My Trader Journey

Dr Alexander Elder and a New Beginning - Market Analysis for February 13th 2012 by Singaporeseeds

2012-02-12T09:42:00.000-08:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Market analysis for this week:
Went for an operation last Monday so didn’t have time to do my market analysis. Was having a hard time overcoming my Nosocomephobia. Thanks to my wife and both sides of my parents, I put my foot down and went for it. Finally got rid of my blocked and swollen nose that had plagued me for the past 7 years. It’s amazing how long I had dragged my feet on this one. I can now breathe properly and I enjoyed the first few nights of uninterrupted sleep in years.

This weekend, spent a weekend with Dr Alexander Elder learning directly from him. It was truly an insightful weekend. I will be incorporating what he taught into my trading systems over the next few weeks. So there may also be some changes to my market analysis over the next few weeks.

Anyway last week was a doji on S&P and Dow weekly charts. Daily charts looks like both S&P and Dow seems to be going for a correction. Nasdaq seems to be the only bullish indicator at the moment but I will not be surprised if there was also a correction especially since all 3 indexes had been rallying straight up since 2012.

I think we should see the start of a correction this Tuesday and it will continue into the week. Support at 1,270 on S&P.

Daily chart for the Dollar

Market analysis for this week:
The dollar should be looking for a bottom over the next few weeks. We may dip one more time before this downtrend reverses. Support at 77.2 on dollar futures.

Daily chart for Gold

Market analysis for this week:
The current rally in gold seems to have ended. We should see a dip this week to around 1,670 before the next leg up.

Daily chart for Crude Oil

Market analysis for this week:
Crude oil had been trading in a range since November 2011 with a number of false breakouts that never lasted more than a week. All this while, there’s a huge bearish divergence building in crude oil.
I believe the next movement in crude oil will be determined largely by the direction of the dollar. So I will be monitoring the dollar closely over the next few days.

Gold at 2000! - Market Analysis for January 30th 2012 by Singaporeseeds

2012-01-29T10:07:00.001-08:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Market analysis from last week:
“The market continued to blast off to new highs the whole week. No bad news coming out from Europe could dampen this rally. This is the most bullish January that I’ve seen since I’ve started trading 4 years ago. The market closed on Friday with a slightly over-bought level on RSI at 1311.25 on S&P futures.
With one more week to go for the January barometer, I do not think anything other than an outright default by a sovereign country can turn this month into a bearish month. There are signals that this rally is getting exhausted, but this will only be a dip in a longer term uptrend.
As for my first target at 1,350, I’m now expecting a dip sometime next week. Let’s see whether the market could reach this level first. I think the dip should come in sometime next week. Support at 1,260 on S&P futures.”

Market analysis for this week:
The market closed slightly up for last week.
We had been moving up almost every day since mid December. All dips had been 1-2 days events with the market turning back up by the end of the day.
However as the market had closed Friday just below a range of resistances, I believe we should be having a minor dip starting this week with support at 1,260 on S&P futures.

Daily chart for the Dollar

Market analysis from last week:
“The dollar is still trending slightly upwards and holding up very well. We should see it dip from today onwards. There is a huge bearish divergence pattern for the dollar. First target 22.3 then 22.”

Market analysis for this week:
For the next few months, I reckon the movement of gold will be influenced by gold. Or should I say inversely proportional to the bullish breakout of gold.
However I’m expecting a bounce this week to around 79.80 on dollar futures. This does not change the current downtrend.

Daily chart for Gold

Quote from my last market analysis:
“With a falling dollar, gold and all other commodities will be expected to rally. However gold had formed a wedge (yellow lines) and if it breaks upwards and out of the wedge, and i expect it to do so, we may see 2000 gold over the next few months.”

Market analysis for this week:
Gold should dominate the headlines over the next few weeks as it breaks above the huge wedge that had been building up since Sept 2011. We will hit 2000 gold over the next few weeks.

Daily chart for Crude Oil

Market analysis from last week:
“Crude oil gapped and dropped on Friday. It closed the week just below it’s 50 day moving average. With this drop, the chart patterns seem to show that crude might not be able to rally above resistance at 39.50 as it had failed to rally above 4 times over the past 2.5 months.
Once it drops below it’s 200 day moving average at 37.20, I will take it that the rally had failed. New target would be 36.10 and then 35.10 on USO.”

Market analysis for this week:
Market analysis for crude oil is still the same.

Hitting New Highs! - Market Analysis for January 23rd 2012 by Singaporeseeds

2012-01-21T09:27:00.000-08:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Market analysis from last week:
“Last Friday, the market hit sequential setup candle 9 and made an intraday dip. I took this as the end of the first leg of rally and expected it to dip a few days before continuing the uptrend. Today, we are making new highs on pre-market futures. Take note that all these against the backdrop of France’s downgrade and the persistent threat of an expanded European crisis. This only shows how bullish the sentiment had been this past 2 months.
I had been long since early December and it seems that we will close with a bullish January. We might still dip later this week to test support at 1,260 before continuing this rally to my target at 1,350 on S&P.”

Market analysis for this week:
The market continued to blast off to new highs the whole week. No bad news coming out from Europe could dampen this rally. This is the most bullish January that I’ve seen since I’ve started trading 4 years ago. The market closed on Friday with a slightly over-bought level on RSI at 1311.25 on S&P futures.
With one more week to go for the January barometer, I do not think anything other than an outright default by a sovereign country can turn this month into a bearish month. There are signals that this rally is getting exhausted, but this will only be a dip in a longer term uptrend.
As for my first target at 1,350, I’m now expecting a dip sometime next week. Let’s see whether the market could reach this level first. I think the dip should come in sometime next week. Support at 1,260 on S&P futures.

Daily chart for the Dollar

Market analysis from last week:
“The dollar is still trending slightly upwards and holding up very well. We should see it dip from today onwards. There is a huge bearish divergence pattern for the dollar. First target 22.3 then 22.”

Market analysis for this week:
The dollar dropped as expected last week. I’m expecting follow through for this week. Target still the same.

Daily chart for Gold

Quote from my last market analysis:
“Gold gapped above resistance last Wednesday and rallied. On weekly charts, gold had been very bullish too. I feel that we are very close to a bottom for gold. Should the huge bearish divergence on the dollar start moving, we will see gold gap and rally.”

Market analysis for this week:
With a falling dollar, gold and all other commodities will be expected to rally. However gold had formed a wedge (yellow lines) and if it breaks upwards and out of the wedge, and i expect it to do so, we may see 2000 gold over the next few months.

Daily chart for Crude Oil

Market analysis from last week:
“Market analysis for crude oil still the same. Target at 45.82 on USO.”

Market analysis for this week:
Crude oil gapped and dropped on Friday. It closed the week just below it’s 50 day moving average. With this drop, the chart patterns seem to show that crude might not be able to rally above resistance at 39.50 as it had failed to rally above 4 times over the past 2.5 months.
Once it drops below it’s 200 day moving average at 37.20, I will take it that the rally had failed. New target would be 36.10 and then 35.10 on USO.

Gunning for a Bullish January Barometer - Market Analysis by Singaporeseeds for January 17th 2011

2012-01-16T22:03:00.000-08:00

Daily chart for Dow

Daily chart for S&P

Daily chart for NASDAQ

Market analysis for last week:
“The market went flat after the New Year gap. It seems to be déjà vu as 2012 started almost exactly the same way as 2011.
At the moment, the dollar is dictating the movement of the markets with dollar inversely related to the market. Last Friday saw the end of the uptrend in the dollar rally so we should see some movement this week onwards.
I’m still bullish on the market with targets at 1,350 for the month and 1,553 for the year, but if the S&P drops below its 200 day moving average support at around 1,253, the trend would have changed to bearish and we might close with a bearish January. Should this happen, we are in for a bearish 2012.”

Market analysis for this week:
Having a great time in Bali and totally forgot about my market analysis until a while ago. I had closed all my positions just before I left for Bali even though I thought the market had a little more rally to go. I never could trust the internet connectivity in Indonesia and did not want to risk being disconnected with open positions for a week.
Last Friday, the market hit sequential setup candle 9 and made an intraday dip. I took this as the end of the first leg of rally and expected it to dip a few days before continuing the uptrend. Today, we are making new highs on pre-market futures. Take note that all these against the backdrop of France’s downgrade and the persistent threat of an expanded European crisis. This only shows how bullish the sentiment had been this past 2 months.
I had been long since early December and it seems that we will close with a bullish January. We might still dip later this week to test support at 1,260 before continuing this rally to my target at 1,350 on S&P.

Daily chart for the dollar (UUP)

Market Analysis from last week:
“The uptrend in the dollar has ended last Friday. The dollar has rallied for 2 months without any significant pullback and had stopped just below a range of resistances. We should see a pullback starting from this week.
Target at 22 and then 21.70.”

Market analysis for this week:
The dollar is still trending slightly upwards and holding up very well. We should see it dip from today onwards. There is a huge bearish divergence pattern for the dollar. First target 22.3 then 22.

Daily chart for Gold (GLD)

Market Analysis from last week:
“Gold hit my first target last Thursday and stopped below the 200 MA. As long as the dollar is on an uptrend, it will put bearish pressure on commodity prices. With the dollar expected to dip from this week onwards, I believe we should see gold rally.
There is now a pennant pattern on daily charts. Gold would have to break resistance at its 200 MA and then the pennant resistance at 165 on GLD before a strong uptrend would emerge. I believe this movement will start sometime this week onwards.”

Market analysis for this week:
Gold gapped above resistance last Wednesday and rallied. On weekly charts, gold had been very bullish too. I feel that we are very close to a bottom for gold. Should the huge bearish divergence on the dollar start moving, we will see gold gap and rally.

Daily chart for Crude Oil (USO)

Market analysis from last week:
“Crude gapped up and faded the gap last week. On daily charts, there’s a huge bearish divergence on MACD and RSI.
However I believe crude prices are now very dependent on news coming from Iran and the Straits of Hormuz. If Iran continues to play mind games with US, bearish divergence or not, we will see crude spike to a new high in no time.”

Market analysis for this week:
Market analysis for crude oil still the same. Target at 45.82 on USO.

Dominance of the US Dollar - Market Analysis for January 6th 2012 by Singaporeseeds

2012-01-09T00:01:00.000-08:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Market analysis from last week:
“We started 2011 at around 1256 on S&P and after rallying to 1373 and then dropping to 1070, it ended the year almost unchanged at 1253. This is against the backdrop of the European crisis and the softening economy of China.
We ended the year right at the 200 day moving average on the S&P.
With the market opening today, everyone will be looking at the January Barometer to determine the direction of the market for the year. Volume will still be light for the rest of the month.
I believe that we are at the beginning of a huge rally that will last for the next 3-4 years. We might dip one or two more times but the S&P should not dip more than 1200.
First target at 1350 and then 1553 for the year 2012.”

Market analysis for this week:
The market went flat after the New Year gap. It seems to be déjà vu as 2012 started almost exactly the same way as 2011.
At the moment, the dollar is dictating the movement of the markets with dollar inversely related to the market. Last Friday saw the end of the uptrend in the dollar rally so we should see some movement this week onwards.
I’m still bullish on the market with targets at 1,350 for the month and 1,553 for the year, but if the S&P drops below its 200 day moving average support at around 1,253, the trend would have changed to bearish and we might close with a bearish January. Should this happen, we are in for a bearish 2012.

Daily chart for the Dollar

Market analysis from last week:
“The dollar is showing a topping pattern on daily charts. On weekly charts, it may continue to hold up for another week or two, but not more. Target is still the same at 22 and 21.70 on UUP.”

Market analysis for this week:
The uptrend in the dollar has ended last Friday. The dollar has rallied for 2 months without any significant pullback and had stopped just below a range of resistances. We should see a pullback starting from this week.
Target at 22 and then 21.70.

Daily chart for Gold

Quote from my last market analysis:
“After the big drop in December 2011, gold should bounce. There’s a bullish divergence pattern over the last 2 weeks. This should bring gold up to around 157 and then 165 over the next 2 weeks. However the longer therm trend is still down.”

Market analysis for this week:
Gold hit my first target last Thursday and stopped below the 200 MA. As long as the dollar is on an uptrend, it will put bearish pressure on commodity prices. With the dollar expected to dip from this week onwards, I believe we should see gold rally.
There is now a pennant pattern on daily charts. Gold would have to break resistance at its 200 MA and then the pennant resistance at 165 on GLD before a strong uptrend would emerge. I believe this movement will start sometime this week onwards.

Daily chart for Crude Oil

Market analysis from last week:
“Crude oil is more bullish than ever, having bounced off it’s 50 and then 200 day moving average in the past week. I believe we should see a dip next week with support at around 37.50 on USO before breaking resistance at 39.50.
Final target will be around 45.20 in 3 month’s time. This will be around 113 on crude oil futures. Expect gasoline prices to increase.”

Market analysis for this week:
Crude gapped up and faded the gap last week. On daily charts, there’s a huge bearish divergence on MACD and RSI.
However I believe crude prices are now very dependent on news coming from Iran and the Straits of Hormuz. If Iran continues to play mind games with US, bearish divergence or not, we will see crude spike to a new high in no time.

January's First week - 5 Jan 2012

2012-01-05T08:34:00.000-08:00

It's been a long break... and so many things are happening in my life just now... all good things though!

Happy New Year to one and all!

If you are wondering what's up with this market movements up and down and it seems that the story is changing on a weekly basis - well, you are right! I am slightly leaning on the the bearish side just now, being cautious (not sceptical) about the rallies that occur. As it turned into 2012, the S&P500 futures (/ES E-mini) opened with bit of a bang, gapping up and giving many a bullish hope for 2012.

Singaporeseeds sent me a message: "Gap gap!" on the 3rd of January 2012.
I replied to him... "Watch it close (the gap)!"

Two days later... it looks like it will happen as this gap is NOT what is typically known as a "gap-and-run".

Here's what I see in the ES charts...

The weekly chart above has a bullish candlestick pattern as Christmas came... but it scored that on low volume. Currently, there is no strong underlying trend and the weekly MACD appears to be attempting a bullish breakout. Emphasis on "attempting"
The daily ES chart on the right panel has bullish MACD, again clearly based on low volume trading. This is followed by a gap up on the first trading day of 2012. The daily ES tested the 200MA FIVE times in the past three months, and it just did a gap up on low volume. This already hints of a "gap and close" rather than a "gap and run". To some other chart artists (aka chart technicians), it may be what is referred to as a "blow-off top".

Well, the 30 mins intraday ES chart show this "gap and close" clearer, with immediate support at 1260-1262 which is where the current ES is holding at time of writing/analysis. What happens thereafter will show hand as soon as the gap is closed at 1250, which is confluent with the Fibonacci XOP.

There are times that a market trends... and other times that the market just fluctuates. This is one of those times the latter takes precedence. Hence, my caution.

Watch it over the next few days...
Oh yeah... if anyone noticed, the Euro is being thrashed yet again.

The MadScientist
5 January 2012

Note: ALL material posted here is from my personal opinion, and my opinion may differ or change without notice. These do NOT constitute as solicitation, investment nor financial advice. By reading the materials presented here, Readers acknowledge the awareness that the materials are intended for educational purposes only. For investment(s) advice, related decisions and/or actions pertaining to investments, always consult your own qualified financial advisors, brokers, etc.

Charts are from TD Ameritrade Thinkorswim platform

The First Market Analysis for 2012; January Barometer will be bullish! - Market Analysis for January 3rd 2012 by Singaporeseeds

2012-01-02T23:18:00.000-08:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Market analysis from last week:
“The past week had been one of the most bullish for the past few months. This is just the start of the huge bullish divergence pattern that appeared on the charts a few weeks ago. This should bring the S&P up to around 1,350 over the next 2-4 weeks. This will be around 12,750 for the Dow.”

Market analysis for this week:

What a year!
We started 2011 at around 1256 on S&P and after rallying to 1373 and then dropping to 1070, it ended the year almost unchanged at 1253. This is against the backdrop of the European crisis and the softening economy of China.
We ended the year right at the 200 day moving average on the S&P.
With the market opening today, everyone will be looking at the January Barometer to determine the direction of the market for the year. Volume will still be light for the rest of the month.
I believe that we are at the beginning of a huge rally that will last for the next 3-4 years. We might dip one or two more times but the S&P should not dip more than 1200.
First target at 1350 and then 1553 for the year 2012.

Daily chart for the Dollar

Market analysis from last week:
“Longer term weekly chart is showing that the dollar will continue to go up, but on daily, it shows down. We might see some weakness in the dollar over the next 2 weeks. First target at 22, second at 21.70.”

Market analysis for this week:
The dollar is showing a topping pattern on daily charts. On weekly charts, it may continue to hold up for another week or two, but not more. Target is still the same at 22 and 21.70 on UUP.

Daily chart for Gold

Quote from my last market analysis:
“Gold is still consolidating after the huge movement. It may trend down to 145 on GLD over the next few weeks. It should move in a range between 145 and 158.50 for the next 1-2 months.”

Market analysis for this week:
After the big drop in December 2011, gold should bounce. There’s a bullish divergence pattern over the last 2 weeks. This should bring gold up to around 157 and then 165 over the next 2 weeks. However the longer therm trend is still down.

Daily chart for Crude Oil

Market analysis from last week:
“Crude oil is more bullish than ever, having bounced off it’s 50 and then 200 day moving average in the past week. I believe we should see a dip next week with support at around 37.50 on USO before breaking resistance at 39.50.
Final target will be around 45.20 in 3 month’s time. This will be around 113 on crude oil futures. Expect gasoline prices to increase.”

Market analysis for this week:
Market analysis for crude oil is still the same.

Santa Claus Is Coming To Town! - Market Analysis for 27th December 2011 by Singaporeseeds

2011-12-24T01:09:00.000-08:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Market analysis from last week:
“We dipped after a huge rally that changed all my indicators from bearish to bullish. On Friday, the market closed around important support levels for all 3 indexes. This is 1215 for S&P.
Today, we shall see whether these support levels hold. If it holds, the chances that we will see a Santa Claus Rally would be much higher.
Currently, I believe that the market will hold these support levels and move up to 1350 by year end or early Jan 2012.”

Market analysis for this week:
The past week had been one of the most bullish for the past few months. This is just the start of the huge bullish divergence pattern that appeared on the charts a few weeks ago. This should bring the S&P up to around 1,350 over the next 2-4 weeks. This will be around 12,750 for the Dow.

Daily chart for the Dollar

Market analysis from last week:
“The dollar (UUP) made yet another bearish divergence in the market on daily charts. However on weekly charts, it seems that the dollar has more to go. At least around 2 more weeks of bullish movement before it finally give way. As the market movement is inversely correlated with the stock market, this might mean that we will have 2 more weeks of bearish market. This will directly cut into the Santa Claus rally. We shall see how it goes.”

Market analysis for this week:
Longer term weekly chart is showing that the dollar will continue to go up, but on daily, it shows down. We might see some weakness in the dollar over the next 2 weeks. First target at 22, second at 21.70.

Daily chart for Gold

Quote from my last market analysis:
“Gold broke out of the triangle last Monday and completed the breakout move by the end of the week. Price closed just below it’s 200 day moving average on Friday.
Today, we should see gold consolidate after a big move. Especially with a strong and rising dollar, we should see further lower prices over the next 1-2 weeks. Next support at around 1500 on gold futures.”

Market analysis for this week:
Gold is still consolidating after the huge movement. It may trend down to 145 on GLD over the next few weeks. It should move in a range between 145 and 158.50 for the next 1-2 months.

Daily chart for Crude Oil

Market analysis from last week:
“The uptrend did indeed end last Tuesday with a gap down and drop over the rest of the week.
Now with crude at it’s 50 day moving average, we should see either a consolidation or bounce before dropping further over the next few weeks. Next support at 35 and then 33.50 on USO.”

Market analysis for this week:
Crude oil is more bullish than ever, having bounced off it’s 50 and then 200 day moving average in the past week. I believe we should see a dip next week with support at around 37.50 on USO before breaking resistance at 39.50.
Final target will be around 45.20 in 3 month’s time. This will be around 113 on crude oil futures. Expect gasoline prices to increase.

Preparing for the Santa Claus Rally? - Market Analysis for 19th December 2011 by Singaporeseeds

2011-12-19T07:23:00.000-08:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Market analysis from last week:
“Well, the markets closed as a doji this week. On Dow, it bounced off its 200 day moving average and on NASDAQ, the 50 day moving average. The market seems to be anticipating some kind of good news from the European Crisis as it shrugged off the bad news reports coming from the ECB discussion and slowly edged upwards this week.
It seems that we should be getting good news from Europe. We shall see about this soon.
Last week, market technical changed overnight from very bearish to bullish with the release of a single news report. We will be getting more of this over the next few months. This shows how news driven this market had become.
I have a target at 1,350 on S&P that should be hit before the end of the month. If the news from Europe is indeed good, we can reach this target overnight. In the meantime, we might just move more or less sideways.”

Market analysis for this week:
We dipped after a huge rally that changed all my indicators from bearish to bullish. On Friday, the market closed around important support levels for all 3 indexes. This is 1215 for S&P.
Today, we shall see whether these support levels hold. If it holds, the chances that we will see a Santa Claus Rally would be much higher.
Currently, I believe that the market will hold these support levels and move up to 1350 by year end or early Jan 2012.

Daily chart for the Dollar

Market analysis from last week:
“On weekly charts, the dollar closed as a doji. Everyone seems to be waiting for a news report from Europe to start a new trend. My market analysis is still the same. I’m expecting a double dip for the dollar to 21 on UUP.”

Market analysis for this week:
The dollar (UUP) made yet another bearish divergence in the market on daily charts. However on weekly charts, it seems that the dollar has more to go. At least around 2 more weeks of bullish movement before it finally give way. As the market movement is inversely correlated with the stock market, this might mean that we will have 2 more weeks of bearish market. This will directly cut into the Santa Claus rally. We shall see how it goes.

Daily chart for Gold

Quote from my last market analysis:
“Gold is still in the triangle. Without any significant movement in the markets and in the dollar, gold should not be moving much. We should be seeing a breakout (up or down) for gold, dollar and the markets all at the same time.”

Market analysis for this week:
Gold broke out of the triangle last Monday and completed the breakout move by the end of the week. Price closed just below it’s 200 day moving average on Friday.
Today, we should see gold consolidate after a big move. Especially with a strong and rising dollar, we should see further lower prices over the next 1-2 weeks. Next support at around 1500 on gold futures.

Daily chart for Crude Oil

Market analysis from last week:
“Crude (USO) formed a support at 37.77 and bounced. This is also the 200 day moving average and meeting point for 2 trendlines.
On candlesticks, it seems to have formed a piercing pattern. Monday has to close as a bullish candle for this pattern to be reliable. The uptrend from early October 2011 should be ending this week.

Market analysis for this week:
The uptrend did indeed end last Tuesday with a gap down and drop over the rest of the week.
Now with crude at it’s 50 day moving average, we should see either a consolidation or bounce before dropping further over the next few weeks. Next support at 35 and then 33.50 on USO.

Just about there... Market Analysis 16 Dec 2011

2011-12-16T05:09:00.001-08:00

While the rest of my buddies are in a Christmas gathering, I am here rushing out an update to my mid-week analysis before the CPI data comes online... and before I rush down to join that Christmas Gathering for the finale.

Basically, the daily chart is looking at a potential (possible but weak case) bounce day. The past three days indicate increasing volatility breakdown. and I am expecting a burst downside by next week Wednesday. Otherwise, all bets are off.

30min chart (right) is showing a second test of the 200MA. MACD indicators are not encouraging for a bull case, but it would also depend on CPI data in 30 mins time. This level is also resistance level as well as a Fibo retracement level. Am expecting downside.... otherwise, a relook is in order.

Quick nips...
On the Gold charts, a bounce is due.
On USD futures, a retracement is due.
Today is options expiry day!

Have a great weekend ahead!

The MadScientist
16 December 2011

Note: ALL material posted here is from my personal opinion, and my opinion may differ or change without notice. These do NOT constitute as solicitation, investment nor financial advice. By reading the materials presented here, Readers acknowledge the awareness that the materials are intended for educational purposes only. For investment(s) advice, related decisions and/or actions pertaining to investments, always consult your own qualified financial advisors, brokers, etc.

Charts are from TD Ameritrade Thinkorswim platform

It's elementary! - WMA 14 December 2011

2011-12-14T04:15:00.001-08:00

Ah! Its been two weeks, and it is time for analyses again!
My last post was about a sucker rally on 28th November, a post I did through my iPad.
Since then, I had been really bogged down with work and other things in life that the little time I had reading news and watching through my mobile devices all did not seem to make much sense. Hence, I abstained... from taking any positions.

A quick review... since my last post, major events include the central banks easing the swap rates, and the Euro Summit. The former fired off a very strong rally but it fizzled as people started to realize that it was a bleed to let off some pressure. This means that there is more time added, hence kicking the can further down the road. While that happened, the bond yields of the European sovereigns actually receded enough to ease tensions, giving the central bank measures some punch for its efforts.
Then there was optimism fuel from the Euro Summit anticipation, as well some seemingly decent economic data out of the US.
Despite the above, the market rallies were short and stunted. A look at the charts reveal the behaviour and psychology of the current market.

Below is a snapshot of what I saw today... click on image to get a larger view.

The ES weekly chart (left panel) appears to be forming a HUGE bear flag, which suggest a deeper downside going forward into 2012. While this is may include some upside as the turn of the year, for now, looks like Santa may have crashed en route to the rally party IMHO...

The daily chart (middle panel) has some very omnious technical aspects. Notice the while downtrending line from August 2011? That trendline has been tested and failed five times. For technical chartists, this is significant as the more times the trendline is tested and failed, the stronger that trendline becomes. Furthermore, see the dark green 200MA line, which has been tested and failed three times in the past two months. Although there has not (YET!) been a Sell signal, there may be one coming along soon if Santa does not rally the market. The dismal outcome of the Euro Summit and developments over the past months in Europe is certainly showing a trend... that hopeful promises will be made, and will yet to be delivered, if at all. These promises will result in powerful bear rallies. In any case, the red arrows outline my baseline expectations in the near term, where the S&P futures should break 1220 and then test 1200. A breakdown of 1200 this time would be really bad. Before this happens, I am expecting a Sell signal in the coming week, barring no new jolting developments from European leaders (which I suspect is unlikely). I am actually looking for the end of the review period of the rating agencies to help in downgrading the sovereigns (and tank the markets).

In the 30 min charts (right panel), it is clear that there is a current downtrend... this would be the first to change if there is a reversal rally, so it is worth keeping an eye on it.

In other charts, not shown here today...

/DX, the USD futures is looking bullish.
/GC, the Gold futures is ranging in a large area and is looking bearish. So is silver. Same for copper.
/CL, the Crude futures, strangely appear bullish to me, and this does not fit into the overall scheme of things. I do wonder as I keep an eye out on crude.

Meanwhile... as US economic and employment data, together with Leading Economic Indicators (LEIs), are looking good for a mild US economic recovery. That is without a doubt. However, a European breakdown is more than enough to overwhelm all that good news and improvement. For now, it appears to be a bear market, and the bull really needs to work real hard in the weeks to come.

Be safe, be wise.

The MadScientist
14 December 2011

Note: ALL material posted here is from my personal opinion, and my opinion may differ or change without notice. These do NOT constitute as solicitation, investment nor financial advice. By reading the materials presented here, Readers acknowledge the awareness that the materials are intended for educational purposes only. For investment(s) advice, related decisions and/or actions pertaining to investments, always consult your own qualified financial advisors, brokers, etc.

Charts are from TD Ameritrade Thinkorswim platform

Waiting for Good News from Europe - Market Analysis for 12th December 2011 by Singaporeseeds

2011-12-10T08:20:00.000-08:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Market analysis from last week:
“What a difference a week makes!
http://www.bloomberg.com/news/2011-11-30/treasuries-set-for-monthly-gain-as-eu-struggles-to-stem-contagion-concern.html
On Wednesday, the US Federal Reserve and five other central banks cut the cost of emergency dollar funding for European banks in response to the continent’s sovereign-debt crisis.
This sparked a huge rally on Wednesday that smashed through all resistances on my charts. Non-farm payrolls on Friday was also expected to be good (which also turned out good) and this added to the euphoria.
On the S&P, we are just below the 200 day moving average and the down channel that we had been in since June 2011. If we break above the 200 day MA, it would be the start of another rally that might bring us back up to the all-time high around 1,550.
The direction of the market this week will determine the direction of the market over the next few months.”

Market analysis for this week:
Well, the markets closed as a doji this week. On Dow, it bounced off its 200 day moving average and on NASDAQ, the 50 day moving average. The market seems to be anticipating some kind of good news from the European Crisis as it shrugged off the bad news reports coming from the ECB discussion and slowly edged upwards this week.
It seems that we should be getting good news from Europe. We shall see about this soon.
Last week, market technical changed overnight from very bearish to bullish with the release of a single news report. We will be getting more of this over the next few months. This shows how news driven this market had become.
I have a target at 1,350 on S&P that should be hit before the end of the month. If the news from Europe is indeed good, we can reach this target overnight. In the meantime, we might just move more or less sideways.

Daily chart for the Dollar

Market analysis from last week:
“Instead of breaking through the 22.50 resistance, the dollar made a bearish divergence on both MACD and RSI. Fundamentally, the Fed boosting liquidity for Europe and the expectation of a 3rd round of stimulus in US is not giving much boost to the value of the US dollar.
http://www.bloomberg.com/news/2011-11-30/oil-rises-in-new-york-as-central-banks-led-by-fed-cut-dollar-funding-costs.html
I’m expecting the start of a new downtrend down to 21 over the next few days.”

Market analysis for this week:
On weekly charts, the dollar closed as a doji. Everyone seems to be waiting for a news report from Europe to start a new trend. My market analysis is still the same. I’m expecting a double dip for the dollar to 21 on UUP.

Daily chart for Gold

Quote from my last market analysis:
“Gold is still within the triangle. However I’m expecting a movement (can be either up or down) this coming week. With the dollar expected to drop over the next few weeks, and the Fed boosting liquidity, Gold is set to make a new high soon.”

Market analysis for this week:
Gold is still in the triangle. Without any significant movement in the markets and in the dollar, gold should not be moving much. We should be seeing a breakout (up or down) for gold, dollar and the markets all at the same time.

Daily chart for Crude Oil

Market analysis from last week:
“Crude oil formed an inverse head and shoulders pattern on daily charts. This should bring USO up to 42.50 over the next few weeks. With the US dollar expected to fall, this should not come as a surprise.”

Market analysis for this week:
Crude (USO) formed a support at 37.77 and bounced. This is also the 200 day moving average and meeting point for 2 trendlines.
On candlesticks, it seems to have formed a piercing pattern. Monday has to close as a bullish candle for this pattern to be reliable. The uptrend from early October 2011 should be ending this week.

Decision Week! - Market Analysis for 5th December 2011 by Singaporeseeds

2011-12-04T09:28:00.001-08:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Market analysis for this week:
What a difference a week makes!

http://www.bloomberg.com/news/2011-11-30/treasuries-set-for-monthly-gain-as-eu-struggles-to-stem-contagion-concern.html

On Wednesday, the US Federal Reserve and five other central banks cut the cost of emergency dollar funding for European banks in response to the continent’s sovereign-debt crisis.
This sparked a huge rally on Wednesday that smashed through all resistances on my charts. Non-farm payrolls on Friday was also expected to be good (which also turned out good) and this added to the euphoria.
On the S&P, we are just below the 200 day moving average and the down channel that we had been in since June 2011. If we break above the 200 day MA, it would be the start of another rally that might bring us back up to the all time high around 1,550.
The direction of the market this week will determine the direction of the market over the next few months.

Daily chart for the Dollar

Market analysis for this week:
Instead of breaking through the 22.50 resistance, the dollar made a bearish divergence on both MACD and RSI. Fundamentally, the Fed boosting liquidity for Europe and the expectation of a 3rd round of stimulus in US is not giving much boost to the value of the US dollar.
http://www.bloomberg.com/news/2011-11-30/oil-rises-in-new-york-as-central-banks-led-by-fed-cut-dollar-funding-costs.html
I’m expecting the start of a new downtrend down to 21 over the next few days.

Daily chart for Gold

Quote from my last market analysis:
“Gold had been forming a triangle pattern since August 2011. A triangle pattern is formed when volatility and price movement had been decreasing gradually. This pattern usually results in a surge of activity together with a large movement in price. This can be either up or down. With the problems occurring around the world, I would expect a surge up in price soon.”

Market analysis for this week:
Gold is still within the triangle. However I’m expecting a movement (can be either up or down) this coming week. With the dollar expected to drop over the next few weeks, and the Fed boosting liquidity, Gold is set to make a new high soon.

Daily chart for Crude Oil

Market analysis for this week:
Crude oil formed an inverse head and shoulders pattern on daily charts. This should bring USO up to 42.50 over the next few weeks. With the US dollar expected to fall, this should not come as a surprise.

What a rally! A sucker rally? - 28 Nov 2011

2011-11-28T07:13:00.001-08:00

The US market just opened 30 mins ago, and I just settled down enough to look at the charts... with a stunning 40 points upshot on the ES (S&P500 futures).

This is an awesome headline rally that followed a huge gap up, that might be a good runner for the next week or so, but the intraday bearish divergence is just so obvious. The ES is now up 40 points, 3.5%, and the charts below are snapshots from my iPad.

Notice that the USD futures, DX also has a bullish divergence... and another interesting point is that Crude (CL) futures had a similar bearish divergence and the rally was not sustained even as the ES continued to rally more.

While the news at the opening of the week is really awesome, I am left to wonder if this is a sucker rally of sorts... I'd be watching that ascending wedge as well as for a reversal swing point.

The MadScientist
28 November 2011

Note: ALL material posted here is from my personal opinion, and my opinion may differ or change without notice. These do NOT constitute as solicitation, investment nor financial advice. By reading the materials presented here, Readers acknowledge the awareness that the materials are intended for educational purposes only. For investment(s) advice, related decisions and/or actions pertaining to investments, always consult your own qualified financial advisors, brokers, etc.

Charts are from TD Ameritrade Thinkorswim platform

Beginning of Roller Coaster Ride (2012) - Market Analysis for 28th November 2011 by Singaporeseeds

2011-11-25T11:29:00.000-08:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Last week's market analysis:
“The S&P closed at its 50 day moving average last Friday and all 3 indexes were forming classic daily patterns of market topping throughout the week as we slowly trend downwards. My trading system also highlighted a bearish signal on Thursday. As we move into the December and the famous Christmas rally, I was cautious of being too bearish in a seasonally bullish period of the year.
Then during the weekend, this news came up.
http://www.bloomberg.com/news/2011-11-21/u-s-debt-supercommittee-is-said-to-be-poised-to-announce-failure-of-talks.html

With the situation in Europe going from bad to worse, and reports of repercussions of bad debts moving across the Atlantic into US, this will definitely move the indexes below their 50 day moving averages. (Only the Dow is still above now) On weekly charts it looks even worse. All 3 indexes are showing classic signs of failure and should hit their early October 2011 lows by the end of the year.”

Market Analysis for this week:
All indexes are below their 50 day moving average now. Short term and long term charts are pointing to a downtrend for the next 2 months. We should be back around the early October lows real soon.
Fundamentally, there is nothing bullish right now. Europe, USA and China are showing weakness, with huge debt problems surfacing in every country in the European Union. The US had been reducing its debt liabilities for the past few years by printing its way out of it but with inflation increasing and spiralling out of control, this will not be an option soon. 2012 is turning out to be a very bad year indeed.
We may see a bounce next week to around 1200 on S&P. However it will be downhill after that. I believe the market will break below the October lows and make a new low by the end of the year.
The roller coaster ride for 2012 had just began.

Daily chart for the Dollar

Last week's market analysis:
“The dollar has bounced back up above its 50 and 200 day moving average, indicating bullishness. This should be the case for the rest of the year.

We should move back up to the early October 2011 highs over the next few weeks”

Market analysis for this week:
The dollar is almost back at its October highs. We should break this high easily. Final target at 23.40 on UUP.

Daily chart for Gold

Quote from my last market analysis:
“Gold had been bouncing off its 50 day moving average throughout last week as a rising dollar puts bearish pressure on the price of gold. With such bad news coming out of both Europe and US, I believe we should see gold at an all-time high in the next few months.”

Market analysis for this week:
Gold had been forming a triangle pattern since August 2011. A triangle pattern is formed when volatility and price movement had been decreasing gradually. This pattern usually results in a surge of activity together with a large movement in price. This can be either up or down. With the problems occurring around the world, I would expect a surge up in price soon.

Daily chart for Crude Oil

Last week's market analysis:
“Crude dipped as expected and found support at its 200 day moving average. This is especially so after a steep uptrend and is healthy if we are to have a sustained rally in crude. Supports for this dip should come in at 37.60 and then 35.20.”

Market analysis for this week:
Crude is still forming a support around its 200 day moving average. I would expect crude to move sideways for the next few trading sessions.

Thanksgiving's Roast - 24 Nov 2011

2011-11-23T21:14:00.000-08:00

Happy Thanksgiving to all!

Today, the US markets will be closed and on Friday, it opens for the last day of the week, albeit with expected low volumes. Over the weekend, there would be results of Black Friday known and Monday may react to the this piece of news. Black Friday is traditionally the start of the shopping sales season and it is taken as an indication of consumer spending strength, as most retail stores get back into the black (accounting term) from this Friday onwards, if it so happens. Therefore, it might become a significant event either way... up or down.

Meanwhile, here is some good weekend reading:
A very good piece to read about knowing the background of this European Debt Crisis (EDC).
and
I personally like John Mauldin's piece titled Print or Perish, as it outlines why the EDC is one huge gorilla in the room, and how it really can be sorted out, albeit selfishly for the rest of the world, as well as how it is a lose-lose situation for Europe.
Note that the title was tagged from the academic phrase of "Publish or Perish".
Having read these two articles, you should have a think about the year ahead... the picture would be pretty clear.

Now, I already had been bearish longer term since end July, preferring to be "risk off", and previously tracked the current technicals compared to that of early 2008. At some point in the last two weeks, I noted that the market had deviated from that track a little after the second dip. The bounce was magnificent, to say the least, and the ES hit the daily 200MA in half the time it did in early 2008! For a while it looked as if the similarities were broken, and a couple of days later after testing the 200MA twice, it failed. This was the "last station before the train falls over the cliff" as outlined in a my blogpost two days ago.

And in the past two days market action, it is raising some alarm bells...
The US markets have a tendency to rally pre-holiday season. Last two days had weak bull activity and the bears clobbered the bulls really swiftly. This looks as if there is offloading at every opportunity, particularly a fear of holding anything over the holiday season.
The thing is, when observing the intraday charts in comparison, it is a little un-nerving.

Here's why...

Below is a SPX chart compared with TLT (Treausries ETF) and VXO (The old VIX that comprises of large caps only - my preference as I observed it to react faster than the widely used VIX).
From the 15 min intraday chart, in the past two trading sessions, there have been two occasions where TLT makes a higher high BEFORE the S&P500 (/ES, SPX, SPY) starts tanking. For TLT, making higher highs at this level is significant as it is pushing towards historical highs. And the correlation to its indication of a the equity market tanking shortly after is almost 100% since July 2011.
The VXO, however, has stopped being such a similar indicator as it was in August and September 2011. This is telling of money movements into Treasury bonds (likely by big players), without triggering a mass sell-off as indicated by the fear indexes (VIX/VXO).

On the daily SPX charts, there clearly were ice-hole failures on the 200MA, and a critical level is identified at 1130.
Despite the rather significant October rally, the TLT retraced and continued to uptrend, potentially to be rejected or breakout into historical higher highs. By the time the SPX is at 1130, the TLT should be at historical highs, given the current trend momentum.
Similarly, the VXO is no where near the August-Setpember highs, but looks set to breakout of the smaller October range highs.
By mid-next week, it would be obvious.

Below are the /ES charts, weekly (left) and daily (right).
If this week closes at the current levels, the MACD indicates are bearish crossover in bear territory, which may mean a farewell to the Santa rally next month. Remember 1130 on the daily chart? It is coincidentally the weely 200MA support. That's how critical that level would be in the weeks to come.
On the daily ES chart, as described previously, a technical breakdown that included 200MA failures, channel breakdown, and Sell signals all occured last week. The last two trading sessions saw a MACD bearish crossover into bear territory, but price is still not reflecting an extreme breakdown - yet.
The TTR model, which compares the ratio of the TLT/TIP ratio is warning of another downleg.

Yesterday, European news that caught my eye included Dexia's bailout that itself was in trouble, and particularly significant, the German bond auction technically failed. With stuff like that happening over the Thanksgiving seasonal holidays, it is little wonder that the US Treasuries will be attracting more funds. Furthermore, Fitch and Moody are reviewing European ratings, particularly that of France, and so is S&P of the US.

Thee various "signs" are omnious... there will be more to come... watch the train fall off the cliff, and if you didn't get out at the last station, be ready to jump out of the train or go down with it!

The MadScientist
24 November 2011

Note: ALL material posted here is from my personal opinion, and my opinion may differ or change without notice. These do NOT constitute as solicitation, investment nor financial advice. By reading the materials presented here, Readers acknowledge the awareness that the materials are intended for educational purposes only. For investment(s) advice, related decisions and/or actions pertaining to investments, always consult your own qualified financial advisors, brokers, etc.

The train has left the last station - WMA 22 Nov 2011

2011-11-22T02:44:00.001-08:00

It's been a while since I analyzed the markets proper... partly due to myself being occupied with many different things as well as the volatility in either direction, and the large range consolidation. However, at the end of last week, a new trend started to emarge...

Let's look at the ES (S&P500 futures) first...

The weekly chart shows that last week was a potential end to the short rally, with indicators stopping short on being bullish (pun not intended). There seems to be a significant downside risk from the weekly chart.
The daily ES chart (right) clearly shows a breakdown out of the uptrendling support. Some see a triangle formation that has broken down as well. Indicators are suggesting that a downtrend started late last week, where a Sell signal was generated. There is now a clear failure of the moving averages. With a short trading week, it appears as if there is more downside over the next 4-5 trading days, likely to come close to 1130 as a short term target. Today, 22 Nov 2011, looks set to have an early morning bounce.

With the global economics and politics moving forward, the downside risks appear to be significantly high for the rest of this week.

At this point of time, when there is a lot of uncertainty and a potential breakdown of the European sovereign debt, a lot of money is moving places, mostly out of equity markets and into safe havens. One such haven is the US Treasuries, and this is concomitant of a rise in the USD dollar index as the markets capitulate. Looking at the ETF for US Treasuries, ticker: TLT, we are able to observe that there are signs which indicate a high probability of equity market sell-offs.

Similarly, the VIX index show indications of market sell-off before it happens. Here, we use the CBOE VIX ETF, ticker: VXX.

Shown below is the intraday chart of the SPY (the S&P500 SPDRS ETF), correlated with TLT and VXX daily closing prices in line charts below. What is obvious in the time marking is that there is a break of a higher high on TLT and on VXX BEFORE the SPY started selling off. This is much clearer in candle comparison charts where the breakout of higher highs are registered, as opposed to the closing prices.

Below is the daily chart of TLT, and it is clear that the MACD is indicating a start of a rally, which is concomitant with a higher high breakout. Compare the current scenario with that of early August 2011. The situations look very similar.

Likewise, the VXX daily chart corroborate a similar indication as well.

All the above are suggesting that a significant market sell off is coming and that the last few days' activity is just the beginning. Notice too from the first chart that the was a failure of the 200MA on the ES. This is a major no-no tyope of ice-hole failure and one should be looking out for signs of major deterioration of the markets from the global economic perspective of politics.

The train has left the last station... next stop may be the bottom of the cliff.

Hang on to your pants!

The MadScientist
22 November 2011

Note: ALL material posted here is from my personal opinion, and my opinion may differ or change without notice. These do NOT constitute as solicitation, investment nor financial advice. By reading the materials presented here, Readers acknowledge the awareness that the materials are intended for educational purposes only. For investment(s) advice, related decisions and/or actions pertaining to investments, always consult your own qualified financial advisors, brokers, etc.

And Down We Go! - Market Analysis for 21st November 2011 by Singaporeseeds

2011-11-21T05:25:00.001-08:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Last week's market analysis:
“Anyway last week ended as a doji on S&P. We should see some market gyrations over the next few days as we hit a range of important resistance levels. On daily and weekly RSI, we are seeing a widening bearish divergence. I believe we are at a market top right now and the market is just churning, stronger hands giving way to weaker hands. Once the pros have moved out of the market, the market should give way real soon. I think we would end the year much further down then the levels we are at today. Most probably we should end the year at the early October 2011 lows.”

Market Analysis for this week:
The S&P closed at its 50 day moving average last Friday and all 3 indexes were forming classic daily patterns of market topping throughout the week as we slowly trend downwards. My trading system also highlighted a bearish signal on Thursday. As we move into the December and the famous Christmas rally, I was cautious of being too bearish in a seasonally bullish period of the year.
Then during the weekend, this news came up.
http://www.bloomberg.com/news/2011-11-21/u-s-debt-supercommittee-is-said-to-be-poised-to-announce-failure-of-talks.html

With the situation in Europe going from bad to worse, and reports of repercussions of bad debts moving across the Atlantic into US, this will definitely move the indexes below their 50 day moving averages. (Only the Dow is still above now) On weekly charts it looks even worse. All 3 indexes are showing classic signs of failure and should hit their early October 2011 lows by the end of the year.

Daily chart for the Dollar

Last week's market analysis:
“The dollar has bounced back up above its 50 and 200 day moving average, indicating bullishness. This should be the case for the rest of the year.

We should move back up to the early October 2011 highs over the next few weeks”

Market analysis for this week:
Analysis for the dollar is still the same.

Daily chart for Gold

Quote from my last market analysis:
“Gold has been showing strength over the past few weeks, breaking the 50 day moving average. I am seeing a bullish signal today. If this follows through, we should see gold break its high at 1923.70 soon. With the mess in Europe getting out of hand and rating agencies making mistakes, this should not be too difficult.”

Market analysis for this week:
Gold had been bouncing off its 50 day moving average throughout last week as a rising dollar puts bearish pressure on the price of gold. With such bad news coming out of both Europe and US, I believe we should see gold at an all-time high in the next few months.

Daily chart for Crude Oil

Last week's market analysis:
“Crude oil had one of the best bullish runs over the past 2 months. However we are reaching the end of this rally soon. My target is at 103 on /CL. Crude oil is very close to being overbought and this straight up rally movement is not sustainable. We could have a repeat of the late April to early May 2011 type of drop. I would expect crude oil to do move back down later this week or next week.”

Market analysis for this week:
Crude dipped as expected and found support at its 200 day moving average. This is especially so after a steep uptrend and is healthy if we are to have a sustained rally in crude. Supports for this dip should come in at 37.60 and then 35.20.

Formation of a Market Top - Market Analysis by Singaporeseeds for November 14th 2011

2011-11-13T16:42:00.000-08:00

Daily chart for Dow

Daily chart for S&P

Daily chart for NASDAQ

Was very busy with the move from Winchester to London last week and coupled with this being the busiest time of the year, I didn’t have time to do my market analysis last week. Will still not be able to have proper internet access until Friday, when the people from British Telecom will come down to fix up the internet access. Things just move at a very slow pace here.

Anyway last week ended as a doji on S&P. We should see some market gyrations over the next few days as we hit a range of important resistance levels. On daily and weekly RSI, we are seeing a widening bearish divergence. I believe we are at a market top right now and the market is just churning, stronger hands giving way to weaker hands. Once the pros have moved out of the market, the market should give way real soon. I think we would end the year much further down then the levels we are at today. Most probably we should end the year at the early October 2011 lows.

Daily chart for the dollar

The dollar has bounced back up above its 50 and 200 day moving average, indicating bullishness. This should be the case for the rest of the year.

We should move back up to the early October 2011 highs over the next few weeks.

Daily chart for Gold

Gold has been showing strength over the past few weeks, breaking the 50 day moving average. I am seeing a bullish signal today. If this follows through, we should see gold break its high at 1923.70 soon. With the mess in Europe getting out of hand and rating agencies making mistakes, this should not be too difficult.

Daily chart for Silver

After the huge drop in mid September 2011, silver is now sitting right above an important support level of 33.60. We should see silver move up over the next few sessions together with gold.

Daily chart for Crude Oil

Crude oil had one of the best bullish runs over the past 2 months. However we are reaching the end of this rally soon. My target is at 103 on /CL. Crude oil is very close to being overbought and this straight up rally movement is not sustainable. We could have a repeat of the late April to early May 2011 type of drop. I would expect crude oil to do move back down later this week or next week.

Poker Face... this week's summary - 4 Nov 2011

2011-11-03T20:17:00.000-07:00

Just posting to share this article I found as a very apt, short and sweet round-up to the events of this week.

Note the last line.

The MadScientist
4 November 2011

Note: Any material posted here is of my personal opinion, and my opinion may differ or change without notice. These do NOT constitute a solicitation nor financial advice, and readers agree that these materials presented herePublish Post are intended for educational purposes only. For any investment(s) and related decisions or actions pertaining to investments, always consult your own financial advisors, brokers, etc.

Which ball to keep your eyes on? - 3 Nov 2011

2011-11-03T02:49:00.001-07:00

A quick and short note...

In the last analysis done on 1 November, I wrote:

" The week just started and if it ends at the current level or lower, the weekly ES chart would be posting a very bearish candlestick pattern. As of yesteray's close, the trend is still up and the retracement looks to be deep. The daily ES chart has a clear failure to breakout and stay above the 200MA, and it looks set to follow through with more downside for today, particularly with an early but strong Sell signal today. There is support at 1228, and at time of writing, the ES was already trading at 1228. The 30 mins chart is showing that the support should hold, failing which a lot more downside would follow through later in the week.
Looking at the TTR model, it appears as this downside risk is likely to continue... "

And from then on, events were happening leading to a build up at the G20 summit, particularly with the Greek referendum and Italian emergency meetings. Attendees to a private gathering two weeks ago heard about Italy being the next likely to face default, and it looks to be surfacing, at least in the media streams. All these are having a bearish effect on the markets and the downtrend is strong (and a deep retracement, if at the least).

Interesting developments are happening as one is left wondering who to keep an eye out on... Greece or Italy...
If the charts are telling me anything, it looks as if the train has left the last station and is heading over the cliff... (more on that over the weekend analysis).

Hang on!

The MadScientist
3 November 2011

Note: Any material posted here is of my personal opinion, and my opinion may differ or change without notice. These do NOT constitute a solicitation nor financial advice, and readers agree that these materials presented herePublish Post are intended for educational purposes only. For any investment(s) and related decisions or actions pertaining to investments, always consult your own financial advisors, brokers, etc.

The morning after Halloween - 1 November 2011

2011-11-01T03:15:00.001-07:00

As if the Trick or Treating didn't end well, the morning after Halloween looks set to have the markets follow through a deep retracement.

The week just started and if it ends at the current level or lower, the weekly ES chart would be posting a very bearish candlestick pattern. As of yesteray's close, the trend is still up and the retracement looks to be deep. The daily ES chart has a clear failure to breakout and stay above the 200MA, and it looks set to follow through with more downside for today, particularly with an early but strong Sell signal today. There is support at 1228, and at time of writing, the ES was already trading at 1228. The 30 mins chart is showing that the support should hold, failing which a lot more downside would follow through later in the week.

Looking at the TTR model, it appears as this downside risk is likely to continue...

As mentioned yesterday, watching the USD (and also the TLT on an intraday basis) helps in telling where the money is moving.

The weekly DX (USD futures) chart has a bullish crossover and this indicates a higher USD in weeks to come. The daily chart shows a strong support enabling the USD to bounce at 75, by and large due to the timely intervention of the Yen by BOJ, as well as the re-emergence of the Euro worries. The Euro worries were underpinned by the increasing yield demands of the Italian bonds, despite the equity market rally of last week. So, keeping an eye on bonds is telling of the underlying story.

Looks like we are in for another down day, although I would not be surprised if there were to be an intraday retracement rally in the morning session.

The MadScientist
1 November 2011

Note: Any material posted here is of my personal opinion, and my opinion may differ or change without notice. These do NOT constitute a solicitation nor financial advice, and readers agree that these materials presented herePublish Post are intended for educational purposes only. For any investment(s) and related decisions or actions pertaining to investments, always consult your own financial advisors, brokers, etc.

Dip in the Uptrend - Market Analysis for 31st October 2011 by Singaporeseeds

2011-10-31T06:02:00.000-07:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Last week's market analysis:
“The market broke to new highs on Friday. Looking at the daily charts since August 2011, the indexes seem to have formed a double bottom with bullish divergence on MACD and RSI. On RSI, we are still within the downward trendline. Other than that, the downtrend seems to have all but ended.

If this rally is to be sustainable, there should be follow through so if Monday closes up. There is a high probability that we are at the beginning of the next rally that should bring us up to 1,370 on S&P.

Resistance at 1,260
Support at 1,215”

Market analysis for this week:
S&P broke through resistance at 1,260 but stalled with a doji on Friday. On futures, the index is back down below the important 200 day moving average but as long as prices do not break below 1,215 the trend at the moment is still up.
We now have a record number of stocks moving in similar pattern. This includes gold and crude oil. Seems like everyone or everything is listening to news reports coming out of Europe and moving with it. The past 3 weeks had been mainly good news but with lingering doubts that the measures taken are not good enough.
I do not think the market has the momentum to rally any further without first pulling back. The rally over the last 3 weeks had been straight up without any dips. Most bell weather stocks are also showing bearish patterns over the past few days. We should get that dip this week.

Support at 1,215 then 1,200.

Daily chart for the Dollar

Last week's market analysis:
“UUP gapped below its 50 and 200 day moving average. This is very bearish and might bring the dollar back to it’s August 2011 lows at 21 for UUP.”

Market analysis for this week:

The dollar is almost at its August 2011 lows. We should see support coming in for the dollar now. I think the dollar should be moving in a range between 21 and 21.75 on UUP.

Daily chart for Gold

Quote from my last market analysis:
“Both gold and silver had been range-bound for the past month. This is not a surprise given that both gold and silver had just a huge move over the few months up and then down.
At this moment, both precious metals still look bearish, with the 20 day moving average forming a resistance level to both metals. I would expect both gold and silver to move down over the next 1-2 weeks.
Target 152.50 for GLD.”

Market analysis for this week:
Gold is moving in a similar fashion to the market and is showing a pause right at its 50 day moving average. This is also at an important retracement level.
The current trend for gold is up, indicated by the bullish divergence pattern on MACD and RSI but it will depend on breaking it’s current levels for the uptrend to continue.

Resistance at 170 then 173
Support at 165

Daily chart for Crude Oil

Last week's market analysis:
“Crude found support at the 50 day moving average on Thursday, forming a hammer, followed by a bullish confirmation on Friday. We should see crude (USO) move up over the next few sessions.

Target 35.17.”

Market analysis for this week:
Crude oil made a huge up move on Monday followed by a gap on Tuesday which hit my target and got out with a fast and nice profit.
There is a range of retracement levels above crude oil followed by the 200 day moving average. We should see crude oil dip this week to around 34.50 to 35.

Daily chart for Natural Gas

Last week's market analysis:
“The bullish divergence on RSI and MACD should be a signal for higher Natural Gas prices soon. This is the same for weekly and monthly charts.

We should see the start of a multi-year rally for Natural Gas by the end of the year. As I’ve reiterated numerous times, this is a long term play so be prepared to keep some gas for a couple of years.”

Analysis is still the same.

Halloween Scare - 31 Oct 2011

2011-10-31T05:18:00.000-07:00

The markets are doing a Trick or Treat!

The relief rally late last week did not follow through a second day after recording at least 3%. On Friday, questions and doubts about the Eurolution (European solution) precipitated and the market went sideways. It was an awesome day to take a holiday as it was really going nowhere before and during market open hours.

After mulling over the weekend, a few things are emerging, more doubts about the Eurolution are surfacing and it is showing in the currency and equity markets. Earlier today, Japan intervened in the Yen and that boosted the USD, triggering a quick selloff in the Euro which has recovered a little. I suspect that that is more to go later today.

Last Thursday, the ES closed just above the 200MA, and this was followed by a doji on Friday. The ES is currently at 1268, just below the 200MA and its close today should be hinting on the direction for this week...
Meanwhile, the weekly ES charts are bullish, the daily ES charts were bullish and overbought... hence, it looks like a retracement of sorts is incoming.

The rally has not really attracted a significant increase in volume and this is suspect to a relief rally. The ES open interest is still flat indicating that net bullish positions are not being opened with the rally. Correlating the USD (/DX) and perhaps the EUR./USD, the /DX futures had bounced off the major support line of 75 and is trapped between that level and 76.5.

I am watching the USD for now... as its breakout or breakdown is likely to indicate the longer term trend in the equity markets.
For now, I am staying out and expect some consolidation, if not a retracement in the equity markets.

Stay safe for now.

Have a great Halloween!

The MadScientist
31October 2011

Note: Any material posted here is of my personal opinion, and my opinion may differ or change without notice. These do NOT constitute a solicitation nor financial advice, and readers agree that these materials presented herePublish Post are intended for educational purposes only. For any investment(s) and related decisions or actions pertaining to investments, always consult your own financial advisors, brokers, etc.

Relief Rally - 27 October 2011

2011-10-27T08:57:00.001-07:00

WOW... what a relief rally.

For those who do not know - yet... The Europeans have apparently come up with a plan!

Although this rally is huge at 2.5%, I would like to see it break the daily 200MA. This puts the previous model in some distress as the 200MA has been hit super fast, unlike in 2008.

Let's see how it goes before I make an analysis update... I do wonder if today will close over the 200MA, that might be telling.

The MadScientist
27 October 2011

Note: Any material posted here is of my personal opinion, and my opinion may differ or change without notice. These do NOT constitute a solicitation nor financial advice, and readers agree that these materials presented herePublish Post are intended for educational purposes only. For any investment(s) and related decisions or actions pertaining to investments, always consult your own financial advisors, brokers, etc.