Thursday, August 30, 2012

TLT 20+ Treasury Ishares and S&P 500

TLT: Bounce or New Bull Campaign:

TLT is in the midst of its expected bounce off the 200 day moving average. For a synopsis on the TLT see the August 15th post. The question now becomes is this a new leg of the aged bull market or a bounce before the 200 day moving average is challenged once again and possibly violated to the downside.

Technical Chart

  • bounced off the 200 day ma coincident with the .618 fan line
  • the bounce has been 50% of the recent decline

 Geometric Chart

  • The large square (AC) is based upon the March-July rally. The 1/2 square of that rally is represented by square BCDE
  • The square of the recent decline is represented by CXZY
  • The center of BCDE square--where BD intersects CE-- marks the August price low at X. Note how this level is also the same as point D since the larger square is almost a perfect 45* isosceles triangle.
  • The center of square CXZY--which is formed by the recent decline--is at approx. 128 which is close to the horizontal 61.8% retracement of the recent decline. This intersection occurs (in time) around the important Sept 12-16th time frame.
  • Another important intersection of time-price occurs in the later part of September where point D and point Y are situated.
  • 120 and 128 are the hot spots to watch on the TLT and September 12-16th and September 24-28th are the 'energy dates'.

 S&P 500

Not much to say here. For my thoughts on the S&P please refer to the August 21st post.
1390 remains the magic spot for the S&P (close only) and September 12-16 looks like it will be bringing some energy to the markets. The Transports are hanging on at the up trend line--a decisive break of 5000 will spell trouble for the other equity indexes. (Dow Theory) (see August 29th update for Transports)


Anonymous said...

12-16 Sep- magic energy, does it means positive energy?


Fibocycle said...

To be honest I have no idea. This is why I try to let the market action dictate to me what to expect. Making broad prognostications usually are futile. However--having said that--Note the following:
Venus was squared Uranus on August 16th. The highest recent closing price on the S&P was the next day August 17th. So if the square is a bad vibe PERHAPS the trine (August 13th)is a positive vibe.

There is a new moon on the 15th. There is an argument that new moons bring market highs--although any empirical data I have seen would call the validity of that proposition statistical untenable at best. Although lately this has been the case--but of the last 12 new moons only 5 have been close to or on a high. (bad odds on that bet)

September is usually the worst month to be a bull. Lots of stats to prove that are available.

Bottom line Sept 13-17th will bring one or more of the following:
1. Perhaps a brief bounce from an oversold condition...if the S&P closes below 1390 between now and Sept 9th.
2. An acceleration to the downside due to some nasty currency/gold action
3. A secondary top--testing the Aug 17-20th top.

Let the markets tell you as the date approaches.

Fibocycle said...

opps...the Venus Uranus trine is Sept 13th not August 13th
Also note mercury combust on Monday Sept. 10th...Should be a relatively volatile week...VIX will give us fair warning on that.