UnBiasedTrading (TM) - NOW AT CHARTLINES.COM

ChartsEdge Pattern Recognition posted at ChartLines.com today

2010-02-24T07:48:00.002-05:00

Dear readers, for anyone who's just finding out - I (Ariel) have moved my site and blog to my new site name, "ChartLines". It's at www.Chartlines.com, currently at the blogspot that points to. I've posted ChartsEdge there this morning. Still don't have time to go into more detail - will when I can! Meantime, "see you" at ChartLines!

ChartsEdge Pattern Recognition map for equities 2/23 at new ChartLines

2010-02-23T07:11:00.003-05:00

Folks - go to my new ChartLines site to see where I've posted today's Pattern Recognition map from ChartsEdge. It was time for me to shift my site over to a name that's more descriptive (not defining in the negative - although the site remains very dedicated to unbiased trading!). All the content and features are there, and that format is the same, though brightened up a bit, and better logo. (I've taken reader comments into consideration on this!)

So come join us over at Chart Lines!

2010-02-21T19:05:00.004-05:00

Dear readers - normally I post here Andre Gratian's Turning Points weekend updates, such as report today on the SPX technical analysis, channel trendlines and cycles and what he's expecting for the upcoming time frames. I did post that at the blog under the new ChartsLine name. And decided I should direct you there, to help move along the transition.

So please go there to see that and start participating in the transition of this blog to my new site with the new name. All the historical posts, sites list, etc., are all in place there. And I'm going to start tweeting under the ChartLines identity at Twitter too! Here's the info to find it:

Announcement - I (Ariel) am moving this blog over to www.ChartLines.com under the new name, "ChartLines" (tm). For now, it will point to http://chartlinestrading.blogspot.com and you can find everything there.

ChartsEdge TCI (Trader Confidence Index) and comments

2010-02-21T18:50:00.002-05:00

Dear readers - normally I post here Mike Korell's ChartsEdge updates, such as his comments today about his TCI and what he's expecting for Monday. I did post that at the blog under the new ChartsLine name. And decided I should direct you there, to help move along the transition.

So, of course you can find Mike's public post at his ChartsEdge Daily Maps site (see list at right). Or just go to my new site to see that - here's the info:

Announcement - I (Ariel) am moving this blog over to www.ChartLines.com under the new name, "ChartLines" (tm). For now, it will point to http://chartlinestrading.blogspot.com and you can find everything there.

ChartsEdge week-ahead cycle forecasts for equities and gold, 2/22 week

2010-02-21T11:33:00.003-05:00

FIRST a personal announcement - I (Ariel) am making transitions that include moving this blog over to www.ChartLines.com under the new name, "ChartLines" (tm). For now, it will point to http://chartlinestrading.blogspot.com and I've started dual publishing to there, this weekend.

AND NOW AS USUAL:

Below are the week-ahead cycle-based forecasts from ChartsEdge. And thanks again to Mike Korell, who's the fellow doing ChartsEdge - and has also provided some additional comments at his ChartsEdge Daily Maps page (link with his comment below) about what his various indicators are showing (based on his Trader Confidence Index, BP and other cycle-based charting). Anyway, here's what Mike Korell is saying and showing this weekend:
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Volumes suggest traders betting currencies turn - just be sure it's true

2010-02-21T09:42:00.002-05:00

Volumes in the euro especially, and somewhat in the yen, suggest that currency traders are looking for a turn to occur. Carry trades can occur using whichever currency they think will weaken and provide lower borrowing rates. But that seems a good question right now - of course, it's all relative, including to the calculation reward for investing in the "riskier asset". Let's start with the US dollar index. Friday, it finally tagged the 80.80 level as I'd stated it was likely to need to do. That represents the ABC zigzag, C=A symmetry target. So there's a possibility it's "done" and readying to turn. The euro chart below (FXE) says the same thing - it slightly exceeded its own symmetry target but probably okay on that score as it counterbalanced the dollar index reaching its own. And look at the FXE volume when that happened on Friday!

The huge volume suggests many traders covered shorts and/or capitulated - probably both. With the positive divergence on the FXE chart, it's very reasonable to think the euro/dollar recent trends are about to change. What about the yen (FXY)? Its volumes ticked up modestly as it tested close to its 200 dma. Given it could be a higher low (as the dollar/yen pair tested close to the 92 revised target of Goldman Sachs), this can be seen as an orderly though deep pullback from a leading diagonal that still propels the yen (FXY) to new highs.

Slam-dunk? Not necessarily. Be certain of two things (at least). One, the the US dollar index doesn't want to go to the 50% retracement at 81.90-ish (virtually 82). Also, that all this really DOES turn. The alternatives include that the euro and dollar change from being zigzag pullbacks to further trending - more dollar up, more euro down. This may be less likely, than just having the trend change turn equire more time and turbulence.

Weekend review of analysts around the web discussing the bullish and bearish aspects of the markets

2010-02-20T21:09:00.002-05:00

It's time for another weekend roundup looking at what other analysts are saying on different aspects of the markets' technical and sentiment-based outlook! We'll include some of our usual favorites we recommend to readers, plus some others that look good:

Be sure as usual to read Terry Laundry's Saturday update at T Theory Foundation: T Theory Calculations, Daily Updates, Charts and Data (2/20), at http://www.ttheoryfoundation.org/t-theory-calculations.html. Click to see his chart and discussions of course - here's a quote:

The small hike in the discount rate didn't prove a problem and the AD Oscillator continues its strong uptrend from the W Bottom.
It is approaching an overbought state but it usually turns toppy well before the market gets into any serious trouble.
I will make the next post here early Tuesday Morning. On Sunday I will discuss a 10 year chart history for Gold and Interest rate trends at See Recent Posts at bottom of page. For a full review of all posts since January 5 2010 go this link then go to the bottom of the page and scroll back in time: T Theory Foundation

Safe Haven | Technical Market Report by Mike Burk (2/20), at http://www.safehaven.com/article-15866.htm.

Schaeffer's Monday Morning Outlook: Traders Remain Wary Despite Rally; SPX Reclaims 1,100. Here's their intro quote:

The short week got off to a rollicking good start -- the Dow Jones Industrial Average surged nearly 170 points on Tuesday -- and the major market indexes spent the rest of the week padding those gains. The Dow is now just shy of breakeven for the year to date. Looking ahead to next week, Todd Salamone, Senior Vice President of Research, notes the relatively low-key response to the Federal Reserve's surprise discount rate hike, and concludes that traders are still living in a low-expectation environment. Still, Todd thinks we might be in for a short period of consolidation following the recent rally. Next, Senior Quantitative Analyst Rocky White explains the Moving Average Convergence Divergence (MACD), a popular technical analysis tool. One day last week, more than 500 stocks were showing a MACD buy signal. That's happened only four times in recent years. Finally, we wrap up with a look at some key economic and earnings reports slated for release this week.

Carl Swenlin's Decision Point®: Chart Spotlight (2/19/2010), http://www.decisionpoint.com/ChartSpotliteFiles/100219_cspot.html. Here's a quote from one part, but check out his charts, they're worth a look:

Our market posture for the S&P 500 remains neutral; however, our Thrust/Trend Model (T/TM) could generate a buy signal if positive price action can continue and the Percent Buy Index (PBI) can cross up through its 32-EMA.

Marty Chenard's 2/18 piece at Safe Haven | Today's Current Accumulation-Distribution Study..., http://www.safehaven.com/article-15848.htm.

Thoughtful swing trader views, in Steven Cohen or Trader A?; Lessons Learned From Tim Knight | Charts and Coffee (2/19), http://www.chartsandcoffee.com/2010/02/steven-cohen-or-trader-a-lessons-learned-from-tim-knight/.

SentimenTrader - Independent Sentiment Research for the Stock and Bond Markets- Here's their gauge as it appears today, 2/20, at http://www.sentimentrader.com/:

INVESTOR SENTIMENT
Click here for more information

Jesse's Café Américain: Gold and Silver Weekly Charts - Explosive Silver Situation Intensifies (2/19), at http://jessescrossroadscafe.blogspot.com/2010/02/gold-and-silver-weekly-charts.html.

Enjoy listening (but guard against getting overly bearish) - Financial News, Economic Education, Analysis & Data - FinancialSense.com, today at http://www.financialsense.com/

Today's first hour of their audio features:

Carl Swenlin (Technical) President Decision Point Topic: Market Correction Further to Go | Marc Faber Editor Gloom Boom & Doom Report Topic: Stock Market, Gold, Sovereign Debt & Inflation

The Technical Take: Investor Sentiment: Bounce Mode - By Guy Lerner
(2/20), at http://thetechnicaltakedotcom.blogspot.com/2010/02/investor-sentiment-bounce-mode.html.

Market Observation - Brian Pretti 02.19.2010: Is the Glass (Steagall) Really Half Empty? (2/20), http://www.financialsense.com/Market/wrapup.htm.

Bull v. Bear decision point facing stock markets can be analyzed with Objective Elliott Wave: Tony Caldaro's weekend update

2010-02-20T12:25:00.000-05:00

Once again the stock markets are at a point where technicians are checking (and debating) whether this is really a bull or bear market. Insights to help discern the difference can cone from Tlliott Qave analysis when it's applied objectively. The Elliott Wave count of the equities markets, typically on the S&P 500 index, is always interesting to puzzle out, and always much appreciated when it's tracked and updated objectively. Of course I'm thinking of Tony Caldaro and his Objective Elliott Wave (and his site is always in the list at right). Here's this weekend's update from Tony's Elliott Wave Lives On site:
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the Elliott Wave Lives On
by Tony Caldaro
February 20, 2010

weekend update

REVIEW

This week the FED increased the discount rate for the first time since Jun 06. This may have been in response to the rising inflationary pressures reported this week, and a message to the banks to increase lending after reports of record declines in lending. Economic reports, in general, were positive. Home starts/builders index was higher, industrial production and leading indicators were higher, and the Philly FED improved. On the inflation front, both the PPI and CPI rose along with import prices. For the week the SPX/DOW were +3.05%, and the NDX/NAZ were +2.65%. The Asian markets were flat, but European markets were +4.4%, and the Commodity equity markets were +3.1%. Bonds were -0.8%, Crude gained 7.5%, Gold rose 2.4% and the USD was +0.3%. Home prices/sales, plus the Q4 GDP revision highlight the next week.

LONG TERM
We start this weekly review referencing the two special reports posted this week: GSC revisited and the Holiday update. Then we'll try to reference the past and relate it to the present and future. In the "GSC revisited" report posted on sunday we examined the theory of a Grand Supercycle and how it relates history. We suggested, based upon an economic cycle in the emerging US economy, that the GSC began early in the 18th century and not with the official Declaration of Independence in 1776. Under this scenario, the US would have experienced five Supercycles (SC) between 1700 and 1929. The two SC peaks, SC1 1770 and SC3 1857, were followed by two major local wars, the American revolution and the American civil war. In each instance the economy contracted about 10% to 20%. When SC5 completed in 1929, however, it completed a much greater cycle: the multi-century GSC. The decline that followed was enormous. The economy dropped nearly 50%, the stock market dropped 89% in only 34 months, and the economic collapse resulted in a major worldwide war. While the US stock market took only three years to bottom after a GSC top. The English FTSE GSC top occurred earlier in 1900 and lasted until 1940, forty years. We also noted some additional technical comparisons in the GSC report. That depression was worldwide.

From 1932 forward the US stock market, as measured by the DOW, progressed in a five wave sequence which is familar to most you. Cycle wave 1 1937, Cycle wave 2 1942, Cycle wave 3 1973, Cycle wave 4 1974 and Cycle wave 5 2007. Some EW pundits have counted the 2000 top, Primary wave III, as the end the of Cycle wave 5. We, however, tracked the five wave bull market from 2002-2007 right on this blog. The charts are still posted in the chartlink. Cycle wave 5 completed in 2007. After it completed it became obvious that it was a very significant top. More aligned with a Supercycle top than just another Cycle wave top. Now, we are fairly certain that it was a Supercycle top, and nothing like the GSC top and collapse from 1929-1932. This revelation has some current and future implications. First, and foremost, we can no longer compare this SC bear market to the GSC 1929-1932 bear market. We had been expecting alternating waves. That expectation no longer applies. Second, we had been expecting a prolonged bear market, similar to 1937-1942, to accomodate the alternation. That no longer applies. Third, we were expecting a retest of the 2009 lows or lower to complete the bear market. That is still possible but we now have to look at other possibilities as well. This bear market is nothing like the depressionary 1929-1932. In fact, neither China nor India even entered into a recession during this worldwide economic contraction.

After tracking the five wave bull market from 2002-2007 we turned long term bearish in early Jan 08. We expected an ABC bear market. All bear markets unfold in ABC's. As the waves unfolded we observed five waves down into Mar 08, a three wave rally, and then another five waves down into Mar 09 to complete a three wave zigzag. At this point we labeled the completed wave structure as Primary wave A and suggested a 50% retracement rally would be next. A few days after the low we projected a target of SPX 1122 (50%) within the range of OEW 1107 and 1179 pivots. In essence we had turned medium term bullish, but remained long term bearish under the wave alternation scenario. The market rallied in three waves, for ten months, and topped at SPX 1150 in Jan 09. Just before the top we had a long term uptrend confirmation from our quantitative OEW. These signals are quite reliable. While some of our other indicators were also flashing bullish signals we made the decision to track the next downtrend carefully. Since there were only a three waves up from the Mar 09 low, and the market had followed our expectations. A resumption of the bear market would be signalled during the next downtrend, with impulsive waves to the downside. Thus far, that has not occurred.

This downtrend is now about four weeks old and the waves thus far look corrective, not impulsive. Corrective downtrends occur during bull markets, or bear market rallies, not in the resumption of bear markets. Since we no longer require wave alternation between the 1929-1932 bear market and present. And, we no longer require anything more to the downside than what has already occurred, see "Holiday update". We can technically count the decline from Oct 07 to Mar 09 as the entire three wave bear market, if we can count the two uptrends from Mar 09 as impulse waves. In the SPX this is quite difficult to do with out major creative wave counting. In the DOW, however, it is not that difficult, and we posted a bullish count on the charts. In review of some of the other technicals we follow. We observe that, unlike the US, and we posted this in early Jan 10, nine of the thirteen foreign markets we follow already have bullish wave structures. At the Mar 09 low this market was the most oversold it has been since the early 1930's. Plus, the last factor we noticed this week was the four-year cycle.

There have only been three times when OEW has confirmed a long term uptrend in a four-year cycle low year: 1950, 1954 and 1958. All three led to multi-year bull markets. On each occassion the four-year cycle low arrived one year early. Prior to that it was in sync with the waves, and in 1962 it synched up again. The 1950's, btw, was also a time when Debt/GDP was over 100%, and the FED fixed rates low while allowing inflation to aide economic growth. It appears in many ways we've been through the current scenario, with some variations, before.

Let's sum this up. We currently have two potential counts. The one we have been posting since early 2008: Oct 07-Mar 09 Primary wave A, Mar 09-Jan 10 Primary B, and Primary C now underway. This is still possible, since we are still in a downtrend, and there are only three waves up from Mar 09. The second count arises after all the recent research into GSC/SC waves, cycles, etc. It suggests, and is posted on the DOW charts, that the bear market ended in Mar 09. The anticipated 50% retracement rally, was actually the start of a new 70-80 year SC bull market. The three waves up, thus far, are only Major waves 1-2-3 of Primary wave I of Cycle wave I of this bull market. Should the current downtrend conclude with alternation with the Jun/July downtrend, and hold the 10% correction threehold, it will be labeled Major wave 4 with Major wave 5 to follow. For now we'll continue with the SPX count as the primary count until this downtrend concludes.

MEDIUM TERM: downtrend
After a six month uptrend July 09-Jan 10 the market entered a downtrend on Jan 19th. This, we anticipated at the time, was the most important downtrend since the final downtrend into the Mar 09 low. If it was impulsive we could assume the bear market has resumed. If not, the potential was there for higher highs in the months ahead. On the hourly charts we could observe impulsive waves from SPX 1150-1072, a rally to 1105, then another impulsive wave to 1045. We counted it as a i-ii-1. However, on the OEW charts, we noted that the decline really didn't look that impulsive at all. It looked more like a zigzag than a i-ii-1. As the market started to rally from the SPX 1045 low, it continued to retrace more and more of Minor wave 1. By this thursday it had retraced that entire decline when the rally hit 1108. This increased the expectations that a zigzag had formed between SPX 1150 and 1045. We are also considering an additional count of a Int. wave i and an irregular Int. wave ii. Zigzags are formed by two implusive waves with a counter rally in between. They are not impulsive waves because impulsive wave require five internal waves not three. This downtrend then is not what was expected to resume the bear market. It looks more like a correction in an ongoing bull market.

SHORT TERM
Support for the SPX is at 1107 and then 1090, with resistance at 1133 and then 1168. Short term momentum is displaying a negative divergence on the hourly charts and is a bit overbought on the daily charts. The decline from SPX 1150 to 1045 was 105 points and 9.1%. The decline in the DOW was 8.3%. We noted this near the lows because we had observed that at no time during the 2002-2007 bull market had the DOW corrected more than 10%. During the bear market that 10% threshold was broken quite early. Yet since March 09 the only correction prior to this was Jun/July: SPX -9.1% and DOW -8.9%. From the Feb 5th low at SPX 1045, the SPX has already rallied 67 points and retraced 64%. This is generally considered about the maximum retracement for a counter-rally during a downtrend. If the SPX clears the OEW 1107 pivot range then we would suspect that the low for this downtrend was at SPX 1045. Ideally, the SPX should top soon and turn lower to, at least, retest that 1045 low or lower. This would give us more information about this downtrend. Plus set up a potential alternation between the Jun/July correction and this one. The inflection point, we spoke about last weekend, has been resolved to the upside. The next decision for this market is bull or bear. Best to your trading!

FOREIGN MARKETS
The Asian markets were flat on the week with China closed. Hong Kong lost 1.9% and the rest were slightly positive.
The European markets had a good week +4.4%. All were within a +4.0% to +4.6% range. The SMI confirmed another uptrend.
The Commodity equity markets averaged a +3.1% week.

COMMODITIES
Bonds dropped 0.8% on the week. Rates appear to be in another uptrend.
Crude rallied for most of the week gaining 7.5%, despite a rising USD. It has rallied $10 in two weeks.
Gold gained 2.4% on the week, as Silver +5.0% led gold higher.
The USD gained 0.3% in a volatile week. The EUR lost 0.1%, (certainly appeared worse), and the JPY lost 1.7%.

