My Trader Journey

Ke Belakang Pusing! - 25 February 2013

2013-02-25T18:54:00.001-08:00

Ke belakang pusing. Army use: A parade square command in Malay (literally 'go to the back and turn around'), meaning to turn around.

In last (week's) post, I ended with "...followed by more downside over the coming days..."

Yesterday's action firmed up that view as well as technically shows a chagne in trend.

/ES (S&P500 futures)

The weekly ES charts show a trend exhaustion after euphoria, with a weekly divergence on the MACD. The daily chart has already given a Sell signal on 22nd February, the day after my last post. Yesterday's price action firmed that it is likely to be a down week with the ES looking to correct at least to 1400-1425 range.

VIX

The VIX spiked. The weekly VIX MACD is about to breakout into bullish area and this is a worrying indication for some. The daily VIX spiked out of boundary into an extreme area and from previous patterns, tends to be out of the bands for some time before moderating. This time is particuarly strong(er) and can expect more downside correction in the overall markets as the volatility spikes for a couple of days.

/DX (USD futures)

While the S&P500 tanked, the VIX spiked, the USD had already been rallying over the last couple of weeks. Again, with a higher USD, we tend to see more downside on the S&P500.

TLT (Bond ETF)

The TLT ETF already clocked in a weekly Buy signal.
Go figure.

Time to be cautious...

The MadScientist

25th February 2013
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 end of the... dead cat bounce - 22 Dec 2012

2012-12-21T10:36:00.000-08:00

I have a short note to add for those still reading and following my blog...

Firstly, the last day of the world isn't quite the last day of the world.
See this PAGE

Secondly, for those who have heard, a number of us traders have been saying that it jolly well could be the end of the financial world as we know it... and so it seems, the end of the dead cat bounce was just a couple of days ago, SELL signals given in the daily charts in the last two days, and just now it looks like a confirmation reversal is in play. There goes Santa...

Finally, I am writing from Perth, Australia.
For those who know the significance of me being overseas... good on ya. Do leave a message if you happen to read this, and just stamp chop your agreement that what I had told you before is true.
Well, what is it? Instead of the markets dropping a whopper when hair is cut (like Conrad Alvin Lim)... the markets tends to tank real hard when I am away. This is an estimated 70-80% accuracy since 2009. Initially identified by my brother, and then my spouse and close friends also began to realize it happening.
For the times I can remember...
I was in Tokyo, Japan in Nov 2008
I was in Melbourne, Australia in Jan 2009
I was in Berlin, Germany in Aug-Sep 2009
I was in Kansai region, Japan in August 2010
I was in Perth, Australia in Nov 2010
I was in Santa Fe, New Mexico, USA in February 2011 and then in Melbourne, Australia in March 2011 when the massive Japanese earthquake struck
I was in Bangkok, Thailand in early October 2012
and I am now in Perth, Australia... December 2012.

Take a look at these periods... definitely no bull (run) there. Either turnaround times, or retracement, or some downward shifts in the market.

An intriguing correlation there...

Meanwhile, as I take my time analyzing charts in my holidays (if at all), I'd like to wish all readers a Happy New World, Merry Christmas and Happy New Year!
Live life to the fullest and do something different everyday.

The MadScientist
22 December 2012

Beauty and Grandeur of Niagara Falls

2012-08-14T08:03:00.000-07:00

Niagara Falls from the Canadian side

Downstream of Niagara Falls

Near the Highs of the Year - Market Analysis for August 13th 2012 by Singaporeseeds

2012-08-13T07:49:00.002-07:00

The past 2 weeks had been really exciting. I traveled to Detroit where I met with my friend and we surveyed Michigan properties together. It was mind-blowing to see properties selling at 30 cents to the dollar and going for yields at around 25%. He had been flipping properties there since 2008 and as of today, he had made 20,000% returns on his money.

Afterwards I drove to Niagara Falls through Ontario, Canada and struck the majestic Falls off my bucket list. Will post a video of it later.

