Money From The Market

Yipes, could these low European volumes be right?

2012-02-01T05:40:00.001-05:00

European markets are up on extraordinarily low volume:

http://data.cnbc.com/quotes/UKX-FT/tab/2

http://data.cnbc.com/quotes/DAX-XE/tab/2
http://data.cnbc.com/quotes/CAC40-FR/tab/2

US futures are up early just like they were yesterday, eventually collapsing as the morning wore on.

The last several tops have been roll-over patterns, not sharp peaks. This looks the same so far.

I went short ADM yesterday. The missed their earnings estimate badly. Yesterday's high-volume-supported price drop makes much lower prices highly likely (there are NO sure things in the market). The 26.20 high volume candle is the target.

The Monthly chart, if i can ever be that patient, shows a potential large ABCdown with a 50% bounce in that pattern:

TWM

2012-01-31T17:11:00.000-05:00

I bought TWM today to short the small cap index represented by IWM. IWM appears to be paying pretty strict attention to the Bud Rolf-type support and resistance levels at even 10's of points. It hit it's head on 80 and there is also up against huge volume from the Aug '11 long black candles with massive associated volume.

TWM trading plan is:

Buy 33.27
Target 42.59
Stop Loss 32.44
R/R 11.2!!!

This is a high Reward/Risk Ratio because the IWM has its "back against the wall," that is 80 as a firm resistance point. The target, well 70 for the IWM might be about 40 for this double fund.

CCJ Continues to Progress to my "Buy" Price

2012-01-31T13:07:00.000-05:00

I have a buy in at : $21.70:

Wha a great A to B this has made in the past month! A retracement of 0.382 proportions would bring in the potential for a 7 or 8 point ABCup!

Why is uranium bouncing here? Well fundamentally, I'm not sure. But technically it has either made a great double bottom or possibly, merely experiencing another sharp bounce as it did in '09:

Will Gold hold up?

2012-01-30T04:24:00.001-05:00

Gold has broken above the upper trendline of its downward-sloping channel. It is falling fast this early morning. A retest of the upper trendling could provide the trade hint (up or down).

A drop back to 145 for GLD is then possible. Or it may de-couple from the market and go counter to it, but that seems less likely; see this morning's Kitco price chart.

GE

2012-01-29T22:42:00.000-05:00

Navin asked me about GE. i keep telling him a conglomerate that big only follows the general market, but he insists on a technical analysis. On a daily chart, GE has formed a Gartley Butterfly, just like S&P, Dow and COMP. It has gone up in price on light volume since mid-December, a decidedly bearish pattern; it ercently broke its up-trend:

I have heard GE referred to a a "mutual fund" and that sounds about right. To move such a huge company upward beyond the constraints of the general market is nearly impossible. It has, in fact fallen below the performance of the general market and stayed there. I would not buy GE here. A GE:SPY ratio chart is below; the trend is not good:

Short

2012-01-29T22:25:00.000-05:00

Holding AB at a 2.3% loss, I initiated 2 short fund trades on Thursday: DOG and SH, based on the Gartley pattern previously posted. Reports suggest 60-70% success for these. With a stop above last week's high and targets fo rthe next swing low they look like this:

	DOG	SH
Buy	$37.31	$38.55
Stop	12842 Dow	1333.47 SPX
	$37	$37.89
Target	$40	$42.00
R/R	5.28	5.23

Targets may be non-conservative. Stops are about a dime below the latest SL.

Bearish Gartley Butterfly Pattern completes -- wil it bear short fruit?

2012-01-25T23:01:00.001-05:00

Here is the Gartly pattern explanation.

Making Money?

2012-01-24T13:12:00.000-05:00

We are on our way back to the Catholic mission we support in Honduras for a week in February. This will be our 13th trip in 13 years, taking medical personnel and teens.

If you have made any money from these blog posts and want to pay back some, just send a check to:

Dominican Sisters of the Presentation

Honduran Mission

3012 Elm Street

Dighton, MA 02715-1603

Make sure the CHECK MEMO LINE has written in: HONDURAN MISSION

It does not have to be much. Wages are $3 a day; $15 is a week's pay for the poor.

It does not hurt to have a whole order of nuns praying for you.

If you have $50,000 to give, they could double the size of their high school, serving girls of character and potential from the mountains, where no high schools exist. The curriculum is so good that the National Agriculture University offers a full scholarship to any of the students that graduate (those nuns are tough and grads of Stonehill College teach much of the curriculum -- love those CSC). In 2006 Sister Maria Ceballos showed us a vacant lot and told us that the school would go there, although she had NO money. I'm invested in her.

http://guaimacamission.webs.com/

Weakness in Volume: AWK

2012-01-23T12:25:00.000-05:00

The stocks, like the market appear to have risen in price without underlying fundamental market demand. Motley Fool rates this "one of the 6 best stocks". But the PEG is 2.02 -- talk about over-valued! growth estimates for the sector are 40% in 2011, but just 3% in 2012. It goes ex-dividend 2/1/12.

Notice how the current Stochastic over-bought condition has signaled a price-drop 9 or 10 times in a row!

US Dollar Driving Down

2012-01-23T12:02:00.000-05:00

With Mr. Dollar driving the markets with an inversely correlated price, and a recent sell signal from Jack Chan, the stock market should be biased to higher prices. It may be a modest increase on meager interest (volume), but O'B believes the $SPX can be driven back to 1350, where it should fail.

AB, Monthly looks bad

2012-01-23T11:51:00.000-05:00

AB looks like a very short-term trade. You can see that its monthly chart shows on a dead cat, 0.382, bounce up from the 2008-09 dead drop off its top. There is no long term upside demonstrated here. I'll take a little profit and bail out. R/R is under 3:

AB
Buy	15.399
A	14
B	15.61
B-A	1.61
C	14.91
Retrace	43.5%
Dprojected	16.52
Target	16.52
Stop Loss	14.97

(Stop Loss executed on market close)

AB

2012-01-22T07:37:00.000-05:00

I opened a trade for AB late on Friday with 1) its price rising on high volume 2) off a tested bottom, 3) an uptrend established and 4) a SH broken Thurs with much higher volume, and a 5) lower price on Fri with lower volume. And an emergence from a 5-month bottoming consolidation to boot.

There is that Aug 8th very long black candle with very high volume, defining a price range to be careful in; I will see if the 16.95 SH gets tested well.

Could this be a decoy to let higher earning pop the price?

Earnings date is 2-10-12.

Trailing Annual Dividend Yield is 9.40%

The business is institutional investment services.

The Weekly chart shows a major SL, retested on very low volume, quite the bullish pattern:

http://optionchance.com/research_charts/ab.html shows some encouraging data:

Growth
	Current Qtr	Next Qtr	Current Year	Next Year
EPS	0.35	0.37	1.49	1.51
EPS Growth	191.67%	-11.90%	12.88%	1.34%
Year Ago EPS	0.12	0.42	1.32	1.49
Revenue	720.68M	726.55M	2.91B	2.93B

National Financial (Fidelity company) is breaking out too on low volume though; this one likes substantial pullbacks after highs and has provided good buys at Swing Lows in the current uptrend:

Market Status 011812

2012-01-18T15:35:00.000-05:00

General Stock Market, SPX, DJIA, COMP: Going up on low volume, not long-term or mid- term confidence here. May peak shortly.

Gold: Going down on low volume, a consolidation in a long up-trend. Looking for a bottom to but under $1500/oz to buy GLD and mining stocks.

US Dollar: Moving generally counter to the stock market and gold, currently worth holding as UUP but nearing support.

Euro: In an awful downtrend, shorting on the bounces here with EUO

Bonds: A hold as TLT, with a Stop Loss sell order in place

Earnings for Financials

2012-01-15T07:35:00.000-05:00

From Manyanville:

Next week nearly every large bank including Goldman Sachs (GS), Morgan Stanley (MS), Citigroup (C), Wells Fargo (WFC), and Bank of America (BAC) will report. Regional bank Suntrust (STI) and credit-card company American Express (AXP) will also report. Tech giants Google (GOOG), Intel (INTC), and Microsoft (MSFT) will also report, after lowering their guidance in the aftermath of the Thailand floods.