NEXT WEEK
Tuesday kicks off the week with Case-Shiller and Consumer confidence. On wednesday we have New home sales, then on thursday the weekly Jobless claims and Durable goods. Friday ends the week with the first revision to Q4 GDP, Consumer sentiment, Chicago PMI and Existing homes sales. As for the FED. On wednesday FED chairman Bernanke gives testimony to Congress in his Semi-Annual monetary policy report. Then he testifies before the Senate, same subject, on thursday. On friday FED governor Tarullo heads a panel discussion in NYC. Best to you and yours this week. It should be an interesting one.

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

Opex Friday caps benign time, now be alert for potentially worrisome markets: Ray Merriman's preview for 2/22 week

2010-02-19T19:35:00.006-05:00

Want to hear from someone who predicted markets' positive moves this week? Raymond Merriman's financial astrology-enhanced analysis of the cycles in equities, bonds, currencies and commodities are always fascinating. Here's his set of public preview comments for the upcoming week, from his site at Merriman Market Analyst MMACycles Weekly Preview Comments:
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MMA Comments for the Week Beginning February 22, 2010
Written by Raymond Merriman

Review and Preview

World equity indices rallied most of last week, following their troughs (lows) of the week before. However, the rallies weren’t large enough to confirm the lows of February 5-9 as primary or greater cycle troughs. On the other hand, if these rallies continue for two more weeks, then they will probably confirm the lows of early February as not just primary cycle bottoms, but even the 50-week cycle trough. Thus, stock indices are in a very important stage right now.

In Asia and the Pacific Rim, the rallies were quite mixed. In India’s Nifty and Hong Kong’s Hang Seng index, the rally from the prior week lasted until Wednesday, February 17. In Australia, the high of the week fell on last Thursday. In Japan, the Nikkei topped out Friday, but then it sold off somewhat sharply to close near the low of the week, following the announcement of the increase in the Fed discount rate.

In Europe, the stock market was bullish all week. Each of the four major indices we track topped out on Friday, February 19.

In the Americas, the Dow Jones Industrial Average, NASDAQ Composite, and Bovespa of Brazil all made their weekly highs on Friday. The Merval of Argentina made its weekly high of Thursday. There is nothing yet to indicate that the rally in any of these markets is completed. In fact, the translation of Venus and the Sun over the former Jupiter-Neptune conjunction remains in force through this week. As discussed before, these translations are in effect February 8-28.

Crude Oil has rallied in concert with stocks. The prior week found Crude prices down to 69.50. Last week saw prices back up to 79.95. Gold and Silver also rebounded from their lows of the prior week. In Gold, the high of the week was realized on Wednesday, but Silver continued higher in to Friday. However, currencies did not fare too well against the Dollar. The Euro currency, for instance, traded below 1.3500 during the day on Friday. This is most unusual, for precious metals and currencies tend to move together. But now, we see them decoupling. Gold and Silver are moving up against all currencies, which suggest something may be developing on the geopolitical front that is causing investors of all nations to demand more Gold and Silver. Maybe that something has to do with the progress of nuclear development in Iran.

Short-Term Geocosmics

The movement up in stock indices last week was not unexpected according to the principles of Financial Astrology. As discussed previously, the geocosmic signatures of February are quite benign, with first Venus, and the Sun, forming conjunctions to Neptune and Jupiter. The last of these “soft” aspects will happen next week, as the Sun will form its annual conjunction to Jupiter on February 28. Three days later, on March 3, Venus will form a conjunction to Uranus, which is more powerful in terms of stock market correlations. In fact, Venus and the Sun will both now start a translation to the Saturn-Uranus opposition. These translations will be in effect March 3-21. If we add the square to Pluto into the mix, it will last through March 25. One would anticipate that the period from March 3-25 will be entirely different in focus and market performance than February 8-28. The February period was benign, while the March time band may be much more intense and worrisome. After all, February highlighted the exuberant and hopeful Jupiter-Neptune dynamic. The March period will highlight the Saturn-Uranus-Pluto dynamic, which instead of being hopeful, has a stronger association with matters like debt, taxes, and “the unexpected.” In the context of “the unexpected,” there may be a slew of incidents involving nature, like high winds, electrical storms, and even earthquakes or volcano eruptions. It will mark the most powerful combination of geocosmic signatures in effect so far this New Year.

Longer-Term Thoughts

I received some mail last week about my column in support of the Federal Reserve Board. It isn’t so much that I support the FRB as I support the leadership of Ben Bernanke. It really doesn’t matter so much (to me) which entity controls our nation’s money, as it does the integrity and honesty of the individual in charge of that role. But it is hard for me to conceive that anyone who is under the control of elected officials (White House or Congress) can be free from an inherent conflict of interest to the American people. Elected officials will tend to make decisions – or demand the Central Bank make decisions - that will enhance their chances of re-election, which may not always be in the long-term best interest of the nation and its economy. For instance, it is seldom popular to raise interest rates, and very few politicians would go on record to support an increase in interest rates.

Yet, every time the economy comes under pressure, politicians are quick to point the finger at the Central Bank. The Federal Reserve Board was blamed by many politicians for the financial panic in September 2008 because it oversaw a very soft and accommodative monetary policy in the middle years of this decade. Yet it could just as easily be argued that it was the lax regulatory policies of the government itself over Fannie Mae and Freddie Mac that allowed for such risks to be taken b y banks, causing so many people to enter into mortgages they could not afford.

It is important to bring these issues up now, because the geocosmic signatures of next month – and even into early 2011 – suggest these themes are about to explode again. The Federal Reserve Board can only control the dangers that they can foresee. The problem is that crises in banking occur where no one expects it to happen (well, afterwards, of course, everyone claims they saw it). But we know that Pluto in Capricorn - especially in the waning phase of the Saturn-Pluto cycle – pertains to financial crises related to out-of-control spending and hence debt explosions. Things can look rosy temporarily, but in fact spending and debt levels are not going down, and debt related problems will continually rise again to confront bankers and politicians alike. I suspect we will see this in March when 1) Mars goes direct, and 2) Venus and the Sun will translate the Saturn-Uranus-Pluto T-square.

Mars retrograde is very interesting in terms of military actions too. In the past week, the USA has launched its new Afghan military initiative in the southern part of that country. The initial reports are very encouraging, which is what one would expect under the transit of the Sun and Venus to Neptune and Jupiter. As mentioned in a recent column, Barack Obama will stage a comeback in popularity during February, and he has. But Mars is retrograde, and usually this means that the aggressor will encounter more resistance and difficulties than anticipated. It will be with great interest that we watch the developments in Afghanistan when the transits to Jupiter and Neptune end, and the translations to Saturn-Uranus-Pluto begin, with Mars retrograde and about to go stationary direct (March 10). I think at that time we will begin to see if the new surge in Afghanistan is really a success, or on course to becoming another Viet Nam-like situation. We may see whether President Obama really is an effective commander in chief too. Right now it is hard to call. The start of the new military campaign started under a new moon and favorable fast-moving transits, which are positive. But it also started under the slower moving Mars retrograde, which to an astrologer is usually not the best time to launch a new war effort. It is a better signature to launch a peace initiative, and if there is one thing I would suggest to President Obama at this time, it would be to call together a summit of world leaders who truly want to end the threat of terrorism – who would form a powerful coalition against terrorism and sponsors of terrorist activities with the goal towards world peace. He could do it, and in my opinion, this may be his true calling in life. But he can’t do it alone, he can’t do it via twitter or a teleprompter where he speaks in front of large groups of fans in contrived photo opportunities, and he can’t sit back waiting for others to invite him to their summits. He needs to initiate the call, organize the event, and bring the leaders together by personal invitation. In my opinion, he needs to do this within the window of opportunity while Uranus and Jupiter are still in Pisces, which is in effect off and on for only the next year. After that, it is “Aries time,” potentially a time of wars and major disputes – unless these matters are addressed and agreed to before then.

Announcements

The monthly MMA Cycles Report and its companion – the MMA Japan Cycles Report – will come out this week, Monday and Tuesday, via posting on our web site for subscribers. This report covers our longer-term analysis of the U.S. stock market, precious metals, crude oil, currencies, Treasury Notes, and grain markets. For subscription information, please go to SERVICES at www.mmacycles.com.

Our next private meeting for MMA subscribers will take place at the Hyatt Regency Hotel in Cambridge (Boston) Massachusetts, on March 1 at 11:00 AM. There is no cost for yearly subscribers of MMA or SOS reports, or for any subscribers of our daily or weekly reports. For all others, the cost is $295.00. This special meeting will last about 2-1/2 hours. It will follow the NCGR conference on “Planetary Revolution: Geocosmic Alchemy II”, taking place February 25-28. Attendance is limited to about 15 persons, and reservations are suggested. There is nothing as exciting and informative as a gathering with MMA subscribers (to me), because they come from very interesting walks of life, from the fields of finance, banking, government, military, intelligence agencies, academia, psychology, internet technology, and astrology. During this special gathering, subscribers may ask any questions they wish, or they may make any statements that the group may then discuss. Great trading ideas tend to arise from this format. Please contact us at 1-248-626-3034, or email us at ordersmma@msn.com if you would like to be a part of this special meeting, as seating is limited. For information on what these meetings are like, read a review of my winter tour of Europe, where I met several subscribers at two separate meetings, in Amsterdam and Zurich.

Please note that I will be giving two lectures in Arizona in March. The first will be Friday, March 12 in Tucson, 7:30 – 9:00 PM. Please contact 520-625-5762 or gaelchi@dishmail.net for reservations and location information. The second will take place in Scottsdale, Friday, March 26, 7:00 – 9:30 PM. Contact 602-952-1525, or as aboard@azastrology.org for reservation and location details. The title of the presentations will be “FORECASTS 2010 AND THE USA ECONOMY.” These presentations will discuss the importance of the “Cardinal Climax,” an unusual planetary pattern that will be in force 2008-2015, with its strongest astrological set up taking place in the summer of 2010. This set up affects the charts of the USA, Barack Obama, and the Federal Reserve. As each of these entities undergoes radical changes, it will also correspond to powerful movements in financial markets and the world economy. This is a year in which tremendous profits, or losses, can be realized, related to Jupiter conjunct Uranus cycle which begins in 2010.

If you are an active short-term trader, you may be interested in our Weekly or even Daily Market reports with short-term trading recommendations. It is the only way I keep in touch with traders on a daily or even weekly basis, as I no longer offer personal consultations. These reports give in-depth analysis of the DJIA, S&P and NASDAQ futures, Euro currency (cash and futures), Swiss Franc, Dollar/Yen cash and Yen futures, T-Notes, Corn, Soybeans, Wheat, Gold and Silver. The daily reports cover all stock indices listed above, as well as futures in Euro, T-Notes, Soybeans, Gold and Silver. Subscription to the daily report also includes the weekly report. For more information, go to http://www.mmacycles.com/services, or call our offices at 1-248-626-3034. In the words of one of our subscribers: “I recently subscribed to your weekly report and am finding it to be excellent and a very useful companion to the MMA Cycles Report. I can't imagine now managing my investments without them.”

CD’S, MP3’s, DVD’S, and webcast viewing of the Forecast 2010 speech will be available in about a week. The Forecast 2010 Webcast Speech took place December 20, 2009. We are offering a CD or MP3 download that contains the audio only. You can also view the webcast again in it’s entirety as a one-time download from Vibation until January 25, 2010. And it will be available in a DVD edited edition too. The cost for any of these recordings will be $45.00 and an additional postage charge if ordering in audio CD or edited DVD format. For further information, go to our website at www.mmacycles.com (it will be up sometime this week). Or drop us an email (ordersmma@msn.com) or fax (248-538-5296), or call us at 1-248-626-3034. “Thank You - it’s very thoughtful and thanks you for sharing your knowledge. A whole new world opened for me.” Attendee to the Forecast 2010 webcast.

The Forecast 2010 book are out!!! For more information, visit our web site at www.mmacycles.com. “Kudos… the 2010 forecasts – you’ve outdone yourself - I see Jupiter is playing a role not anticipated (if I recall correctly) last year .... it all clicks.” RR, Santa Fe

The MMA Catalogue of products and services for 2010 is now out!!! You can download it in PDF at http://www.mmacycles.com/option,com_docman/task,doc_download/gid,161/Itemid,63/. The ordering page is the last page of the catalogue. This is especially useful for those outside of the USA, since we do not send these by snail mail unless requested.

MMA is currently preparing a listing of astrology books on its web site for readers to consider in their education of this unique study. The initial offering can be seen on our web site at www.mmacycles.com, under Astrology Books.

Disclaimer and Statement of Purpose

The purpose of this column is not to predict the future movement of various financial markets. However, that is the purpose of the MMA (Merriman Market Analyst) subscription services. This column is not a subscription service. It is a free service, except in those cases where a fee may be assessed to cover the cost of translating this column from English into a non-English language.

This weekly report is written with the intent to educate the reader on the relationship between astrological factors and collective human activities as they are happening. In this regard, this report will oftentimes report what happened in various stock and financial markets throughout the world in the past week, and discuss that movement in light of the geocosmic signatures that were in effect. It will then identify the geocosmic factors that will be in effect in the next week, or even month, or even years, and the author’s understanding of how these signatures will likely affect human activity in the times to come. The author (Merriman) will do this from a perspective of a cycle’s analyst looking at the military, political, economic, and even financial markets of the world.

It is possible that some forecasts will be made based on these factors. However, the primary goal is to both educate and alert the reader as to the psychological climate we are in, from an astrological perspective. The hope is that it will help the reader understand these psychological dynamics that underlie (or coincide with) the news events and hence financial markets of the day.

No guarantee as to the accuracy of this report is being made here. Any decisions in financial markets are solely the responsibility of the reader, and neither the author nor the publishers assume any responsibility at all for those individual decisions. Reader should understand that futures and options trading are considered high risk.

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ChartsEdge Pattern Recognition map for equities 2/19

2010-02-19T07:29:00.004-05:00

Welcome to opex Friday! Here's the Pattern Recognition map for today from Mike Korell and his ChartsEdge Daily Maps at http://www.chartsedge.com/wp/:

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ChartsEdge Pattern Recognition

Posted: February 19th, 2010 | Author: Mike Korell |

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

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Folks, between the Olympics, special projects, and this market bucking many expectations about hhow it would manifest the bounce this week - I'm totally beat! But if you took the common swing approach to buy on Tuesday - even at the 1:00 "low" - you are doing all right. Recently the market has been a buy-on-Friday affair as many have noted. But with the 1107 SPX test yesterday and the overly bullish sentiment as measured by SentimenTrader's gauge (which I posted at the UBTNB3 blog that "feeds" over at right), this may not be one of those Fridays.

We've got the late month time frame which is often weak - the mutual fund manager's tine to buy often around the 26th of any month, just a general tendency that's all. The overly hot sentiment. The cyclic lows that Andre Gratian, Jim Curry, and even Ray Merriman, and maybe others. are expecting to be around this corner. As for Terry Laundry - he's pointing out that the SPX needs to get support around 1095. Can't disagree with that!

Tony Caldaro's Objective Elliott Wave counts have a couple or perhaps three versions just allowing for the uncertainty right now about what this market can pull off. But generally expecting some pullback before anything else really big.

For myself I'm looking to see how it all fits together and wondering if and when events like Treasury bonds dropping will shake equities. There are some who think bonds aren't ready to make a big mice down yet - and perhaps they're right if it'll be equities that drop first and put the scare on that pushes bonds up for a couple more weeks - will see.

Since the futures don't always put a lock on the market cash action we can't assume the SPX will lose 1095 support. We kinda think it will ... But it's always good to remain a bit on the edge to have and keep an edge. So we won't get complacent, either way. The dollar poked higher and the euro lower as I expected (and the yen lower as GS expected) - so even there, it's a matter of "what now"?! Either the dollar sinks and equities, oil, gold, and pretty much all else (well probably not bonds) all fly higher. Or the correction gig isn't over yet, and the dollar probes higher than a lot of people want or expect to see.

So careful out there as always - and happy market navigating!

Euro almost done or not?! Factors to consider

2010-02-18T21:53:00.003-05:00

Tonight the SPX futures (ES) are down 10+ points, suggesting the SPX cash index may fall under the 1096 midline of Terry Laundry's "T Theory" channel. This seems to accompany the euro falling into a low target point with positive divergence on the daily ... or is it something different? My monthly chart of the euro, $XEU, still warns that it can trace a continuation down as the wave C of a very large wave 2. The .618 retrace level it could reach may be down to around $112. That's much lower than many are expecting! I'm not saying that's locked in stone. But I'm just saying, it isn't at all guaranteed that the euro is bottoming at a symmetry target right now.

For that matter, gold is weak tonight too, and it isn't immune from more pullback either. I've covered alternative paths for it and won't repeat those here in this post. Basically, we may see the dollar spike some more, with more consequences for the euro and other tradable assets. The most likely time frame is a low next month but that could also push back somewhat into April - will just have to see.

Max pain overrules short-term bear hopes as stocks barrel into opex

2010-02-18T18:16:00.001-05:00

This has been a fascinating week even though frustrating for the Elliott Wave folks, and even the ChartsEdge cycles. First Ray Merriman said last Friday that a "sweet" time for Valentine's would usher in a short-term bout of optimism. Then Terry Laundry started showing a small "T" off the bounce from his lower envelope band. Trendline analysts like Andre Gratian and Marty Chenard showed the bounce was from trendline support. And technical analysts showed strength in the A/D, plus sentiment had gotten too bearish. Sure enough, "max pain" took the SPX to Tony Caldaro's 1107 pivot! Expected tomorrow - but it happened today. Maybe just in time, just before the Fed announced raising its discount rate to 0.75% - which seems to be cooling sentiment after hours.

While my time has been eclipsed by some special projects, I can certainly post charts of the SPX, technicals and sentiment that somewhat speak for themselves. The SPX 1108 level tested both the 34 and 50 day moving averages. We've been expecting for weeks now that the better tradable low will come in March. Equities are now trying to scare some into buying lest they miss the boat. Friday might still squeeze a bit more, but after tomorrow which is Feb. 19 - which some believe is a turn date - that leaves at least two, maybe two and a half weeks to see what the next cyclic low will send our way.

It seems unlikely the SPX could mount over its 34 and 50 day MA's without turbulence. Assuming we get a turn coming up, the next question will be whether we get a new low on the next drop. We're expecting a better buying opportunity in March, either way.

The McClellan chart is an example of what we're expecting. The Oscillator has entered overbought territory on this spike, so it's warning that it can roll over again. While the Summation Index has continued curling up, boding well longer-term. After more time passes, it'll be interesting to see what the SI does at its own 50-dma - but there'll be enough time for that.