Then it was to Kingston, New York where I met my long-time trading buddy who is working there and then onwards to New York City.

At New York City, I was gazing at the big banks there and fooling around with the ex-Merrill Lynch bull and wondered how it would be like to run a bank. Over the next few days, I just can’t get the thought out of my mind. It will be really fun to make money from nothing but obviously you will need expertise, knowledge and the capital for it. And I’ve not checked but I assume you need a license for it.

Anyway that was exactly a week ago. Over the last 7 days, I thought that if I am to start a bank and also succeed, it cannot start it in a developed country. The established players will destroy me before I can start an office. So it has to be somewhere unsaturated, where people are still foreign to the concept of leverage and then get someone who has experience in bank operations into this with me. And if it is not a developed country, I would definitely need someone with connections to get the license. Lastly would be the capital.

For the capital, I’ve come up with a list of people whom I can call up. So that part’s settled. I’ve also decided on the country and also know a couple of people whom I know have the power and connections to get almost anything they want. So what’s lacking now is someone with expertise but as a person who believes in divine intervention and believes that he’s doing God’s work, I just have a feeling that I will meet this person soon.

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Anyway nothing much has happened over the last 2 weeks. We are still overbought with low volume. Seems like this has been the case over the last 5 weeks and the market is waiting for something to move it in either direction. From my charts, the uptrend has ended last week but I think we should only see movement after this Wednesday.

Daily chart for the Dollar

The dollar dropped as expected and is starting to get oversold. There is a strong support around 81.6. We should see it stay above.

Daily chart for Gold

Gold is still forming a base with no breakouts either way. However my longer term charts is telling me that the chance of a breakout upwards is more likely.

Conrad and the WAT course

2012-08-05T07:49:00.003-07:00

Just found out that my blog was selected by Conrad's Appreciation post on Pattern Traders. So just want to reply to his post.

Conrad's WAT course was the defining course in my business & trading career. I started doing business 2005 when I was still in university. Went full scale into it in 2007 when I graduated. Took Conrad's course in early 2008 and it was from Conrad and his WAT course that I found out the scale of the market panic that was going to happen later that year. I dare say that if I had not known about Conrad and the stock market cycle, I would had went bust. Having the ability to make sense of stock charts and market cycles saved me from financial ruin. And I have Conrad to thank for that.

The WAT course is not just for stock traders. It is much much more than that. It is about making sense of the financial world and learning to play the money game. If you are interested in financial success, I would definitely recommend Conrad's WAT course.

Lonely New High – Market Analysis for July 30th by Singaporeseeds

2012-07-28T14:44:00.001-07:00

Daily chart for S&P

As I’ve mentioned in my previous post, the start of the downtrend will be when the MACD Histogram turns red. It looked like so until last Thursday when we moved higher on very light volume hence a lonely new high supported only by a few players. We are 2 days left before the end of the trading month and it is still green so I suppose this is not the time yet. In fact, it looks like we are going to make a new high for the year.

From what I see on my charts, as long as we stay above support at 1366, we will remain bullish. First support at 1366, then 1310.

Daily chart for the Dollar

The Dollar (UUP) failed to break resistance at 83.7 and made a failure movement. If it ends down on Monday, it will confirm the downtrend. First support at 81.6, then 79.

Daily chart for Gold

Gold broke the wedge that it had been in since December 2011. This is the start of the next leg up for gold. We might dip a bit over the next few days but we should see gold (GLD) rally over the next few weeks. Support at 156.73. Resistance at 164.5 and 174.

Daily chart for Crude Oil

Crude Oil (USO) just made a bullish set up. Confirmation will be when it breaks about the 50 day moving average at around 34.6. Before that happens, it is still technically bearish.

