Weekend Watering

[99er]

Good Morning.

To start things off, a couple of charts indicating a possible drop in equities early next week.

ES http://99ercharts.blogspot.com/2011/10/es_22.html
SPX http://99ercharts.blogspot.com/2011/10/spx_22.html

Have a great weekend!

[99er]

Updates

Copper http://99ercharts.blogspot.com/2011/10/copper_22.html
Crude http://99ercharts.blogspot.com/2011/10/crude_22.html

[cougar]

Good morning 99er!
What a Friday!!!
Did you notice that the term of “option expiration” was inexistent in the exuberant speeches of the CNBC and Bloomberg cheerleaders?

[99er]

Updates

Gold http://99ercharts.blogspot.com/2011/10/gold_22.html
Silver http://99ercharts.blogspot.com/2011/10/silver_22.html
30-Year http://99ercharts.blogspot.com/2011/10/30y_22.html

[99er]

Morning, cougar.

Friday gave me a headache. I'm going out to spend the day away from the computer but will be back to see what you and Volpinacci have to say. Your charts are informative and so very nice to look at. Thanks for sharing! Enjoy the weekend.

99er

[ocassional observer]

i guess next week is critical. spy doing a back test in the 1260's with 200 day&50 week resistance and overbought conditions seems to merit a short position. economic indicators coming out of europe this month (PMI, IFO) confirm entry to recession. since economic activity in germany has not followed yet, most pain is yet to be felt. according to the oecd leading indicators for august (yes, the leading indicators are 2 month old but presumably lead by 6 month) the US is on the verge of recession. i guess recession starts oct-nov. hussman's indicator has started flashing red by the end of july and usually has about 13 weeks lead. the ECRI joined chorus 2 weeks ago, so i believe this call is valid. short term indicators such as fed manafcturers do not materially change that picture. for longer term traders i believe next week or two will provide the best short entry points in this cycle before a waterfall in prices as recession sets in. China will not save the day.
last but not least, the credit suisse fear barometer:

[cougar]

Yesterday, before the final “RAMPO”, I though that ”the easiest move for crossing the blue line, would be
an overnight gap above it”…But I was wrong because THEY had no problems in closing above that line.
In spite of that I tried to be disciplined and, as I posted, I liquidated all my SPY and QQQ derivatives long positions, to stay flat over the weekend.

Why did I do that?
Because:

1. The last move of the day might have been a Pinocchio wave”. This sis supported for the fact That after the stock market closed and well into the after-hours trade THEY continued to push SPY higher, up to 124.24…but on very low volume…actually ridiculously low. Let us look at those vol. numbers:
124.21: 200 shares
124.22: 100 shares
124.23: 1499 shares
124.24: 400 shares
Does that look to you as if the Big Boys were accumulating SPY at a high price? NO! LOL!

2. The second reason is a CAVEAT hidden in the “curved channels” displayed on the chart below and labeled In green rectangles 1 & 2.

I shall briefly analyze their story later.

[cougar]

Nice commentary “occasional observer” !
Very true!

[cougar]

In my limited experience, curved channels are frequent in indices. In contrast, they are rare in "interesting" stocks", where “good-to-follow moves” are mainly contained in Linear Regression Channels.
We should first zoom on the SPX curved channel of 3/17 to 4/11/2011, where BUY and SELL signals are generated by some “ad hoc” selected and adjusted indicators:

[Apple]

i guess next week is critical. spy doing a back test in the 1260's with 200 day&50 week resistance and overbought conditions seems to merit a short position. economic indicators coming out of europe this month (PMI, IFO) confirm entry to recession. since economic activity in germany has not followed yet, most pain is yet to be felt. according to the oecd leading indicators for august (yes, the leading indicators are 2 month old but presumably lead by 6 month) the US is on the verge of recession. i guess recession starts oct-nov. hussman's indicator has started flashing red by the end of july and usually has about 13 weeks lead. the ECRI joined chorus 2 weeks ago, so i believe this call is valid. short term indicators such as fed manafcturers do not materially change that picture. for longer term traders i believe next week or two will provide the best short entry points in this cycle before a waterfall in prices as recession sets in. China will not save the day.
last but not least, the credit suisse fear barometer:

"Here's what ECRI's recession call really says: if you think this is a bad economy, you haven’t seen anything yet. And that has profound implications for both Main Street and Wall Street."

copied from: http://seekingalpha.com/article/301282- ... ps-further

[BullBear52x]

Happy weekend all, slow down on them booze!

I will start with something so obvious that my uncle Ben can even see it coming.

Fib then and now comparison, I believe we are at note #2

Some bear will hope for Reversal Island? well, possible, but don't see it due to the fact that EOD close is quite strong.

Now lets go to where bread and butter are, no doubt the trend is UPbuy the DIPis on. here is my line in the sand, bears need to see 123 breached like Monday or your life will not be easy in the week to come.

Disclaimer: follow Bullbear52x you will most likely lose money so don't be crying.