ChartsEdge intraday cycle map, and swing TCI graph, for equities 2/18

2010-02-18T07:33:00.002-05:00

Mike Korell with his ChartsEdge keeps things interesting - thanks again Mike! Today he's providing a Trader Confidence Index (TCI) update for swing traders, plus his BP map for daytraders (remember the BP is a more robust forecast when it synchs up or "agrees with" with his Pattern Recognition map when available, plus today's portion of his weekly cycle-based forecast chart (which you can always locate here too, using the "ChartsEdge weekly" label)). The TCI pointing a high in 1-2 trading days implies that we may see a higher SPX level Friday or Monday. It'll still be interesting to determine whether we're seeing a wave 2 or X (whether or not exceeding SPX 1104), that sends equities to a higher low or lower low in early March, which could target 1030-1050 ... Will see! But back to the ChartsEdge forecasts - From Mike's Daily Maps site at http://www.chartsedge.com/wp/

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ChartsEdge BP Chart

Posted: February 18th, 2010 | Author: Mike Korell |

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

ChartsEdge TCI

Posted: February 18th, 2010 | Author: Mike Korell |

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

I tried to read too much into the TCI chart last time. Best to ignore the small turns.

Goldman Sachs moderated their dollar-yen target - maybe this is why

2010-02-17T22:00:00.006-05:00

Recently I noticed a headline about Goldman Sachs moderating their dollar-yen target from 98 to 92. Since that represents only a partial retrace, I was kinda glad to note that target fits better with the yen continuation upward that I'm still expecting (and I believe Tony Caldaro still expects). I chart it typically as $XJY at Stockcharts.com, sometimes as FXY since this ETF tracks very closely (and when I want to see volumes). It moves inversely to the widely quoted dollar-yen pair, so as dollar-yen has moved up closer to 92, the $XJY has dropped again. It's true that $XJY has dropped to the lower Bollinger Band on the daily chart (below), aided by the dollar index' strong up-move overall. But a deep retrace to the prior swing low of 106.83 is still okay, because it looks like it's correcting a leading diagonal up from that prior low. In Elliott Wave terms, it means a deep retrace is common from a diagonal. It could go as far as a double bottom about 107; but it just cannot poke lower than that prior low (106.83). Otherwise the Elliott Wave count would have to change.

On the big picture - see monthly chart below - $XJY is on track to push new highs from a multi-year consolidation. So long as it gets support - either here, the 200-day moving average just above 108, or just above that prior swing low - then it should regain the 111.49 long-term Fibonacci level yet again, and pivot on up to new highs. While my personal EW view of the monthly chart is different from Tony Caldaro's, mine would actually support a higher ultimate target. Still - I do have a bearish alternative if the $XJY cannot regain 111.49. I continue to accumulate on pullbacks (but will bail out / stop out if the prior swing low of 106.83 is violated).

Equities and other markets sending mixed signals mid-week toward opex

2010-02-17T16:32:00.003-05:00

The stock market put in a creditable followthrough consolidation day; although indicators look mixed overall, and this gives me enough pause to remember that the ChartsEdge weekly indicated a low on Thursday. Maybe not a lower low, but enough to springboard equities higher on Friday (and opex). Did you realize the dollar moved up today?! I'm still thinking it will eventually test yet higher - meaning that I'm also tilting toward equities weakening after Friday. Will see ... There's plenty of data and analysis to digest. Meanwhile, as the SPX and many tradable indices and assets are testing their 50-day moving averages, gold also mimicked equities after gold's massive push up in recent days. All these moves are probably implementing "max pain", as some analysts noted in reports we listed this weekend suggesting an up week testing toward SPX 1100.

Meanwhile US Treasuries slipped again - no surprise to our readers. I'm guessing it's fueling equities short term. Big question is whether TLT going down will help equities weaken also into early March for the cyclic lows we've been thinking about for awhile. The tone is definitely turning more bullish. But I'm going to remain cautious until we get past that early March time frame. So smoke 'em if you got 'em into opex (maybe we'll get a nice drop tomorrow to buy into Friday - sure hope so!). It's all shaping up for this weekend's analysis to be another must-read batch of new insights. Meantime, happy Chinese New Year of the Tiger, and happy market navigating!

ChartsEdge Pattern Recognition map for equities on 2/17

2010-02-17T07:37:00.003-05:00

Thanks to Mike Korell and his ChartsEdge - here's his Pattern Recognition map for Monday. Remember he added a new feature - see his "confidence" level number posted within his notations on the map image, below. Readers know it gains confidence when it "agrees" more closely with his other, weekly and the daily BP maps - hence the confidence number displayed. And you can always keep up with his publicly posted charts and updates (and get subscription information) at his ChartsEdge Daily Maps site page, http://www.chartsedge.com/wp/:
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Big bullish moves today - here to stay? Currencies hold clues

2010-02-16T16:51:00.007-05:00

Huge moves by the markets today! 1:00 ET could be seen as a low in the sense that the SPX moved even high afterward! Some are seeing a C=A symmetry at ~1095 if this is a wave 2 up; but we'll need confirmation by followthrough on a wave 3 down IF that's the right count! Readers know that different analysts we're featuring here have differed recently in their projections. For myself, I tend to this still being a correction within a move that has yet to point lower and bottom early March. Let's look at the US dollar for clues.

The daily and weekly of $USD are below. The dollar dropped smartly but not from a clearly peak type top. On the weekly, it's dropped back from MA resistance. But it didn't fully take out the 80.80 symmetry target either. Indicators don't confirm it's downtrending again - at least not yet. It's fair to say the dollar pulled back from being overbought, and technical resistance. This also helped gold power up by $30. But to be consistent, which is to come down - the dollar, or equities? I've already described my skepticism about the wave structure of the dollar, doubting that it's a symmetrical zigzag. I think there remains risk the dollar does probe higher. Partly for cycle reasons. Just as the cycles are likely not finished with equities either. Whatever happens this opex week, I'm braced for equities to move lower afterward. It'll be just as well if the number of bears diminishes this week, to help make another leg down work well in late February and early March.

There are other signs for equities too. The Dow and SPX face resistance at their 50 dma's, and for the SPX there's also resistance at the 1000 level, as well as 1007. The SPX monthly chart's 55 MA is at 1150.56, a sobering fact - so any high as we're thinking in May, will face stiff resistance. But that's for later. Near-term, there's even resistance at SPX 1096/1097.

The dollar ($USD) did lose short term momentum. But its drop is testing its 13-day MA. The MACD is close to rolling over but not a confirmed signal. It remains over its 34-day MA. Its 13-week MA just nudged over its 34-week MA. Yes, these things can change. But they remain reasons to think the dollar isn't necessarily going to roll to new lows, just yet.

Outlook for Feb. 16 and ChartsEdge comment

2010-02-16T07:38:00.003-05:00

Readers know we normally have a daily map of intraday cycle forecast from ChartsEdge Daily Maps, http://www.chartsedge.com/wp/. Today, Mike Korell with his ChartsEdge and ChartsEdge Daily Maps has provided the following comment instead:

(Feb16, 2010 - Tuesday) The cycle calculations are presently inverted and combined with a long weekend make synchronizing the daily charts too difficult. Look for a reversal around 1:00 today. It may be a high or a low. Daily charts will be posted tomorrow morning.

Thanks Mike for the info! Folks - while my own personal guess is a low, that can be 100% as Mike points out! Swing traders may as well use other methods like indicators and trendlines, and we'll also see soon enough if and when there's a change in Mike's TCI graph which currently shows a high either put in or very soon. Day traders, pretty much the same, combined with levels. Like SPX 1076 which has become quite a divider, above that being 1082, 1087, and 1092 / 1097. Below being 1068, 1065/1066, and of course 1060/1062, then 1057-1053-1052 (and down under, 1040's and 1030's). Not that we've got any reason to think we even get under 1068 today! But if it happens, remember that Tony Caldaro's support pivot is 1061, with a range of 7 points either way.

Obviously the euro/dollar plays a role, and notice the love affair with gold has flamed up again. I'd like to believe gold is ready to move but not at all convinced the cycles agree so soon. In fact the same probably true for equities. So as opex games heat up, and premium vanishes rapidly, be careful out there. And happy market navigating!

Is the S&P 500 in a bear market AND a bull market? Andre Gratian analyzes in his Turning Points weekly update

2010-02-15T18:40:00.000-05:00

Have you been having the feeling that the stock markets are exhibiting both bullish AND bearish signs? Andre Gratian has a startling new take on this, in this weekend's Turning Points update of technical analysis focused mainly on the S&P 500 but also with reference to the QQQQ, banking index, and the dollar. Frankly I'll have to read and ponder this myself! Andre's work must be considered; he takes a very unbiased approach using classic technical analysis together with cycles, Fibonacci work and some thoughts about wave counts, in his Turning Points reports. Andre's website is at Market Turning Points (always included in the sites list at right side of the page here). He provides his weekend updates also to his subscribers, and on occasion at Safe Haven as well. And of course his intraday updates and comments to his subscribers.

Here's Andre's eye-opening analysis:
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February 15, 2010
Turning Points
By Andre Gratian

A 3-dimensional approach to technical analysis
Cycles - Breadth - Price projections
“By the Law of Periodical Repetition, everything which has happened once must happen again, and again, and again -- and not capriciously, but at regular periods, and each thing in its own period, not another’s, and each obeying its own law … The same Nature which delights in periodical repetition in the sky is the Nature which orders the affairs of the earth. Let us not underrate the value of that hint." -- Mark Twain

Current Position of the Market

Very Long-term trend - Down! The very-long-term cycles have taken over and if they make their lows when expected, the bear market which started in October 2007 should continue until 2014.

Long-term trend - Up! We are in a medium-term bull market, which is a corrective move within a long term bear market. This bull market should last until 2011-2012.

SPX: Intermediate trend. Technically, the index is still in an intermediate move until it breaks below 1029.

Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discusses the course of longer market trends.

Daily market analysis of the short term trend is reserved for subscribers. If you would like to sign up for a FREE 4-week trial period of daily comments, please let me know at ajg@cybertrails.com.

Overview:

Are we in a bull market and a bear market?

One of the first things that confronts a stock market analyst is semantics. How long is short-term? What is long-term? How do you define a bull market? I have that problem right now! So I am going to resolve it by saying that we are probably in a medium-term bull market within a long-term bear market.

I believe that the bear market which started in October 2007 ended in March 2009, and that we are now in a bull market which will last until 2011-12. HOWEVER, this entire bull market will be a corrective wave within a long-term bear market which also started in October 2007 but will not end until 2014, in conjunction with the 120-year cycle low (courtesy of Bud Kress of SineScope).

If we look at the Weekly Chart above, we can now clearly see that the bear market ended in March 2009 by coming out of a (red) bearish channel in June, after completing a 5-wave pattern. At the same time, it came through its 200-DMA. In July, it successfully back-tested its channel line and kept on moving up.

Since then, the SPX has moved in a narrow band in the center of an Andrews Pitchfork (dashed lines) pattern. It’s inability to move to the top of the channel warns that it may break the lower trend line by the time the 4-yr cycle makes its low in the Fall.

In October, the index broke through the long-term trend line which goes back to the October 2007 top, but by then, it was in an overbought state and when it ran into the 200-wk EMA, it was a good occasion to take a breather and pull back to the trend line!

In the process of back-testing the long-term trend line, the index has found good support from the 34-wk MA, and the 50-wk EMA which happen to meet at this time. If that is not enough, the 200-DMA is just below the current low, ready to repeal the rest of the bears, if necessary.

The 4-year cycle which is bottoming in the Fall will probably take us to a lower level, but in the meantime, the 9-mo cycle which helped provide the correction probably bottomed last week and is now adding to the support. Looking back, it has a normal phase of 38 weeks which occasionally varies by 1-3 weeks.

With all this well-defined support, if the SPX trades below the 1029 level (the last short-term price low), we can deduce that we are in the process of resuming the bear market. Until then, we are still in an uptrend.

What's ahead?

Chart Pattern and Momentum

The Daily Chart (below) is very detailed. There are channels within channels, all relevant in analyzing the various trends which make up the main trend. A short-term sell signal was given when the SPX broke out of its bullish black channel from the July low, at the same time breaking the (red) median of the pitchfork.

The black channel represented the short-term trend which started in July ‘09. The trend has now expanded to the green trend channel which started in March ‘09 and represents the intermediate trend. The longer trend is represented by the Andrews Pitchfork pattern. You can see how the trading is currently confined to a narrow band between the dashed lines -- parallels to the pitchfork lines.

In October 2009, the SPX broke out of its long-term down-trend line, traded above it for 13-weeks and pulled back to back-test it. All the support shown on the weekly chart (above) should help make this back-test successful.

Additional support should come from the lower trend line of the intermediate green channel which started in March. We came to rest on its bottom trend line at the same time that we back-tested the long-term downtrend line. The 200-DMA is about 20 points below our recent low, just in case the bears have some fighting spirit left in them.

If my assumption that the 9-month cycle has just bottomed is correct, the trend-pressure should now turn upward and we should already have made a reversal of the decline from 1150. The only near-term challenge left is the bottoming 17-wk cycle (formerly incorrectly labeled 90-day cycle) which is a mighty adversary and should be respected. It is scheduled to make its low about the first week in March. We need to see what kind of an effect it will have on the index before being certain that we have made a short-term low.

We will not have a confirmed resumption of the uptrend until price moves out of the red channel, which would also put it above the 50 DMA. If we do that, with the two cycles at our back, there is a very good chance that we can continue up for another 2 or 3 months. Let’s say that we make a high in May, along with Terry Laundry’s “T” projection. By then, the top green channel line will be above 1300 and could easily accommodate a projection to 1190-1200 if we make a new high.

This will sound like fantasy to the bears but, considering the market position, it is certainly within the confines of technical possibility.

All the indicators are in a good position for a reversal. The lower (A/D) indicator is already leading the way with plenty of positive divergence to the price. The middle indicator, after showing some positive divergence at the low, appears ready to break out of its down-channel. And the top one is on the verge of crossing lines, which would give a buy signal.

Let’s now move to the Hourly Charts of the SPX and of the QQQQ, side by side. Both indices have broken out of their down channels from the mid-January high. The QQQQ is more advanced than the SPX, and closer to moving above its former short-term high. It also resisted the decline much better. This relative strength is bullish for the market. However, the indicators are showing some negative divergence which is especially pronounced in the lower one (A/D), and we could have another pull-back before a good rally gets under way.

Friday could easily have been a much more negative day than it was considering the way it started, and if the intra-day rally which occurred on Friday follows through on Tuesday, the market tone could turn more bullish.

The positive influence of the 9-mo cycle may prevail over the bottoming 17-week cycle, and we could have a clear buy signal before re-testing the lows. Let’s see how it plays out.

Cycles
The 9-month cycle is mainly responsible for the recent decline. It should have made its low on 2/5, exactly 38 weeks from its last presumed low.

The 17-wk cycle -- previously incorrectly referred to as the 90-day cycle -- has been a very dominant cycle. It is estimated that it will make its low about the first week in March.

Longer-term, the 4-year cycle should exert pressure in the second half of the year.

Projections:

Previous projections:
By breaking below 1085, the SPX has given a projection to 1050-1058.
We should also keep in mind that .382 retracement of the move from July to the top is 1043.

- If we break below 1029, the next projection is 970.
- A normal test of the highs would take us up to 1130-35.
- A resumption of the uptrend could reach 1190-1200.

Breadth
Note the difference between this week’s NYSE Summation Index (courtesy of StockCharts.com) and last week’s. The RSI is now at the level from which it normally reverses. It also shows some subtle positive divergence to the index. This is more evidence that a bullish scenario is developing. However, since the index made a new low along with the market, it may be a warning that the coming rally will be confined to a test of the highs.

After showing some positive divergence at the last low, my daily A/D indicator is on the verge of giving a buy signal, but has not yet done so. A strong advance on Tuesday would probably clinch it.

Something that has bullish implications occurred on Friday: the SPX opened lower, and in the first hour was down 15 points with net declining NYSE issues of -2108. That was the low point of the day. By the close, the index was still down -2.96, but the A/D closed a positive 172. Such a rapid A/D recovery from a very negative number of issues in the first hour is unusual and I don’t recall ever seeing it before. It smacks of accumulation and adds to the list of bullish signs appearing at this level.

Market Leaders and Sentiment

The long-term sentiment indicator (at left, courtesy of SentimenTrader) continues to show readings that do not support a bearish view of the market.

While the short-term sentiment indicator on the SentimenTrader is neutral.

It matches the position of my indicators which are a little overbought short-term but are developing a bullish longer term condition.

On the left, above, is a chart of the Banking index. It did not participate in the decline to the extent that the major equity indices did, and its indicators are in a position of giving a buy signal. If it holds above its recent low and breaks out of its short-term decline pattern, it is very likely to make a new high to about 53 (pink line).

On the right, is the UUP dollar index. It just completed a rally to its projection which almost retraced .382 of the last phase of its former decline into the lower confines of overhead supply.

Both indices are leading indicators for the stock market. The UUP, reversely so.

Summary

By declining to 1044.50, the SPX has retraced almost .382 of its up-phase from July 2009. This was most likely engineered by the bottoming 9-month cycle at a time when the equity indices were very overbought and needed a correction.

The 9-month low is now most likely behind us, but the 17-wk cycle is due around the first week in March and could prevent a full-scale reversal until it has made its low.

After the second cycle has bottomed, the index should experience a recovery which could lead to about 1135, minimum, in a test of the highs, or even to a new high before the 4-year cycle begins to exercise downward pressure into the Fall.

Andre

ChartsEdge week-ahead cycle forecasts + comments; for equities and gold, week of Feb. 15

2010-02-14T17:31:00.007-05:00

Below are the week-ahead cycle-based forecasts from ChartsEdge. And thanks again to Mike Korell, who's the fellow doing ChartsEdge - and has also provided some additional comments at his ChartsEdge Daily Maps page (link with his comment below) about what his various indicators are showing (based on his Trader Confidence Index, BP and other cycle-based charting). His comment about the longer-term view focuses on equities and not really gold (though one might speculate a loose correlation - that's how I'm tending to think for the near-term myself, and then probable disconnect sometime by May - will see!). As for the comment about the TCI - well, readers know I'd thought out loud about the possibility of a low there, and if you were also referencing Terry Laundry's T Theory as I mention from time to time you already knew that test of his lower band at SPX 1044/1046 was going to produce some noticeable reaction, as it did. So as always, I think it's good to keep an eye on all around; and all the ChartsEdge inputs are very appreciated.

Anyway, here's what Mike Korell is saying and showing this weekend:
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Comment by Mike Korell / ChartsEdge:

US Markets will be closed on Monday. The Long-Term BP chart shows a trend lower into mid-week, and then a rally into Friday. The same pattern is apparent in the cycle charts.

There was a missed signal by the TCI on Feb 8th. This weak signal resulted in a very shallow rally into the 12th.

Another signal occurred on the 12th indicating a HIGH. That is in line with the other charts mentioned above.

Ask no questions, I'll tell you no Fibs: a reader contributes thoughts on possible equities turn dates

2010-02-14T16:42:00.005-05:00

Folks, I've received another communication from "Method" about analysis of turn dates such as Fibonacci-based and change-in-trend date predictions. I'll be candid, I do not have enough experience with "Method"'s track record to tell you that it should be reviewed on a par with the other analysts often featured here on this blog. Maybe this is great stuff - will see! Because I'm curious to see how this holds up, and some of my readers may be equally interested. So just take the statements below, from "Method", for whatever you think they may be worth to you:

Hello Ariel,

Interesting site you have here. I wanted to thank-you for posting some of my predictions on your blog and give you a little background information on the method that I am using.

When I did the astro study based on planetary movements at Trading the Charts, it confirmed that the markets are influenced by planetary movements. However, it was difficult to predict the direction and the movements were too short. I was interested in trying to find a longer term trend that could be confirmed and then traded. Financial astrology is too much of a cult for me as I was looking for something more scientific - astrology is not something that I really believe in.

I became interested in McHugh's phi-mate turn dates when I signed up for a free trial and last year decided to calculate the dates myself using the start of the bear market in 2007. The results were pretty amazing - the turn dates were producing market movements on a majority of occasions. Again I still wasn't able to see how long a trend lasted and some of the dates only produced a one day movement before going sideways for a month.

At the end of 2009, I decided to chart out this method to see if I could notice any patterns and be able anticipate market movements. I color coded the chart with turns that were based on a top, turns that were based on bottom and turn dates that had both a top and bottom form on the same date. See "All 2009 Fib Turn Dates"

I noticed that I had every major trend change and that it occurred right around an area where the turn dates had both a top and bottom form on the same date. More specifically, the trend change occurred on a turn date that occurred before or after the one that had a top and bottom on the same date. There were only four of these in 2009. See "2009 Fib Turn Dates"

These top/bottom turn dates also seem to act as a confirmation of the trend, whether it continues or sets up the turn date afterward.

One other thing that I noticed from the "All 2009 Fib Turn Dates" chart is that when 2 turn dates are close together, it usually means the end of a countertrend move.

What's next?

So far we have a trend change down based on the Jan 18th trend change date - this was confirmed on Jan 29th.

Since Jan 29th is a turn date, we have gone sideways and are now hovering around the same close price as Jan 29th with another turn date over the weekend on Feb 14th. Chances are that we continue down on Tuesday and may hit 1023 on the S&P next Thursday or early Friday.

Counter trend rally - this should start around the Feb 19th time frame and end on or between Feb 23 - Feb 25th. Possible bounce off the 200 day MA - it may only be a dead cat bounce.

Next Trend Change Date
March 12th to March 17th with an alternate date of March 26th if price goes lower after March 17th. Low of this first leg down may be around 944 on the S&P.
See "Feb 12th Update" and "Feb 12th Prediction" - I'm using a forward looking fib for the price levels.

Method

Feb 12 update:

Feb 12 prediction:

Love gold for Valentines? We do too, buying lows in coming days/weeks

2010-02-14T11:11:00.001-05:00

Love gold - and why not now, as it's Valentine's Day - and price has pulled back from the highs?! We basically love it too, as a long-term investment. There are some Elliott Wave types who claim it will drop way down, but there's Tony Caldaro's Objective Elliott Wave view (see his Elliott Wave Lives On site in list at right) which is very bullish - informed by a very healthy skepticism about currency devaluations which do much to drive the price of gold much higher. But is it time to buy now? We do want to be buyers over the coming days or weeks, looking for signs a good low has been made. So let's take a look.

Cyclically, we're expecting a low to be put in by the time we also want to see the next high in equity indices, meaning May. There seems a loose inverse relationship over time between stocks and gold. There's also an idea I've seen Tony Caldaro mention, that assuming the dollar drops much lower, that can send stocks reflexively higher first, then bring them down probably due to financial jitters. Well, enough of theorizing how it will work in - we already know financial concerns of one sort or another will help propel upward. It just got overbought as it peaked into long-term Fibonacci projections around $1200. Has the overbought condition been worked off? It's actually become somewhat oversold. While I share the view that it can be positioning now to come out of recent lows to trend up again, I do harbor concerns that the wave pattern is different from Tony's view. Maybe I'm just allowing for the possibility that events can turn (like if the dollar makes a surprise move higher, to 82 $USD or higher), and change the wave count to create a lower level on the pullback.

I've described before that I can allow gold to get to its 200 dma and test closer to the prior swing high around $1034, or lower support levels around $1000-1007. (If for example, the whole move to $1200+ was a wave 1 off the $681 as a wave IV.) It could even get to $950 (perhaps as a lower wave 2 type pullback), though I'm starting to doubt it will get that low - but possible. At $950 I'll still buy, but under $950 I'll cash out (maybe short it too) because another alternate view is that it retests the $681 low. (The "wave C" idea if $1200+ was a wave B and the prior $681 was wave A.) That idea isn't my primary count though. My primary view is the pullback possibly to $1030, $1000 or $950, then buy and hang on for the next huge move up!

Technically gold is still under the Bollinger Bands midline, and giving hints it wants to turn. But with time time window for the cyclic low so large - still two and a half months within which the expected low will be made - I'm not ready to buy aggressively. Let's let this love affair with gold remain in the anticipation stage for a while longer, until we can be more certain it doesn't want that 200 dma test first. If it does move over the Bollinger Bands midline, okay, we'll start using that midline MA as early warning whether it's getting buying support. Otherwise if we do see the lower levels I've mentioned, we'll start testing in with looking for trading buy patterns triggering (higher highs and lows with better buying volumes). I'm guessing that's more likely to happen at those lower price levels over the next several weeks.

So we'll see. If we can have more certainty we're getting a good price for long positions, then we'll love where gold takes us next, all the more.

Objective Elliott Wave points the probabilities after the stock markets' roller coaster: Tony Caldaro's weekend update

2010-02-13T17:21:00.001-05:00

The Elliott Wave count of the equities markets, typically on the S&P 500 index, is always interesting to puzzle out, and always much appreciated when it's tracked and updated objectively. Of course I'm thinking of Tony Caldaro and his Objective Elliott Wave (and his site is always in the list at right). Here's this weekend's update from Tony's Elliott Wave Lives On site:
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the Elliott Wave Lives On
by Tony Caldaro
February 13, 2010

weekend update

REVIEW

The roller coaster ride of the second week of Feb 10 ended on the plus side. Day traders were chalking up big profits, while investors were left scratching their heads. On the economic front, retail sales improved, and there were declines in jobless claims and wholesale/business inventories. On the downside, consumer confidence declined and the trade deficit increased. For the week the SPX/DOW gained 0.9%, and the NDX/NAZ gained 2.0%. Asian markets were +1.9%, European markets +1.6%, and the Commodity equity markets +1.2%. US Bonds were down 0.7%, Crude gained 4.7%, Gold added 2.6%, and the USD was flat. Next week's economic reports will be highlighted by housing, PPI/CPI and Leading indicators.

LONG TERM: bear market
This stock market has become quite a bit more interesting than anyone expected at the start of 2008, or the start of 2009 for that matter. After a seventeen month zigzag decline from the Supercycle SPX 1576 high in Oct 07 to the anticipated Primary wave A SPX 667 low in Mar 09. The market has rallied in three waves to SPX 1150 in Jan 10. During this entire period of time OEW had turned long term bearish in early Jan 08, and then medium term bullish in early Mar 09 anticipating a five month Primary wave B rally into the SPX 1120 area. The rally unfolded, but it took ten months instead of five, and it reached SPX 1150 instead of 1120+. Nevertheless, OEW turned long term bearish near the recent highs anticipating a retest of the Mar 09 SPX 667 low by year end. While the initial seventeen month decline was unfolding we expected the bear market to unfold in three Primary waves. We anticipated that the market would bottom with a completed pattern, rally about 50%, and then turn lower to either retest the lows, (a flat), or break the lows, (a zigzag). As the ten month rally started to extend past five and six months it appeared more likely that only a retest of the lows would occur after it completed. The market had evolved from an all out total zigzag collapse scenario, like 1929-1932, to a more manageable flat scenario like 1937-1942.
Then in early 2010 OEW confirmed a long term uptrend. At first we noted that during 1937-1942 a long term uptrend was also triggered about halfway through that bear market. In fact, right after it was confirmed the market headed lower. Historically, however, only 30% of these signals occur during lengthy bear markets. The other 70% of the time they signal new bull markets. With all these factors in mind we determined that the next downtrend, which has been underway since Jan 19th, would have to be impulsive in structure. This fits the structure of the entire bear market, as all of the downtrends during the Oct 07 to Mar 09 decline were also impulsive.

MEDIUM TERM: downtrend
As this downtrend unfolded the hourly charts certainly looked impulsive. We could observe five waves down from SPX 1150 to 1072 and we labeled that Intermediate wave one. A rally to SPX 1105 was labeled Intermediate wave two. Then another five wave decline to SPX 1045 appeared smaller than an Intermediate wave three, and we labeled it Minor wave 1 of Int. wave three. Since then the market has rallied to SPX 1080 in quite a complex pattern. And it has taken much longer, (five days), than the previous rally, (two days), of a higher degree. This alone has some important implications. During this entire decline, however, we were not watching just the hourly charts, but some other charts as well. These charts, one in particular, clearly displayed that the patterns on the way down from SPX 1150 to 1045 were not that impulsive. This occurred at the start of two previous downtrends during the decline from Oct 07 - Mar 09. So far, then, there is no reason to change the count. However, if the market does not start impulsing to the downside soon. This type of choppy activity could turn into an ABC (5-3-5) from SPX 1150 to 1045, and the current rally an X wave separating it from the next ABC to follow. This is one of the reasons why we noted in the last weekend update that the market had reached an inflection point. Unfortunately, this week did little to resolve the situation, with the exception of the additional time noted earlier. With monday a holiday in the US, and this an options expiration week. This will lilely force this decision process to conclude.

SHORT TERM
Support for the SPX remains at 1061 and then 1041, with resistance at 1090 and then 1107. Short term momentum spent most of the week vacillating around neutral, and then was overbought at thursday's SPX 1080 high, and slightly oversold at friday's 1063 low. The entire week was spent bouncing off the OEW 1061 pivot, every day, and in the upper 1070's area. As noted earlier it did little to resolve the inflection point. Since the market has had a difficult time getting through the SPX 1080 level. It hit it on thursday and came close to it on tuesday and friday. It could turn over from friday's close, SPX 1076, and head lower before reaching the OEW 1090 pivot. Should it break through SPX 1080 that pivot will likely offer significant resistance. Prior to the decline from SPX 1105 to 1045, the OEW 1090 pivot acted as a fulcrum point until the market finally broke. To clear up the current market indecision. The SPX needs to start impulsing to the downside and break through the SPX 1045 low, and then DOW 9430. This would help to confirm that this downtrend is impulsing lower. A rally above SPX 1105 would help to confirm that the decline from SPX 1150 to 1045 was actually a zigzag in a corrective downtrend. This would imply that the market will likely make a higher high than SPX 1150 when the downtrend concludes. Lots of variables! We'll continue to monitor day by day to determine what this market decides. Bear markets can be a bear!

FOREIGN MARKETS
All of the Asian markets we follow were higher on the week for an average gain of 1.9%. Every one of the five remain in downtrends.
All of the European markets we follow we also higher on the week, average gain 1.6%. All five are in downtrends as well.
The three Commodity equity markets we follow were mixed, but gained 1.2% overall. Russia's RTSI lost 3.4% and all are in downtrends.

COMMODITIES
Bonds lost 0.7% on the week and look a bit toppy in their uptrend.
Crude gained 4.7% on the week, responding to that daily positive divergence in both Crude and the GTX.
Gold also responded to its daily positive divergence and gained 2.6% on the week. A continuation of this rally and we could get something going on the upside medium term. The recent low at $1045 is around the price where India bought all that gold from the IMF.
The USD continues to look toppy in its three month uptrend. It was flat on the week. The EUR was -0.7% and the JPY was -0.8% against the USD.

NEXT WEEK
Monday starts to week with a holiday. Good trading to our overseas friends. On tuesday, the Home builders index will be released at 1:00. Wednesday we have Housing starts, Import prices and Industrial production. Thursday, the weekly Jobless claims, the PPI, then Philly FED and Leading indicators. Then on friday, the CPI and possibly the Budget deficit. As for the FED. The FOMC minutes will be released on wednesday afternoon, and then there's a speech by FED governor Duke thursday evening. Best to your extended weekend, and trading week. We're doing some work on the Grand Super Cycle theory and plan to release a report on this blog soon.

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

Talented technical analysts on the web review the S&P 500 and find near-term positive signs

2010-02-13T16:25:00.008-05:00

Each weekend we like to keep up with other market analysts. This weekend isn't any different! I'll start with a couple - and I'm already adding more later today, and tomorrow. Since it's a very busy weekend (Valentine's Day - hmmmm .....!)!

One I like to start with is Terry Laundry's T Theory Observations: Terry Laundry's Weekly T Theory Observations, at http://www.ttheory.com/:

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Observations for Sunday Feb 14 2010 Today's topics will include update to the Long Term Advance-Decline Ts picture; Lessons from the Long Range Ts 1966 to 2009, and about the new site format.
Charts for this discussion: Daily chart below of the NYAD Line with A-D T #13. The PDF equivalent chart can be downloaded here: Download ADT1320100212
...
A chart of the full series of the thirteen AD Ts from 1966 and other notes, including Gold and the Armstrong 8 year cycle below. The clearer PDF picture can be seen here: Download LongRangeADTs
...
Audio Commentary for these charts, etc to come on Sunday.

And there are some others to check out:

Safe Haven | Here is Where You Need to Pay Careful Attention - By Marty Chenard (2/12), at http://www.safehaven.com/article-15790.htm

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Bottom Line: We are at an important testing and pivot point for the market ... the second most important point since last April.
Here is where investors need to pay close attention to what happens to the Institutional Index of "core holdings" held by Institutional Investors. (Institutional Investors are responsible for over 50% of the volume on any given day ....

FT.com / Comment / Opinion - A Greek crisis is coming to America - By Niall Ferguson 2/10, at http://www.ft.com/cms/s/0/f90bca10-1679-11df-bf44-00144feab49a.html

Here's the introduction; click above to read his whole article:

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A Greek crisis is coming to America
By Niall Ferguson
Published: February 10 2010 20:15 | Last updated: February 10 2010 20:15
It began in Athens. It is spreading to Lisbonand Madrid. But it would be a grave mistake to assume that the sovereign debt crisis that is unfolding will remain confined to the weaker eurozone economies. For this is more than just a Mediterranean problem with afarmyard acronym. It is a fiscal crisis of the western world. Its ramifications are far more profound than most investors currently appreciate.

The U.S.: Land of the Free and Home of a Nearly Failed Treasury Auction of Its Own -- Seeking Alpha - By "OmniSans" at http://seekingalpha.com/article/188380-the-u-s-land-of-the-free-and-home-of-a-nearly-failed-treasury-auction-of-its-own.

Friday Preview: China Puts First Pin in the Bubble -- Seeking Alpha - by Phil Davis (2/12), at http://seekingalpha.com/article/188331-friday-preview-china-puts-first-pin-in-the-bubble. Another example of how he comments on trading options including short-term. Below is the quote of his intro:

Thank you China!

I had put out a post last nightdetailing how we ended up short at yesterday's close and at 3:21, when I published it as I was checking the Asian markets (don't ask, I keep strange hours) it looked like I had called it wrong as the Hang Seng went into lunch up over half a point and commodities were still hanging tough after yesterday's ridiculous run up. In fact, at 12:07, in Member Chat, I just so happened to say: "Copper $3.13 - ridiculous… Very annoying movement, not very playable like this as it can all crash back down again very fast."

Schaeffer's Monday Morning Outlook: Dow Tests 10,000; Overseas Fallout Could Make for Choppy Week Ahead. Here's their intro paragraph:

Global economic worries and concerns about how the Federal Reserve will unwind its massive stimulus programs made for a volatile week, with the Dow Jones Industrial Average (DJIA) closing below 10,000 on Monday. Still, by Friday, the DJIA recovered that landmark and managed a weekly gain for the first week in five. Looking ahead to next week, Todd Salamone, Senior Vice President of Research, notes that the S&P 500 Index (SPX) is trading above its rising 160-day moving average, but below its declining 80-day trendline. Todd thinks this might indicate a short-term trading range. Next, Senior Quantitative Analyst Rocky White examines the Rydex Nova/Ursa ratio, which compares the amount of assets in two Rydex mutual funds. Nova is a bullish fund and the Ursa is a bearish fund. A high ratio indicates optimism, while a low ration signals pessimism. Finally, we wrap up with a look at some key economic and earnings reports slated for release this week.

Happy "sweet" days for markets, etc. into Valentine's Day - just be prepared for what's later: Raymond Merriman's weekly preview

2010-02-12T18:26:00.001-05:00

Raymond Merriman's financial astrology-enhanced analysis of the cycles in equities, bonds, currencies and commodities are always fascinating. Here's his set of public preview comments for the upcoming week, from his site at Merriman Market Analyst MMACycles Weekly Preview Comments:
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MMA Comments for the Week Beginning February 15, 2010
Written by Raymond Merriman

Review and Preview

Equity indices around the world completed a leg of their current downturn between Friday, February 5 and Tuesday, February 9. Most then rallied modestly into Thursday and Friday, after which some then commenced another decline. This is all within last week’s overview, which stated, “Nevertheless, the geocosmic picture of this month is not so ugly. Venus will first conjunct Neptune on Monday, and then Jupiter on February 16. This is known as a “translation” of Venus to the separating Jupiter-Neptune conjunction…. Under these themes of optimism and hope, stock markets can rally. If not, the downside of these same signatures can be hysteria and panic. But it is March 9-21 that we want to focus the greater attention on in the near future. There will be nine important geocosmic signatures taking place then.”

The highs of January 11-19 in world equity markets continue to hold as highs for this year so far. But as mentioned above, many indices fell to lows that ended between February 5 and 9. In Europe, the DAX bottomed on February 5 at 5433. The AEX of Netherlands, FTSE of London, and SMI of Switzerland all bottomed on Monday, February 8. The AEX, however, made a slightly lower low on Friday, February 12. In between February 9 and 11, all of these indices posted modest rallies. The MICEX of Russia was restrained the entire week.

In Asia and the Pacific Rim, all the indices we track bottomed last Monday or Tuesday, and then all rallied into Thursday and Friday.

