ChartsEdge equities (trader confidence) map for 12/3

Today ChartsEdge is making available their TCI graph. Their BP and Pattern Recognition maps are at their subscriber site- I can tell you they don't match each other.... You should be re-checking their weekly chart anyway each day (use ChartsEdge weekly" label to locate conveniently); so take that into consideration, along with the levels we've been watching so closely. I mentioned last night about leaning long at the end of the day so I'll be watching for a TMAR moment, even if it's only a day's trade and will see if damage is done that affects swing positions on this Thursday (since the dollar is toying at the edge and equities action is choppy and uneven). Each trader has their own style and timeframe of course, and I know that many do like me, with some core swings and plenty of cash devoted to intraday trading; I add on hedges as I see fit for the movements, but there are times when overall I'm positioned more bearish. Over 1112 I'm feeling more positive but if and when we see 1122 I'm cautious again (and losing 1100/1090 is more bearish again IMO for the swings).

Well without further ado, I'll reserve any more comments for the day to my tweets, and here's ChartsEdge's contribution for the day from their http://www.chartsedge.com/wp/ site (thanks again, Mike and ChartsEdge!):

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TCI chart for Dec03

Posted: December 3rd, 2009 | Author: Mike Korell |

Filed under:One-Day Market Map | No Comments »

Achey fake-y breaky - or prelude to SPX trying its own 50% retrace

Remember what I posted yesterday about breakout or fakeout? Today traders fished out those stops at SPX 1114, sending it briefly to 1116 before it swooned negative, then barely kep balance between 1107 and 1112. Just enough to avoid immediate revolt among bulls, without looking encouraging either. You can see below, the dollar (inverse of the euro, FXE) didn't make a new extreme and actually helped put a damper on the action.

Poking over 1114 "should" send the SPX to test 1122 so it can join other indices that made their 50% retracements back to 2007. We'll have to wait and see. I'm no cycles expert, and even my EW skills are getting taxed. Tony's keeping a sort of watch with the a/B count so for us, we'll just keep watching the levels for now!

Update: the A/D moved up (and TRIN's 10-day MA stayed above 1.20 thus technically oversold), and Terry Laundry's update tonight states it didn't break out yet but he's expecting it will. Futures are up now, which is consistent with more upside - but we'll just have to see what tomorrow brings. So far I've adjusted to the idea of switching this week from short to long bias with cash on hand and will see if SPX can get to 1122 with or without the dollar strengthening - and see how SPX (and gold) react around these levels).

ChartsEdge intraday cycle forecast map for 12/2

Here's today's intraday BP map from ChartsEdge Daily Maps (remember, their Pattern Recognition intraday map for today is at their subscriber site (and their two types of intraday maps, plus their weekly cycle forecasts (use "ChartsEdge weekly" label), gain predictive power when they all look similar) - follow links on their site for details, link above and at right):
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ChartsEdge BP chart for Dec02

Posted: December 2nd, 2009 | Author: Mike Korell |

Filed under:One-Day Market Map | No Comments »

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Thanks once again, Mike and ChartsEdge! Folks, the markets' movements have got to have analysts making their lists and checking them twice - trying to find out if the rest of December will be naughty or nice! The SPX has just been stymied so far trying to get to its 50% retrace at 1122, with the 1112 level proving so difficult so far. As of yesterday traders were thinking that a lot of buy and buy-to-cover stops could be taken out, just above the prior highs, at 1114. We may see today if that happens. Gold pushed yet higher and as my post last night reviewed, we're in an area where traders have to be cautious between a breakout or a fake-out. Keeps us on our toes! There's news in a minor headline at Bloomberg that GS is saying funds will "go east" for 20 years and you gotta wonder if they mean literally around the world - believable - or sideways in price, which could be the case for some but there are reasons to expect some sectors (real estate especially) to have more downward volatility, while others will have more swings that can include an important high in 2012 or 2016 per Armstrong (reference in last night's post, I'm leaning toward 2016).

Focusing on the immediate future we've got to see if 1112 is decisively taken out, pointing toward 1122 or maybe higher (1145,1150,1179); or does this upwave chop and falter out after some more overlapping small swings? Support should reside at 1107, with 1100, 1097, and 1092 if really needed (yuck if one's long), with the idea that 1107 should point up to 1112 and above. It's only Wednesday so the buy-on-Monday approach can't be worried at this point. So, careful out there, and happy market navigating!