Just before all hell breaks loose - Market Analysis for July 24th 2012 by Singaporeseeds

2012-07-24T03:50:00.000-07:00

It’s been more than a month since I last wrote my market analysis. I went to Myanmar, got to know some really good friends, met up with many old ones and in the process, got to know myself a lot better. I was told this year will be a year of opportunities for me, but I would prefer to say that this is the year I broke my own limitations and realised there were actually nothing stopping me except for those in my own head. From the long cold journey to catch the aurora borealis in March to planning a retail outlet in Myanmar, all these were unimaginable 2 years back when I can barely go out of my house for more than an hour before I started feeling giddy and weak. Just last week, I recovered from gastric flu after a good night’s sleep when usually it would have taken me a week to do so.

As for the one month hiatus, it happened because I had to travel to Myanmar and without the readily available internet connection; I had to exit all my positions. But I was so busy over the next few weeks that I did not have time to look at the market until now. And luckily I did.

Monthly chart for S&P

The monthly chart for the market rarely forms bearish divergences but when it does, it goes down in a bad way. As you can see from the yellow trendlines on MACD, it had happened twice since 1996 and both times the market dropped for more than a year. Just based on chart symmetry, I can say that we will be going down to around 600 on the S&P in within a year’s time from now. Right now, the MACD histogram is shortening and when the month ends in a down red histogram, it will be the signal for the start of this year-long downtrend.

I’ve spent the whole of last week arranging to sell off all my stock certificates, unit trusts and accumulating cash on the sidelines. When the drop happens, property will also be hit and I’m waiting to scoop up at least one property in UK when that happens.

Anyway be prepared for another round of global recession. We are now halfway through a major 20 year sideways cycle that will end in 2019.

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

On daily charts, all three indexes are showing a bearish divergence. However we are now at a range of support levels and I’m looking for follow through after 2 down days. We should be around 1,286 by end of this week.

Daily chart for the Dollar

There is a bearish divergence for both dollar index futures and UUP. The dollar usually moves in the opposite direction of the market and with the very bearish outlook of the markets, I believe it should rally very soon. So I’ll be looking out for failure signal for this bearish divergence.

Daily chart for Gold

Gold seems to be forming a base around 1550 for a year now. I have a wedge pattern on daily with volatility decreasing. Whichever way it breaks out from, it’s going to be a big movement.

Radio check, over... 12 July 20012

2012-07-12T04:25:00.001-07:00

It's been a while, and during this time, there has been a nice dead cat bounce.

Today's post is about a possible end to this dead cat bounce rally as we are technically at a decision point turnaround.

/ES

The weekly ES (S&P500 futures) chart show a bounce off the moving averages and a possible failure to make a new high. What is not seen is a reversal of a trend IF the ES closes at its current level or below this Friday. Zooming into the daily ES chart, a uptrending support line is just about to be broken. Having a Sell Signal earlier in the week, with extended indicators as well as a potential bearish crossover of the moving averages, a break of this uptrending support line would see the daily 200 moving average be the next support test, which coincides with the previous low. Price action beyond this low by Friday means a break of the weekly and daily uptrend.
In essence, it technically looks like a turnaround point... however, we are looking for trigger events to bring this successfully into fruition and with much further downside.

/DX

The USD futures weekly and daily charts are showing a renewed interest in a rally. With a new recent high made, it indicates a continuation of the rally un USD. With this, a drop in equities (ES) is correlated. The recent run up in the USD is technically supported by indicator as well as moving averages and the market fueling of the EUR/USD dumping to all time lows

/GC

This is a favourite... cos it is a tad challenging. So many people I know are so bullish on Gold, that it is about time Gold does some distribution. The weekly gold futures chart show the recent Gold double top peaks that had prices test 1550 on many occasions. There seems to be a traiangle formation and indicators are showing a potential divergence. Yet, gold is not breakout and have been ranging over the ast few weeks. The daily charts show that clearly and uite differently show prices below the moving averages with undecided price action and technicals. All said, the range bounadries are closing in and a breakout or breakdown is due... watch for this.

/CL

Crude futures in recent weeks have had a tough time, and clearly breaking an uptrend. Expect a short term bounce and consolidating range between 80-90.

