Thursday, June 30, 2011

Test of the 200s

The correction from May 2nd has successfully tested the 200 day moving averages of several key indexes. This is a bullish indication, especially considering that the diagonal trend lines from the peaks have either been broken to the upside or are at these trend lines. However, the swing-pivot points of the decline have yet to be taken out.
A break above the pivot points would further strengthen the bullish case, while a downside violation of the June 16th low (March low + 90 degrees) would be a disastrous scenario for the bull market.

ENERGY DATES for July will be posted this weekend.







Friday, June 24, 2011

Nasty Potential: Time to be Extremely Careful

TRANSPORTS

Thursday's high has become a VERY IMPORTANT PIVOT POINT. 5355.88

GOLD and CRB
$1460.00 Support is CRITICAL
CRB hanging by a thread...monitor grain complex and base metals


Thursday, June 23, 2011

Intermediate Cycle Downtrend vs. S/T Uptrend

REMEMBER:The Intermediate Term Cycle is more powerful than the Short Term Cycle

CRB

SILVER

GOLD

S&P 500



Wednesday, June 22, 2011

Transports, AAPL and RIM

Research in Motion ( a downward motion...)
  • Gapped below channel--watch for possible island reversal
  • ADX pivot--possible exhaustion
  • Harmonic support between 18-22

Apple
  • Trading at the bottom of channel - a trade > $330 would be constructive.
  • OBV broke support but has hooked back up
  • RSI oversold


Dow Transports
  • tested bottom of channel
  • OBV very impressive--bullish
  • RSI was oversold and has turned back up--bullish
  • A break above diagonal resistance 'X' would be quite bullish for the entire equity sector--a break to new highs would be EXTREMELY BULLISH


Monday, June 20, 2011

June 15-18 Energy Date: A short term low?

S&P 500
The projected June 15-18 Energy Date appears to be a low--above the pivotal March 15th low. (90 degrees apart)
  • RSI in over sold territory
  • Bollinger Band reversal???
  • S&P touched 200 exp. MA

VIX


The VIX approached an upside breakout and then backed off coincident with the projected Energy Date.
  • VIX pivots at the 180 degree point of the last volatility cycle.

Thursday, June 16, 2011

Monday, June 13, 2011

A Few Charts

S&P 500
The serious nature of the decline since May 2 is highlighted by the fact that the decline is both the longest in time and greatest in amplitude since the July 2010 low. This over-balance is not a good long term development for the market.
Due to the oversold condition of the market and the fact that some sentiment indicators are getting into the extreme bearish level, a low around the June 15-18th could start a rally that could take the market to the June 28-July 3rd Energy Date.


TSX (Toronto)
Last week the market dipped below the 200 day exponential moving average and the horizontal support levels. Although short term indicators are suggesting a possible low--like the S&P 500--the market structure is deteriorating significantly.


US Dollar Index
Price action and volume are suggesting that an intermediate cycle low is in place for the USDX and a significant rally could unfold over the coming months. A break above the indicated breakout level--especially if accompanied with high volume--could be the beginning of a powerful move to the upside. The Euro could decline violently and significantly.



Friday, June 10, 2011

Longer Term Perspective

Transports
  • RSI entering oversold
  • Nearing 200 Day ema
  • Diagonal support can be expected at downtrend channels
  • Target 4800~4900 (yellow highlight)
  • ADX beginning to trend


S&P 500

  • trend lines project from cycle rectangles.
  • Trend from 1987 @ 1100.
  • Midpoint of Top Structure 1170 (2002 Low; Note 1173 Nov '10 low) and 1120 (2009 low)
  • Target: 1170 and/or 1100-1120

Thursday, June 9, 2011

Short Term Crossroads

Markets rebounded today, finally breaking a multi day sell-off. A rally is likely due to either: resume the major uptrend or to relieve a relative overbought condition. Failure to rally here would likely raise the level of consternation to levels that could precipitate a panic selling scenario. VIX is behaving for now.

Gold has retraced 78.6% of the May 2-5 decline. A rally above $1560 would suggest higher prices.

US $: See Euro FX comment below.

XLF SPDR Financial
  • XLF has retrace 61.8% of the August-Feb. rally and the RSI is in oversold.
  • OBV has dipped below the support line--a bearish indication
  • XLF held the 120*--fell through 180*, so if the 61.8% does not hold prices may find support at $14.50 level (240*).


EURO FX
  • possibility of a counter-trend rally is in place: the red diagonal resistance should hold a rally if the market is about to reverse major trend from up to down.
  • RSI touched over-bought and has turned down.
  • DMI (ADX) has signaled a potential secondary top.





Wednesday, June 8, 2011

Problems in the Cloud(s)

Apple recently unveiled its cloud service--effectively making its presence known in all aspects of the sector. All seems well in the Apple galaxy but there are signs of deterioration in its stock price. What is ahead for Apple !

Things are getting tenuous in the equity markets. The low of March 16th @ 1250.11 is the next pivot point to be tested. The evidence continues to suggest that the intermediate term cycle has finally turned down. Between now and June 15-18th should be interesting.

Monday, June 6, 2011

Trouble Brewing at the Banks?

Apple

Deteriorating OBV must hold previous support (orange) to avert a massive sell-off

Sunday, June 5, 2011

June 6 2011 Update

"The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title." Anonymous


There are many bubbles looking for a pin !!!!!

US Dollar

The USDX has had its largest rally since the late December 2010 peak--a bullish development. Currently, the market is correcting and could resume its uptrend in the near future. A close above 75 would be an indication that a powerful continuation rally (3 Wave) is commencing.


GOLD (June)
The rally in June Gold was reached approximately the 78.6% retracement from the 1462.50 low of May 5th. The chart below shows the importance of converging trendlines which intersected at the 1462 low. A break of this level on the downside could usher in a violent decline and and reassertion of the BEAR trend. A break of $1520 would violate the recent uptrend.
May 28th was 120 calendar days from the January low, while June 5th is 180 cds from the Dec 7 2010 high.

June Cycles
The geometric price projections form a energy cluster between June 15-18th--look for a possible trend change or acceleration of the trend in this time frame. The period between June 27th and July 2nd is also a potential harmonic time window.


Transports
The DJ Transportation Average is approaching a crucial support level and will have to hold if the equity markets are to stay in their bullish trend. A break below 5175 would be disastrous!!!!


S&P 500 (cash)
The 1289-1294 level is critical support and should hold if the Transports are going to hold its support area--5175-5200. A break below the 1294.70 would suggest that a test of the March 16th low of 1250.11. Equity markets are deteriorating in concert with weak commodity markets and a strengthening US Dollar.
The adage 'SELL IN MAY AND GO AWAY' may be particularly apropos this year. If support breaks the next 4 months could be frightening--if not disastrous-- to the Bullish crowd. Leveraged Market Bear ETFs may be a very prudent holding over the next several months. Any rallies should be viewed with great caution--especially if market breadth does not confirm apparent index strength.
Monitor the performance of hedge funds: a drop in liquidity may be a serious development for the industry.



GOOGLE

Google is currently trading below the major trend line from the 2008 bottom. If further price erosion continues an acceleration in its decline will be the likely outcome.



Apple
Important trendlines are in the process of being tested. A sideways consolidation before a resumption of the incredible uptrend is likely the most bullish of scenarios. A break of horizontal and diagonal support could lead to a significant decline in the valuation of Apple.