundamentals will drive any future selloff and any future rallies. Just like every other major rally and major selloff.

There is a fallacy to be learned from this post. Most people don’t really understand what drives the economy and markets. Technical analysis gives those people a simplified window of those factors. A window that is much easier to understand. But one must understand technical analysis always fails at major turning points because fundamentals drastically change in the process. And fundamentals are the major factor driving technicals.

The future will not be divined by staring at a chart of stocks above or below their 200 day moving average or of MACD. Instead fundamentals will give us insight into what those self-fulfilling indicators will do.

]]> By: m111ark http://www.ritholtz.com/blog/2009/08/the-annotated-sp/comment-page-1/#comment-208114 m111ark Mon, 24 Aug 2009 12:40:27 +0000 http://www.ritholtz.com/blog/?p=36347#comment-208114 I'm relatively new to stock trading, was a futures trader years ago. So, when did this stop being a free market? We all know the currency markets are not; GATA may convince you that gold is not; then there's the 'Plunge Protection Team' that surely intervened in the past. Does any one else think Wall Street made a deal with the messiah - 'give us all the money we want and we'll give you a bull market.' Where's the world's best performing stock market? Didn't have anything to do with the economy. So, where's all that funny money to go... I dunno, seems all the analysis in the world won't help you thru this mess unless you've got a pipe into GS I’m relatively new to stock trading, was a futures trader years ago.

So, when did this stop being a free market? We all know the currency markets are not; GATA may convince you that gold is not; then there’s the ‘Plunge Protection Team’ that surely intervened in the past.
Does any one else think Wall Street made a deal with the messiah – ‘give us all the money we want and we’ll give you a bull market.’

Where’s the world’s best performing stock market? Didn’t have anything to do with the economy. So, where’s all that funny money to go…

I dunno, seems all the analysis in the world won’t help you thru this mess unless you’ve got a pipe into GS

]]> By: DiggidyDan http://www.ritholtz.com/blog/2009/08/the-annotated-sp/comment-page-1/#comment-208074 DiggidyDan Mon, 24 Aug 2009 06:42:56 +0000 http://www.ritholtz.com/blog/?p=36347#comment-208074 If you really want to base all of your investment decisions upon one man's (exceptionally enlightened) perspective, pay for his service. Otherwise, analyze and filter the advice and ramblings of the unwashed masses posting. You could do well still, thus. If you really want to base all of your investment decisions upon one man’s (exceptionally enlightened) perspective, pay for his service. Otherwise, analyze and filter the advice and ramblings of the unwashed masses posting. You could do well still, thus.

]]> By: constantnormal http://www.ritholtz.com/blog/2009/08/the-annotated-sp/comment-page-1/#comment-208062 constantnormal Mon, 24 Aug 2009 05:09:45 +0000 http://www.ritholtz.com/blog/?p=36347#comment-208062 Again, his blog is the most minor of his activities, and he has paying customers who pay for that information (among other things). All I suggest is that it is as improper of us to ask him for that info for free as it is to walk up to a physician friend and ask for a free medical opinion on our condition. Barry is not just another one of us, he falls into the "professional" category, and therefore needs to be treated under different rules. He does, from time to time, throw us a bon mot indicating his opinion. I took your comment to mean that you thought he ought to do so on a more regular basis, which seemed inappropriate to me. Here's a hypothetical question for you -- I don't know what you do for a living, but let's suppose, for the sake of argument, that you are an independent professional who makes a living selling your expertise to clients. Maybe a lawyer, doctor, or a fund manager. Maybe an art appraiser. Could be anything. Further suppose that you operate a blog that covers areas of interest to you in your realm that you think might be of interest to others. A blog reader wants you to give YOUR PROFESSIONAL OPINION on the state of whatever area your blog covers, for free. Even ignoring the aspects of personal liability entailed here, do you feel inclined to oblige him in that request? That's how I perceive this situation. Just sayin', that's all. Again, his blog is the most minor of his activities, and he has paying customers who pay for that information (among other things). All I suggest is that it is as improper of us to ask him for that info for free as it is to walk up to a physician friend and ask for a free medical opinion on our condition. Barry is not just another one of us, he falls into the “professional” category, and therefore needs to be treated under different rules.

He does, from time to time, throw us a bon mot indicating his opinion. I took your comment to mean that you thought he ought to do so on a more regular basis, which seemed inappropriate to me.

Here’s a hypothetical question for you — I don’t know what you do for a living, but let’s suppose, for the sake of argument, that you are an independent professional who makes a living selling your expertise to clients. Maybe a lawyer, doctor, or a fund manager. Maybe an art appraiser. Could be anything. Further suppose that you operate a blog that covers areas of interest to you in your realm that you think might be of interest to others.

A blog reader wants you to give YOUR PROFESSIONAL OPINION on the state of whatever area your blog covers, for free. Even ignoring the aspects of personal liability entailed here, do you feel inclined to oblige him in that request?

That’s how I perceive this situation. Just sayin’, that’s all.

]]> By: Myr http://www.ritholtz.com/blog/2009/08/the-annotated-sp/comment-page-1/#comment-208058 Myr Mon, 24 Aug 2009 05:00:27 +0000 http://www.ritholtz.com/blog/?p=36347#comment-208058 I just saw BR's vid on tech ticker...that's exactly what I wanted to hear. I just saw BR’s vid on tech ticker…that’s exactly what I wanted to hear.

]]> By: Myr http://www.ritholtz.com/blog/2009/08/the-annotated-sp/comment-page-1/#comment-208055 Myr Mon, 24 Aug 2009 04:45:23 +0000 http://www.ritholtz.com/blog/?p=36347#comment-208055 @constantnormal, How's this for a simple question? Is Barry bullish or bearish? I thought that was a reasonable question to ask of someone who runs a very active daily blog on the stock market. Perhaps I was wrong. @constantnormal,

How’s this for a simple question? Is Barry bullish or bearish? I thought that was a reasonable question to ask of someone who runs a very active daily blog on the stock market. Perhaps I was wrong.

]]> By: constantnormal http://www.ritholtz.com/blog/2009/08/the-annotated-sp/comment-page-1/#comment-208054 constantnormal Mon, 24 Aug 2009 04:41:38 +0000 http://www.ritholtz.com/blog/?p=36347#comment-208054 The pros can take care of themselves (or not). I just had a delicious thought about a possible black swan that would disrupt (that's putting it mildly) the calm demeanor of our gummint. Suppose that among the data turned over by UBS are accounts of a number of our stalwart elected officials? Wouldn't that be delightful? Or better yet -- if Tim the tax cheat was tagged. Of course that will never happen, as it would be against the thieves' code of peer conduct -- but it's fun to contemplate, and I take my pleasure where I can find it these days. The pros can take care of themselves (or not).

I just had a delicious thought about a possible black swan that would disrupt (that’s putting it mildly) the calm demeanor of our gummint.

Suppose that among the data turned over by UBS are accounts of a number of our stalwart elected officials?

Wouldn’t that be delightful? Or better yet — if Tim the tax cheat was tagged.

Of course that will never happen, as it would be against the thieves’ code of peer conduct — but it’s fun to contemplate, and I take my pleasure where I can find it these days.

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