While we are waiting for the CFTC's release of the raw COT data tomorrow in order to update all our proprietary studies, graphs and indicators, I will provide you with a couple questions along with my detailed answers from the message board this evening. I hope this helps you understand the level and quality of our service. Our service and these studies our light years ahead of anything else I've seen on the web today ladies and gentlemen. If you are looking for an edge that can be supported by real statistics, look no further, you've found it here!
FYI - The DVD workshop video special is now over. I hope you took advantage of it!
Member Question #1
FUA Premium Discussion Forum
Stocks: ltd
Posted By: Mike_Kiss
Date: Sunday, 14 November 2004, at 8:57 p.m.
Floyd,
I was reading a forcast that said the value of LTD shares is $40.75 per share. When they execute the tender offer buyback of 69 million shares it will equate to $1.25 for the $500 Mil special dividend. Do you know what is the time frame for the buyback? In your work, do you see this stock going as high as $40.75. This has been a good one.
Thank
Mike
FUA Premium Discussion Forum
Re: Stocks: ltd
Posted By: Floyd In Response To: Stocks:
ltd (Mike_Kiss)
Date: Sunday, 14 November 2004
I don't know for certain how high this stock will go of course, but I like the company for several reasons and remain bullish on it. I am particularly bullish longer-term (5 to 10 years and more) because I believe in the company and I like the people running it. Furthermore people will always need clothing (well, at least here as it gets pretty cold in the winter).
While I do believe the price will continue pushing higher longer-term, there's a risk of a minor pull-back short-term (minor only). I am bullish nevertheless however! Even bullish markets can pull-back (short-term). When a bullish stock pulls-back short-term, that's typically the best time to add to positions (if bullish longer-term). Anyway, here's what I see short-term (read below)....
IF the stock market experiences a short-term pull-back, I'd look for LTD to pull-back with it as well. Thus there's this risk of a short-term pull-back in it. And since this stock has risen so much already (more than 50% since January) if a pull-back happens it could be a little sharper than the broader market, but quick (and I'd look for a FP formation to mark the end of it IF a pull-back even happens).
Now, IF the stock market continues higher short-term I think LTD will continue to rise with it. In addition, I expect the upcoming earnings report to be bullish (meeting and/or exceeding the recent upward revised Q3 expectations). Now, here's the second concern for a potential short-term pull-back. IF this stock pushes to a new high and then posts a reverse plunger formation following a bullish earnings report (its very important the earnings report be bullish) then that too would be a sign that we could see a short-term pull-back in price (following a bullish report). This would the result of selling by those who had already been buying on the rumors long before the fact. Thus, selling on the news of a bullish earnings report, which is very common. Those that got it right (via buying ahead of the news) reward themselves for getting it right by selling on and immediately following the news, as price has already risen in "anticipation" of this news. Its really important you understand what I am attempting to explain to you here. This is how all markets work! The markets (all markets) are constantly fluctuating in price in anticipation of where the true value is, which is never known until all the data is known. When a big report comes out and it's exactly as the market had already anticipated (via all the participants) those same participants are now going to load up again! They are going to begin taking profits. They will be able to take profits by selling to the buyers who are to timid to buy BEFORE the news is out. It takes GUTS folks, it takes guts to do this.
Now, regarding LTD. Please keep in mind LTD has already risen better than 50% this year and is certainly beating the performance of the broader market by a BIG BIG margin. For instance the S&P500 is only up about 6% on the year. Would you rather be long the S&P500 or LTD?
Now, Why do I like it? LTD is well run corporation in my opinion. Furthermore the fundamentals are encouraging in the industry, in the individual corporation and for the economy as a whole going forward. Hence LTD looks good going forward too. The company has confirmed the fundamentals by initiating a corporate buy-back (buying back millions of its own shares at current prices and higher). It is also planning a substantial dividend to shareholders.
The stock market, as most of you know of course, is also a leading indicator for the overall economy itself. It leads the economy by about 6 to 9 months (avg). Thus, based on the current Q4 S&P500 performance (all of the gains this year have occurred in the last month basically) the economy appears poised to strengthen 6 to 9 months out as well. And that is bullish LTD too.