In the Americas, all the indices we track bottomed the week before on Friday, February 5. Each of these indices then rallied into Thursday, before pulling back again Friday. There were no yearly highs made last week. However, many of these indices are poised to rally again, on the basis of their technical strength, or at least a retracement of their recent oversold conditions. Additionally, there are no horrendous geocosmic signatures in effect for the remainder of this month. To the contrary, the geocosmic climate appears benign until March.

Crude Oil and precious metals also appear to have formed at least a trading cycle trough the previous Friday, February 5. Crude Oil bottomed at 69.50 then, and by Thursday had rallied back to 75.69. Gold bottomed at 1044.50 February 5, but by Thursday, February 11 had recovered back to 1098.40. March Silver fell to 1465 on February 5, but by Thursday of last week had recovered to 1573. The Euro currency, meanwhile, fell under 1.3600 again. The debt explosion is hitting the Euro community very hard, with several members on the verge of having their debt rating downgraded lower. It’s all about Pluto in Capricorn, the midpoint of the Saturn-Uranus opposition, and the focal point of the “Cardinal Climax” now underway, 2008-2015. Those leaders who cannot get their country’s finances in order, and who continue out-of-control, spending behavior of taxpayers monies, are courting both national and personal disaster. Pluto in Capricorn is a purging of leaders in business, banking, and government who are unable to control the Treasury’s debt explosion, or who are deemed to have personally benefitted at the expense of the common man, as may be the case with health insurance companies in the United States. Bankers and government leaders have been the scapegoat of populace anger so far, but that is likely to soon expand to include executives in the health insurance fields as Saturn and Uranus will soon make another opposition in the health related fields of Virgo and Pisces. Under this aspect, we can anticipate Congressional investigations and penalties to be parsed out to these individuals and companies in 2010. Many may be driven out of business as a result.

Short-Term Geocosmics

This week will find the Sun conjunct Neptune and Venus conjunct Jupiter on February 14 and 16 respectively. It is a perfect combination for Valentine’s Day, for both signatures can pertain to matters of the heart. There may be a lot of marriage proposals taking place at this time. In terms of markets, the Sun-Neptune conjunction is a strong Level One signature, which means it is in a select group of geocosmic signatures that have the highest correspondence to primary cycles in U.S. stocks within an orb of two weeks. In fact, it has a historical rate of frequency here of 79%, one of the highest correspondences of all signatures in Financial Astrology. The Venus-Jupiter conjunction is not nearly so strong. However, by its very nature, it can be favorable for stocks, for Venus rules stocks, and Jupiter pertains to optimism and hope.

In terms of astrological delineation, we note that Jupiter is also in Pisces, and co-rules Pisces. The other ruler of Pisces is Neptune. Thus, there are a lot of Neptune and Pisces themes likely this week. Since Pisces and Neptune have to do with romance and dreams, there may be an inordinate amount of “sweet” stories being reported on the news – stories of love, stories to stir the heart. But it should also be noted that Neptune and Pisces rule wishes more than realities. Therefore any “good news” for the stock market may be based more on hope than realities. The fact is that there is debt and too much of it. Still, this is a favorable time for President Obama to try and bring opposing sides together. There is a chance they may act “sweetly” with one another, at least for a few days. And any kind of civility in the political arena would be a welcomed change for most Americans.

Longer-Term Thoughts

As benign as February looks, March and April are shaping up to be more combative. Of great importance to Financial Astrologers will be the transits of Saturn and Pluto to the Federal Reserve Board chart. Not only are they square to one another, but Pluto will be sitting on the FRB natal Sun, which is opposite its Pluto, and Saturn will retrograde back to early Libra, forming a T-square to both. It may get even more intense in late May when Uranus enters Aries, making another square to both the FRB Sun and Pluto.

The Federal Reserve Board was founded December 23, 1913, at 6:02 PM in Washington DC, according to a New York Time story published the day after, sent to me by Astrologer Matt Carnicelli of New York City. The Sun in the FRB chart is posited at 1 degree, 32 minutes of Capricorn. The Sun represents the head of the FRB, or Ben Bernanke. Pluto, as a transit, usually means there is a change of powers, a change of duties. Bernanke was just approved for his second term as chair of the Fed, but his problems are not over. Although the White House wants to expand the powers of the Fed, there are several members of Congress who want to do just the opposite: they want to strip the Fed of many of its powers. With Saturn square the FRB Sun, it seems more likely that Congress – and not the White House or Fed – will win this battle. The Fed and Bernanke may find their roles becoming more limited and restricted.

No one knows Bernanke’s birth time. According to public records, he was born December 13, 1953 in Augusta, GA. My guess is that he was born around 8:10 AM, with Capricorn rising, perhaps very close to the same degree as the FRB Sun. I base this simply on my observation of this remarkable man. To me, he seems humble and not one who craves attention, as seems the case with so many leaders these days. He is more of a professional and academic, which fits with the Sun in Sagittarius in the 12th house. The Capricorn rising also fits with the idea that he is the head of the Federal Reserve Board. He has no other planets in Earth, and it is hard to conceive of this man without any earth planets, for Earth rules the mundane, practical side of life. Early Capricorn also fits, because there are otherwise no major aspects in the Cardinal Climax to his natal chart, and it is just improbable that he is not presently undergoing some “stress” as indicated by this huge astrological configuration. Early Capricorn rising in the horoscope of Mr. Bernanke would account for many of the pressures presently going on with the Fed, as well as many of the positive personal characteristics that can be observed about the Fed chair. I personally wish him much luck in the battles that seem inevitably looming on the horizon, for the alternatives to his leadership (more government involvement in the country’s banking management) will not likely elicit much confidence on the part of the world financial community, or even ordinary citizens.

Announcements

Our next private meeting for MMA subscribers will take place at the Hyatt Regency Hotel in Cambridge (Boston) Massachusetts, on March 1 at 11:00 AM. There is no cost for yearly subscribers of MMA or SOS reports, or for any subscribers of our daily or weekly reports. For all others, the cost is $295.00. This special meeting will last about 2-1/2 hours. It will follow the NCGR conference on “Planetary Revolution: Geocosmic Alchemy II”, taking place February 25-28. Attendance is limited to about 15 persons, and reservations are suggested. There is nothing as exciting and informative as a gathering with MMA subscribers (to me), because they come from very interesting walks of life, from the fields of finance, banking, government, military, intelligence agencies, academia, psychology, internet technology, and astrology. During this special gathering, subscribers may ask any questions they wish, or they may make any statements that the group may then discuss. Great trading ideas tend to arise from this format. Please contact us at 1-248-626-3034, or email us at ordersmma@msn.com if you would like to be a part of this special meeting, as seating is limited. For information on what these meetings are like, read a review of my winter tour of Europe, where I met several subscribers at two separate meetings, in Amsterdam and Zurich.

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The purpose of this column is not to predict the future movement of various financial markets. However, that is the purpose of the MMA (Merriman Market Analyst) subscription services. This column is not a subscription service. It is a free service, except in those cases where a fee may be assessed to cover the cost of translating this column from English into a non-English language.

This weekly report is written with the intent to educate the reader on the relationship between astrological factors and collective human activities as they are happening. In this regard, this report will oftentimes report what happened in various stock and financial markets throughout the world in the past week, and discuss that movement in light of the geocosmic signatures that were in effect. It will then identify the geocosmic factors that will be in effect in the next week, or even month, or even years, and the author’s understanding of how these signatures will likely affect human activity in the times to come. The author (Merriman) will do this from a perspective of a cycle’s analyst looking at the military, political, economic, and even financial markets of the world.

It is possible that some forecasts will be made based on these factors. However, the primary goal is to both educate and alert the reader as to the psychological climate we are in, from an astrological perspective. The hope is that it will help the reader understand these psychological dynamics that underlie (or coincide with) the news events and hence financial markets of the day.

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Chart of the Day - Gold more than quadruples during its nine year bull market

2010-02-12T17:36:00.002-05:00

The folks at Chart of the Day have another interesting chart view of gold, a long term chart which does a good job of showing its rise. Granted, we do have some longer-term views than this, and a while ago Tony Caldaro made a post which we also quoted here having very, very long-term (and bullish) views. At any rate, here's today's view of gold from Chart of the Day:

http://www.chartoftheday.com/20100212.htm

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Chart of the Day - Gold more than quadruples during its nine year bull market

Feb. 12, 2010

Today's chart provides some long-term perspective in regards to the gold market. As today's chart illustrates, gold has been in a strong bull market since 2001. The pace of that upward trend increased beginning in mid-2005. Following the financial crisis of late 2008, gold surged once again. Recently, however, gold has pulled back from resistance (red line) of its upward sloping trend channel. In the end, with gold currently trading at just shy of $1,100 per ounce, gold has more than quadrupled in price during its nine-year bull market.

Notes:
- Does the gold rally continue or is the party over? The answer may surprise you. Find out now with the exclusive & highly regarded charts of Chart of the Day Plus.

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Quote of the Day
"The desire for gold is the most universal and deeply rooted commercial instinct of the human race." - Gerald M. Loeb

Events of the Day
February 14, 2010 - Chinese New Year - Valentine's Day - NBA All-Star Game - Daytona 500
February 15, 2010 - President's Day - Washington's Birthday (observed)
February 16, 2010 - Mardi Gras
February 17, 2010 - Ash Wednesday

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ChartsEdge Pattern Recognition map for 2/12

2010-02-12T08:18:00.003-05:00

Too late a night for me - but here is today's map, thanks to Mike Korell and his ChartsEdge at http://www.chartsedge.com/wp/

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Pattern Recognition

Posted: February 12th, 2010 | Author: Mike Korell |

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

Triangulating before Valentine's Day doesn't feel right but might play a role in stock market's pattern

2010-02-11T17:27:00.005-05:00

Recently I've been commenting and especially tweeting about an idea of a triangle in equities, particular the S&P 500 which is what I track most closely. I've borrowed Tony Caldaro's OEW chart of the SPX hourly (thank you Tony!) from his public charts, which you can locate in his charts link at his Elliott Wave Lives On site in the sites list at right. On top of Tony's markings, I added some lines in bright blue (and a few notes) to indicate what I've been referring to. Bottom line, the SPX could turn here, or could even rise to perhaps 1096 (or 1100 to 1104), and still be within a triangle that can break to the downside.

Elliott Wavers will appreciate that I can see the triangle idea playing out either as a larger triangle, with its first leg (the A wave) where Tony has marked the wave "ii" at 1104.73, and then the B down at 1044.50, C up to Tuesday's high, D down at today's low, and E to complete anytime soon and could reach higher such as the 109o+ area.

Or as a smaller triangle where the first leg (the "a" wave) is at Tuesday's high, b down at yesterday's low, c up at yesterday's high, d at today's low and e completed. Only thing, the e wave cannot be higher than the a wave, and that may be a problem for viewing this as a smaller triangle.

That also means an even smaller triangle could be involved. Meaning, the rise from SPX 1044 to about 1070 as wave a of 2 up, then a triangle wave b that finished at today's low. And the wave c of 2 up in progress, which can project to 1086 if wave c=a. This would be convenient because it would allow that 1082 level we originally projected as the higher wave 2 target. That still leaves the door open to a wave 3 down, whether it's a wave 3 of iii or more like a wave 3 of a larger C down.

There can be more bullish ways to see the entire structure, and that's definitely a reason to short-term trade bullishly if the SPX gets above 1104/1105. Frankly, I'm not really tilting that way; but of course we'll see.

For the larger triangle idea, which I'm warming up to, it would mean viewing the drop to 1071.59 as an (A) wave that took about 2 weeks. Then this (B) wave triangle taking about 2 weeks. Then a (C) wave down that should have some symmetry or Fibonacci relationship to the (A) wave, and also take two weeks. Let's say that the (B) wave may complete either tomorrow or Tuesday (since Monday is a U.S. markets holiday). That would point the stock market to a low right into the end of February or very early March.

I know there are some reliable cycle ideas for thinking the low should be about March 10, approximately. So my idea here doesn't fit that timing exactly. Unless you extend the (A) wave timing somehow by saying it started mid-January (in some creative manner), thus letting the (C) wave take longer too (and maybe the (B) wave a bit longer).

Just some suggestions for the near-term Elliott Wave possibilities. We should also remember that the market's action remains consistent with Tony's idea that this is a wave 2 as he marks on his chart. In which case, the wave pattern looks like it is an abc=A up into Tuesday's high, then B down into yesterday's low, and C up in the making to complete soon. It just cannot exceed 1004 of course, and probably wouldn't get higher than 1082 area (or perhaps 1096 but that would be an unusually lengthy wave 2 under the circumstances).

By the way, I notice that Tony Caldaro is also posting alternative OEW possibilities for the longer-term equities markets counts, at his public charts, as marked onto the Nasdaq Composite (QComp) and the Nasdaq 100 (NDX) weekly and daily charts. That makes two alternative views, and it might even be that one of those alternates can co-exist with the primary count for the SPX if you go with the idea that the Nasdaq companies can be in a more bullish posture.

However this all works out in the near term, we still stick with the general idea of expecting weaker and lower levels in late February / early March, and then looking for another tradable swing long into a high early May. Okay - there's still the topic of whether we get yet another high in August - but right now it just seems too early to call that one, until we finish slogging through this price/time zone and can "read" from its pattern what clues indicate for later in the year. I'm still thinking by the time we get to the tradable low, it may well be in that price area about 1030 (unless the SPX really makes a big move to test 950).

Given the sideways movement we're seeing currently, that seems to support some kind of ABC idea better than the big "wave 3 of 3" that the EWI contingent is marketing; as well as possibly postpone Tony's thoughts of his wave C down. At the same time ... the last thing we want to do is become complacent! The price, time and technicals haven't ruled out the possibility of the markets rolling over into the third wave of Tony's C wave either!

Readers should also remember that Jim Curry's cycles update (posted recently here, scroll down the page or use the "Cyclewave ... by Jim Curry" label anytime) indicates lows during that late February to early March time; and resistance from his cycle bands which probably ranges from 1080 to perhaps 1091 by now. And Terry Laundry's T Theory update this morning mentioned resistance at the 1096 mid-channel line on his T Theory chart. (Links for these sites are in the sites list at right.) I still like the 1082 level which is the .618 retrace from 1044 back to 1104, but if this is a triangle then the .786 also is common, and that retrace level would be just slightly over 1091. (Interesting again as 1090 or 1091 is one of Tony Caldaro's pivot levels.) I like to point these things out because when different methods are pointing to the same probabilities, that tends to lend some more strength to the likelihood of those probabilities playing out.

ChartsEdge intraday cycle map for 2/11

2010-02-11T07:30:00.003-05:00

Thanks again to Mike Korell, here is today's "BP" intraday equities cycle map from his ChartsEdge Daily Maps at http://www.chartsedge.com/wp/. Remember that these are more predictive when these also look similar to his Pattern Recognition daily chart (when available - as it is today at his subscriber site - and which does have a high confidence number today), and his week-ahead cycle forecasts (use the "ChartsEdge weekly" label to locate here). You can always get the full set by subscribing to his moderately-priced subscription(s), of course. And info on all this is available at his website shown in the lists at right side of the page here.

The intraday movements depicted, begin right about the 9:30 a.m. ET market open. Will be interesting to see whether or not this map plays out, and if it will work off a higher level than yesterday's high, or just a lower high. And of course, whether it leads equities to move out of the "triangular" range (if it is a valid tri), let alone to drop low enough later today or soon in order to get the US dollar index up to the 80.80 symmetry target.

But enough of my editorializing - here's Mike's map (thanks again Mike!):

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BP chart

Posted: February 11th, 2010 | Author: Mike Korell |

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

Weird Wollie Wednesday waffles from wow! down, to wandering waves - to where?

2010-02-10T18:41:00.002-05:00

The stock markets felt like a triangle today - weird! Probably fitting for Weird Wollie Wednesday, as opex is on Friday next week and options premium may as vanish (to options sellers' pockets) while the market tries to decide what to do. I'm still tilting to the idea there's more risk to the downside, whether or not the OEW count takes us into a wave 3 of 3 real soon. The hourly SPX chart indicators look undecided about direction out of this (possibly not valid) triangle, while on the daily the SPX still was pushed down from the 8-day moving average.

Speaking of triangles and triangle traps (traps being the ones that break out in a direction you didn't expect), I get the feeling corporate bonds represented by the ETF, LQD are falling down from one. LQD dropped smartly as did TLT. So perhaps at least Treasury 10-year notes and bonds are starting the wave 3 of c we've been talking about. Hmmm, Bernanke said something this morning about a possible rate rise - has he been following Tony Caldaro (or - ack - this blog)!?! Probably not!! But with the likes of PIMCO with Bill Gross and El-Erian out talking on the topic for some days now, we can't be too surprised. But we can be positioned.

For charts today I decided on the monthly of the $SPX and $RUT. Prices are still under key moving averages. I notice that even Terry Laundry's recent update had some pessimistic notes about the extent of what to look for in early May, after the real rebound from a bottom we should expect lower later this month or March. Just a reminder that the stakes in the big picture are very substantial.

ChartsEdge Pattern Recognition intraday map for 2/10

2010-02-10T07:18:00.008-05:00

Here's today's map from Mike Korell's ChartsEdge. I've added some comments of my own a bit later, underneath the map chart, to discuss the swing view of equities. Meantime, thanks again Mike! for this Pattern Recognition map today, at http://www.chartsedge.com/wp/

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Pattern Recognition

Posted: February 10th, 2010 | Author: Mike Korell |

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

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Thanks again Mike! Folks - the idea of dropping rather than rising seems unlikely for another day, despite Mike's recent statement about his TCI most recent signal at ~1100 having been a high rather than an impending low. I'll take Mike's interpretation he gave, which is to expect sideways (range) movement before the next trend move down.

The time and price movement indicated for today kinda makes the Objective Elliott Wave idea that's Tony Caldaro's primary count of a small wave 2 up, look a little less likely. But it remains very possible. Especially under SPX 1082-1087 range. So far the rise was a Fibonacci 34 points to 1079 in the SPX cash index. Above that, it can still persist, theoretically up to 1100-1104, but would become less likely. The cycles guys all seem to be warning of lower levels into late February or early March. So even if the OEW count is forced to change (maybe as a larger wave ii or b, correcting the whole drop from 1150-1144, although that idea has some structural problems too), any alternate count should allow for another significant and maybe sharp drop (as Terry Laundry puts it in his T Theory update this morning; follow the links at his site in the sites list at right).

