Broader Market Analysis: Indicies Looking Very Suspect Heading Into Second Half Of The Year
14/06/09 10:13 PM
As we head into the second half of this year, there a
few trends that seem to be very prominent:
Let’s first revisit a monthly chart of the S&P. After that bearish double top that we experienced in late 2007, we have seen a precipitous selloff, which in turn lead to a test and a break of the lows set back in 02/03. We eventually reached a short-term bottom in the early stages of this year, something that was no doubt influenced by the Obama presidency, bank bailouts, stimulus projects and his otherwise hollow promises to save the free-world from an economic catastrophe. There are a couple of things on this chart that stand out, the first obviously being that double top, and the second being the low volume rally we have seen from 665 to our current level of 950. The fact that this rally has been on much lower volume than the heavy selling we saw in 2008 is by itself enough to be cause for suspect. Furthermore, after looking at this monthly chart more closely, it looks as though we could be in the process of forming a bear flag on the S&P. Should this be the case, then we could actually see a bit more upside in this market with an eventual test at 1000 before continuing downward towards a retest/break of the lows.
An Elliot Wave analysis seems to correlate with the monthly analysis above, as it looks as though we are in the final stages of the fourth up-wave. Should this be correct, the fifth and final leg down shouldn’t be too far off. That weekly downtrend will come into play around 1,000, not to mention the fact that many traders will likely look at the S&P 1000 level as an area of phycological resistance.
On a intraday chart, things have been fairly choppy, but objectively, the trend is up and continues to be up for now.
Gold on a weekly chart continues to look very bullish. The inverse head and shoulders that we mentioned way back in February is still in play and a break above 1000 would lead a flurry of buying.
On a daily chart, Gold seems to be consolidating around that $90 level as well as its 50-day moving average. If you look closely, you will notice that another inverse head and shoulders seems to be in the final stages of forming that right shoulder. We will be looking at the 50-day as an area to start getting long gold again for a move and a break above 1000.
The dollar continues to be one of the worst looking charts out there. It seems as though global investors (aka China and Co.) are beginning to realize that the United States isn’t as safe of an asset as was once thought. Longs beware.
So in a nutshell, the longer term trends seem to point towards a rise in the price of gold, and a drop in US equities and the dollar.
That about does it from here.
Good luck.
Let’s first revisit a monthly chart of the S&P. After that bearish double top that we experienced in late 2007, we have seen a precipitous selloff, which in turn lead to a test and a break of the lows set back in 02/03. We eventually reached a short-term bottom in the early stages of this year, something that was no doubt influenced by the Obama presidency, bank bailouts, stimulus projects and his otherwise hollow promises to save the free-world from an economic catastrophe. There are a couple of things on this chart that stand out, the first obviously being that double top, and the second being the low volume rally we have seen from 665 to our current level of 950. The fact that this rally has been on much lower volume than the heavy selling we saw in 2008 is by itself enough to be cause for suspect. Furthermore, after looking at this monthly chart more closely, it looks as though we could be in the process of forming a bear flag on the S&P. Should this be the case, then we could actually see a bit more upside in this market with an eventual test at 1000 before continuing downward towards a retest/break of the lows.
An Elliot Wave analysis seems to correlate with the monthly analysis above, as it looks as though we are in the final stages of the fourth up-wave. Should this be correct, the fifth and final leg down shouldn’t be too far off. That weekly downtrend will come into play around 1,000, not to mention the fact that many traders will likely look at the S&P 1000 level as an area of phycological resistance.
On a intraday chart, things have been fairly choppy, but objectively, the trend is up and continues to be up for now.
Gold on a weekly chart continues to look very bullish. The inverse head and shoulders that we mentioned way back in February is still in play and a break above 1000 would lead a flurry of buying.
On a daily chart, Gold seems to be consolidating around that $90 level as well as its 50-day moving average. If you look closely, you will notice that another inverse head and shoulders seems to be in the final stages of forming that right shoulder. We will be looking at the 50-day as an area to start getting long gold again for a move and a break above 1000.
The dollar continues to be one of the worst looking charts out there. It seems as though global investors (aka China and Co.) are beginning to realize that the United States isn’t as safe of an asset as was once thought. Longs beware.
So in a nutshell, the longer term trends seem to point towards a rise in the price of gold, and a drop in US equities and the dollar.
That about does it from here.
Good luck.
|
GM: The Reinvention Spoof
14/06/09 11:41 AM
Market Analysis: Market Looking Bullish Going Into This Week
31/05/09 11:15 PM
Well after last weeks action, we could very well be in
for some more upside next week:
As we mentioned before, we remain stuck in an up-trending channel that has been holding up for about a month now. Until it breaks, the bias is to the upside. The fact that we held 880 on the S&P is definitely bullish and it looks as though we could see a test of 950 from here.