Bottom line - LTD is pleasing its shareholders. I believe profits at LTD will continue to grow as the economy improves and grows. A growing economy is good for this company. In addition a falling dollar is working with this company too (supporting foreign sales). Therefore right now I don't see anything stopping LTD from pushing higher. I do believe it will reach $40/share as well and higher longer-term. However, short-term I explained the risks above. And to add to that right now this stock is pushing against its all time high! This it the place for a RP to form and a minor pull-back to occur. I don't think it will stop this market from going higher longer-term but short-term it could cause it to pause. Again, that certainly might just be another buying opportunity (in a stock that has already done extremely well this year). Certainly in my opinion this is an important price juncture "technically" speaking for this stock (on the charts). If the price breaks above its all-time high on a closing basis, I believe this would then trigger more buying as the RISK of a short-term pull-back begins to fade (short-term). Thus at that point buying on a new all-time high would likely only attract MORE buying as momentum moves prices higher. So, bottom line yes I think it can go to $40. Its only a question of when. But longer-term I really do like it (which is far more important than any short-term price targets in my opinion only of course). Yet this is one that I believe can continue to do well near-term and longer-term (as long as the economy does well). Now, what could kill it long-term? If the economy takes a serious hit for any reason, this stock could suffer!
Floyd
Member Question #2
FUA Premium Discussion Forum
Other: slope polarity
Posted By: Clay_Sm
Date: Saturday, 13 November 2004
Floyd,
I'm very intrigued by the slope polarity on your graphs. Is there any more detailed info on your website about how you go about plotting it? I'd like to find out things like: if both daily and weekly graphs of a pargticular commodity are both moving together in a steep incline (or decline) does that mean the odds of a buy (or sell) on a countertrend being more successful (once your bars change from neutral to the color of the direction the polarity plot is heading)
than, say, one where the daily polarity is headed in the opposite direction of the polarity of the weekly chart?
Thanks, Clay
Floyd's Response #1
Floyd -- Monday, 15 November 2004
FUA Premium Discussion Forum
Re: Other: slope polarity Pic-Inc!
Posted By: Floyd In Response To: Other:
slope polarity (Clay_Sm)
Date: Monday, 15 November 2004
Floyd,
I'm very intrigued by the slope polarity on your graphs. Is there any more detailed info on your website about how you go about plotting it? I'd like to find out things like: if both daily and weekly graphs of a particular commodity are both moving together in a steep incline (or decline) does that mean the odds of a buy (or sell) on a countertrend being more successful (once your bars change from neutral to the color of the direction the polarity plot is heading)
than, say, one where the daily polarity is headed in the opposite direction of the polarity of the weekly chart?
Thanks, Clay* The trend is always the most important indicator of price direction (short and long term direction). The slope is a unique method I have devised for identifying the current type of trend (upward or downward) and its severity. A negative sloping line indicates a downward trending market while a positive sloping line indicates an up upward trend. The severity of the slope is determined by its angle (which is not directly proportional to the angle of the raw price structure by the way as its a little more complicated than that).
The slope measurement is not the same as a moving average either(which isn't really all that technical, but nevertheless is very useful). Moving averages are useful for many reasons and we use them quite extensively. However, every tool (graph) on our site provides something unique rather than duplication. Furthermore every unique measurement I have developed is generally derived from some form of statistics. And that's the case with the slope here as well. The slope is based on a "Goodness of Fit" calculation which includes various intercept values that provide a measurement of slope.
If both the daily and weekly slopes are pointing in the same direction then that indicates both the daily and weekly are in sync and thus a strong trend has a high probability of existing. In this case Swing trading should be done using "Swing Approach A" which is "The standard trend approach". That is my favorite approach, which is well documented. In this case you would buy an upward sloping line and sell a downward sloping line. This will almost always be the best trade (highest probability) Which of course means buying strength (buying a rising market) and selling weakness (selling a falling market). Taking positions with the price flow usually provides the highest probability (highest confidence) of success.
