Monday, August 30, 2010

S&P 500
Friday's rally, although impressive on the surface did not do much damage to the overall bearish picture. As can be seen in the chart below the September futures contract moved almost exactly one square up from the 1040 area to close at 1063.70--which also filled the gap on the floor session between August 23rd and 24th. Globex prices also stayed within the confines of the channel suggesting that prices still have room to move to the upside before challenging the 1072 resistance. The S&P could oscillate between the 1060-1075 level until the Energy Date that is due in early September--immediately following the Labor Day holiday. September 7th should be interesting.
The daily chart shows the impulse wave down from April and the corrective rally that ended at the August 9th Energy date. The previous support at 1040 has been tested and it will likely take some consolidation before another test--which should ultimately break the 1040 level.
The trend remains down with resistance at 1072 and 1086. A close above 1086 would cause the 'caution lights' to flash. A close above 1107--highly unlikely--would possibly change the bearish structure of the market.


There has been a lot of talk about the 'Head and Shoulders' in the S&P. Market pundits have been warning investors of the dire consequences of the neckline of a head and shoulder pattern being broken. It is interesting that while the large H&S which is depicted in blue is rather popular in the financial media, the potential of a reverse head and shoulders has not received much press. The potential Reverse H&S is highlighted in yellow. Just an observation !!!


Treasury Bonds.
Friday was a great day to be short T-Bonds. After having met its Gann square objective, bearish candlestick formations supplied further evidence of a imminent reversal. Prices broke hard on Friday. There are Gann and Fibonacci price harmonics at the 128.25--128.30 level. Once prices break below the green support trendline emanating from the May and June peaks, T-Bonds should decline swiftly to this harmonic support.



Gann's Hexagon Chart, Planetary Aspects and the U.S. Dollar

The graph below shows what is known as a Gann Hexagon. It is used like a Square of Nine chart to determine both time and price harmonics. Gann Square charts, when combined with its natural adjunct--planetary phenomena--can deliver incredibly accurate information pertaining to future price objectives and time periods to expect pivots or acceleration in the trend.

The Dollar made its low at 80.08 on Friday August 6th. During that weekend Venus was in opposition to Uranus and conjunct Saturn. On Monday August 9th Venus made an opposition to Jupiter. It is little wonder that the Dollar and Stock market made significant pivots during this time period. (Energy Date). Since Venus is the common factor, its relationship to the conjunctions and oppositions should be monitored. This means that when Venus makes harmonic angles to between 0 and 3 degrees of Libra-Aries the U.S. Dollar and the U.S. Stock market should be especially sensitive. This also suggests that the autumn equinox--which occurs when the sun enters Libra (Sept 23rd) may be a important period for both currencies and stock markets. Note how the S&P and USDX made pivots on the summer solstice and the spring equinox.
The culmination of the Cardinal T-Square is now beginning to effect markets in a significant and dramatic manner.

If you look at the Hex Chart you will see that the Venus ingress and conjunction/opposition took place between 0* and 2* of the Libra-Aries axis (0-180) If you look at the 240* line, it intersects '80' -- the low of the U.S. Dollar. This indicates that when Venus changes signs (30* multiple of the 0-180 hot spot) the U.S. Dollar and possibly the U.S. stock markets become activated. (120* & 240* are trines of the circle)

The Gann chart overlaid on the U.S. Dollar is not perfectly accurate since the price graph uses trading days and the Gann data is based upon calendar days. The accompanying tables on the graph indicate the prices and dates to watch for.

GOLD

Not much to report on Gold. The sidelines seem like a good place to be until further price action gives clues to the direction of the main trend. There is a confluence of cycles coming at the end of this week which could resolve the question as to whether the latest rally is corrective or part of a new impulse wave to the upside that will test the previous high and perhaps break through to new highs. Wait for more evidence.


No comments: