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Daily Observations for Friday

Teresa Lo @ 4:38 PM | Leave a Comment 

WSJ.com reported that, “The Dow Jones Industrial Average surged 500 points amid reports that President-elect Barack Obama will name Timothy Geithner, the current head of the New York Fed and a prominent figure in the government’s recent market interventions, as his Treasury secretary. The rally halted a sharp two-day plunge which had pushed stocks to their worst levels in 11 years. Unease about the financial sector lingered, however, as Citigroup shares plunged 20%.”


It Take Balls: The PPT Makes The Getaway
Picture © Teresa Lo

Two thoughts: (i.) yesterday’s podcast was dead on with respect to market sentiment, and (ii.) Robert Rubin has obviously passed on his trademark Plunge Protection Team tactics to the Obama camp.

In any event, there is still an eternity to pass before Geithner (if confirmed) takes office until January. If you wish to read all about him, check out Robert Rubin’s memoirs, In an Uncertain World. Meanwhile, Rome continues to burn.

The Doomsters: Louise Yamada

Teresa Lo @ 2:37 PM | 1 Comment 

CNBC Fast Money has a survey at the end of When Will The Selling End? that asks, “Are the doomsayers correct and will the Dow fall to a once unthinkable level like 6,000?”

I’ve seen so many Dow 6,000 (and worse) segments on TV over the last two days that it’s time to make a doomsayer’s hall of fame. Let’s start with Louise Yamada who we mentioned a couple of days ago:

Chartology: When Will The Selling End?
The previous five years were great for investors living in a dream world, but with this market experiencing the fourth worst decline in the last 80 years the real question is, is the nightmare now beginning?

A Nightmare on Wall Street?

Unfortunately, the short answer is yes, according to technical analyst Louise Yamada. She says, “I think the charts have been forewarning us that the markets are deteriorating.”

“The 2002 lows are very vulnerable and chances are good they are going to be broken,” she tells the traders, grimly.

If you look at the chart below you see a massive double top with a critical 10 year support at 2002, she says. “And we’re breaking that support.”

In other words, not only has the S&P fallen below its 2002 lows, but it will likely continue lower from there.

Sound far-fetched? Maybe but Yamada is one of the most celebrated technicians on the Street, winning the award for best chart analyst 4 years in a row from 2001 to 2004.

She has a 600 target on the S&P 500 and a 6,000 target for the Dow. That’s where she thinks we’re heading.

There’s more: Yamada Sees U.S. in ‘Structural Bear Market’ for Years [WATCH VIDEO]. If you’d rather use Windows Media Player, CLICK HERE.

We’ll continue this series throughout the weekend.

Santa Lays Off Three Elves

Teresa Lo @ 2:02 PM | Leave a Comment 


By Kipper Willams, The Guardian.

It’s PAY-back Time

Pete @ 1:58 PM | Leave a Comment 

When I wrote about VeriFone Holdings, Inc. (NYSE:PAY) in January 2008, I pointed out that there is never just one cockroach.

We received a lot of positive feedback on the article because readers appreciated the detailed research. Many investors are not fans of CEO Douglas G. Bergeron. PAY just gave its shareholders some news that made them puke:
>>CLICK HERE TO READ MORE<<

The 50/200 Cross: WMT

Pete @ 12:10 PM | Leave a Comment 

A stock scan performed after the close on Thursday for “the cross” found one stock that might be instructive. There were no ‘golden crosses’ with today’s market action:

  1. Wal-Mart Stores, Inc. (NYSE:WMT)

Wal-Mart Stores is in the retail (department & discount) industry. Oh boy, you know there is something really wrong when WMT — the most “recession proof/safe” investment beloved by all the experts — is doing the “death cross”. Give us some hope WMT!!


Daily Chart with InVivo Swing Trading Tools

The RMI chart shows WMT to be outperforming the S&P 500 Index by going down less.

The company tried hard the other day, announcing a new CEO along with a statement that it is ‘optimistic’ about the holiday shopping season. *Cough* Which phase of The Investor Sentiment Cycle might this be?
>>CLICK HERE TO READ MORE<<

$SPX Bear Flag Hits Downside Target

Teresa Lo @ 4:41 PM | 3 Comments 

We identified a classic trade setup LIVE during today’s podcast: the fast bear flag. By the close, the pattern hit the downside target and then some.


S&P 500 Index: Bear Flag Hits Downside Target

Members, please refer to the Glossary of Trade Setups for details. This pattern is a core trade setup from The Ultimate Trading Course.

Trading Ideas for Friday

Teresa Lo @ 4:34 PM | Leave a Comment 

If you enjoy reading our blog and trading ideas, why not buy us a cup of coffee to show your support? Membership is only 53 cents per day! Treat yourself to 24/7/365 access to professional insight, daily market barometer readings, weekly ETF rankings, portfolio strategy, trading tools, comment privileges and the occasional stock pick. You’re only a click away from viewing this article...

What The Market Says NOW (Podcast)

Teresa Lo @ 3:23 PM | Leave a Comment 

It’s been two weeks since our last podcast, and while this one was intended for members only, Pete and I decided to make it available for all due to the market mayhem.

  • Right click ON THIS LINK and select “Save Target/Link As…” to save the MP3 file to your computer.

In this podcast, we discussed the sound of fear last heard in early October as the Shanghai Composite breached 2,000. At this point, we believe price action has entered the Discouragement phase of The Investor Sentiment Cycle. Analysts are opening bearish, giving the market up for dead, confidently projecting large “next stop” percentage declines for the Dow Jones Industrial Average and crude oil [SEE VIDEO].
>>CLICK HERE TO READ MORE<<

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