Deciphering some clues on whether markets are breaking or faking, for making bulls' or bears' fears

Neither bulls nor bears always get what they want, or can avoid what they fear. Did today represent a last gasp or the start of a new breakout? Thinking on this made me also recall one of Ray Merriman's comments that the markets would likely make some surprise moves that might seem like a breakout or breakdown, then turn out to be faking instead of breaking. But which is it? Meanwhile on the bigger picture, trader Joe pointed out that Martin Armstrong has issued a new newsletter 11/26/09, "The Sum of All Fears: A Great Depression" at http://www.martinarmstrong.org/files/The-Sum-of-All-Fears-A-Great-Depression-11-26-09.pdf. Based on the cover note you might want to download and save your own .pdf copy of it right away.... One of the points he makes is that the stock market high should be in 2012 or 2016. That should bust some bears, representing their worst fear - since many bears project lows for those time periods! While I've had a hard time projecting a final high for that time frame, that's based on my concerns about time frame and maybe I need to review (and could see it more easily for 2016 I'll admit). Overall that's compatible in my view with the idea of the Elliott Wave (EW/OEW) flat, depending in part on whether we count the 2007 high as a B or a large III and how to count the waves down to the March low. Tying into T Theory is another matter too. Would fit kinda neatly if there's a low in 2010 or 2011 and then allow five years for a final wave "V" high. Can't say I've got "the answer" yet on what path the SPX will take but it's fascinating to work out.

Do read Armstrong's newsletter if for no other reason than to see his forecast for real estate (very bearish!), and explanation of wealth shifting from non-movable assets to movable assets.

Meantime below are charts starting with daily and weekly showing the US dollar index ($USD) overlaying gold (in gold color of course) and the Dow Jones Industrial Average equities index (in blue). You can see that gold vaulted to get just beyond the $1192 level, while the dollar and Dow edged up so close to their prior extremes that they look like they want to push farther. But is that the fake-out? Or was it that major extreme last Thursday when US markets were closed and now the markets seem acting as though nothing happened? Near-term, we just work with the levels (and thanks to Andre, Tony and Terry who provide great input in their respective analyses updates!). Terry Laundry tonight agrees there isn't a breakout confirmed but takes note that the A/D edged higher, and also notes the obvious monthly cycle currently that suggests a high in mid-December. (Locate his T Theory site in the list at right, then navigate to his daily update page).

So let's let the levels tell us whether, or not, the markets haven't finished the rally yet. As close as they edged today, they didn't confirm. The shape of the SPX and Dow right now remind me of another boxy top made by oil when it topped, but given the TRIN and CMF money flow as I showed in the prior post earlier this evening - I'm just not ready to bet that the indices have quite finished the top yet. So we'll give it at least another couple of days to reveal.

Swing traders mostly sidelined as active traders ride the choppy range in equities

Most swing traders are sidelined by the choppy range-bound trade in the SPX and other equities markets right now. While banks, GS and other financials remain in the saggy category (possible 4th wave for GS not complete), leading equity indices have been saying they're not done yet! Tony Caldaro (at his OEW site, in list at right) has been pointing out the trend is still up, and doesn't change unless and until a trend change is confirmed. How true!! Recently I dud a listing of bullish and bearish factors - looking at my SPX and TRIN daily charts below, you can see 2 or 3 bullish ones still: good volumes on the past couple of up days including today; CMF (money flow) went positive recently and continued increasing today; TRIN's 10-day moving average still well above 1.20 meaning the market is technically oversold! You get the feeling that between the consolidation movement sideways, and the dive last week when the regular U.S. markets weren't open, some big players reloaded some hefty clips. But as traders we must take it as it comes.

You'll see on Tony's hourly SPX chart below (thanks Tony!) he moved the a/B designation above today. I don't think we can read that as saying "it's finally done" - just that it didn't finish previously so swing traders must remain on watch for a sign of when it will be done. Tony's comments in his update day to look for a breakout above the 1107 pivot, meaning above 1112/1113 for practical purposes. Or a breakdown under 1090.

Well I can't guarantee anything but between the TRIN, CMF, price movement and ChartsEdge weekly, I get the impression the market wants to test the bears' patience some more with higher prices. We'll also want to see if Terry Laundry's advance/decline indicator is giving the breakout he wants for a bullish T; check his site (also listed at right) for any word he may post on that tonight in his daily updates area.