An eye on XLF and these:

Long ETF	Long 2X	Long 3X		Inverse -2X	Inverse -3X
IYF/IYG	UYG	FAS		SKF	FAZ

KRE, the regional bank index bears watching too. As opposed o thise big companies, they still lend money! Last week's KRE volume was very good and trades may be possible:

CapitalSource Inc Common Stock- weak	CSE
Webster Financial Corporation C- fair	WBS
Trustmark Corporation- good	TRMK
BB&T Corporation Common Stock - Caution: did >1:1.618 C to D	BBT
Zions Bancorporation - BEST: jumped the creek, buy on ice retest if ok	ZION
Susquehanna Bancshares, Inc. - BEST: On a great uptrend awaiting retracement	SUSQ
Popular, Inc. - Will retest bottom -- weak	BPOP
BancorpSouth, Inc. Common Stock -- good price bounce but weak long term chart	BXS
FIRST REPUBLIC BANK - at Mega-resistance	FRC
Associated Banc-Corp - Caution: Gartley Butterfly suggest lower prices	ASBC

So, a long trade here assumes the market will continue higher to support it because the individual stocks are not looking robust as a group. The best, ZION, is quite a bit better looking than the group. It is a holding company, so may have different basic fundamentals. It pays a 21 cent dividend too. But the longer term weekly chart looks weaker than the daily, so trading looks to me to be the only potential safe way to play this stock now.

Ah, here is the problem. Look at the Monthly chart:

The drop from the 2007 top has had nor even a dead cat (0.382) bounce. There is not a lot of life in this chart. I'll proceed in a trade with even more caution as a result.

Gartley Butterfly forming?

2012-01-13T08:43:00.000-05:00

Gartleys work. The right hand "wing" of the butterfly has to peak and drop.

Shanghai Breakdown

2012-01-12T18:43:00.000-05:00

See the monthly chart for $SSEC:

Notice that the lower trendline has or is about to break! If that confirms, it always (I don't use that word often) means lower prices.

Here is another chart for that index:

Short SMH with SSG -- Mistake?!

2012-01-11T23:33:00.001-05:00

I was wrong with this trade and need to end it. SHM, long the symbol for the Semiconductor Holders Index changed to SOXX and SMH is now a Market Vectors semiconductors fund. How they correlate with SSG remains to be seen; it is mirroring the apparently incorrect SMH volume! Stochcharts.com has yet to fix its SMH data; it is a combo of the old and new fund for volume -- crazy! SMH came into being just the end of last month: http://www.vaneck.com/funds/SMH.aspx

Anyway, beware!

The SMH chart appears to be setting up an incredible short, based on volume; look at the ridiculously low volume under the current uptrend!

Short % of Float (as of Dec 15, 2011)

Short% of Float (as of Dec 15, 2011)

Analog Devices Inc ADI 2.30%

Altera Corp ALTR <1

Applied Materials Inc AMAT 1.10

Advanced Micro Devices Inc AMD 14.90%

Amkor Technology Inc AMKR 17.40%

Atmel Corp ATML 3.00%

Broadcom Corp BRCM 1.80%

Intel Corporation INTC 2.20%

KLA-Tencor Corp KLAC 7.90%

Linear Technology Corporation LLTC 5.40%

LSI Logic Corp LSI 2.40%

Micron Technology Inc MU 8.60

National Semiconductor Corp NSM

Novellus Systems Inc NVLS

SanDisk Corp SNDK

Teradyne Inc TER

Texas Instruments Inc TXN

XilinxInc XLNX

I am using SSG:

The upside would seem to be a retracement of the entire low-volume uptrend of the SMH.

SPY, $SPX, $NYTV, QQQ, $COMP, IWM: HHMLV or CHMLV -- A test of Timing the Trade

2012-01-10T18:59:00.000-05:00

If there was ever a test of O'B's Timing the Trade concept of volume at Swing Highs for this market, we are in the midst of it.

Major indexes and related ETFs that have prices above (Higher [Swing] High, Much Lower Volume: HHMLV) or challenging prior swing highs with MUCH lower volume (Challenged High with MUCH Lower Volume CHMLV) include: SPY, $SPX, $NYTV, QQQ, $COMP, and IWM.

O'B would rant and rave about this, indicating the instability of such price increases. Yet the fact is the Dow is at 12642.50 today, 3% above the October 27th SH, which had 1.3b shares traded; the highest volume day since that level was exceeded was 1.0b, with most days around 0.5b.

If the market goes up from here, it will be another coffin nail for use of Timing the Trade under the prevailing market conditions.

Honda

2012-01-09T22:55:00.000-05:00

HMC has produced a nice ABCup off a bottom. It bears watching lost for trade setups.There is also fundamental news:http://www.bloomberg.com/news/2012-01-09/honda-expects-20-u-s-sales-gain-on-resigned-cr-v-suv-accord.html

Low Action

2012-01-09T20:43:00.000-05:00

So very little is going on here. O'B looks for a retest of the late October Swing High before any significant price drop. I am in DUG and UUP, and will either get stopped out or weather the storm if O'B is right. Other technical analysts believe 1300 will be the top for the $SPX. Either way, we could be awfully close.

Bill Gross' Monthly Column

2012-01-05T21:08:00.000-05:00

http://www.pimco.com/EN/Insights/Pages/Towards-the-Paranormal-Jan-2012.aspx

Gold easy to misinterpret

2012-01-05T12:34:00.000-05:00

A comment I put on a SeekingAlpha article, http://seekingalpha.com/currents/post/108082

Tuesday 11:44 AM Gold and silver erase the entirety of their late year dives in a few hours of 2012 trading, with silver making a particularly dramatic move, +6.1% to $29.64/oz. Gold is 2.6% higher at $1,607. An effective hedge against stock declines earlier in 2011, gold and the S&P 500 have mostly risen and fallen together since the October equity lows.
2 Comments
[Commodities, On the Move]

My Comment:

Gold is NOT necessarily "An effective hedge against stock declines" in any given market conditions. In fact, gold, the metal, correlates with stock prices to an extent with the ratio between about 0.9 and 1.25, aside from a 2011 excursion off track:.

http://stockcharts.com/h-sc/ui?s=$GOLD:$SPX&p=W&b=5&g=0&id=p40714969556

Gold mining stocks are particularly sensitive to stock market fluctuations:

http://stockcharts.com/h-sc/ui?s=GDX:$SPX&p=W&b=5&g=0&id=p57453592252

The ratio between those is generally a narrow 0.03 to 0.05.

DGP

2012-01-05T06:18:00.000-05:00

I jumped into DGP, a gold trade, at mid-day yesterday; betting a return trip to or towards the upper side of the channel:

Here is the trading plan:

DGP
Buy price	50.38
Current price	50.52
Profit/Loss	0.28%
Target	55
Stop loss	49.15
R/R	3.76

Like GLD, DGP is pushing into a minor SH with higher volume and has broken a recent downtrend. The target would bring gold back well into the 1600s. A quick 5 to 10% profit would be terrific.

A Great Rally? Follow-through? Gold soon?

2012-01-04T06:37:00.000-05:00

Yesterday was the attempt to get through the resistance that has capped the market for months (since May):

What has been missing is the follow-through to sustain prices above the "line-on-paper" resistance that has stopped the market dead in its tracks 5 times and which is so emblematic of a "real" (untampered-with) market. We are just THAT close to launching another rally, however contrived it may be. And even I'll buy-in long!

Unfortunately, Europe, a potential key to the US stock markets for 2012 is not cooperating this morning:

Europe and Asia often set the tone for US markets and they have no follow-through, appearing to double-top the FTSE with disastrously low volume (the chart may not yet reflect full day volume?):

The DAX is following suit:

Yesterday's headlines like

Wall Street's happy new year: Dow up almost 180

Try to indicate that one day reflects the tone for the entire year. i still think the contrary.

Oil is triple topping: $WTIC, USO; and the markets probably won't go higher without taking the price for it along.

It may be time to short crude here, as DTO tests a bottom on less than half the prior volume.

I like how this guy writes today: New Year's Revolutions

GOLD had a TLBBS for Chan yesterday. He will wait for a pullback to give him a setup to buy and I may bite a bit, but I am still skeptical at these prices -- it would be a bounce in the downtrend, not the new major upleg:

Fannie and Freddie

2012-01-03T16:18:00.000-05:00

With Fannie and Freddie back in the news, its time to look back here:

http://moneyfromthemarket.blogspot.com/2009/02/wall-st-fraud.html

Gold, lower prices ahead?

2012-01-02T17:32:00.000-05:00

An interesting detail on last week's GLD chart suggests lower prices still coming for gold, the metal.

O'B does not talk about details of his Timing the Trade system much any more, but the dip below a 12/15/11 high volume (21m shares traded) Swing Low (SL) with lower volume on 12/29, with a subsequent closing price back above the SL on Friday 12/30, resets the volume level needed to sustain the stability of the downtrend:

Thursday's SL candle volume was also equivalent to that of the 6/24 candle, the last time price was in this range (O'B's Quality Volume, better put, comparative volume) another data point suggesting the probability of a continuation of the downtrend.