Could we actually get a break above the 200-day? If the daily charts are any indicator, then odds are we might.
Gold is in the final stages of forming that inverse head and shoulders that we mentioned way back in February. If you don’t own any gold now, it’s definitely not too late to step in. We are looking for an immediate move in the GLD to $115 after that shoulder is broken.
Just keep in mind that this is purely a commodity driven rally and it can only be looked at as such.
Good luck.
As we mentioned before, we remain stuck in an up-trending channel that has been holding up for about a month now. Until it breaks, the bias is to the upside. The fact that we held 880 on the S&P is definitely bullish and it looks as though we could see a test of 950 from here.
Could we actually get a break above the 200-day? If the daily charts are any indicator, then odds are we might.
Gold is in the final stages of forming that inverse head and shoulders that we mentioned way back in February. If you don’t own any gold now, it’s definitely not too late to step in. We are looking for an immediate move in the GLD to $115 after that shoulder is broken.
Just keep in mind that this is purely a commodity driven rally and it can only be looked at as such.
Good luck.
Index Analysis and Trading Ideas For The Rest Of The Week
26/05/09 08:37 PM
Just a quick look at some charts tonight:
The S&P remains stuck in an uptrending channel that began in late March. Until we break the channel, we could see more upside here.
The Gold miners ETF broke out of that inverted head and shoulders last week on heavy volume. This chart could be a bit ahead of itself here, but its’s a definite buy on the pullbacks. You could have caught this trade with us on the Seeking Alpha tab.
Gold itself has also traded well over the past few weeks. Now that we’re back above the 50-day on heavier volume, this chart looks very bullish. There’s some definite resistance at $94.50, so a pullback/consolidation period here is expected. But from there, it looks like a very good trade to be long. Could we get another inverse head and shoulders on that 3-month chart? Only time will tell, but our guess is that we get something along those lines.
The refiners have also been very bullish lately. After breaking out of an ascending triangle on extremely heavy volume, we’ve seen a nice pullback to that resistance turned support area at around $13.4. This definitely looks like a good area to get long, as we’re at double support near this price level. We mentioned the refiners as very interesting looking long plays a few posts back, so hopefully some of you caught that with us.
TSO also looks great here. Notice the accumulation indicator on both of these charts, definitely bullish.
And that does it from here. Hope you all had a great Memorial Day.
Good luck.
The S&P remains stuck in an uptrending channel that began in late March. Until we break the channel, we could see more upside here.
The Gold miners ETF broke out of that inverted head and shoulders last week on heavy volume. This chart could be a bit ahead of itself here, but its’s a definite buy on the pullbacks. You could have caught this trade with us on the Seeking Alpha tab.
Gold itself has also traded well over the past few weeks. Now that we’re back above the 50-day on heavier volume, this chart looks very bullish. There’s some definite resistance at $94.50, so a pullback/consolidation period here is expected. But from there, it looks like a very good trade to be long. Could we get another inverse head and shoulders on that 3-month chart? Only time will tell, but our guess is that we get something along those lines.
The refiners have also been very bullish lately. After breaking out of an ascending triangle on extremely heavy volume, we’ve seen a nice pullback to that resistance turned support area at around $13.4. This definitely looks like a good area to get long, as we’re at double support near this price level. We mentioned the refiners as very interesting looking long plays a few posts back, so hopefully some of you caught that with us.
TSO also looks great here. Notice the accumulation indicator on both of these charts, definitely bullish.
And that does it from here. Hope you all had a great Memorial Day.
Good luck.
Channel Bound Again / Critical Levels Here
21/05/09 12:03 PM
Just a quick look at the S&P:
After a brief break above the channel a few weeks ago, we came back within the channel and are now presented with one of two scenarios that could occur. Should we stay within the channel, we would be looking for a retest of 930. A break below 880, though, would be pretty bearish and given the fact that the financials seem a bit toppy here, it might help to keep those stops tight.
Also, keep an eye on any of the gold/oil related stocks. They’re on fire.
Good luck.
After a brief break above the channel a few weeks ago, we came back within the channel and are now presented with one of two scenarios that could occur. Should we stay within the channel, we would be looking for a retest of 930. A break below 880, though, would be pretty bearish and given the fact that the financials seem a bit toppy here, it might help to keep those stops tight.
Also, keep an eye on any of the gold/oil related stocks. They’re on fire.
Good luck.