ChartsEdge (US) equities forecast maps for 12/1

Daily Charts for Dec01

Posted: December 1st, 2009 | Author: Mike Korell | Filed under:One-Day Market Map | No Comments »

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Readers should remember that the ChartsEdge weekly forecast is accompanied by the two types of intraday forecast maps made available by ChartsEdge Daily Maps. Yesterday they added an update of their new Confidence Chart suggesting a bottom being made. Now we can't expect just these to confirm a new trend upward on the daily and weekly charts - for that, we need to see the SPX exceed key levels like 1100, 1107 and ultimately 1113 (which would start pointing to 1122 and possibly above). It will also be more telling if we see indices like the RUT 2000 do anything more than a partial bounce (i.e., new high or not). We'll be able to see at the end of the day how much lift this gives to the indices, as well as dollar and gold effects. Gold is already higher again so we'll see what happens after it spends a full day over $1192, but if the dollar makes a new low that will be very telling. Meanwhile, remember the ChartsEdge weekly and other indications (which I'll review at UBT from a big-picture basis) that equities can be cycling higher after today. (Thanks again, Mike and ChartsEdge!)
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US Treasuries and TLT rise in resumed uptrend -

US Treasury bond prices rose instead of downtrending - so it looks like they are resuming their prior uptrend. Last week I tweeted about dumping my TBT because TLT was moving back over its 50-day MA. That suggests that these bonds will still try upward for perhaps a 50% retrace of their drop. That suggests $USB to $127.50, and TLT to and above $101. I also noticed that the selling volumes in TLT off the high weren't so massive - another reason to give these bonds benefit of the doubt here, above their 200-day MA now too.

UNG appears to need more consolidation and buy volume, but can be traded cautiously away from this level

Natural gas dropped today and I'm sure many are wondering if it was a wave 2 pullback to start buying. The ETF, UNG, doesn't show great buying volume on the recent bounce, followed by lighter volume on the pullback as typically needed for a swing trade reversal pattern. So I hesitate to recommend buying even a move higher from here, because it doesn't look promising. Still it's possible to buy a move up from here, just keeping a stop and honoring it to minimize loss if it falls back again. It's traced out a wide channel on its downtrend - a move up to $10.50 would be about at the upper bound of that. I can't rule out that it won't drop in another (final) wave down, even if it does test a bit higher first. Part of the reason I day that is because of the $NatGas chart (also below).

The $NatGas chart (which moves differently from UNG, so should be analyzed on its own - but should be referenced) is consolidating from its smart move off its low. It doesn't necessarily have to drop lower or pullback more. But it can, since the correction doesn't look like much yet. It had already poked up to price resistance and moving average resistance, so it wouldn't be surprising for the $NatGas pullback to be only partway through an ABC correction.

Maybe the best way to sum this up is, that it can be traded in whichever direction it selects in a day or so, but with more skepticism for UNG on the long side unless the technicals substantially improve. That approach may mean different things depending on whether you're already in a position and considering an option hedge, or setting up a straddle or other options play. Otherwise, those interested in buying UNG should use good stop protection, or instead, might want to wait a bit longer for a more promising entry. I've been pounding the table about buying volumes for weeks now - and that's still what's needed!

Stock markets show they're not ready to roll over yet, as financials retest upward

Stock markets were able fo find support today, and even get a boost from the favorable Chicago PMI report to move back above SPX 1092 to retest 1097. The charts below show that the financials which supposedly led the rally today were actually retesting back up to technical levels which remain resistance for now. The NYAD moved positive of course, but not enough to show a breakout. So the markets have hung in for another day, trying to bide time for a possible re-testing of upper resistance such as SPX 1100. That may happen, will see, but also may need more "downtime" first. That doesn't necessarily mean a huge drop. Just as 1100 is resistance, SPX is getting support above 1082, and it would take a break of 1082 to get more bearish. Instead, it's looking like a sideways consolidation or churning and for a trend trade needs to break above or below. Meantime, daytraders are making money on both sides as the SPX moves up and down in the current range.

Technically, with the higher volumes that came in today, the SPX got support above the 1084 level that's important now, and 1087, which happens now to be the area of the Bollinger Band (BB) midline. And it halted at the 1097 level which now happens to be the 13-day exponential moving average (EMA). This gives added reason to get more bearish if the SPX moves under 1082 because that would also be a loss of the BB midline. From an Elliott Wave perspective, I'm finding the moves to be too choppy to give me a satisfying wave count. So I'm tempted to think if terms of an extended fourth-wave consolidation but won't get wedded to the idea.

I've included below the hourly charts of Goldman Sachs and the XLF (also a daily chart of the XLF). A positive way of looking at this is that they didn't drop today, and they could be building a base. Actually we've got the idea that GS may be working on a 4th wave consolidation so that idea of a base could be right ... but kinda think GS needs to test down to the $150's first. That's one reason we weren't tempted to buy as it and XLF flicked up into MA and BB resistance today.

The second chart below is an hourly chart of FXE, the ETF that tracks the euro. It's moving inversely to the $USD dollar index. You can see the break where the euro dropped sharply but today recovered, though not all the way. This is certainly an important factor we and others are watching closely because currently, dollar weakness still favors equities.

I reviewed an interesting analysis today saying that the dollar won't always move inverse to commodities. It reminds me of the point that it won't always move inverse to equities either. But today the inverse correlation seems intact still.