The weekly chart puts this retracement into perspective. It shows the characteristics of a countrend bounce, a B to C of an potential ABCup:

Short-term Fib levels also reflect the more significant retracement since the all-time high:

Looki8ng at the long-term chart of the metal itself, $GOLD, Fib retracements to much lower prices are readily possible without disturbing the long-term uptrend and bull market in gold:

Gold CAN go lower from here, not lose any of its long-term upward price momentum, and present a great buy at a lower price. Its price movements pay attention to Fibonacci levels, so breaks and bounces off them need to be carefully observed. Its price has tended to follow the U.S. stock market to a minor extent -- banks selling off gold to raise cash when stock prices drop.

Fox Insight

2012-01-02T14:02:00.000-05:00

Lose weight, quit smoking, stop drinking, get finances in order, spend more quality time with family, get blood pressure checked ... Some people have more goals than others on New Year's Day.If Uncle Sam were even remotely interested in self-improvement, here's what would be on his list:- Stop runaway deficit spending. Start paying down $15 trillion national debt before it's $20 trillion and counting.- Find more fossil fuels--or an alternative energy source--to replace the increasingly expensive oil we keep importing from overseas.- Fix Social Security and Medicare before Baby Boomers retire en masse in five years.- Address trillions in shortfalls at public and private pension plans as more people than ever start pulling money from the market to retire.- End mortgage-foreclosure mess that popped the nation's financial bubble.- Stop unemployment crisis. Quit idling American workers and sending jobs overseas.- Do something--anything--about the student-loan crisis. Not everyone is cut out for school. Not every school is worth the tens of thousands in loans it takes to go there.- Quit saying "too big to fail." It ain't.- Prepare for the end of Europe as we've known it.- Acknowledge we have not been recovering from economic malaise since 2008, but sorting through the wreckage of a global credit bubble.- Admit the economy will never go back to normal, as we knew it. We fought two wars and lowered taxes to pay for them. We created an entire industry based on loaning money to deadbeats. It will take years to even come close to fixing.- Scrape up more than $2 trillion to repair all the airports, bridges, dams, transportation systems, schools, utilities and other pieces of critical infrastructure that received a D grade from the American Society of Civil Engineers in 2009 and still haven't been fixed.- Quit pretending there will never be inflation while printing unprecedented amounts of money. Quit pretending unemployment is improving when millions of people are simply giving up hope of finding a job. Quit pretending the nation's gross domestic product is expanding in a meaningful way when it's juiced by zero-interest loans to banks. Acknowledge, for once, that too many economic indicators are biased to the upside--which is the main reason we're not technically in a recession, and one of the main reasons we're still in this mess.- Try to sustain Dow Jones Industrial Average to above its 1999 levels. Geez, remember when it was supposed to be 30000 by now? [I'm not so sure about this one]- Prosecute financial crimes. If an enormous crime is committed, as so often alleged, why just a civil settlement, without admitting nor denying guilt?- Clean up the accounting and auditing industries. How many times do we have to find out the books have been cooked to realize these so-called professionals are incapable of self-regulation?- Figure out what derivatives are, and how they are likely to unwind in a global debt crisis.- Tax everyone, not just the middle class. We face a national emergency. Everyone who makes money needs to pitch in like it's World War III. This includes people at the bottom who pay no taxes, and the people at the top, who pay too little. We are not growing our way out of this one.- Stop corruption in Washington, legal and otherwise. Lobbyists and the big corporations they represent have been gaming the system too long.- Learn to distinguish between crime and warfare. The "War on Terrorism" is an ongoing waste of money. And strip searching little old ladies at airports is a national embarrassment.- Decide who is in and who is out. If you want cheap labor from other nations, be prepared to pay the price.Too bad for a nation, New Year's resolutions are hard to keep.(Al's Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective. Contact Al at al.lewis@dowjones.com or tellittoal.com.)Read more: http://www.foxbusiness.com/politics/2011/12/30/new-years-resolutions-by-trillion/#ixzz1iKRYmNXr

2012 = ?

2012-01-01T23:04:00.000-05:00

A market collapse to the 2009 bottom is not unlikely on a technical basis. A continuation of the current long, wide (but not unprecedented -- see chart below) consolidation.

The attempt to get to higher prices has been like jacking up a truck, long and tedious, and volatile, with very slow results fighting big price drops the whole way, so very unlike a an increase that will lead to higher strong prices.

It is an election year. But if you look at that link, there appears to be no correlation since 2000, or really all-time by party or incumbent:

S&P 500 Stock Market Returns During Election Years
Year	Return	Candidates
1928	43.6%	Hoover vs. Smith
1932	8.2%	Roosevelt vs. Hoover
1936	33.9%	Roosevelt vs. Landon
1940	-9.8%	Roosevelt vs. Willkie
1944	19.7%	Roosevelt vs. Dewey
1948	5.5%	Truman vs. Dewey
1952	18.3%	Eisenhower vs. Stevenson
1956	6.5%	Eisenhower vs. Stevenson
1960	.50%	Kennedy vs. Nixon
1964	16.5%	Johnson vs. Goldwater
1968	11.1%	Nixon vs. Humphrey
1972	19.0%	Nixon vs. McGovern
1976	23.8%	Carter vs. Ford
1980	32.4%	Reagan vs. Carter
1984	6.3%	Reagan vs. Mondale
1988	16.8%	Bush vs. Dukakis
1992	7.7%	Clinton vs. Bush
1996	23.1%	Clinton vs. Dole
2000	-9.1%	Bush vs. Gore
2004	10.9%	Bush vs. Kerry
2008	-37%	Obama vs. McCain

The market has bucked the economy since 2008, O'Bama policies supporting an artificial (I think unsustainable) price increase.

Europe certainly holds a key with their debt crisis possibly blowing up any minute, which would cause a drop in the Euro (especially if a large country withdraws, and a commensurate rise in the US Dollar as a retreat to strength, and thus a dro pin the stock market due to a dearer Dollar.

Make The Most Of Big Moves In Crude Oil And Energy Stocks-Forbes- Annotated

2012-01-01T17:40:00.000-05:00

Make The Most Of Big Moves In Crude Oil And Energy Stocks (Chart links and commentary are added.)

The cost of filling up at the pump has become more reasonable over the past eight months as the average price of a gallon of unleaded gasoline in the U.S. has tumbled from $3.97 in early May, down to $3.25 a gallon over the final weekend of 2011. Even though gasoline has gotten cheaper, crude oil has seen a big spike higher with West Texas Intermediate Crude $WTIC [triple topped since mid-Nov] jumping from $76 a barrel to $98 in the past three months.

For the entire sector, the Energy SPDR (XLE) was up 2.84% in 2011 [capped like the SPY]compared to the 1.89% advance (with dividends) of the SPDR S&P 500 (SPY).

Integrated oil companies were winners, reflecting the flight to large, relatively ‘safe’ dividend-payers as markets tumbled for most of the summer. Chevron CHV [potential Long Term ABCup, but at the top of its range] and Exxon Mobil XOMtacked on 20% and 18%, respectively. ConocoPhillips COP [potential Long Term ABCup, but at the top of its range] was up a more moderate 10% for the year. Oilfield service outfits were mostly losers, with the OIH down 17.3% and Halliburton HAL losing 14.8% in 2011.

For investors who can stomach the volatility, the independent oil and gas producers have put on quite a show. Cabot Oil & Gas (COG) is up 101% in the past year, 23% in the past quarter. Since the oil-price rebound began in October, Plains Exploration & Production (PXP) [off a bottom on high volume; look for a low-volume retracement, but just a 0.382 dead cat bounce off '09 bottom] has gained 62% and Denver-based Whiting Petroleum (WLL) has advanced 33% in price [may have bottomed on volume climax, into potential ABCup having had good volume and 50% retracement].

Check out the Market Blaster video above for ideas to play both bull and bear for 2012 in the energy sector.

Also see:

Oil Exploratio-Production

BP

Oil Producer Support

SLB nearing a buy?

RIG 8% yield

NE near a buy.

Any buy here is much better off supported by the general sector movement higher. without that, trading becomes far more risky.

Stockcharts Facebook

2011-12-31T12:19:00.003-05:00

http://www.facebook.com/stockchartscom

Wash and Dry, anyone? Or is it an up-trend?

2011-12-28T22:34:00.001-05:00

Nothing much is changing, even in this low-volume week. Another SPX up-leg, another ragged top forming:

The higher-high is losing its standing. Meanwhile the US Dollar is skying per UUP, which is heading for a SH with much higher volume.

Oh, and this drop did this:

S&P back in negative territory for 2011

1250 could be reliably exceeded in 2011.

A Christmas Present -- Do Not Open Until Retracement!

2011-12-23T08:41:00.000-05:00

AKRX

Merry Christmas!!

2011-12-22T22:11:00.003-05:00

http://dilbert.com/strips/comic/2011-12-03/

2011-12-21T18:08:00.001-05:00

OK, so what is this about? This symmetrical triangle (read the linked description) is a pretty big pattern:

Such patterns are usually continuation patterns. So where is it coming from? Look at the weekly chart to see:

You can also see that the last time a triangle formed like this one, there was an upside breakout (continuation). This time, the triangle is wider, more volatility creating it, and the downside volume at the initiation is a lot higher. The bottom line is steeper and the top one a bit shallower. No clarity there.

Here is the "over-arching" pattern I see is an over-arching pattern:

Until something breaks through the roof of that house, I'll stay a bear. That's what called off the bear last time:

QED

US Dollar Intraday Chart

2011-12-21T08:32:00.001-05:00

This link should be a 30-minute candle US Dollar Intraday Chart. It has a continuous 24-hour data.

Given the strong inverse correlation between the Dollar and stocks, it should be consulted to help you trade!

Stopped out

2011-12-20T12:23:00.002-05:00

Looks like my shorts were caught by a Santa rally.

Here is a fabulous column by Mauldin:

http://www.johnmauldin.com/images/uploads/pdf/mwo121711.pdf

Europe's Indices in Trouble

2011-12-20T06:23:00.000-05:00

One hears about the trouble in European bonds and interest rates, but what about stocks? Here are the major European stock indices charts over the past three years.

France, unrecovered from last summer's drop and looking like a potential ABCdown:

A	4200
B	2700
A-B	-1500
C	3400
%Retrace	-46.7%
Dprojected	1900

Brittan, unrecovered from last summer's drop and looking like a potential ABCdown:

FTSE
A	6071
B	5062
A-B	-1009
C	5702
%Retrace	-63.4%
Dprojected	4693

Germany, unrecovered from last summer's drop and looking like a potential ABCdown:

DAX
A	7516
B	4965
A-B	-2551
C	6348
%Retrace	-54.2%
Dprojected	3797

Italy, not a large world economy, but worth a look due to their precarious economic position in the EU; bnot even a Dead Cat bounce (0.382 Fibonacci retracement):

IDX
A	22448
B	13882
A-B	-8566
C	16998
%Retrace	-36.4%
Dprojected	8432

Notice too, how the Italian Index is pushing into the March 2008 low with much higher volume.

Always a good read: ChartWatchers - the free newsletter from StockCharts.com

2011-12-19T11:23:00.000-05:00

http://stockchartscom.createsend1.com/t/ViewEmail/r/79FEAE250D044A06/CEBD4F352B91E1313FEC1D8A50AFD3BD

Odd Day, Odd Week, Odd Month, Bad Year

2011-12-16T18:02:00.001-05:00

Odd Day

The SPX was up in price (+0.32%), but not nearly consistent with its high volume or the very high NYSE Primary Market volume (1.74b, second highest since the August bottom).

The Dow was flat with high volume.

The NASDAQ and NDX were up 0.56% on very high volumes, the sort of volume witch one might expect to result in a 1% to 2% gain.

The NYSE followed the SPX and NASDAQ.

The US Dollar was down a tad, on what I can only assume was very low volume based on UUP and UND.

Intraday

So what was the story? The intraday charts say this. Some strong volume pumped up prices at the open today, but then flopped back to near the open with low volume; again a weak market move.

The Week

NYSE was down for the week on very high volume, so was the COMP and QQQ; the SPX was a bit lower on volume, but the down-side move on all looks very determined (long black candles, down 2.5 to 3+%).

The Month

This month's Dow candle looks like it will challenge the Oct high with much lighter volume (HHMLV or CHMLV). The COMP and SPX could not get up to their respective Oct highs.

Sick, sick, sick.

O'B thinks the SPX will tag the Oct high with a Christmas rally, then tank. Often he over thinks or tries to prognosticate just to sound confident.

I bought back into UUP today based on the extreme low volume retracement; price found support at its breakout point for the second day in a row -- that's my support for a stop loss order. While the prior higher Swing High was exceeded with lower volume, price went back under the SH level and now can try to be over the highs. I see an ABCup, as shown in the table and on the chart:

A	21.07
B	22.44
B-A	1.37
C	21.97
Retrace	-34.3%
Dprojected	23.34
Buy	22.5
Stop	22.31
R/R	4.42

OK, so A to B should be smoother; see it on a weekly chart. Now it may pay homage ('tis the season) to its emerging channel, in which case I'll get stopped out Monday; weekly volumes suggest that case -- I didn't look enough in depth before I traded:

One more thought:

Interesting charts

2011-12-16T12:39:00.002-05:00

http://www.scribd.com/fullscreen/75862303

200 DMA on a slippery slope"

2011-12-16T06:44:00.000-05:00

The 200 DMA

is now sloping down: gently but unmistakably. The weekly chart below has a 200 DAY moving average plotted on it:

A December Onslaught of Puts

2011-12-16T05:38:00.000-05:00

Option traders have been making Puts their choice for all of December, so far:

Gold is sliding like never before within its bullish uptrend:

Notice all the volume support in the 1500's.

I love this EUO chart. And will get in when Chan buys UUP again or on my own.

Weak looking market

2011-12-15T22:31:00.000-05:00

UUP stopped out with almost 2% profit. It had a HHMLV and I thought I could get back in at a lower price.

SH and DXD I stayed in, as they hit stop loss levels but recovered. I have rarely seen a market so weak in my 13 yeas of trading. Were it not for big buying on the close it would seem virtually paralyzed.

Gold is looking like the target for a buy may be in the 1400s. Price is below the 200 DMA for the metal for the first time since the bottom of the recession slump. This will be a GREAT buy when it sorts out its bottom.

More SH tomorrow?

2011-12-14T22:19:00.000-05:00

Chan has a buy kick in for SH today.

Brief shorts

2011-12-14T21:44:00.000-05:00

In addition to maintaining my trade in UUP, I initiated shorts using SH and DXD today. I expect them to be brief trades.

SH
Buy 41.97
Stop 41.71
Target 42.82
Potential Gain 0.85
Potential Loss 0.26
R/R 3.3
Full % Gain, if achieved 2.0%

This trade involves the filling of the gap on SH:

My DXD trade goes like this:

Buy 16.37
Stop16.18
Target 17.40
Potential Gain 0.97

Potential Loss 0.19

R/R 5.4

Full % Gain, if achieved 6.3%

Not looking for a home run here, just a bunt single. The market mus be down again on the open and lay in another down day for success. Futures look favorable this evening. Beyond this I expect a Santa Claus Rally, potentially into New Years, but who really knows? Wait and see and place educated trades.

No big drop yet

2011-12-14T06:41:00.000-05:00

Not much downside action or signal yet:hung up on the 0.382 support line:

The US Dollar, however, went up nicely yesterday. Though UUP was short of volume compared to the target SH and may hesitate before attempting higher prices:

Gold was the big signal the past couple of days.
No hesitation there!

An interesting econ data site

2011-12-13T19:29:00.000-05:00

http://www.shadowstats.com

http://www.shadowstats.com/imgs/charts/alt-unemployment-mini.gif

http://www.shadowstats.com/alternate_data/money-supply-charts

http://www.shadowstats.com/charts/retail-sales

Gold breaks one Confluence, heading for the next Confluence?

2011-12-13T17:11:00.000-05:00

This next chart shows a more important support level based on Confluence.

Shorts dumped, Gold slumped

2011-12-12T22:00:00.000-05:00

I sold my shorts today, QID, TWM and FXP at nice profits: 4%, 1.4% and 9%, respectively. I held on to UUP, a low-volatility ETF. Looking to twin it with EUO.

Volume was weak today and I see the likelihood of a bounce here. Then,after that, another drop, maybe a big one, a 100% retracement to the Sept Swing Low:

The 5-Day Arms is >>7.5, a signal that a low is forthcoming, or maybe here for stocks: 2.36+0.53+5.15+0.78+1.02 = 9.84. Today also saw two (actually 3) big down-ticks, well over 1100, to confirm the Arms signal:

Today may finally be the restart of the gold's long awaited dip . See Chan's charts (p. 1 and 2 of his public charts list) for a taste, and the chart below:

GLD below 150 and $GOLD under $1500/oz could eventually set up a sweet buy in this perennial bull market..

Gold, the metal, could also have a Head & Shoulders pattern* on which to base a lower price prediction of 1522:

*Almost all price patterns can be quite impotent. A Head and Shoulders (H&S) or an invertedH&S can be a very powerful pattern for example; but with proper volumeconditions supporting the head and each shoulder it can be a monsterindicator! A H&S top/bottom has an odd number of(but at least 3) prominent highs/lows in a pattern with the central hightypically more marked. Sometimes therecan be two heads or multiple sets of shoulders. Drawing a straight (not necessarily level) line connecting the inside of the two shoulders formsa “neckline.” The neckline will form level of highly significant price support that will getretested. A broken neck (broken by morethan 3% of the price difference between the top of the head and the neckline)signals strong reversal with the price due to fall below the neckline an amountequal to the head to neckline difference. That’s the standard description. I get the neckline at 1696, so with a close of 1669, that's 27/162 = 16%, yes well over 3%.

What they don’t always tell you is that thevolume must be high, med, and then low for the left shoulder, head and rightshoulder, respectively for the pattern to have a high probability of working asadvertised. Of course if the neckline isbroken with high volume, you should know that it’s also a very bearishstrong signal anyway (or bullish for an inverted head and shoulders). Bounces off a neckline (a failed head andshoulders) can also provide a strong rally base, very much worth trading. Inverted head and shoulders patterns workexactly in reverse. Volume has been a fickle ally in the markets these days and so I will watch for an attempt to get back up through the neckline tomorrow.

An interesting study of perception

2011-12-10T10:10:00.000-05:00

http://www.theinvisiblegorilla.com/

Do the markets try to build illusions about themselves and their products?

Yes.

It takes study to break through the illusion.

Hoping for a light volume up day...

2011-12-09T08:37:00.000-05:00

...to get short some more.

	GAZ	TWM	UUP	QID	FXP
Buy Date	12/3/11	12/2/11	12/5/11	12/2/11	12/2/11
Fundamental	Winter price increase	Sm Caps weakest	Euro crisis	O'B''s weakest index	LT downtrend intact
Pattern	Bottomed?	LLLV	SH	Cup handle; Index down-leg	FXI intact downtrend
A			21.07		26.03
B			22.44		34.76
B-A			1.37		8.73
C			21.97		27.33
Retrace%			-34.3%		-85.1%
Dprojected			23.34		36.06
Target	5.38	49.69	23.34	51.59	36.06
Buy	4.78	39.945	22.02	44.36	28.61
Stop	4.71	37.91	21.95	44.13	25.99
R/R	9.57	5.79	19.86	32.43	3.84
Current	4.53	41.16	22.19	45.34	29.65
% ±	-5.2%	3.0%	0.8%	2.2%	3.6%
$ ±/Share	-0.25	1.215	0.17	0.98	1.04


Hold/Sell?	Sell		Hold	Hold	Hold

Top Selling

2011-12-07T16:26:00.000-05:00

Obscenely Low Volume then the fall

2011-12-07T07:22:00.000-05:00

Volume which can be described only as Obscenely Low at a top, drove today's indices higher then let them drop on the close, a bearish occurrence if there ever was one.

I think I get it, maybe: With European currency taking the brunt of the hit from this debt crisis there, the US Dollar will be grabbed up as a currency and stability haven. Will that whack stock prices down? They seem to be pushing toward this week's high again, given this morning's futures.

Al thinks a sideways move here will precede a pop up into Christmas, but as usual, he does not back it up with any detail. volume. The US Dollar can be watched intraday here.

See PipHut today. The Euro is at a decision point. The US stock market should follow it, following the inverse of the US Dollar. The Euro is up at 7AM:

European Euro

$1.3376

+0.2355%

Finally a stall?

2011-12-06T16:26:00.000-05:00

1% above yestersay's open, the SPX futures are stalling this morning. Volume came in at the close yesterday but it could not raise prices much -- here is the intraday chart:

QQQ, DIA and IWM did the same thing at the close. Gold took it on the chin all day:

The US Dollar was up flat after an initial selloff:

The metal is crawling back $10 this morning, after dropping $20 yesterday.

I remain in TWM, QID and FXP at losses, UUP slightly positive, and stubborn, expecting Santa to abandon the market here before picking it up again into Christmas.

The Dollar was whipped around yesterday:

Commodity futures are down.

Futures up Monday AM

2011-12-05T06:47:00.000-05:00

Futures are up this Monday AM, but not higher than Friday's abandoned intraday high. Stops may kick in on my short fund trades if that high is exceeded. But unless prices exceed Friday's high, we ain't going nowhere. More likely for me is a candle pair top and another "head hit" on the upper trendline of the wide downward-sloping channel, giving it more strength.

Trying on some shorts

2011-12-04T02:08:00.000-05:00

The 5-Day Arms is at 3.41; on Thursday it was 3.43. The signal from that indicator at a value of 4 or less is that a top is forming. The indices fell back down from substantial gains yesterday (Dow fell 120+ points from its intraday high yesterday, e.g.), forming lovely bearish inverted hammers for the SPX and DJIA and along black candles for the $COMP.

The P&F chart for the Put/call Ratio broke to a new low (although there was a reversal from that sort of break last time it that happened):

Indices' prices got caught at the barbed wire at the top again, including staying below the 200 Day Moving Acerage:

I bought QID on Friday:

Gold is coming to a potential decision point at the apex of that triangle it will potentially break up or down -- it doesn't have to, but chances are probably better than 50-50 it will choose a path there besides its current sideways price trend (up or down, i.e.):

Actually I already bought TWM on Friday:

Every index and industry SPDR that has had its 50 Day Moving Average cross UNDER its 200 Day Moving Average, a bearish signal if there ever was one. UUP, the ETF for the US Dollar, made the reverse of that crossover Nov. 1, then went back to flirting with that crossover as it did all summer; it has defined a very shallow uptrend.

Interesting Trading Site

2011-12-03T20:51:00.000-05:00

http://thepatternsite.com/sitemap.html

Put-Call Ratio: tops following lows

2011-12-02T09:34:00.000-05:00

This says we are very close to a top. Do you see the ones I left out?

Precious Metals Watch; GPL

2011-12-01T06:18:00.000-05:00

As Gold and Silver come down, setups for great trades in mining stocks will develop. Here is Great Panther Silver as an example:

Salient features of this chart include the major volume-supported price increase of late 2010 (that high volume looks like bug dust now, but it was major at the time); the early 2011 runup on very high volume; high volume at the 5.04 swing high (high volume SHs are always retested); and dropping volume with dropping price during 2011.

The price hold above the bottom of the 10/24 weekly high-volume candle was interesting but a break of the downtrend will be needed to provide confirmation that long trades can be supported with confidence. This will dance with SLV, of course.

Housing Bull

2011-12-01T06:02:00.001-05:00

O'B has mentioned a new bull market in housing that is initiating. He mentioned the best of the sector:

TOL

Also mentioned were

LEN

and by Ken Shrieve:

ITB

Trades of these equities should be more stable than trades using the general market.

12/1/11
Let me add PHM to the list of good lookers here.

Fed finds more bullets...Enemy (debt) remains in alive and well

2011-12-01T05:54:00.001-05:00

Fed and China save the day? What about the week, month and year?

So-called "loosening the money supply" is no more than increasing "the money supply," as China banks "increase liquidity" by "allowing higher leverage," i.e., the bottom like, allowing loaning out of a higher percentage money compared to of deposits. Percentage is really the wrong word -- it gives the wrong impression -- those numbers run more like from 5 to 10 times the value of deposits. Meanwhile the Fed reduced the interest on Dollars for foreign banks by 50%. This demand for US Dollars is up and this serves to allow for their "sale;" the Euro barely moved however, considering the scale of the stock market movement.

Thus this is no more than "printing more money" AGAIN. This sort and level of intervention is unique: unprecedented in stock market history. It appears to stem from use of the Plunge Protection Team
as a means to INCREASE market prices. This has president in foreign countries (are we Bangladesh??) O'B pointed out this "buy" on the close, doubling the volume for the day:

This manipulation notwithstanding, the recent highs of the indices should be challenged. This was a no more than another bailout of big banks, downgraded by the S&P the afternoon before.

One of O'B's callers pointed out that Sept 19 2008 had what appeared to be a similar situation (press release wording the same) followed within 2 days by the crash:

The press releases from that time period are exactly as they were yesterday.

Ken Shrieve mentioned that while there were a lot of breakouts today among his IBD 100 stocks, he did not see the high volume the should be consistent with those big price jumps.

Bottom line, this appears to be another unstable price increase, pure manipulation, doomed to eventually dump these gains.

There is something very odd about the price advances of the past 2 days

2011-11-30T22:11:00.001-05:00

There is something very odd about the price advances of the past 2 days. What the heck would on a fundamental basis really drive the market up 7% in 2 days under these economic conditions?

I still consider this a very unstable price increase. Look at the cumulative Advance-Decline line for the NASDAQ. And look at this WSJ poll.

This was clearly a currency-driven price move -- currency that is being printed to cover debts, a deal we already know is bad. But Wall St will burn up that fuel if it is handed to them by politicians.

WSJ further says: "This rally is nice, but we need follow through from Europe," said Uri Landesman, president of Manhattan-based Platinum Partners. "We need a long-term plan for how they're going to support the currency...We need legitimate improvement, not just central banks bailing us out."

Traders and fund jockeys are happy to follow a government-driven price increase within the confines of a trading range but real market sentiment would seem to lay elsewhere. This is not the irrational exuberance of Greenspan in 1996, but unjustified inflation of the stock market. We did break above Confluence and should come back to test it.

The 5-Day Arms should drop to a very low number tomorrow (<<4), signaling a temporary (at least) top; 7.5 or higher signals an intermediate term low is nearing; 4 or lower signals an intermediate term top is nearing. Daily arms readings indicate as follows:

Neutral Reading = 1
Bearish Reading > 1
Bullish Reading < 1

Wow -- Financials Whacked

2011-11-29T22:09:00.000-05:00

Downgrades of major financials appera to have turned the futures and seem likely to turn the markets tomorrow.

Confidence in Confluence

2011-11-29T07:11:00.000-05:00

Confluence, as definded by Joe DiNapoli and explained by O'B is a price band that provides the highest degree of support or resistance for equity price movement. To get the right position for shorting again in this market, I'll keep an eye on failure at those resistance levels.

Here is another explanation of Confluence:

Current

ABC Confluence

ABC UP

Security

"A1"

"A2"

"B"

"C"

Price

Retrace

Zone

Retrace

CONFLUENCE?

RNWK

5.05

6.1

8.0

7.02

33.2%

6.8731

6.6.8258

51.6%

Just Above

Aha! Here are the ostensible (illusory?) fundamentals behind a bounce (here) theory!

2011-11-28T04:33:00.000-05:00

Holiday weekend sales hit new peak

Ephemeral though it may be with official unemployment still over 9% and real unemployment in the high teens, although no one talks about that any more.

Interim Stop? Santa Claus Rally?

2011-11-28T04:21:00.001-05:00

Chins are down after 6 of 7 days with falling US Index prices, but futures are up swell. There is some scattered evidence for support here and an inverted hammer candle (same candle as in all indexes):

Here is the Dow, also with a shaky support line, an inverted hammer but also note the top of the bunch of high volume bars providing support for that funky line:

The NASDAQ has scattered theory behind a support line here, along with the inverted hammer candle:

I think this meager support occurring as price breaks more conventional support should be interpreted as potentially setting up a bounce where I will consider shorts again.

Consider a Santa Claus Rally one might say?

The Santa Claus Rally Circumstances

Part I: The Setup

December is typically an up-month for equity markets. Now, that does not mean you can just plowmoney into anything and it will go up.

A good technical trading system helps you to discriminate among stocks once youhave identified a particular stock group with upside potential. The Santa Claus Rally often creates newgroups of stocks that will simply do well or poorly in the December timeperiod. And it can be as simple as this:

1) Stocksthat have been increasing in value during the calendar year will be bought byfunds to make it look like they have a lot of “winners” in their portfolios.

2) Stocksthat have been decreasing in value during the calendar year will be sold byfunds to make it look like they have no “losers” in their portfolios.

What do “funds” have to do with it? They are the major holders in the stockmarket. What they do drives stock pricesto a great extent. Like it or not, weindividual traders are just the fleas on an elephant. Using price-volume correlation as our majortool, we go watch carefully where the elephant goes so we do not lose our majorsource of information!

Look at the December SPX charts below. There is nothingspecial about many of them, although they do tend to finish “up” from theDecember 1^st price for the vast majority of years since 1999. Note too, that an early December dip oftenoccurs before takeoff.

Year	Trend	% + or -	Year	Trend	% + or -
2006	Up	2.3%	1997	Sideways	0.8%
2005	Sideways	0.0%	1996	Down	-2.1%
2004	Up	3.1%	1995	Up	1.7%
2003	Up	5.1%	1994	Up	2.2%
2002	Down	-6.4%	1993	Up	1.3%
2001	Sideways	0.0%	1992	Up	1.4%
2000	Sideways	0.0%	1991	Up	10.9%
1999	Up	5.8%	1990	Up	3.8%
1998	Up	5.8%

Adding these here: 2007 sideways, down; 2008 up; 2009 up; 2010 strongly up.

Santa has only showed up big time about half the time in thenew century? Only if you consider the wrong sectors.

So, the first step of this game is easy. QED. Then, you identify the strongest sectorsfor the year and then the strongest stocks in that “group” and implement aselection and trading strategy.

See Part II for the next step.

Part II: Choose Your Sectors

I like XLB on the bounce, but not on the year:

XLP, XLU and GLD have held up the best this year by far.

Here are SPDR holdings:

XLP Holdings Consumer Staples SPDR

Utilities SPDR - XLU

Happy hunting. Don't be afraid to comment if you find a stock you like!

Reversal to an uptrend?

2011-11-27T21:33:00.000-05:00

Got Gas?

2011-11-26T11:02:00.001-05:00

The Wall St Journal says" Natural-Gas Prices Buoyed by Cooler Weather". Let's see if the price charts of the stocks in the Amex Natural Gas Index support or belie that story.

$XNG has been in a high-volatility downtrend (Lower highs and lower lows) since April. The index has lost over 10% in the past 2 weeks. A strong-looking bounce up from an October low shows some promise but it could not get above the 715 high of the index from last April. The monthly chart shows a failed ABCup:

A	292.59
B	584.86
B-A	292.27
C	470.23
% Retrace	0.39
B-C	114.63

Dprojected	762.50
Dactual	715.00

Its recent uptrend support line was broken and there has been a bearish MACD crossover.

Normally this would be enough to throw a technical trader off any trades in this sector, but since the fundamental news is ostensibly good and honest, lets scan the index's stock charts and a few other key gas equities:

$ XNG Index Stocks:

APA APACHE CP Follows the index closely: monthly volumes bearish

APC ANADARKOPETROLEUM At the top of a very high volatility uptrend (channel from 34 to 85); monthly volumes bearish, but chart is very moderately bullish

DVN DEVON ENERGYCP (OK) Weaker than the index

EOG EOG RESOURCESINC Weaker than the index

EP EL PASOCORPORATION Asset sale jumped the price in Oct, but higher price unlikely here; a price drop to 21.69 on low volume could set up a buy. It closed at 24.84

GAS NICOR INC Just finished a long-term ABCup to 58; could be a buy at 45 to 48

KMP KINDER MORGANINC The index's strongest stock. A very cautious buy here, given the sector's issues, around 74 to 74.50; could be a 14 point ABCup

NBL NOBLE ENERGYINC Mirrors KMP's chart, slightly less bullish buy at 84 to 85 as it did bit break above its August Swing High.

NFG NATL FUEL GASCO Always an interesting symbol, showing some hope the last 2 months, but in a major downtrend without any bullish signals on a long-tern basis.

NI NISOURCEINC HLDG CO Launched into a 18 to 22 price uptrend from a volume climax low in Aug, the long-term chart has an uptrend that began March '09; trade potential here -- see charts below.

STR QUESTAR CP Volume very weak post mid-2010; potential if under 16

WMB WILLIAMS COS Follows the index closely: monthly volumes bearish

PPP Pogo Producing Co Recently recognized by Wall St.

NI's price has gone from $6 to $22 in 3 years with the price of gas dropping (see $NATGAS). Although notice the huge volume support at $3/MMBtu. I'm a buyer here, despite the continued sector weakness. The weekly chart gives the buy price: at its channel's lower trendline:

Here is a more average chart -- be careful with this sector:

(One immediate possibility, NI, and a good growth possibility, PPP, from 2 hours of analysis -- well its a weak sector still.)

Slip-sliding away

2011-11-23T22:06:00.000-05:00

Ugly doesn't begin to describe today. I should have stayed in my shorts from last week, but that's ok, I made my dough there. I stopped out of all my positions today except CHD. Cash is not bad here.

The pattern on the SPX is an amazing arch which will be more amazing if it completes without a retracement down to 1075:

It's hard to find support on the chart, below the current level, until it reaches 1075.

I'm watching gold, the metal and its stocks dip here too. I was in NGD and got stopped out today. It is at its channel's lower trendline and may bounnce, but it could fall through the floor here too -- too risky.

Caution! Wet Floor!

2011-11-23T09:11:00.000-05:00

Some success long

2011-11-23T07:47:00.000-05:00

It was a lack-luster day in stocks on Tuesday. Data as of Nov 22 Tuesday’s Close:

Dow -53.59
11,493.72
-0.46%
Nasdaq -1.86
2,521.28
-0.07%
S&P -4.94
1,188.04
-0.41

I was stopped out of T, some acquisition deal gone sour.

	T
Date	11/21/2011
Pattern	ABCup
A	27.13
B	29.80
B-A	2.67
C	28.15
Retrace%	-61.8%
Dprojected	30.82
Target	30.82
Buy	28.42
Stop	28.12
R/R	9.00
Current	28.0315
% ±	-1.4%
$ ±/Share	-0.3885


Hold/Sell?	Sell
Source	FXB

% of Max $ Reached	-16.2%

NGD on the other hand showed some high volume off a bottom. CHD hung together well but on lower volume.

	CHD	NGD	NUS	NWL	VZ
Date	11/21/2011	11/21/2011	11/21/2011	11/21/2011	11/21/2011
Pattern	Channel	Channel	ABCup	ABCup	Channel
A		9.73	37.67	10.87
B		9.94	51.67	16.53
B-A		0.21	14.00	5.66
C		9.78	45.42	14.66
Retrace%		-76.2%	-44.6%	-33.0%
Dprojected		9.99	59.42	20.32
Target	45.00	12.83	59.42	20.32	37.73
Buy	42.81	9.89	46.18	14.79	36.06
Stop	42.39	9.62	44.23	14.33	35.77
R/R	6.21	11.89	7.80	13.02	6.77
Current	43.37	10.35	46.15	14.68	36.19
% ±	1.3%	4.7%	-0.1%	-0.7%	0.4%
$ ±/Share	0.56	0.46	-0.027	-0.11	0.1304


Hold/Sell?	Hold	Hold	Hold	Hold	Hold
Source	FXB	FXB	FXB	FXB	FXB

% of Max $ Reached	25.6%	15.6%	-0.2%	-2.0%	7.8%	4.5%
	Spike low touched lower trendline	Challenged Low, Much Lower Volume CHMLV	Touched 50 DMA & rejected lower price	Potential ABCup; could still retrace more	Day low touched lower trendline
Tue 11/22	Up on modest volume, filling yesterday's gap	Off a bottom on high volume; nice!	Sideways on very low volume	Sideways on modest volume	LLHV

Afternoon longs

2011-11-21T17:05:00.000-05:00

The market seemed to reach a bottom just before noon. UUP, the US Dollar started to drop and then the market followed with a bounce: I sold all my shorts with good profits. Normally, going into a major holiday, stock prices increase. Today's price drop, ostensibly on the "news"of the Congressional Committee reaching no results, prices dropped on low volume.

I looked for some decent longs to play the bounce up into Thursday and probably Friday and found these on my watch list:

	CHD	NGD	NUS	NWL	T	VZ
Buy Date	11/21/11	11/21/11	11/21/11	11/21/11	11/21/20	11/21/11
A	Channel	Channel	37.67	10.87	27.13	Channel
B			51.67	16.53	29.80
B-A			14.00	5.66	2.67
C			45.42	14.66	28.15
Retrace%			-44.6%	-33.0%	-61.8%
Dprojected			59.42	20.32	30.82
Target	45.00	12.83	59.42	20.32	30.82	37.73
Buy	42.81	9.89	46.18	14.79	28.42	36.06
Stop	42.39	9.62	44.23	14.33	28.25	35.77
R/R	6.21	11.89	7.80	13.02	15.12	6.77
Current	42.76	9.94	46.03	14.76	28.36	36.07
% ±	-0.1%	0.5%	-0.3%	-0.2%	-0.2%	0.0%
$ ±/Share	-0.05	0.05	-0.147	-0.03	-0.06	0.01


Source	FXB	FXB	FXB	FXB	FXB	FXB
							Total
% of Max $ Reached	-2.3%	1.7%	-1.1%	-0.5%	-2.5%	0.6%	-0.4%
Buy Rationale	Spike low touched lower trendline	Challenged Low Much Lower Volume CHMLV	Touched 50 DMA & rejected lower price	Potential ABCup; could still retrace more	Potential ABCup; LLMLV at C point	Day low touched lower trendline

Cashed Out

2011-11-21T11:31:00.000-05:00

The Dollar began to drop at about 11 AM and i cashed out of all trades. This was too good a day to lose any money. The Dow is down 300 and volume is relatively low.

I'm looking for some longs for a bounce.

	ERY	QID	SDS	SH	TLT	TLT	UUP
Date	11/16/2011	11/15/2011	11/17/2011	11/9/2011	11/4/2011	11/8/2011	11/9/2011
A	11.42	41.93		Channel	109.82	109.82	21.07
B	12.67	45.95			119.49	119.49	21.88
B-A	1.25	4.02			9.67	9.67	0.81
C	12.07	42.59			115.53	115.53	21.58
Retrace%	-48.0%	-83.6%			-41.0%	-41.0%	-37.0%
Dprojected	14.75	46.61			125.2	125.2	22.39
Target	14.75	54	28.16	42.50	125.2	125.2	22.39
Buy	12.29	42.72	21.32	41.7	116.69	116.62	21.97
Stop	13.87	48.17	21.68	42.73	119.24	119.24	21.77
R/R	-0.56	0.29			-2.34	-2.27	3.10
Current	14.3116	49.446	22.13	43.154	120.194	120.194	22.03
% ±	16.4%	15.7%	3.8%	3.5%	3.0%	3.1%	0.3%
$ ±/Share	2.0216	6.726	0.8125	1.454	3.504	3.574	0.06
Shares	1000	400	800	500	100	200	1000	Total $

Source	O'B	O'B	FXB	Chan	FXB	Chan	Chan

% of Max $ Reached	82.2%	59.6%	11.9%	181.8%	41.2%	41.7%	14.3%	45.6%

QQQ, DJIA, Too

2011-11-21T10:24:00.000-05:00

The QQQ seems to be one huge mess of a consolidation:

The Dow has just broken into the lower trading range at 10 AM:

Will they bounce?

Home today, watching the market

2011-11-21T10:16:00.000-05:00

The SPY price has dropped back into the prior trading range. Unless it's a one-day wash-and-dry, I'll look for it to move to the bottom.

Nice Newsletter

2011-11-20T23:55:00.001-05:00

http://blogs.stockcharts.com/chartwatchers/

A Market Sentiment Gauge

2011-11-20T07:10:00.001-05:00

www.stockcharts.com has a "Predefined Scan Results" page (link on its home page) that seems to provide a read on market "technical sentiment" by presenting the number of stock charts for which certain technical indicators apply.

I differentiate "technical sentiment" from what normally is called "market sentiment". The latter is based on price and fundamental analysis, is generally a backwards-looking gauge, and can sometimes be a good contrary indicator (when an obvious "top" or "bottom" presents itself on index charts). The former contains a degree of forward-looking indication. So let's look.

Tables of bullish and bearish Technical Indicators have the numbers of stock showing those criteria counted at the right. There are currently about 3000 in the bearish categories and under 200 in the bullish categories.

Here, you can see here that Bulls are currently dominating bears in "sentiment". That would be the contrarian indicator for me, bearish, as would be the stockcharts page of lop-sided technical sensor data, bearish.

GLD Bullion Holding Do Not Drop, HOWEVER,

2011-11-20T06:24:00.000-05:00

O'B mused several weeks back, and I mentioned it here about the GLD Exchange Traded Fund (ETF) potential to sell off physical gold due to its dropping price. Well, here is an article explaining that it did not happen. And here is a summary if you get tired reading the first one.

HOWEVER, While GLD holdings of physical gold (a very high amount is held by that fund) did not drop,it has not really increased since July '10 when gold was about $1200/oz. That says to me that the fund manager is a long-term planner. There was a similar, though not quite as extended a period of holding without any big buying March '09 through May '10:

Their influence may be seen a little here during their big buying period in '10:

Does GLD have a big influence on the price of physical gold? It appears not. Do they know when to buy and when not to? We shall see sooner rather than later. If gold drops in price from here, consistent with predictions, they certainly will have made the right decision, stopping their accumulation around $1700/oz. There is an untested SL at 1535. I sure would buy there.

Put-Call Ratio

2011-11-19T17:12:00.002-05:00

Here is a nice comprehensive article on the Put-Call Ratio:

http://www.aaii.com/computerized-investing/article/the-put-call-ratio
And here is how I like to look at those values: as oscillators, using Point-and-Figure Charts:

The Equity Daily Put-Call Ratio,
http://stockcharts.com/def/servlet/SC.pnf?chart=$CPCE,PEUADANRBO[PA][D][F1!3!0.0333!!3!20]&pref=G
has triple topped with 3 X's building it up on Friday (Options Expiration). More Puts on Monday will potentially result in a breakout for Bears and signal, for me, more downside in the market; a failure here at the triple top will potentially signal a rally, as described in the article above.
It's a double top on a weekly:

http://stockcharts.com/def/servlet/SC.pnf?chart=$CPCE,PEUAWANRBO[PA][D][F1!3!0.0333!!3!20]&pref=G

Here is the daily line chart:
http://stockcharts.com/h-sc/ui?s=$CPCE&p=D&b=5&g=0&id=p50173843336

Now, here is a monthly P&F showing more upside space for Puts:

Notice too the unusual patterns for August (a long line of X's up), September (a long line of O's down), October (A) stagnant, and November (B) a long line of X's up, so far. Month ends tending to carry the pivot points with consistency throughout the month. If November hold this trend, it should provide more Puts, a higher Put-Call Ratio, and so lower stock prices.

I stayed in my positions Friday, adding SDS:

	ERY	QID	SDS	SH	TLT	TLT	UUP
Date	11/16/2011	11/15/2011	11/17/2011	11/9/2011	11/4/2011	11/8/2011	11/9/2011
A	11.42	41.93		Channel	109.82	109.82	21.07
B	12.67	45.95			119.49	119.49	21.88
B-A	1.25	4.02			9.67	9.67	0.81
C	12.07	42.59			115.53	115.53	21.58
Retrace%	-48.0%	-83.6%			-41.0%	-41.0%	-37.0%
Dprojected	14.75	46.61			125.2	125.2	22.39
Target	14.75	54	28.16	42.50	125.2	125.2	22.39
Buy	12.29	42.72	21.32	41.7	116.69	116.62	21.97
Stop	11.04	42.33			114.54	114.54	21.77
R/R	2.97	10.97			4.96	5.13	3.10
Current	13.25	47.15	21.15	42.19	119.34	119.34	22.01
% ±	7.8%	10.4%	-0.8%	1.2%	2.3%	2.3%	0.2%
$ ±/Share	0.96	4.43	-0.17	0.49	2.65	2.72	0.04

China flogs Greeks

2011-11-18T12:26:00.002-05:00

http://www.spiegel.de/international/europe/0,1518,797751,00.html

Shorts making Hay

2011-11-18T07:03:00.000-05:00

ERY, 3X Bear Energy, is my latest buy. based on:

Intradya ABC up:

	ERY
Target	14.74
Buy	12.29
Stop	12.04
R/R	9.8
Current	13.09

A	$11.42
C	$12.67
B-A	$1.25
C	$12.07
Dprojected	$13.32
D Actual	$13.38

New Stop: 12.59

I also bought SDS near the close but will sell on the open to get a better position.

Futures Dive (wish I could put that submarine-dive noise on here)

2011-11-16T06:35:00.000-05:00

Up at 6AM, stock futures turned down pretty hard. at 6:30. funny, usually the big boys come in at 7 to straighten them out for the day (or set up the head fake). This is a bit unusual.

Franc tancs

2011-11-15T18:24:00.000-05:00

It's too bad there is no short fund for the French franc. It has formed as well a defined top as you could wish to see. And look at the volume under that downtrend, a very bearish pattern:

I will short this on a bounce.

All my caution flags are out

2011-11-14T17:20:00.001-05:00

The disastrous looking 2+month consolidation has resolved itself into a higher trading range. I still do not trust it. My current position's are Chan's: TLT, UUP and SH.

Again, time to see which breaks first, the top or bottom of this channel. A descending triangle is a bearish formation that usually forms during a downtrend as a continuation pattern.

All my caution flags are out.

Gold price resistance

2011-11-14T06:20:00.000-05:00

Gold will have to blast through this resistance to get much higher. If it does, the buy would be on the retest of ice. But the selling volume thee and above that was fierce and I think it will drop lower before it can go up again.

And if GLD, a huge physical gold holder is caught selling...gold price will react negatively.

How much trouble is Europe in? Thoughts on Valuation, Gold and GLD

2011-11-14T06:00:00.000-05:00

http://www.johnmauldin.com/frontlinethoughts/where-is-the-ecb-printing-press/

This requires your email address to see, but Mauldin is well worth it. his free newsletters are outstanding.

I saw this column by Al on stock valuation and it hit me in a place where ny mind often goes: the falsehood of the current stock market:

http://ezinearticles.com/?There-Are-No-True-Valuations-Today&id=2986461

Futures are flat this early morning. I dumped my gold and silver trades Friday at good and modesl profit, respectively. The GLD announcement of their fund selling should be out this week and it could weaken (or strengthen, but that's less likely to me) the market substantially.

A short opportunity?

2011-11-11T07:01:00.000-05:00

Another low volume price increase today, the holiday, could set up some short trades.

A lovely day for bears

2011-11-10T19:38:00.000-05:00

Today's pathetic bounce, like the upward bounce of a ball bounding down a staircase, sets up the likelihood for more downside for this market. Every stock market sector followed suit, trying to set up a sucker's bet.

Not biting that bait here.

Staying in SH, GLD, SLV, TLT UUP. See Chan.

Gold was suspect yesterday, but it hit its lower support line with low volume and went half-way back up like a cheap shade today:

TLT broke the lower support line but rejected a price below its 20 and 50 DMAs, finding support there, good enough:

SPY, like a lot of equities had an "inside day" today. And here is a nice summary from earlier this week.

Bottom lesson

2011-11-09T23:23:00.000-05:00

Candles talk, but at least one more is needed to see if the market is listing to a candle turn signal.

This stock is certainly not ready for any long term upside, but an average volume of a million shares a day can provide some good trading opportunities for the careful trader.

Demo Chart to learn

2011-11-09T23:13:00.000-05:00

A fundamental Technical Lesson from Joe Majocha

The Odds

2011-11-09T21:29:00.000-05:00

The odds of a much lower market in the near future got a bit higher today with a huge price drop on higher volume. Follow-through to lower prices tomorrow would provide some needed confirmation of that occurrence.

Chan's buys were triggered (and setups occurred -- i.e., major support below the buy price representing a stop-loss at less than 3% loss) for UUP, SH and TLT.

Uranium???

2011-11-09T06:44:00.001-05:00

Some of these uranium stock's charts look awfully good. Unfortunately, CCJ, which should be the leader, looks pretty neutral compared to ones like URRE, DNN and USU.

See the Fox News piece fo an attempt at a fundamental explanation. I thyink this could be money flowing out of other sectors looking for "basing" charts in a sector with some eventual pop to it. This has happened before. See the late 2010 pop in URRE:

Given the fundamental climate in nuclear energy (I am very familiar with the industry), I'll keep an eye on this but not hoping for much at the moment. Oh, beware of the low-volume stocks listed in that article, as you would for any sector!

5-Day Arms

2011-11-07T18:28:00.000-05:00

•    A Daily Ratio of 1.0 for a given day means the market is in balance,
•    Daily Ratios above 1.0 indicate that more volume is moving into declining stocks (bearish), while
•    Daily Ratios below 1.0 indicate that more volume is moving into advancing stocks (bullish).
•    Typically, within 1 to 3 days, a 5-Day total of:
     o    4 or less forecasts; a short-term market (S&P 500, e.g.) top
     o    6 or more forecasts; a short-term bottom
     o    Lower or higher values for these two cases respectively provide stronger signals.

Today's total 6.02 can lose the 2.90 value tomorrow and fall to 5 or less, suggesting a temporary market top.

Stopped out, held on and put on

2011-11-07T18:02:00.000-05:00

I was stopped out of my market shorts last week (SRS, SSG and DUG) with losses, but held GLD and SLV long and that has been good (see yesterday's entry).

I also picked up TLT on Friday, and put on a small short position in JEF:

	GLD	JEF short	SLV	TLT
A	156.05	15.33	29.14	109.82
B	170.29	9.79	34.44	119.49
B-A	14.24	-5.54	5.3	9.67
C	163.61	12.66	31.5	115.53
Retrace%	-46.9%	51.8%	-55.5%	-41.0%
Dprojected	177.85	7.12	36.8	125.2
Buy	170.74	11.65	33.54	116.69
Stop	167.44	12.23	32.22	114.54
R/R	3.15	8.81	3.47	4.96
Current	174.98	12.24	34.09	117.22
% ±	2.5%	-5.1%	1.6%	0.5%	1.2%
$ ±	4.24	-0.59	0.55	0.53	4.73