Watchlist for 7/31/08

Sad Day

The Seattle Sonics are no more. The gutless City of Seattle reached a a settlement this afternoon with the thieves that bought this team from our gutless former owner, Howard Schultz. Ugh.... All we have left now is YouTube highlights of the Reign Man and the Glove.

Paul Desmond (Lowry's): "Quite a ways from a bottom"

"We think we're still quite a ways from a bottom," Desmond warns. Over the next year, he expects the Dow to fall 30% to 50% from its October '07 top. The market could enjoy a few short-lived rallies during that span, like the one we experienced from March through May. But each rally is apt to result in a lower high and a lower low in the market.

 - Barron's 6/30/08

Desmond is the author of the esteemed Lowry's Report and is someone I go out of my way to listen to. 

Below I've attached a chart showing the 30% and 50% retracement levels off of that Oct '07 top. 

T2108 Update

Thankfully, it appears my status as a "Spam Blog" has been removed and I'm free to post to Blogger once again. Though, some of you may think this blog is just as spammy as ever. Ha. Spurred on by Stewie's exuberance here is an update on the Worden TeleChart T2108 indicator.

T2108 is an indicator which tracks the % of stocks that are above their 40 day moving averages. It's worked very well in the past as an indicator that gets you long when everyone else is experiencing maximum amounts of pain. I first picked up on this indicator a few years back when Gary B Smith, formerly of TheStreet.com, would reference it constantly.

We're at 15.00 as of the close today. This is below the levels we hit in Jan and Mar of this year and just above the Nov 07 lows (hit about 13). The Aug 07 lows hit 7.7.

T2108 - Oversold Indicator

The vaunted Worden TeleChart T2108 indicator is beginning to approach levels that are more associated with bottoms than tops. I'd be careful with shorts here and start making your long watch lists. We may not bounce today, tomorrow or even next week but it is important to be ready for when we do.

GOOG

I went long a pretty good sized position in GOOG today on the chart pattern below. My entry was at 553 and I'm holding overnight for now. Got out of the MON today as well as ferts don't look safe for now.

Interesting Note from Hamzei Analytics

"Our Market Pulse Indicator (MPI) is getting ready to setup for a [ROYAL] FLUSH of the weak longs. Once we are thru that painful process, we should be ready for a blast off. The window is 2 to 5 days. Brace Yourself."

This and more at their site: Hamzei Analytics