So KI$$ swing traders shouldn't feel that they're missing any opportunities with these market gyrations. Some of the gyrations appear to be caused by European countries helping Greece with their bond situation. Also by the US dollar almost tagging the 80.80 symmetry target. But between "almost" not being the same as "meeting" (and don't forget the yen, which has been quietly consolidating and threatens to run above $XJY 111.49 again), plus the technicals, sentiment and cycles, the situation does not look ripe yet for serious swing buying. So keep that KI$$ cash cold for another two or three weeks.

So we'll keep the close eye on equities indices and currencies, and also on whether TLT / US Treasury 10-year notes and bonds are starting to roll over into that wave 3 down we've described in several posts here recently. If so, it should happen quickly enough and might become our current "best trade" since wave 3 movements are normally the best. Early speculative stops at the highs of the past few days, and confirmation for standard swing trades hopefully coming in the next day or so.

All in all - careful out there as always, and happy market navigating!

U.S. Treasuries in position to fail 50-dma and turn lower

2010-02-09T19:32:00.003-05:00

Once again US Treasuries weakened off this afternoon, and TLT closed lower. This might be an early trigger. But if so, it still needs followthrough down. And also, increased volume along with more movement down. Together those would look like a wave 3 down starting. So I'm posting to alert it may be starting - although don't get complacent in case it's still too early.

Stock markets' relief rally may be brief, or extend - levels to watch

2010-02-09T18:06:00.001-05:00

It isn't that I want to complain, it's that there remain key levels the markets are struggling with and would need to conquer before looking safe for serious long entries. The SPX poked over 1074 but didn't make 1082 (yet) let alone above ... and let's not even talk about 1100 yet! The hourly SPX remained controlled downward by its short-term 34-hour MA, and the index couldn't close above the 1074 level it has tested. Sure, the one-day gain was a great move, I'm just talking about stepping back to gauge things. The daily SPX remains dangled above its 200-day MA. The $BKX banking index (not shown) closed under its 50-day MA - again. Indicators on the SPX chart, and my TRIN chart, below, show the index really can go either way. There are hints of positive divergence, and the TRIN's MA's (the ones greater than the 3-day MA, anyway) are all over 1.2 so technically the stock markets are oversold. But today's jump brought today's TRIN value under 0.80, so it's possible the move was made today. Interesting thing, my sense is that if the market does weaken again, it doesn't need to be a devastating 3 of 3 down yet; it could just get to the SPX' 200-day MA, and the potential symmetry levels like SPX 1027/1030 and US dollar index $USD 80.80, and THEN have a good bounce.

But the markets won't necessarily listen to me - it's us, who must take the market's temperature and figure out where it's going. So I added the VIX chart - the VIX closed over its 200-day MA. So that's another cloud. It's all making me think that if the equities markets make a bigger rally over 1082, 1087 from here, then we may have to kiss symmetry goodbye and brace for much lower levels once the rally gives out.

Funny that the excuse for the rally was the Eurozone rallying to support Grece with their bonds situation. That acted to release some buying pressure for US Treasuries, and the TLT (ETF for Treasury bonds) dropped rather well later in the day. Maybe that will become the trigger for the TBT trade we've been anticipating for over a week now.

ChartsEdge intraday cycle map for (US) equities 2/9

2010-02-09T07:15:00.005-05:00

Thanks again to Mike Korell who has posted the "BP" portion of his daily chart forecasts (shown below), at his Daily Charts webpage, http://www.chartsedge.com/wp/, for today's equities market action. Remember that these are more predictive when these also look similar to his Pattern Recognition daily chart (when available - as it is today at his subscriber site - and which does have a high confidence number today), and his week-ahead cycle forecasts (use the "ChartsEdge weekly" label to locate here). You can always get the full set by subscribing to his moderately-priced subscription(s), of course. And info on all this is available at his website shown in the lists at right side of the page here.

The intraday movements depicted, begin right about the 9:30 a.m. ET market open. Will be interesting to see whether or not this works off a higher level than yesterday's high, or just a lower high, and whether it leads equities to drop low enough later today or Wednesday in order to get the US dollar index up to the 80.80 symmetry target.

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BP Chart for Feb09

Posted: February 9th, 2010 | Author: Mike Korell |

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

S&P 500 Down-Cycle Phase In Firm Force: Jim Curry's cycles update

2010-02-08T15:17:00.004-05:00

Cycles play an important role in financial markets, and some analysts spend enough time working with them to be able to share expert insight. Jim Curry is weighing in again with a new update of his cycles work on the S&P 500. Check out his charts and discussion below, in this update from his website at http://cyclewave.homestead.com/0208102.html - thanks Jim!

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S&P 500 Down-Cycle In Firm Force

By Jim Curry - February 8, 2010

The U.S. stock markets have taken a dive since mid-January, where the various indexes were each in the process of going over larger cyclical peaks. That topping action was then favored to give way to a sharp correction into the month of March - then to be on the lookout for technical signs of the next mid-term low.

From a prior article, it was pointed out that the most dominant cycle for indexes like the S&P 500 has been the 45-day component - which is the current expression of the nominal 10-week cycle. This particular cycle/wave is nothing new to the markets, and long-time students of cyclical analysis are well aware of it's presence throughout history. Back in the 1990's it was the larger 18-20-week cycle that held the more dominant position, and - even to this day - still holds a firm influence on market direction. Having said that, below is an updated chart of the smaller 45-day cycle:

My prior observations regarding this 45-day cycle had suggested that it would not attempt to bottom out prior to the first week or two of February, simply based upon a detailed statistical analysis of the patterns of this particular component. That is, with it's peak made on 01/19/10 - and it's subsequent breach of the 12/9/09 low (it's last bottom) - this 45-day cycle had to have formed a more bearish pattern - that of a 'higher-high into a lower-low'.

When the above pattern ('higher-high/lower-low') had occurred in the past, the average 45-day down cycle phase lasted an average of 24 trading days off the top, while approximately 85% of those saw their declines lasting at least 14 days or more before bottoming. Thus, this statistical inference favored that any shorter-term rallies that would play out in-between would ultimately fail - and would then be followed by lower lows with this cycle into the first week of February (or beyond).

In terms of time, Friday's break to new lows for the swing has basically satisfied the early-end time expectations for this 45-day component. However, should it's decline see something closer to the statistical average, then it's bottom could potentially push out into 2/22/09 or later. Though this would appear to have lower odds - by no means can it be ruled out - at least until something else were to confirm an earlier-than-expected turn with the same.

In terms of price, the average 45-day down phase within the pattern of a 'higher-high into a lower-low' had been in the range of 8.4%; this favored a move to the 1053 level or lower before the cycle would attempt to bottom. Thus, Friday's action on the S&P has also now satisfied the statistical expectations with price. Even said, that won't mean that the S&P can't continue to push down to even lower numbers, as we do have the 200-day moving average acting as an attractor to price; this key moving average is currently at the 1018 figure, and is rising at about a point per day.

Stepping back just slightly, the larger 90-day (18-20 week) cycle also went over it's top back in January; it is now 65 trading days along from it's last labeled bottom, which was the 11/02/09 low of 1029.38 SPX CASH. Though this rarely occurs with a high degree of precision, should this 90-day cycle bottom where it is currently projected, it will low-out sometime around mid-March of this year. However, I should also point out that this cycle does have a large plus or minus variance of what could be several weeks in either direction. Here is an up-to-date chart of this 90-day cycle:

In taking a look at the pattern analysis of this 90-day cycle, with it's January top it had to have registered the pattern of a 'higher-high'. When seen in the past, the average time decline with this component was in the range of 23 trading days off the top; if seen on the current rotation, the inference is that this 90-day wave won't attempt it's next bottom prior to 02/19/10. On the back-end, approximately 85% of these 90-day down phases have seen their bottoms made on or before the 38 day mark - which makes the suggestion that the low for this cycle could be made on or before 3/12/10. This is important, as the next low for this 90-day component should end up as the next mid-term bottom for the U.S. stock market.

The above-noted observations with the 90-day cycle should be kept in mind going forward, as, in the past, the average rallies off the bottom for this wave have averaged either 14% - or 22% - depending on what pattern ended up being registered at it's bottom. We will have a much better idea on this as we move forward.

Otherwise, for the very short-term cycles, heading into the new trading week the probabilities seem to favor a bounce into an early-week high, with resistance at or near the upper red 'Cycle Bands' (chart, above). These bands are currently at the 1092-1095 range on the S&P, but are dropping rapidly and will move to the 1080's (plus or minus) early this week. If tested, they could stall any bounce attempt, thus allowing for a continued push to lower lows (and an eventual test of the 200-day moving average) on the following swing down.

Jim Curry - Market Turns

website: http://cyclewave.homestead.com

ChartsEdge Pattern Recognition map for Feb. 8

2010-02-08T07:35:00.000-05:00

Here is today's Pattern Recognition map for equities from Mike Korell of ChartsEdge. (Thanks again, Tony!) Notice that once again, its confidence value is over 100 (actually almost 200), as it's been for the past few days. And check his "Comment" at his site (link below, and always in the list at right), which I also included with the "ChartsEdge weekly" post here on Saturday, which gives his thoughts about where equities are heading over the longer term incorporating his longter-term BP as well as TCI index. How you play it depends on your trading time frame and style. Thanks to Mike Korell, from his ChartsEdge Daily Maps webpage at http://www.chartsedge.com/wp/

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ChartsEdge Pattern Recognition Map for Feb08

Who Dat Bull?! Super Bowl Indicator says this year 2010 won't be too bearish - as the Saints win!

2010-02-07T21:35:00.008-05:00

If the "SuperBowl Indicator" lore works again this year, the bulls will do well this year - or at least better than many currently envision! The New Orleans Saints just won their first Super Bowl (by an astonishing 31-17, in a game with plenty of action, surprises and suspense). They're members of the NFC - they defeated the Indianapolis Colts (AFC). When the NFC prevails in the SuperBowl, market pundits say the stock market will be up for the year. It's a surprisingly good predictor! as you can learn from the information quoted below, from Investopedia.

Here is the explanation of this indicator:

What Does Super Bowl Indicator Mean?
An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in the stock market for the coming year, and that a win for a team from the old NFL (NFC division) means the stock market will be up for the year.

Investopedia explains Super Bowl Indicator
Chalk it up to coincidence, but this indicator has been surprisingly accurate (around 85% correct) over the past years. Even so, you probably shouldn't bet the farm on it.

Source: http://www.investopedia.com/terms/s/superbowlindicator.asp

Bull vs. bear clues in the technical analysis of the S&P 500: Turning Points update by Andre Gratian

2010-02-07T16:41:00.002-05:00

With all the turns in the stock market, we appreciate updates from the expert of Turning Points! Last weekend, Andre Gratian showed that the S&P 500 wasn't quite ready to drop right away, but more likely to have upward pressure just ahead; but then also commented, among other things, that: "We should also keep in mind that .382 retracement of the move from July to the top is 1043." Well, the market did both! Rallied, then turned and dropped to SPX 1044, then a hard bounce. What a week!

Technical analysis can show timing, probabilities, even price projections. Andre presents his points of view by conducting classic technical analysis focusing on the S&P 500 index together with cycles, Fibonacci work and some thoughts about wave counts, in his Turning Points reports. We appreciate his work because it is always unbiased! His website is at Market Turning Points (always included in the sites list at right side of the page here). Andre provides his weekend updates also to his subscribers, and on occasion at Safe Haven as well. And of course his intraday updates and comments to his subscribers.

Let's see what Andre is showing about the stock market now:
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February 7, 2010
Week-end Report
Turning Points
By Andre Gratian

In spite of the recent market weakness, technically we are still only in a short-term downtrend, and in a correction in an intermediate uptrend. What would it take to confirm that we have started an intermediate reversal?

-- Trading outside of the green channel! As long as we remain within the channel, we are still in an uptrend. On Friday, both indices tested their channel lines and found them to hold. We had a good rally at the close which turned the market from negative to positive.

-- Breaking decisively below 1029, the low of the last short-term correction. We are still in a pattern of higher highs and lows, hence, in an uptrend.

-- The SentimenTrader would have to be much more bearish than it is. On the contrary, both the short-term and long-term trend are bullish, indicating that we are more likely to be at a low than at a high.

-- A larger increase in the 52-week lows and a larger decrease in the 52-week highs.

That does not mean that we are ready to go to new highs on the SPX. It could simply mean that we will have a test of the highs without surpassing 1151. Considering the way that we ended the day on Friday, there is a good chance that we already have started a rally -- that is, if the dollar is ready to have a correction.

I stopped following the dollar closely a few weeks ago, and that was a mistake. Since March 9, the dollar index and the equity markets are still in very close inverse synchronization and tracking the dollar continues to give important clues about the SPX’s short-term trend. Let’s look at the chart of the US Dollar Bullish Fund.

In early March 2009, it started a decline which closely paralleled, inversely, the SPX’s rise. In early January 2010, it reversed its downtrend and, so far, has had a 3-wave rally which appeared to top on Friday precisely at the same time that the SPX made a low. This caused the index to convert a 19-point loss into a 3-point gain by the close.

Analyzing the UUP’s trend since its reversal at the beginning of January, it appears to have completed 3 waves, which begs at least a short-term reversal if it is now starting a wave 4 correction, and much more if it just completed a corrective a-b-c pattern. Correspondingly, if we assume that the pattern of inverse relationship will continue for a while longer, the SPX should have at least a short-term rally or continue its rally to a new high if the dollar resumes its weakness.

Of course, other factors will be affecting the SPX‘s price action, and we can’t depend strictly on the performance of the UUP, but it will certainly bear watching.

Looking at the Daily SPX Chart! Both lower indicators met resistance at the tops of their channels and pulled back in conjunction with the sharp re-adjustment in prices; but did not go, relatively, as low as the price, thereby creating positive divergence. That, and the sharp bounce off its trend line at the close, is a potential signal that the index has found a low and is ready to start a rally. Confirmation would be the normal trend line break, and overcoming the last high in both the indicators and price.

I had expected a 9-mo cycle low in this time frame. If this is it, we should have a reversal for sure. But we will probably not know for certain until the 90-day cycle -- which has been very dominant and is still ahead of us -- has bottomed.

We have about two more weeks to wait. If last Friday’s low has not been exceeded by then, and the dollar has not made a new high, we can feel much more confident that we are not yet finished with the rally from March.

The Hourly Chart will show us more clearly what must be done to end the downtrend and begin a new rally. A big positive is that the bottom of the channel (green line) held the last two day’s vicious assault by the bears and created a strong end-of-day bounce on Friday. This has turned all the indicators, two of them from a position of positive divergence -- another positive. If we are making a true reversal, the SPX should continue up with an hourly close above 1075, sending the MACD histogram in the green. These are minimum requirements that should lead to a rise out of the red channel.

The bullish case sees the pattern that is being made as a reverse ascending triangle in which, when prices rise above the flat top line (1104), they continue to the triangle’s projection (it’s width) which is 1161.

The mild bearish case states that the index has already made a top, and, that the rally only takes it to 1130 before it turns down again and (this time) penetrates the green channel line and eventually moves prices below 1030.

The strong bearish case keeps prices from rising above 1104 before they turn down again and continue the precipitous decline, as the dollar rises to new highs after only a short correction.

(SentimenTrader gauge at left, courtesy of SentimenTrader.com)

Since the SentimenTrader has a bullish reading right now, I believe it favors the first two options.

This would require that the 9-mo cycle has truly bottomed, and that the 90-day cycle does not bring about a new low.

The above analysis shows the possibilities, depending on the market and dollar action. We now need to let the market choose its future path.

Andre

Gold may seek simple symmetry pullback; but watch in case it's worse

2010-02-07T15:30:00.001-05:00

Gold dropped - interestingly, to $1044 as the SPX was testing that price level - so gold may be working on the C of an ABC zigzag. The C=A level would be about $1011. You can see on my daily chart below, that's close to the 200-day moving average. On my weekly chart, you can see there's lots of support just over $1000. And there's the $950 level that can provide support if needed. Under $950 and gold would become more concerning.

We want to buy a low sometime over the next month or so. So we should be able to give it some time to work out where and when gold wants to make that low. If under $950, we'll have to consider a retest of the $681 low - but first let's see if it's going to get support at, or lose, the $1011/1000/950 levels.

ChartsEdge issued a revision of their week-ahead cycle chart for gold, which I inserted into that post (posted here yesterday). Seeing that change was part of my reason for putting up these charts with these comments.

U.S. Treasuries now closer to likely turn up in yields, down in price

2010-02-07T15:02:00.000-05:00

While thete hasn't yet been a trigger to trend reverse US Treasuries, sending yields up and bond prices down, we're still expecting it. Below are two of Tony Caldaro's charts from his public charts at his Elliott Wave Lives On site (in list at right - thanks again Tony!) - you can see that $UST moved higher along for gap fill, and has now even moved to the 61.8% retrace level that's common for a wave 2 pullback. Thus makes it closer to the turnaround point where the idea of "Got TBT?" will become more significant.

For KI$$ purposes, we want first to see a move and close under the prior day's low. That can be a trigger for speculative short entries on TLT or other bond/ETF vehicles (or long entries in TBT) with a stop at that prior day's high (or prior day's low in the case of TBT). Or wait for what we'll look for next - followthrough with increased volume. Assuming this all comes together, the yields (and TBT) should push above the multimonth range high, with Treasury 10-year notes and bonds prices dropping to new multimonth lows.

Weekend must-read and some fun-read analyses and articles about financial markets

2010-02-06T16:42:00.003-05:00

Here's another weekend wrap of various articles and posts by others on the web. We'll start with some of our standard favorites, then as the weekend progresses I'll add more:

First - Today's update from T Theory Foundation: T Theory Calculations, Daily Updates, Charts and Data at http://www.ttheoryfoundation.org/t-theory-calculations.html - here's his quick summary, click his link to see his chart and trad his discussion of alternate T constrction:

Saturday Noon February 6 2010 Comment for Feb 5 Close: T Theory Forecast remains bullish for the longer term based on the long term AD T #13 but the S&P broke down below the mid-channel support noted in the chart and this is negative near term. Currently I am looking for a new red Small T to eventually get the trend headed up to an early May peak, but don't think we are there for the final low just yet. (Text Corrections coming in an hour)

Yesterday the S&P dropped to the lower green envelope (now S&P 1045) during the early part of Friday's trading, then "mysteriously" rallied to close unchanged. I would like to believe that my envelope theory, based on technical energy conservation principles, was "right on", but the fact is that the concept missed the last top suggests to me that investors have serious concerns that will eventually require a decline in the S&P somewhat below the channel lower bound. Most of the Friday bounce probably was short covering rather than informed buying for the rally projected into early May. So we need to see how next week goes and I assume this rally attempt will fail. the following tutorial helps to explain the forecast in technical terms.