Edited: One more, it will not be fair to leave the Negative Divergence on hourly, on the chart bears the black dot is your final obstacle, take them down

[cougar]

In my limited experience, curved channels are frequent in indices. In contrast, they are rare in "interesting" stocks", where “good-to-follow moves” are mainly contained in Linear Regression Channels.
We should first zoom on the SPX curved channel of 3/17 to 4/11/2011, where BUY and SELL signals are generated by some “ad hoc” selected and adjusted indicators:

Now let’s use the same tools for recent events. We are still under the “spell” of a buy signal, delivered and confirmed at the base of the curved channel (10/5). However, the wave is getting kind of tired as the “Trend Quality” and the “Momentum” are idle and coiling.
Prudence!

Note: I am not a fan of astrology but I noticed in the past some correlation between Moon cycles and the turning on and off of price evolutions contained in curved channels.

[cougar]

And finally, here is an illustration of the previous statement: “…in interesting stocks , ‘good-to-follow moves’ are mainly contained in Linear Regression Channels”.
NUAN (Nuance Communications) is one of my best stocks. For over a month, its UP move is contained in a Linear Regression Channel (+/- 1SD)

[BullBear52x]

Thanks guys, I learn so much from all of you.

[dcurban1]

CNBC is great TV when the market is tanking. Out side of that I try to avoid it like the plague.

My worries stem from a newsflow that talks about the market hoping for a Greek solution that will solve the problem yet the words from the EU are stating the exact opposite.

Oh yeah, this has been my favorite link over the last week. The yield on 1 year Greek debt. Even if it falls I doubt it goes back to the teens.

http://www.bloomberg.com/quote/GGGB1YR:IND 183%

Added the 2 year yield for fun. http://www.bloomberg.com/apps/quote?ticker=GGGB2YR:IND 77%

Earnings for the most part have been mediocre with some weak 4th quarter forecasts.

I would feel better if the ECRI actually called a recession rather than dragging this out. At least we can then focus on a recovery rather than trying to figure out if the country is in a recession.

The Nasdaq has led the rally but if it cannot power through to new highs soon I think we see a major selloff. Looks like a double top unless we power through that next week.

Am I too bearish?

[cougar]

SPX stopped at the 4x1 price/time line of the descending Gann fan. But, if a GAP UP can be engineered on Sunday night, we should watch next the ~1248 zone, which is at the 7/8 MM level on this Gann Squares chart:

[cougar]

Excellent charts and commentaries, BullBear! It’s a pleasure to read your stuff!

[cougar]

Let’s go to AAPL…
I have 3 charts, which, by various criteria, support the view that AAPL stopped its downfall at a critical level…
A further drop would take us to my next support which is 382 on the Gann Squares chart…IMHO.

[cougar]

I do not trade AAPL right now but I looked at it because of the widely spread opinion that the relatively poor performance of NDX (when compared to SPX) is mainly AAPL’s fault. IF this were true, then we should see a clear contrast between the bullish NDX internals and idle NDX price action But, in reality, the internals are not stellar either. The McClellan Osc. barely got out of jail and the Empirical Mode is still cycling.

One might also notice that, after reaching fast the top of its curved channel, NDX was limited, for that last 5 days, to a flat, sideway course.

[rhight]

Great charts everyone, lots to digest. We are all aware of the correlation between the USD, Euro, and SP500. With that in mind, let's look at the USD. As we can see it closed on the 50DMA, and is sitting in a critical support area. The Euro is essentially the inverse of this. How they move from here will be reflected in equities.

Next, let's look at the the CRB index. The pattern would suggest another leg up (3 wave), but the cycle and momentum suggest a possible revisit of recent lows in 2 to 3 weeks. Weakness in Silver and Copper support this view, but they could also be forming bottoms with positive divergences in RSI. To tough for me to call.

With regards to SPX. Notice how this Thursday/Friday was very similar to last weeks! Almost remarkable. And so, to conclude that Monday will be up, simply because we broke 1230, is not necessarily in the bag. It was not a high volume breakout, and what volume there was may be attributable to options expiry. Of course, the consolidation period of the last few days could either be a continuation, or reversal pattern. Trend based indicators are still in bull mode, but my decision matrix issued a Sell on 10/20 (my black box). It is not an automatic sell, but contingent on pattern for entry. By my rules, I could now sell a long or open a short on a drop through 1197. But, since that would then form a lower low in the 60 min. cycle, at my discretion I could wait for the bounce and the sell or short into strength as long as a lower High follows, a higher High cancels (make sense?) In the bullish case, if prices continue to climb, the Sell signal is invalidated and I wait for another one.

Notice that price could be in an bearish ascending wedge, with a possible third trend line break in the near future. Three trend line breaks can often precede a minor reversal. This would correspond to a H&S or triple top pattern.

That's all for this week. I will refrain from timing studies until a trend change is apparent. Have a good weekend all.