The counter-trend approach as its place too! Obviously there are times for picking tops and bottoms. Trends DO end! The best buys are always on the bottom (low) just as the best sells are and will always be on the top (high). However, trends can continue for long periods of time while going through various phases (discussed in the 2003 workshop manual and video). The price trend continues on through long periods and the various phases while the beginning (bottom) and ending (top) only happens once! Therefore there are numerous opportunities to be wrong (lose money) by attempting to pick a top or bottom while the trend is active. Thus there's fewer chances to get it right when attempting to pick the precise time that a major turning point occurs (beginning and/or ending of a trend).
Thus you have to get it right and secondly when wrong you have to be able to recognize you are wrong quickly and GET OUT quickly to avoid losing to much money (very important part of trading tops and bottoms).
We have several approaches and strategies that deal with both identifying tops and bottoms and recognizing when we are wrong. First lets look at how we identify major tops and bottoms. By going back through all the data (I did this in 1998 by the way via a test I performed across all 45 markets) and look at ALL significant turning points (MAJOR tops and big bottoms) we find one consistent signature at each major turning point! This one signature comes up more frequently and more reliably than any other signature. This is the IMPA (UCL/LCL) net-com trigger selection! We find that the commercial positions when combined with statistics provide the best insight in identifying significant longer-term turning points before they happen. And it makes sense why the commercial data works best for this. The commercial traders (producers and consumers) are the most knowledgeable) in the markets that make up their business. For example, in 1998 and early 1999 when everyone was extremely bearish crude oil and unleaded gas (crude was roughly $12 a barrel and NYMERC unleaded gas roughly 38 cents a gallon) the Commercials were extremely bullish! At that time however all other fundamental data was bearish. The world was said to be "a wash" in crude oil. They couldn't give the stuff a way. Now, fast forward to today! We now see 1998-1999 was a MAJOR low in energy (crude and unleaded gas). The price data itself (when the lows were being struck) did not provide any real insight that these were indeed major lows. HOWEVER, the IMPA data CLEARLY shouted these were major lows! Likewise, in April 2000, the commercial data clearly shouted the end of the major bull run for the Nasdaq was at hand! The price data said nothing bearish at all. Prices were in fact at the all-time high and the market was just as bullish as could be! Yet the IMPA net-com UCL/LCL trigger selection was bearish (SELL SELECTION). This SELL selection occurred suddenly (practically over-night for all purposes). Prices have NEVER returned to those highs in the Nasdaq nor has crude oil or Unleaded gas ever returned to the lows marked in 1998-1999. Those were MAJOR turning points and thus excellent buys (in crude and unleaded gas in 1998-1999) and excellent sells (Nasdaq or QQQ during April 2000).
The IMPA indicators fluctuate independent of price and represent true "LEADING" measures which makes sense! And this is so important to understand. In other words these measures are not based on strange things we can't understand or grasp (market relationships based on the positions of the moon or on some strange Fib numbering sequence). No, these indicators are derived from one thing - The Keen knowledge of the producers and consumers who represent the true market INSIDERS in the markets we trade, period! They know, and that's a fact.
Now, when we have a trigger selection in a market, we then begin monitoring the price activity for other technical formations which I teach here and other formations that are taught by others too. Any and all of these formations may be very valid. They ALL can potentially be used in conjunction with the IMPA when attempting to trade the major tops and bottoms (significant turns) via counter-trend trading!
Two counter-trend measures I like really well are the plunger formations and the detrended measures. The plungers provide short-term signals and the detrended studies provide more intermediate term indications of Over-bought or Over-sold conditions (which can take a little time to reverse of course). I could get into the formula for the detrended studies but we've had that discussion here already.
I hope all this helps with your understanding of our strategies and data. Be sure to review my article which illustrates the 2000 IMPA sell in the Nasdaq. You can access that below. I've also provided the IMPA graph for the Nasdaq below which once again (plain as day) shows the significance of the commercial knowledge at turning points).
Floyd