Next, Mike Burk's equities market technical analysis update, at Safe Haven | Technical Market Report, 2/6 at http://www.safehaven.com/article-15731.htm.

An article by Marty Chenard: Safe Haven | Global Debt Problems vs. Economic Progress ..., 1/5 at http://www.safehaven.com/article-15716.htm.

Calafia Beach Pundit's article, Employment: The Bottom Is in Sight -- Seeking Alpha, 2/5 at http://seekingalpha.com/article/186970-employment-the-bottom-is-in-sight.

Terry Laundry's T Theory Observations at http://www.ttheory.com/.

Schaeffer's Monday Morning Outlook: Dow Jones Industrial Average Clings to 10,000, 2/6 at http://www.schaeffersresearch.com/commentary/content/monday+morning+outlook+dow+jones+industrial+average+clings+to+10000/observations.aspx?click=home&ID=97845:

Here's their intro paragraph:

That was a close one! It came down to the wire on Friday, but the Dow Jones Industrial Average (DJIA) managed to rally back nearly 200 points and eke out a close above 10,000 for the week. Growing concerns about European sovereign debt and a less-than-inspiring January nonfarm payrolls report were at least partly to blame for last week's turmoil. Looking ahead to next week, Todd Salamone, Senior Vice President of Research, examines key technical support and resistance levels for the S&P 500 Index (SPX). He also drills down on several sentiment indicators, and explores the potential for a buying opportunity in the current market environment. Next, Senior Quantitative Analyst Rocky White takes a look at the December lows indicator, and examines the theory that the market is in for a rough year if the prior December's lows are taken out. Finally, we wrap up with a look at some key economic and earnings reports slated for release this week.

Jesse's Café Américain: CFR: When the Fed Stops Monetizing US Sovereign Debt..., 2/5, at http://jessescrossroadscafe.blogspot.com/2010/02/cfr-when-fed-stops-monetizing-us.html.

Jesse's Café Américain: Fortune Editor Suggests That the US Treasury Will Have to Start Defaulting On Its Bonds, at http://jessescrossroadscafe.blogspot.com/2010/02/social-security-is-broke-beware-of.html

With the following quick disclaimer (but still a great read if you can devote several minutes):

Disclosure: The title of this blog entry is almost as sensationalistically misleading as the headline of the Fortune news article below.

Thursday - Greece is the Word | Phil’s Stock World - By Phil Davis, 2/4 at http://www.philstockworld.com/2010/02/04/thursday-greece-is-the-word/.

FSO Editorial: "Changed To Neutral Posture" by Carl Swenlin 02/05 - SPX review; we've got some different thoughts from him, but interesting to know what he's thinking (and he does have a relatively steady approach to position trading (versus shorter-term swing trading)): 2/6, at http://www.financialsense.com/editorials/swenlin/2010/0205.html.

What does the volatility mean for markets from here? Objective Elliott Wave insights from Tony Caldaro

2010-02-06T14:51:00.005-05:00

So far, the basic idea of the stock market having topped a large B wave can be intact, as Tony Caldaro explains. Although at this blog, we entertain other possibilities (like the idea of a low in March and new highs in May). But we don't doubt that this us a bear market and it's just a matter of time before the next huge multimonth wave down can be confirmed. Tony Caldaro has been tracking the equities markets as well as currencies and commodities with his Objective Elliott Wave analysis, at his the ELLIOTT WAVE lives on site - his great work is a reason we keep his site in the list at right. Let's see what he's sharing now (thanks Tony!):
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the ELLIOTT WAVE lives on
Market analysis using proprietary Objective Elliott Wave techniques
by Tony Caldaro

February 6, 2010
weekend update
REVIEW

The first week of February starts off like a roller coaster. While it would appear little transpired on a week to week basis: the week started at SPX 1074 and ended at 1066. What occurred in between, a rally to SPX 1105 then a drop to SPX 1045, had the bulls wondering and the bears celebrating. Economic reports for the week were generally positive. While construction spending continued negative. Auto sales dropped, as did productivity, and weekly jobless claims increased. On the flip side, personal income/spending continued positive and, ISM manufacturing/services continued to improve. Also, factory orders and pending homes sales rose, while the payrolls/ADP employment reports improved, and unemployment dropped to 9.7%. Even the decline in consumer credit was far less negative than in recent months. The managed economy appears to be getting a bit more manageable. For the week the SPX/DOW were -0.65%, and the NDX/NAZ were mixed. Asian markets were -2.1%, Europe was -3.8% and the Commodity equity markets were -2.3%. Bonds gained 0.6%, Crude lost 1.4%, Gold slid 1.5%, and the USD gained 1.3%. This week's economic reports will be highlighted by the twin deficits and retail sales.

LONG TERM: bear market
We continue to prefer the count that a Supercycle bear market has been ongoing since Oct 07 at SPX 1576. We counted the decline from Oct 07 to Mar 09 at SPX 667 as a Primary wave A detailed zigzag. Then, based upon historical OEW charts, we projected a 50% counter trend rally near the SPX 1120 level for Primary wave B. This rally did unfold, in what appears to be a simple OEW zigzag, from the Mar 09 low to Jan 10 at SPX 1150. Now the preferred count remains a five Major wave decline into late 2010 to complete a 3-3-5 flat near the Mar 09 SPX 667 low.

While Primary wave B was underway several events occurred that were not anticipated. First, we expected the rally to last about five months. It took ten months. Nevertheless, we were still able to hone in on the upcoming January 2010 uptrend high as early as the beginning of December. Second, we did not expect to get an OEW long term uptrend. One did occur. This, however, gave us reason to pause, and review the internal market action of both uptrends from the Mar 09 low. Since 70% of OEW long term uptrends are a signal that a bull market is underway. We were forced to offer an alternative bull market count, which appears on the NAZ chart at the bottom of page 1 in the link below. We also discovered in the midst of the previous bear market flat, during 1937-1942, a long term OEW uptrend was also triggered. Our final determination, while respecting both of these opposing market views, was to carefully track this downtrend. Should this downtrend be impulsive, then the bear market scenario holds. If a corrective downtrend unfolded, then the market is likely to head higher after the downtrend concludes.

MEDIUM TERM: downtrend hits SPX 1045
Thus far this downtrend is only 13 trading days old. Yet, it has already declined 105 points, (SPX 1150 to 1045), more than the previous downtrend, (SPX 956-869). Also, the percentage drop has already equalled that Jun-Jul 09 downtrend at 9.1%. This time the selling has also been far more broadbased than the sector specific selling during the previous downtrend. All these factors suggest that the market has completed a more significant wave in Jan 10, than in Jun 09. Which fits into the continuing bearish scenario. We are not, however, totally convinced at this time that the downtrend is indeed implusive.

Certainly we have labeled the decline from SPX 1150 to SPX 1072 as Intermediate wave one. The rally, which was quite short lived, to SPX 1105 as Intermediate wave two. Then the decline from SPX 1105 to the recent low of SPX 1045 as part of Intermediate wave three. We're quite comfortable with counting these three waves down from the SPX 1150 high. We all were, however, a bit perplexed by the wave action around the SPX 1090 level in late January. The market appeared to hesitate when it should have been impulsing lower. Putting that aside, since this has occurred in the beginning of downtrends before. As long as Int. wave three continues to unfold impulsively it will continue to add more conviction to the bearish scenario. Remember, we need to track this downtrend quite carefully. Also of note.

When we review the major US indices we observe three waves up from the Mar 09 low. Objectively, this can be counted as an 'abc' B wave, or as a 1-2-3 of an impulse wave. When we review the thirteen foreign indices we track we observe something totally different. Ten of the foreign indices appear to have bullish patterns. Seven of these ten indices have actually completed five waves up from their low, or more. Can the US, and others, collapse while the rest of the world merely corrects? Certainly possible. Not all indices bottomed together in 2002/2003 either.

Another observation we have is well seated in the "managed market for a managed economy" concept. After most stock markets bottomed in early 2003 they all started rising in unison. During the entire period from Mar 03 to Oct 07 the DOW never corrected more than 10%. Not once. After the Oct 2007 top that 10% limit was broken in Jan 08 and the bear market was underway. After all that went on in 2008. and more than a 50% loss in total value, the market finally put in a substantial low in Mar 09. The first uptrend carried the DOW into a Jun 09 uptrend high. Then the DOW corrected just 8.9%, ending the downtrend, and entered a prolonged six month uptrend. While this ten month rally was underway banks were increasing equity through secondary offerings and issuing bonds. Corporations were also improving their balance sheets through downsizing, other cost cuts and equity/bond offerings as well. While the stock market rallied the economy bottomed and started to turn around. GDP turned positive in Q3 and even more positive in Q4. If real free market capitalism is a relic of the past, and a "managed market for a managed economy" is the current mantra. We're not likely to see a correction of more than 10% in the DOW during this downtrend. Lots of food for thought.

SHORT TERM
Support for the SPX is at 1061 and then 1041, with resistance at 1090 and then 1107. Short term momentum displayed a positive divergence at fridays lows. Momentum on the daily charts also displayed a positive divergence at friday's lows. This sets up the short term count for some interesting possibilites for next week. We have been counting this downtrend as Major wave one of Primary wave C. From the high: Int. wave 1 SPX 1072, Int. wave 2 SPX 1105 and Int. wave 3 underway. This is the preferred count. We will suggest that Minor wave 1 of Int. wave iii completed at SPX 1045, and Minor wave 2 is underway. This makes the most sense from the wave structure thus far. This would indicate that the late friday afternoon rally should run into resistance on monday. Then a Minor wave 3 down will likely take hold.

Another potential count, based upon a bullish scenario, would suggest that an ABC completed into friday's low. The positive divergence on the daily chart, at friday's low, aids in suggesting this outcome. An interesting inflection point for this always interesting market. Best to your trading!

FOREIGN MARKETS
The Asian markets were all lower on the week -2.1%. All five indices are in confirmed downtrends.
The European market were all lower as well -3.8%. All five indices are in downtrends, and Spain's IBEX lost 7.7% on the week.
The Commodity equity markets were mixed -2.3%. All three indices are in downtrends, but Canada's TSX was up 1.2% on the week.

COMMODITIES
Bonds gained 0.6% on the week as prices remain in an uptrend, with downtrending rates.
Crude lost 1.4% on the week and confirmed the downtrend we mentioned last week.
Gold lost 1.5% on the week, breaking through the double bottom pattern. Support remains in the $1025-$1075 range.
The uptrending USD gained 1.3% on the week. It pulled back, and then rallied to a higher high, as expected. Now displaying a negative divergence.

NEXT WEEK
A relatively quiet week ahead economically. Nothing scheduled for monday. On tuesday we have Wholesale inventories, and on wednesday the twin deficits Trade and Budget. Thursday, weekly Jobless claims, Retail sales, and Business inventories. Then on friday a Consumer sentiment reading. The only FED activity is testimony on wednesday from FED governor Tarullo in the US Senate. Best to your weekend, and week!

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

ChartsEdge cycle-based forecasts for next week and beyond - equities and gold, 2/8 week

2010-02-06T13:00:00.007-05:00

Below are the week-ahead cycle-based forecasts from ChartsEdge. And thanks to Mike Korell, who's the fellow doing ChartsEdge - and has also provided some additional comments at his ChartsEdge Daily Maps page (link with his comment title below) about what his various indicators are showing (based on his Trader Confidence Index, BP and other cycle-based charting). Amazingly when you think on it, his comments last week were on point - a low Monday, a high Tuesday, and the week generally sideways - that spike Friday afternoon to 1066 brought it almost "sideways" compared to the prior Friday's close! His comment about the longer-term view focuses on equities and not really gold (though one might speculate a loose correlation - but be careful on that). Anyway, here's what he's showing this weekend:
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Next Week and beyond

Posted: February 6th, 2010 | Author: Mike Korell | Filed under: One-Day Market Map | No Comments »

Price & time in SPX & UUP do suggest possible turn in play

2010-02-06T11:56:00.004-05:00

Following up on my prior post this morning about possible turns from the dollar's symmetry move testing 80 in the $USD dollar index, here are two hourly charts of the SPX and the dollar ETF called UUP. The SPX made a swift drop from 1150 of 60 points to 1090. Then consolidated until it reached a high retest of 1100, at 1104. That consolidation took about twice as long as the first swift drop. Then another swift drop of 60 points from 1104 to 1044 (in about the same time it took for that first drop). This also resulted overall in a move that dropped to Terry Laundry's mid-channel line in his T Theory, then ultimately to his lower channel band (that was at 1046 as of Friday morning). I'll let Terry Laundry speak for himself of course. Just a couple quick points about the price and time.

First, though it's tempting to call it a zigzag ABC with price and time symmetry, I think the consolidation inbetween took too long for what would be the intervening B wave. Second, that leaves the probability that some other wave structure is in play that doesn't support the idea that equities now rebound to new highs.

Third, we've got a lot of technical damage done, despite some positive divergence showing up. Finally, the cycles reasons to expect lower into March.

However - given what looks like some type of 5-wave move down in the SPX and up in the dollar (UUP), with the selling picking up in UUP on Friday, it isn't unreasonable to expect some decrease in volatility just ahead.

I've seen a suggestion elsewhere that the move down to 1044 on Friday could have completed the entire first wave (or wave a) down from 1150. If that's right, then we'd expect a wave 2 (or b) up to retrace at least .382, or better .50 or .618, of that wave down. I suppose it's possible although the consolidation that would have to be its internal 4th wave looks a little large. Anyone having that idea will have to stop out if and when the SPX pokes under Friday's low without having made a retrace of such an amount.

How to swing trade this? My inclination is to allow for some more poke up to perhaps the 1070's or 1080's, while remaining overall defensive (short). If the SPX were to get much higher than that, then to stop out and reassess. Because our overall perspective is lower into March. If the SPX moved over 1090 and especially 1100 near-term, it wouldn't change this overall perspective, but only would alter our ideas about the wave structure that leads the market down over that time frame.

U.S. Dollar hit the easy target - now what (and why we should care)

2010-02-06T10:57:00.002-05:00

The U.S. Dollar index ($USD) is central to what's happening in financial markets now; not by causing events but very well reflecting them. It made a spectacular intraday reversal off the area just over 80 which was a target. In a way, it was the easy target because it's a combination of a potential c=a symmetry, retesting to prior price consolidation, and retesting a prior Fibonacci level it broke under on the way down from the highs around 90. But now what? If the dollar reverses back down, other markets like equities and commodities should rise again. Maybe the dollar will reverse from here. There's also another somewhat higher level, about 82, which was also previously important support - and is the level where it would retrace 50% back to those highs (about 81.9 so I'll call it 82). It's one of the levels to keep in mind now. Main question is, will the dollar reverse and drop, either from here or from 82 in the $USD dollar index - even to new lows? Put another way, will the euro make a low now or soon, and recover to new highs?

Fundamentally people care because a weaker dollar helps U.S. companies sell goods and services abroad. It also makes it "cheaper" for foreign companies and people to invest in the U.S., travel to the U.S., and buy its products and services. But there's another role, which is that investors bid up the dollar when it looks like a flight-to-safety play and to be risk-averse when other investments - or countries - look too risky.

We care because of the remarkable correlations against other tradable assets. And because many traders trade currencies. So we really want to know on a big scale whether or not the dollar will fly up to retest the 90 level in the dollar index. Some think it will, as a "C" wave where the bottom about 74 was a B wave (I think that's possible, or it might be part of a large triangle that hasn't finished yet). Others think the dollar is moving up impulsively to vault far beyond 90 $USD (I don't believe that's the case, which is a reason I remain long-term bullish on gold). I suspect that the dollar can move up higher, maybe even retest 90, but not guaranteed - it could well get above 82 to achieve a Fibonacci retracement of .618 or .786 back toward the 90 area.

So let's review. Reversing from here is one possibility - but I've got a nagging sense that's too easy. That "bull flag" it broke upward from looks too robust, IMO, to support simply this quick poke up to 80. The dollar index could also extend a bit up to 82 (and I've seen a euro projection to $132, maybe that "fits"), as equities test a bit lower (like the SPX to 1030), and then turn. If this happens, it could take a bit of time with deceleration of the trend and then working out a reversal pattern that incorporates the 82 level and lasts into the month of March.

I did say there's at least another possibility that the dollar may proceed much higher. One reason I continue to allow for this is that the recent consolidation it moved up from, looks rather bulky to be the "b" wave of an "abc" zigzag. A zigzag should complete at about 80 or 82 (c=a symmetry). If it's working out a triangle, then this part of the dollar's move up could easily get to 84 or better, 86.50 - 87 in the $USD, before this upwave is done. It would be a sharp movement up if it happens by early March, but triangles are composed of sharp zigzags. Still, the protracted move down that poked to 74 doesn't look much like a zigzag. So it remains possible this dollar move is only a correction that, when done, allows the dollar to make an important new low as suggested by Andy Askey's Gann work.

For the bigger "C" wave up idea - If the most recent spike up isn't a "c" wave but instead the first wave of a third wave up, then after a little wave 2 pullback it would move persistently much higher. The scenario I'm thinking of would be more likely a larger C wave where the low under 74 was a B wave.

I don't have a firm Elliott Wave count in mind, but actually do have a preference on the dollar's projection from here, and that is for a count that would result in the dollar making a substantial low (probably a new low) in May or August. Partly because of Andy Askey's Gann view (posted about a week ago here), and partly because of Terry Laundry's T Theory projection of equities making new highs in May and August. Also because of currency cycles views suggesting that the dollar and euro are making corrections now that will complete into March, and then support such moves by equities.

How all financial markets are now affected by the world awash in debt: Raymond Merriman's comments for 2/8 week

2010-02-05T22:44:00.000-05:00

Last weekend, Raymond Merriman spoke in his public weekly comments about the markets likely to make a quick correction in their short-term trend - or just collapsing. We got the first of those. Though on Thursday it started to feel like both! After today's sharp movements in both directions, it's time to start reflecting on the probable paths of the markets from here. As usual, we open it up with the reflective and preview comments Ray Merriman provides for the upcoming week. This isn't the same as his specific market subscription services - those are available as you can learn from his Merriman Market Analysis site (always in the list at right). Let's see what he's saying in his comments this time:
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MMA Weekly Comments for the Week beginning February 8, 2010
Written by Raymond Merriman

Note: My apologies for the delay in this week’s column. I left Friday morning for vacation in Marco Island, Florida. The plane was delayed two hours due to storms. By the time I got to the island, the storm had knocked out all the internet connections. I hope I can get this column out by Saturday now, as it is late Friday night and still no internet. The island is dark.
- Raymond Merriman

Review and Preview

The highs of January 11-19 in world equity markets are holding. These highs were nearby to the stations of Saturn (January 13) and Mercury (January 15), which was the basis for our critical reversal date of January 14, +/- 3 days. After attempting a rally from the lows associated with Saturn square Pluto on January 31, the markets sold off sharply again last Thursday. Many markets made new multi-week lows on Friday. The Dow Jones Industrial Average, for example, fell below 10,000, to 9835 intraday, its lowest level since this primary cycle began in the first week of November. It recovered to close back slightly above 10,000.

