Tuesday, December 21, 2010

It is Time to Pay Attention.

The chart below shows the Gann Square of Nine levels emanating from the Aug 27 low @ 1039.70.
  • The 360* (2 squares) is 1172.68 which is near the last pivot on Nov 116th low at 1173.00. This is clearly an important level in the current structure of the advance.
  • The 180* (1 Square) is that 1105.19. The area between 1105-1115 has been mentioned numerous times over the last few months. The four times since April that the S&P has declined through this level was during high periods of volatility. (May 20, June 22, July 29, & Aug 11.) 1105-1115 is an critical area--if the S&P were to decline below 1105 alarm bells should go off.
  • The 540 level is at 1242.17. This area may provide resistance--especially seeing that the S&P has reached the anticipated 1250 level on an Energy Date. (Dec 21-22.) When prices are harmonic with dates the markets often turn--or sometimes accelerate.
  • This week has several geometric points which are highlighted in red.
At this point 1173.00 has to be considered a structurally important level. For traders seeking to get short the market-the formation of another nearby pivot would set up an excellent formation to set up a short sale.

IMPORTANT: Check out the Transports--they are making a classic top formation at the 5080 level mentioned last week.

The hourly chart below shows the two minor pivots--1232.85 & 1219.50 that should be monitored. Aggressive traders should use these levels--if broken-- to execute shorts with appropriate stops.


The Gann Square of Nine chart shows that the S&P is near important natural squares
  • On the far left at the Sept 23 Equinox the levels 1041 ( Aug 27th low) and 1174 (November 16th low) are naturally squared. 90 degrees lower is the current date--December 21st--solstice.
  • 90 degrees from the Dec 21st is the Spring Equinox level which has 1243 as a natural square. The market closed slightly above this level. If the rally continues 1243 should become a strategic support level. However, as mentioned above, the 1243-1250 level could provide significant resistance to a continuation of the rally.
  • Note the 1010 near the Summer solstice at the top of the chart. 1010 (July 1st low) is only one away from the natural square.


The chart below is for entertainment purposes only. It is a pentagon--full of Fibonacci goodies--formed from the Mar 06 2009 low. Where the midpoints of the side of the pentagon are formed are coincident with some interesting market dates--pivots. Fibonacci relationships are wondrous gifts from nature.


This may be the last update until after Christmas. If so: Peace to All and Thank You for visiting My Squiggly Lines.

Sunday, December 19, 2010

Solstice-eclipse overlap first in 456 years


Thursday, December 16, 2010

Time to be Vigilant

So far the high has been 1246.73 on Monday the 13th which is in line with the geometric cycle projection. (Dec 10-13)
The following levels should be support levels on any decline that is 'corrective' in nature:
1235.19: Wed's close & Range Harmonic.
1227.08: High November 5th.
1219.80: Range Harmonic & April 26th high
1173.00: November 16th low & Pivot Low.


The behavior of the RSI during this early decline will be important to monitor since it will reflect the nature of the decline--whether it is corrective or impulsive. The next Energy Date is expected between Dec 20-22nd. If the market has enough upside momentum, the decline could terminate and the S&P may make an attempt at the 1250-1255 area before an intermediate term correction begins. (Possibly Jan 4-8)

A break below 1219.80 will suggest that the decline is gaining steam and that a confluence of longer term cycles may be affecting a turn in the market. The metal markets and currencies will give clues about where the S&P is headed. Breaking 1173.00 and a serious decline may have commenced.
Note how the lower tine of the yellow pitchfork intersects the 1219-1220 level during the Dec 20-22nd Energy Window--it currently is acting as support at the 1235 level..


Wednesday, December 15, 2010

Another Brick In The Wall

A few weeks ago I mentioned that the Chicago P/C Equity ratios were not at the type of extremes that one would expect at a significant peak. Last week a chart showed how low TRIN did not necessarily signal a market correction.
However,when both the CPCE and TRIN are at extremes--like now--the probability of an imminent correction is significantly increased.

1219.50 and 1256.00 are important levels to monitor.



Below shows an intersection of two pitchforks...INTERESTING........



Perhaps it can be viewed as 'Another Brick in the Wall'

Thank You Pink Floyd !!!!!

Tuesday, December 14, 2010

S&P 500 1250

The chart below shows the amplitude of the rallies and declines in the S&P since the April 26th high. Virtually are of the corrections were extremely close to natural geometric numbers: 60, 90, 120, 150, 180, 210...

Projecting these harmonic amplitudes up from the various pivots produces two clusters of levels between 1200 and 1300. There are 1220-1225..near the November 5th high and at 1250-1255 level.

The December Cycle Projections suggest that pivots could form between Dec 10-13th and Dec. 20-22nd
A break below 1219.50 will be a distinct warning that a high is being made. The First January Time harmonics will be between Jan 4-8th.