So there... things are at some decision point. My warnings of a fall in the markets since March 2012 had materialized in May 2012 and since the market has had a bounce... possibly a dead cat bounce. Between now and October, something might happen to pull the markets one way or another... something not seen. IF the markets rally, it is likely to overextend itself and not expecting it to be higher than the high at the beginning of the year. This may be a setup just like it was in July 2008 to September 2008. I am looking for the signs... it might do us all well to keep a look out too.

Fundamentally, everyone is yet again bailing and easing... this time, the markets aren't reacting with that much favour. One might ask oneself why so... and let's keep our eyes out for the answer.

Have a good weekend ahead!

The MadScientist

13 July 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

Cyprus Next in Line to Seek a Bailout - Market Analysis for week of June 4th 2012 by Singaporeseeds

2012-06-04T05:49:00.001-07:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

I wasn’t able to blog about the market last week as my in-laws were visiting. We did a road trip from London to Newtonmore in Scotland. We saw the British Dance Open in Blackpool and visited St Andrew’s Old Golf Course in Scotland. Also went to numerous sightseeing spots along the way. This Thursday, I’ll be going to Rekjavik, the Golden Circle Route and will be feasting on the delicious seafood in Iceland.

Anyway back to the markets….I saw an excellent short entry for the markets on Monday that I took just before I left on the road trip. The markets dropped like a brick over the week and we entered oversold conditions on Friday. We might bounce as far up as 1,345 over the next few days before continuing down to 1,150 for S&P. It is still a downtrend and any rallies will be better entries for shorting.

Recently there’s speculation that Cyprus may be seeking a bailout from the EU. This and a few other really pessimistic news coming from Europe should be enough to keep the market from rallying much.

http://www.marketwatch.com/story/cyprus-may-be-next-country-to-seek-bailout-2012-06-03?dist=beforebell

Daily chart for Gold

Quote from my market analysis 2 weeks ago:

“We had gold bounce off support at 1,546 last Thursday. I believe we should see gold test this support again within a week or two before beginning a new rally.“

Gold tested support over the following 2 weeks before making a huge one day rally spike last Friday. This is the beginning of the next rally for gold. I was unable to enter a long position as I was driving somewhere in between the Grampian Mountains gazing at the breathtaking views of the loch and glens of Scotland.

We should see gold rally over the next few days and then come back down to test channel support. That will be a good and safer entry for the next leg up.

What time is it? 1 June 2012

2012-06-01T02:50:00.001-07:00

I posted this on my FB Timeline yesterday...

"Ok... Haven't had proper time to blog it... But I am officially worried about the global markets. The price action and overall feel is really uncanny to a couple of years ago. When I get bad vibes, it usually means something.
All the pieces seem to be in place. The time for opportunity is upon us."

And what happened later in the trading session was a (dead cat bounce). Today, about 2 hours ago, the S&P500 started to drop and is currently down 15 points. While I expect a Friday in this climate to be down usually due to not wanting to hold over the weekend, this is more than that. And the usual first day of the month bullish tendency doesn't look anywhere near.

Well, it seems that I am not the only one feeling the bad vibes... Conrad also posted about a feeling of some geographical bad feeling... And only a few minutes into writing this blog post did he post a report on an earthquake in Tokyo.
See: https://www.facebook.com/conradalvinlim

Co-incidence?
I think not...
Some are more attuned to "energy" forces and if we listen hard enough, it's what others call a vibe.

Anyways, this is just one of those things that we independently felt and posted... What it means really will depend on you the reader to decipher. Point being, take heed.

