What We're Reading

This in follow up to my February post pondering if the shipping index had bottomed which was most definitely chucked in to the round file by most as the market has become convinced the industry is dead.  I still beg to differ.

Being a big believer in moving averages, if I see a stock or Index with rising moving averages, I take it as a sign of buying within a name.  That being said, if I see falling longer term moving averages (100d and 200d), that to me signals trouble; stay away or short any pop.  However when I see longer term MA's flattening.......my curiosity is peaked from a bottom fishing point of view.  My first thought "is the bad news over and is it putting in a bottom?

After writing my February post, I put my money where my mouth was and bought $NAT looking for a reversal out of it's bottom (which it did) and today it absolutely plowed through it's 200d where I banked partial. 

Do I believe that it will hold?  No.  With so many shorts it's certain to be faded *and

A long standing theory of reversals for Technical Analysts, buy [or sell] a break of a third trend line has been around for ages.  Also considered by some as the Fan Principle, it allows you to wait for supply and demand to battle it out and jump in when the winner [trend reversal] finally reveals itself.........not to mention with a nice base for support [or resistance].

Very often a consolidation within a trend is considered a "resting period" before another leg down [or up] continues but how can one tell if the trend is truly over?  That's when a break of a 3rd trend line comes in handy.

It worked quite well when the U.S. Dollar reversed.

I also utilized the method getting long WLT @ $29.60 [just to name a few]

Now I've been stalking bonds to the short side along with every other market participant after having been long TLT in the Spring of 2011 [now flat] but this chart of TBT has truly piqued my curiosity.

I'll be waiting and watching for a 3rd tre

Just too much good research to let it disappear. Get a cup of coffee, take the phone off the receiver and snuggle up. Reprinted from one of my favs SlopeofHope

SEPTEMBER UPDATE

Overall, we are seeing divergent data coming through as usual, so we'll have to wait and see where we fall. In general, I tend to believe the longer term theme that I've laid out that our economic situation for consumers is slowly grinding to a halt while big business is taking full advantage of the globalization of the world economy and managing to keep busy. I think this is why some of this data remains stubbornly positive despite what the average guy is feeling here in the US. The fact that large multi-nationals are diverse enough to show gains abroad is great and is really beneficial to the US economy, if we didn't have that, I think we'd be in a much worse position.

TOTAL RAIL TRAFFIC - http://railfax.transmatch.com/

Rail traffic can reversed its season decline and all carriers have resumed their forward

Once in a while you come across an article that not only provides good ideas for long positions [healthier, above their 50d] but also for short ideas should and I say should the market turn on us. Not advise to long or short, but good, solid, basic research for investors [imho].This from BespokeInvestments:

Below we highlight the key ETFs that we follow that are currently trading the farthest above their 50-day moving averages. As shown, the Internet stock ETF (HHH) is currently on top of the list at 10.31% above its 50-day. Malaysia (EWM) ranks second at 9.29%, followed by Base Metals (DBB), Australia (EWA), and then REITs (IYR). A lot of times we'll see ETFs from one asset class clustered at the top of the most overbought list, but it is currently pretty diverse.

Below is a chart of the Internet ETF (HHH) that is currently trading 10% above its 50-day. As shown, the ETF has made a huge move over the last four days. We also provide a table of the stocks that make up HHH. As shown, A