Sunday, December 12, 2010

S&P 500 Geometric Harmonics

The chart of the S&P 500 below shows an interesting relationship between price and harmonic angles.
The Bottom Chart:
  • form a rectangle from the October 2007 high and March 2009 low.
  • From the bottom left corner of the rectangle--October 11 2007 project 30, and 45 degree angles.
  • Draw horizontal lines from the intersection point of these angles and the vertical line representing Mar 9 2009.
  • The 30 degree intersection--when extended forward in time intersects the July 1, 2010 low of 1010.
  • The 45 degree intersection when projected forward is slightly above current levels--between 1250 and 1260. This level may provide resistance to any further ascent in prices. If a horizontal line is projected back in time--to the left--the horizontal intersects the March 21 2008 low @ 1256.98
The Top Chart
  • Extend 30 and 45 degree vectors from the top and bottom horizontals of the rectangle representing the October 2007 high and March 2009 low.
  • Note where the 30 vector from the October high (Green) intersects the 30 degree vector from the March 2009 low. (Orange) You can use either top of the rectangle or bottom corners of the rectangle since they necessarily intersect in the same place.
  • This intersection of vectors takes place at the April 2010 high.
  • If the 45 degree vectors are extended from the same corners interesting pivots are indicated.
  1. The 30 degree vectors (Green) from the October 2007 high intersect the 45 degree vectors (Blue) emanating from the March 2009 low. This occurs in this current time period.
  2. The 30 vectors from the March low--both corners of the rectangle (Orange)--intersect in the current period as well--coincident with the 30-45 intersection mentioned in point 1.
  3. Note also where the 45 degree from the March low interests the 30 degree from the march low. At the July 2010 low!!!!
The period between now and January 8th may form a significant high in the S&P 500.



Friday, December 10, 2010

Transports & U.S. Dollar

Transports:
The behavior of the transports at this harmonic price level will offer a clue as to the direction of the general market in the short term. If the Transports break above 5080 significantly, further rally in the equities can be expected. If 5080 becomes strong resistance a topping process may be in the making.


All seems well with the US $.

  • Diagonal resistance points from the June 7, 2010 high were at the 15 and 30 degree vectors (August high @ 30* and the recent November high @ 15*)
  • 45* vector off the November low has acted as diagonal support at the Dec 3rd low. Dec 3rd--a Friday--was 119 days from the August 6th high.
  • Note the resistance at the recent high is at the extension of the diagonal of the base rectangle formed from the Aug 6th low and the November 4th low. 90 Days
  • Resistance encountered at the 200 day SMA.
  • Energy Date Dec 18-23 should resolve the current price congestion. December 19th is 135 (90+45) days from the August 6th high.

Harmonic Price Levels are:
Geometric PRICE
Degrees 75.63
30 78.56
45 80.04
60 81.54
72 82.75
90 84.58
120 87.67
135 89.24
144 90.18
150 90.82
180 94.02


Wednesday, December 8, 2010

S&P 500

Pivot Points for Dec. 8,2010
R3 1246.85
R2 1239.15
R1 1231.45
PIVOT 1227.35
S1 1219.65
S2 1215.55
S3 1207.85



The possibility of an intermediate top will increase if 1200 is broken in the cash market. A break of 1173 (especially on a closing basis) would complete the formation of the pivot point.
  • The center tine of the Andrew's Pitchfork should act as diagonal resistance on the daily chart. (top)
  • The lower tine will be near 1200 over the next few sessions--diagonal support should be expected.
  • Lower Bollinger Band is at approx. 1173. Since this is the last pivot point as well, strong support should be anticipated.



  • Upper tine of APF held prices back on Tuesday. Selling at the close suggests that the lower BB may be tested which is near 1214-1216.
  • 1200 represents the 50% level of the November decline. Diagonal support from the hourly APF should be expected.

Monday, December 6, 2010

A Sobering Chart.

Several blogs are pointing out the low 5 day Arm's Index (TRIN) on Friday. Low TRINs are supposed to indicate over-bought markets--markets that are ready to pivot downwards--well that is the conventional wisdom.
The chart below indicates that low TRINs over the last 3 years seem to occur during the acceleration stage of several rallies since the March '09 low. Judging by the evidence I would be inclined to be cautious when using TRIN.


This is interesting since a comparison to the "TRINs" of the 1990s and early 2Ks to the behavior of market breadth today suggests that the market--for whatever reason--is a different beast. Is it because of the power being exerted by hedge funds??--the omnipresence of ETFs???, black pools, the Fed.....ad nauseam. The finger of immediate blame may be pointed in many directions--but one thing is certain--the general public are becoming farther and farther removed from the 'market place'. At one point--when America was 'humming' individuals owned shares of Ford, GE X KO EK....the middle class participated in the economy--reaped the benefits and invested in the country on a personal basis. Today the middle class--the remaining few that can afford to invest in equities-- have their wealth managed by institutions that package product which consequently does not necessitate an individuals direct attention to the industrial economy.
As the middle class struggle in a world where money is being polarized at the fastest rate in America's history, their jobs are disappearing while at the same time their wealth is being invested in a world that becomes increasingly obscure and removed from the devastation of the foundations of our way of life.

The markets have changed--for the benefit of the common good??? That would be a tough argument to make.

Extremely low TRIN values are indicated by the green columns.

Sunday, December 5, 2010

Transports

There are some interesting things about the chart of the Transports below:
When the Range from the May 19, 2008 -Mar 9 2009 is 'squared' harmonic angles become active.
  • using the range amplitude (ht.) as the hypotenuse of a equilateral triangle, the height of the perpendicular is .866 = sin(60) The translates into a value of 5080.65 for the Dow Transports.
  • Note the significance of the various 30, 45 and 60 degree rays coming from the low, high and 'squares'.
  • The second cycle is coming to an end and current prices are at a harmonic level.
A high in this vicinity (5000-5100 2%) followed by a reversal pattern would be an early warning of further deterioration in the broader markets.

The following levels should act as support and resistance. Breaking the lower support level would raise the probabilities that a significant top has been completed

  • R2: 5243
  • R1: 5156
  • Pivot: 4988.74
  • S1: 4901.31
  • S2: 4733.80


.

Thursday, December 2, 2010

Wednesday, December 1, 2010

Two Numbers:

SPX 500 Close less than 1170.71 and VIX close greater than 24.52

suggests turbulent waters ahead.



US Dollar