The MadScientist

Downtrend Part One - Market Analysis for May 21st 2012 by Singaporeseeds

2012-05-20T10:06:00.001-07:00

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

What a week! The US market had its biggest drop since August last year. And according to my charts, it seems that this is only the beginning. We should get at least 2 waves down and we haven’t even completed the first down wave so this is going to be big. I believe support for this first down wave should start to come in around 1,280 on S&P futures. We are just 10 points from that so I believe we should get a bounce sometime next week. It’s going to get a lot more volatile and exciting as the roller coaster gains speed. The second wave should bring us down to around 1,150. On the Dow index, there’s a broadening wedge. This chart pattern indicates increasing volatility and usually does not end well. We may see a bounce to test the bottom of the trendline of the wedge at around 12580 but we are definitely going be end the month much lower than where we currently are now.

Daily chart of the VIX

Volatility had been increasing rapidly over the past few weeks. And as my trading buddy Chris had mentioned, we had begun a new volatility cycle sometime last month. And we should see increased volatility in the markets over the next 3 months.

Daily chart for Gold

We had gold bounce off support at 1,546 last Thursday. I believe we should see gold test this support again within a week or two before beginning a new rally.

What next week brings... 19 May 2012

2012-05-19T08:33:00.002-07:00

Oh what a week!
Global markets tanked in the midst of uncertainty and looks like there may be more to come.. the "Sell in May and Go Away" sure worked this round. Not to be too surprised as the market was way overbought as April ended.

So what does this week's technicals tell us to expect of next week?

/ES
The S&P weekly chart is clearly is not in a bullish trend any more. A sell signal and momentum confirmation is a good indicator of downside for the S&P500 futures over the next few weeks. The daily chart is a little extreme in the bearishness, being oversold and looks to bounce (dead cat) some time later next week, but not before a tad more downside early in the week.

VIX
The volatility cycle has started about 1.5 months ago, and this week confirms a breakout to the upside in the weekly chart. The daily chart is also a little extreme but looks to corroborate with the /ES analysis of spiking early next week, and then retracing later in the week.

/DX
The USD futures are clearly having a good rally. With higher USD, lower Crude, Gold and Equities. Need I say more?

/GC
Gold hit the support and buyers entered the market to give an awesome 2 day rally to recover the Gold price. However, from the weekly chart, I am a little cautious about this rally and rather wait out at this point. Gold buyers are acting on the Euro contagion uncertainty, but in a true panic, these will be washed out nonetheless. The weekly chart is confirming lower Gold prices, but the daily shows a bounce off 1540 support level.

AAPL
Again, featured as I am watching this closely, particularly after a parabolic run which was followed by a topping pattern. The weekly chart is favourable for further downside over the next two months. The daily chart is similar, even having moved significantly downwards over the past three weeks, it is still signalling an immediate downside into the coming Tuesday before a potential technical bounce is expected. Monday should open down for the morning session.
It's really bearish, and I suspect that Facebook breaking below $38 would pressure the NASDAQ to sell off.

DBA
Ah... my favourite, play for the next 10 years... Soft commodites. Despite a drop across almost all market sectors, DBA (Sugar, corn and wheat ETF amongst other things) actually had a buy signal on the daily chart. This follows a bullish divergence and a bounce off the extremes. The weekly chart has a bullish engulfing that is probable to work. This one is good for going long long term IMHO.

Be safe, have fun!

The MadScientist
19 May 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

Sell in May & Go Away - 17 May 2012

2012-05-17T09:57:00.002-07:00

A quick but very important note...

The Sell signals are firmed and it is obvioously clear that the rally has ended. It is time for a correction, one that it fulfilled by the events in Greece (and Europe), at least for now and the months to follow.

ES charts show confrimed sell signals that were given as early as 1.5 months ago. The topping pattern is completed and indicators are compellingly clear.

Find the charts in HERE

The volatility cycle is also starting, with Buy signals confrimed and the VIX has a breakout.

The USD futures (/DX) also clearly show a run into safe haven...

AAPL is a feature... this was a market leader as it accomplished a parabolic run, and now it is clearly correcting, as a leader on the downside as well.

Gold futures point to a make or break on support levels. This snapshot fo the chart was taken at midday yesterday, and today a very strong bounce is lifting gold futures more than $30. This one should be watched closely although I think that a panic would send gold sharply down before a real rally to >$2000.

This is the time to be really aware and perhaps take appropriate action where necessary sooner than later. It will be more volatile from now till September to October as I expect.

Be safe.

The MadScientist

17 May 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

2012-05-07T16:49:00.002-07:00

Daily chart for Dow

As you can see from Dow futures, there had been a false upside breakout. Price broke and made a new high on May 1st but promptly dropped and closed below the 50 day moving average. This coupled with a bearish divergence on RSI, Force index & a bearish trendline for RSI is a strong indicator that we are going down for the next few weeks. This bearish divergence is also present for S&P and NASDAQ. If we are going to continue to rally, all 3 indexes will have to move above their 50 day moving average (13,000 on Dow futures & 1380 for S&P) and stay above. See following for the daily charts for S&P and NASDAQ Daily chart for S&P

Daily chart for NASDAQ

Should the market fail to keep above these levels, we should see Dow falling to around 11,140 and S&P going to 1200. Daily chart for Crude Oil

Crude oil gapped and dropped last Wednesday when the market realised that the economy was not as resilient as they thought it was. UK was in a recession for the first 3 months of the year while Europe was still struggling with the European Union mess. Everyone who believed US was finally on its way to recovery realised that recovery still had a long way to go. Crude oil, which was one of the most important drivers of the economy, got a real 3 day beating. Daily chart for Gold

As for Gold, it had been building a bullish divergence for a couple of weeks now. It had been going sideways for 2 months now and I believe it should start a new rally in a few days.

The Bulls have left the farm! 8 May 2012

2012-05-07T10:02:00.004-07:00

Written on 6th May 2012 but due to technical fault, images were lost and post not updated.

About a month ago, there were clear sell signals in the S&P500 futures, /ES. This was highlighted in my last blog post, and then followed by a dead cat bounce. As of last Friday, after the non-farm payrolls, the bulls have little left and it is about time to watch the bears march in...

So far, the expectations have been playing out accordingly...

ES
The S&P500 futures weekly chart stalled in April, and last week ended with an indication of the start of a new trend... Down. The daily chart had a sell signal last Thursday, and Friday's close reaffirmed it. All other indicators are showing bearing inclinations, and price action targets the previous low as a break point for support. Once a lower low is registered over this week, a top is confirmed, and perhaps it would be a volatile ride down all the way till almost the end of this year.

VIX
The VIX charts are also reaffirming the ES outlook in that the next volatility cycle is upon us. A Buy signal on the weekly is valid and the daily breakout of the last high would confirm.

DX
The USD futures suggest USD upside in the near term. Hinting of lower equities prices.

GC
At this point, I want to specially mention one of two highlights. First being Gold futures. Regardless of what others say, I see that Gold is weakening and not ready for a rally. Strangely, a hint of a quick dip appears to be on the charts. This is observed in the weekly chart from the MACD, and the daily Buy signals that have been anulled.

AAPL
Apple is the other highlight... and this is one obvious tanker.
AAPL had gone parabolic and extreme. The stall was expected, and then we saw Sell signals which saw the daily price work its way to the 55EMA. Immediately after that, AAPL released its results and a huge gap opened. There was no "gap and run" and instead stalled. Then Sell signals appeared which coincided with the weekly trends. Last Friday clearly indicates that AAPL is heading much more down... next stop at 535.

Clearly, I have positions in AAPL.
And also see what one of my teachers wrote about AAPL a couple of days after position was taken:
http://www.marketwatch.com/story/apple-a-bearish-one-day-wonder-2012-05-07

Trade well and take care!

The MadScientist

8 May 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

Beware - 29 March 2012

2012-03-29T09:27:00.002-07:00

As I write this, our system Sell signals were given last week, and today looks very much like another Sell signal (even at midday). Last's week's signals were not violated and a failed new high closing together with technicals suggest a pullback in the cards, over the next week... albeit a slight relief from the beginning of the month rallies, but at this point, looks like a target of 1260 or a breakout over 1402 on the ES.

Click on image to enlarge.

The MadScientist

29 March 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

Glass ceiling - 27 February 2012

2012-02-27T08:30:00.002-08:00

In an analysis done in the late morning of Monday's trading, here is what I am seeing from the S&P500 futures (ES charts)...

The weekly chart (left) has perfected a Sell Setup and hit resistance outlined by July 2011 high. The past two weeks is basically a stall, rather than a pause, and the Force Index is hinting that the rally in recent weeks is not an accumulation phase. Given that the weekly price level is exceeding the maniac levels. This is the first warning that the next couple of months may see a good retracement/correction... now, we just need a reason to start it all rolling, something that should be within the next couple of weeks. (Watch Greece Lightning in mid-March!)
The daily chart (top right) is showing an obvious bearish divergence amid a stall. The daily chart close up (bottom panel) has a new Buy Setup that is just initiated, and needs to end below 1360 today to continue its reversal, making a breakdown of 1350 very highly probably this week. It could well exhaustively break above 1360 and return through the range to breakdown as well. For now, the downside risk is much greater than 2 weeks ago.

I'd leave you with these words: CAUTION x 2

The MadScientist

27 February 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 day after Valentines - February 15, 2012

2012-02-15T07:08:00.001-08:00

AH!
It seems that when you rock the boat so hard, you tend to be balancing for your dear life quite a bit.
And that is what has been happening to me for the past 2 months or so... it's not been an easy task to balance the extremes of life's journey, but I am glad I am doing ok for now.

I am looking forward to more refinement and streamlining to make things less technical, and more accurate in 2012. This would be in line with the other parts of my career that I am pursing.
I am good at what I do... and I want to be better!

So, what has been happening since the beginning of the year? A nice rally is what it is, if you missed it. Which is kinda tough to do as the rally has turned the tables on last August's rout... or has it?

Again, I find myself available to look at the charts, just before a decisive action is about to take place...

ES futures (S&P500 E-mini futures)

From the chart below, the year started with an impressive rally, and it turned the bearish outlook around having tested and failed to bread the weekly 200MA. The current rally, however, looks tired and near exhaustion. Recent high probability daily sell signals were voided and technical indicators were not too excitable following the mania in the prices just now. Notice that that candles are grey in colour? I am waiting for an impending sell signal, which should appear some time next week, perhaps after an exhaustion spike later this week, if at all. The charts are telling me something: CAUTION.

DX futures (USD futures)

The USD futures are longer term bearish, but weekly prices have been well supported. The daily chart clearly sprung a buy signal, which is suggestive of lower equities in the near term. What I do not see is the news that would spark this USD rally... not yet at least. Perhaps the Greek deadline of 25th March might be it, or the mess leading to the muddle through on 25th March 2012 will contribute?

VXX (VIX futures ETF)

Volatility had been falling well for the past 1.5 months, and the cycle is about to reverse. The weekly charts are stalling and the daily chart has buy signals. It appears to be a ripe time for an increase in volatility, and if so, this warns of an exhausted ES rally into correction phase.

TLT (Bond ETF)

Money hasn't really been pouring into the bond market since late last year. Daily moving average supports have been tested and buy signals given. This suggests a possible start of a bond rally if supports hold.

GC (Gold futures)

The gold futures weekly chart is at a downtrending channel resistance, with less than favourable candlesticks over the last 3 weeks. Weekly indicators look weak, and the daily chart has given sell signals with accompanying bearishly looking technical indicators.

Overall, while the longer term picture does seem a tad bullish, the immediate term is suggesting a bearish/corrective outlook. How this correction develops and its fundamental reason for correcting may set the backdrop for months to come. I'd be slightly bearish and very cautious as it is obvious that there is compelling confluence between the equity-USD-volatility-Gold-bond markets, all which point to a turning point and a decent correction in equities.

The MadScientist

15 February 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

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.