The sell-off was noted in many commodities as well. Gold, for instance, fell from a high of 1128 on Wednesday to 1044 intraday on Friday. Silver fared even worse, falling from 1695 on Wednesday to 1465 on Friday. Crude Oil also tumbled, plunging from 79.66 to 70.75 in the June contract, from Wednesday to Friday.

The culprit was exactly what we have been highlighting in the last several columns: debt. But it is not just debt in the United States anymore. It is debt in Europe, and specifically the countries that make up the European Union. Consequently, the Euro currency is plummeting sharply against other currencies. Against the US Dollar, for instance, the Euro currency has now plunged from a recent high of 1.5110 in early December, to under 1.3600 on Friday. That is one of the major reasons why Gold, Silver, and Crude Oil have fallen, for their prices are denominated in the U.S. Dollar, which is rising sharply as forecasted in our recent Forecast speeches, as well as in the Forecast 2010 book.

In short, the world is awash in debt. The debt ratings of countries all around the world are vulnerable to being downgraded further. And now the same is true of the United States as a result of its continually mushrooming debt. It is all related to Pluto in Capricorn, the midpoint of the Saturn-Uranus opposition and the focal point of the evolving Cardinal Climax of 2008-2015. It peaks, from an astrological point, in mid-2010. But the damaging consequences of this debt explosion will be felt for the next 2-5 years, and probably throughout the entire decade, unless politicians around the world can honor their campaign promises and break their addiction to out-of-control spending they – we - cannot pay. But that is not likely to happen, for in the last 20 years or more, politicians have learned one lesson every well: winning elections is not about how well you can govern, but how well you campaign. What they may not have realized however, is that voters are discovering this too. And with Uranus approaching a square to Pluto-in-Capricorn, a populist revolt against politicians, bankers, and big businesses is already underway. It can only be stopped by the positive potentials of Pluto in Capricorn: honesty, truthfulness, and ethical behavior. In other words, honor your campaign promises. Sacrifices will be necessary to get back to a foundation of core values and common sense practices.

Short-Term Geocosmics

This last week was typical of the principles of Saturn square Pluto, which began the week on Sunday, January 31. The attention of the world was on the destructive nature of debt. Credit agencies downgraded nations. The specter of higher taxes spooked the market with the realization that companies are not hiring new employees yet, despite the fact that the business cycle is ready to turn up. It won’t – can’t – improve dramatically until businesses know what their taxes will be, if they can afford them and still hire new people. Based on the President’s budget proposal given this week, it doesn’t look good – not just for this year, but for all years of this new decade. The President’s promise to put a freeze on new spending was qualified to not begin until 2012, and well after more record-breaking budget deficits first. By then it may very well be too late to recover. And so the market sold off as credit agencies threatened to downgrade to U.S.A. credit rating, for who is going to loan it money if its budget projections show it will spend over $1 trillion+ per year more than it brings in? At some point, the debt will explode too far, and then there is danger of default. Who wants to loan money to an entity that is on the path to defaulting on its loans? Not China. Not anyone.

Nevertheless, the geocosmic picture of this month is not so ugly. Venus will first conjunct Neptune on Monday, and then Jupiter on February 16. This is known as a “translation” of Venus to the separating Jupiter-Neptune conjunction. Obama and the White House may experience something of a “comeback,” for it was the Jupiter-Neptune conjunction last year that supported the world’s belief in his powerful aura, or “magic.” But it has worn off sharply since its last passage on December 21, according to many polls. Yet, the translation of first Venus, and then the Sun (February 14-28) to Jupiter and Neptune can indicate a temporary recovery of that charisma and magic. Under these themes of optimism and hope, stock markets can rally. If not, the downside of these same signatures can be hysteria and panic. But it is March 9-21 that we want to focus the greater attention on in the near future. There will be nine important geocosmic signatures taking place then.

Longer-Term Thoughts

We are now more than halfway through the Mars retrograde cycle (December 20-March 10). The commodity and currency markets that bottomed at the time of the retrograde (Gold, Silver, Euro currency), have now broken down below those lows of December 22 after a rather impressive 2-3 week rally. The idea now is that they may continue lower until the Mars retrograde cycle ends.

In the study of astrology, Mars retrograde pertains to the idea that new efforts begun around the time of the retrograde date may have to be aborted before it resumes its direct motion. We have already noted this phenomenon at work in the United States Congress, where the Senate passed its much anticipated Health Care Reform proposal right before breaking for the Christmas holiday season, or, right around the time that Mars turned retrograde. This was not a favorable geocosmic time to pass such a proposal, or any new effort that you wish to be accepted. Our comments at the time suggested that this proposal would not pass the entire process necessary to become law without some major revisions. This analysis was based solely on Mars retrograde. One month afterwards, the state of Massachusetts shocked the country when it elected Republican Scott Brown to the seat that held been held by Democrat Edward Kennedy for several decades. With that upset, the Health Care Reform proposal of the Senate was dead, for Democrats lost a filibuster-proof majority.

Yet the idea of universal health care reform will not die as quickly as many Republicans may hope. After all, Uranus is still in Pisces back and forth through much of 2011. And Jupiter is now in Pisces, which rules this kind of reform movement.

Mars retrograde may have portended the collapse of the Senate’s proposal. But my guess is that even this month, it could be resurrected again, in a new form. And that really is the nature of Mars retrograde. It doesn’t always kill the effort. It just means it has to be done over again, with considerable modifications. The public is still plenty angry at health insurance companies. And with Pluto in Capricorn, these companies will still be held accountable for their opportunistic behavior at the expense of common people. Both the population and government will force them to make significant changes that are more in line with the mood and needs of the public. The public wants reform in this area, and I believe they will still get it this year. It’s not dead. It is just in the process of being resurrected in another form after Mars goes direct.

Announcements

Our next private meeting for MMA subscribers will take place at the Hyatt Regency Hotel in Cambridge (Boston) Massachusetts, on March 1 at 11:00 AM. There is no cost for yearly subscribers of MMA or SOS reports, or for any subscribers of our daily or weekly reports. For all others, the cost is $295.00. This special meeting will last about 2-1/2 hours. It will follow the NCGR conference on “Planetary Revolution: Geocosmic Alchemy II”, taking place February 25-28. Attendance is limited to about 15 persons, and reservations are suggested. There is nothing as exciting and informative as a gathering with MMA subscribers (to me), because they come from very interesting walks of life, from the fields of finance, banking, government, military, intelligence agencies, academia, psychology, internet technology, and astrology. During this special gathering, subscribers may ask any questions they wish, or they may make any statements that the group may then discuss. Great trading ideas tend to arise from this format. Please contact us at 1-248-626-3034, or email us at ordersmma@msn.com if you would like to be a part of this special meeting, as seating is limited. For information on what these meetings are like, read a review of my winter tour of Europe, where I met several subscribers at two separate meetings, in Amsterdam and Zurich.

If you are an active short-term trader, you may be interested in our Weekly or even Daily Market reports with short-term trading recommendations. It is the only way I keep in touch with traders on a daily or even weekly basis, as I no longer offer personal consultations. These reports give in-depth analysis of the DJIA, S&P and NASDAQ futures, Euro currency (cash and futures), Swiss Franc, Dollar/Yen cash and Yen futures, T-Notes, Corn, Soybeans, Wheat, Gold and Silver. The daily reports cover all stock indices listed above, as well as futures in Euro, T-Notes, Soybeans, Gold and Silver. Subscription to the daily report also includes the weekly report. For more information, go to http://www.mmacycles.com/services, or call our offices at 1-248-626-3034. In the words of one of our subscribers: “I recently subscribed to your weekly report and am finding it to be excellent and a very useful companion to the MMA Cycles Report. I can't imagine now managing my investments without them.”

The February issue of the SOS Global Stock Market Cycles Report went out last week. If you subscribe to this report and did not get it, call our offices at once. This report covers the long-term as well as intermediate and short-term outlook for the USA stock market (DJIA and NASDAQ Composite). It then covers the intermediate and shorter-outlook for the XAU Gold and Silver mining index, the German DAX, Netherlands AEX, Hang Seng of Hong Kong, and Australia’s All Ordinaries. This is our only subscription report that gives detailed discussion on geocosmic variables that are forthcoming. For subscription information, please go to SERVICES at www.mmacycles.com.

CD’S, MP3’s, DVD’S, and webcast viewing of the Forecast 2010 speech will be available in about a week. The Forecast 2010 Webcast Speech took place December 20, 2009. We are offering a CD or MP3 download that contains the audio only. You can also view the webcast again in it’s entirety as a one-time download from Vibation until January 25, 2010. And it will be available in a DVD edited edition too. The cost for any of these recordings will be $45.00 and an additional postage charge if ordering in audio CD or edited DVD format. For further information, go to our website at www.mmacycles.com (it will be up sometime this week). Or drop us an email (ordersmma@msn.com) or fax (248-538-5296), or call us at 1-248-626-3034. “Thank You - it’s very thoughtful and thanks you for sharing your knowledge. A whole new world opened for me.” Attendee to the Forecast 2010 webcast.

The Forecast 2010 book are out!!! For more information, visit our web site at www.mmacycles.com. “Kudos… the 2010 forecasts – you’ve outdone yourself - I see Jupiter is playing a role not anticipated (if I recall correctly) last year .... it all clicks.” RR, Santa Fe

The MMA Catalogue of products and services for 2010 is now out!!! You can download it in PDF at http://www.mmacycles.com/option,com_docman/task,doc_download/gid,161/Itemid,63/. The ordering page is the last page of the catalogue. This is especially useful for those outside of the USA, since we do not send these by snail mail unless requested.

MMA is currently preparing a listing of astrology books on its web site for readers to consider in their education of this wonderful subject. More will be announced on this shortly.

Disclaimer and statement of purpose:
The purpose of this column is not to predict the future movement of various financial markets. However, that is the purpose of the MMA (Merriman Market Analyst) subscription services. This column is not a subscription service. It is a free service, except in those cases where a fee may be assessed to cover the cost of translating this column from English into a non-English language.

This weekly report is written with the intent to educate the reader on the relationship between astrological factors and collective human activities as they are happening. In this regard, this report will oftentimes report what happened in various stock and financial markets throughout the world in the past week, and discuss that movement in light of the geocosmic signatures that were in effect. It will then identify the geocosmic factors that will be in effect in the next week, or even month, or even years, and the author’s understanding of how these signatures will likely affect human activity in the times to come. The author (Merriman) will do this from a perspective of a cycle’s analyst looking at the military, political, economic, and even financial markets of the world.

It is possible that some forecasts will be made based on these factors. However, the primary goal is to both educate and alert the reader as to the psychological climate we are in, from an astrological perspective. The hope is that it will help the reader understand these psychological dynamics that underlie (or coincide with) the news events and hence financial markets of the day.

No guarantee as to the accuracy of this report is being made here. Any decisions in financial markets are solely the responsibility of the reader, and neither the author nor the publishers assume any responsibility at all for those individual decisions. Reader should understand that futures and options trading are considered high risk.

Copyright MMACycles 2007-2010; you may link to this site or page, but you may not distribute these texts in any way (by email or otherwise).

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Bit of technical positive divergence may help equities indices bounce near-term

2010-02-05T22:33:00.000-05:00

The hint of positive divergence in the McClellan Oscillator ($NAMO and $NYMO charts below) at my UBTNB3 site recently, has grown a bit more as you can see in the charts below. It's even shown in the StochRSI indicator as applied to the oscillator. I don't want to over-promise, because positive divergence can persist a bit longer (or worse, get erased). But for now, it's an early indicator that the equities indices may be readying for a turn, perhaps a better turn or bounce than we've yet seen on the drop from SPX 1150.

Extremes marked the day and week in all financial markets

2010-02-05T16:37:00.004-05:00

Best of times, worst of times?! This week's volatility can either mark a significant low along with the US dollar hitting targets above 80 $USD (dollar index), with higher equities and other market levels (gold, oil, commodities) ahead. Or a temporary respite, with a vicious 3rd wave down leg of some proportion that can take the SPX down around 1030 next week. But don't worry now, it's Friday!! Seriously, if this is a small-level wave 2 in the SPX, it can stall out around 1066 (where it closed), 1074 (50% retrace) or 1081-1082 (61.8% retrace and level of 34-hour MA and 8-day MA). Moving well above those levels early next week would suggest a different "count". But there are reasons to expect the SPX falls from resistance and goes down to test around that 1030 area.

Treasury 10-year notes and bonds pushed higher, with $UST getting closer to a gap fill. We still like adding to TBT or readying to buy it on a good trigger that indicates the 10-year and the bonds are ready to roll down. It may well be that will happen when the SPX starts on a more serious bounce. There's already negative divergence in the $UST daily chart, and positive divergence in the SPX daily chart, so that time may be here or soon.

During the afternoon, Bill Luby of VIXandMore tweeted he was going long at SPX 1047 or 1048. That was also as the SPX got support at Tony Caldaro's 1041 pivot, and at Andre Gratian's projections. I don't know if it was a short-term swing (probably), but when the "VIX meister" speaks I pay attention. The VIX spike was awesome but hit resistance as the SPX got support. You can see the reaction on the hourly charts below. Some are also thinking the SPX touched a lower trendline that parallels the upper trendline from the March 2009 lows on a log scale chart - dunno, but will look forward seeing how Andre Gratian charts it this weekend.

Of course, it all makes a great intro for another weekend of interesting analysis and review. Happy Friday evening!

Chart of the Day - Job losses are over triple the average trough

2010-02-05T15:07:00.002-05:00

The market reacted badly to two days of bad unemployment data. Although the technicals were warning anyway so the news is just that, news. For trading purposes we may want to think that some of the bad new is already baked into the markets; but still, thete can be surprises. Remaining aware of the economic situation is very important. Especially when quantified in ways that help compare against previous economic cycles. So here's "Chart if the Day" with another timely update of how the umployment data comparisons look - see the quote below for their chart and information, from: http://www.chartoftheday.com/20100205.htm:

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Chart of the Day - Job losses are over triple the average trough
February 5, 2010
Today, the Labor Department reported that nonfarm payrolls (jobs) decreased by 20,000 in January. Today's chart puts that decline into perspective by comparing job losses following the beginning of the current economic recession (solid red line) to that of the last recession (dashed gold line) and the average recession from 1950-1999 (dashed blue line). As today's chart illustrates, the current job market has suffered losses that are more than triple as much as what occurs at the lows of the average recession/job loss cycle. It is also worth noting that 25 months after an average recession/job loss cycle began during the second half of the 20th century, the job market recouped all losses and was already in process of adding new jobs. At the same 25 month mark during the 21st century, the job market was still suffering losses.

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- Where's the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron's recommended charts of Chart of the Day Plus.

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ChartsEdge Pattern Recognition map with good confidence for equities on Friday, Feb. 5

2010-02-05T07:33:00.003-05:00

Turn away from the TV pundits and look at today's Pattern Recognition map for equities from ChartsEdge. Notice that once again, its confidence value is over 100 (actually above 200), as it's been for the past few days. Now - if their "swing view" TCI index is right that we'll see a stock market high today or Monday - then any low that gets put in today might give way next week. (I wondered if it should be read as a low today or Monday, but don't see Mike saying so; thus must assume it suggests an intermediate high - that's just my take.) So as always, how you play it depends on your trading time frame and style. Thanks to Mike Korell, from his ChartsEdge Daily Maps webpage at http://www.chartsedge.com/wp/

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Pattern Recognition

Posted: February 5th, 2010 | Author: Mike Korell |

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

U.S. Dollar at one target level means be alert for possible turn in currencies

2010-02-05T06:39:00.003-05:00

Back when the dollar was reacting upward for our lower Fibonacvi target, I posted that a logical target for the dollar index ($USD) would be to retest the 80 level. It was important before, and represents the area of the 50% retracement back to the high. This morning the dollar is testing slightly above the 80 level, so we must consider whether it's hitting target and what that may mean. The daily chart might be interpreted as 5 waves up and ready for a pullback down. More bearishly for the dollar, it might be that the dollar is capping off a pullback upward and ready to downtrend again. That's a big difference, isn't it!

It's reasonable therefore to be on alert for a turn of some proportion, small or large. This nay become a consolidation too. Indicators suggest that the dollar can turn but likely to test around somewhat rather than making an immediate change. Frankly I think it's a little early for the dollar to go into a sheer downtrend again. At the same time, it should react at least noticeably from approximately 80, and the nature of that should also be a clue. There are reasons to expect financial markets to continue to be roiled into March, so the dollar may either consolidate, or pullback and then resume uptrending, for another few weeks.

Some others have mentioned the $137 area as a target for the euro, which also fits as it's happening this morning. The euro might drop much lower; but here again, this can be an area where the euro starts going into a pullback (up) or consoludation before "deciding" whether to make another leg down into that same March time frame.

I've posted about the yen recently, and tweeted yesterday about the $XJY popping up again to that $111.49 Fibonacci level. This positions the yen to continue on up to multi-year highs. I can't guarantee it's enough to send the dollar index down that much, since the dollar index strength is also caused by weakness in the euro and other currencies. (I'm sure someone is making jokes about, beware of Greeks bearing bonds - but I'm not keen to laugh at others' pain). But the yen strength can contribute to the dollar at least pausing, and obviously doing more than that if the euro (and of course stock markets) start to find at least intermediate support soon.

Go home with the one you want, but do dance with other technical analysis methods when trading financial markets

2010-02-05T05:44:00.004-05:00

Do you prefer to stick with just one or two analysis methods? That's fine for trading discipline purposes, like setting your entries, trade management and stop loss protections in a consistent manner that helps you control risk, cut losses, let winners run (and TMAR - take money and run, holding off on your next trade until you see the setup). But what about the benefits of knowing what other methods offer? Sometimes other methods clue you into other possibilities you hadn't considered. Or even open your eyes to a whole new idea - which often you can work into your own methods. Such as, by suggesting an alternative wave count, or cycle timing. That's a big reason we keep referring to other methods like Terry Laundry's T Theory Observations. Below is the quote of what Terry posted at his daily calculations chart page, which you can find by navigating from his main page at http://www.ttheory.com/:

Thursday Morning 8:00 AM February 4 2010 Comment for Feb 3 Close: T Theory Forecast remains bullish for the longer term based on the long term AD T #13 but the S&P broke down below the mid-channel support noted in the chart and this is negative. Also an Arms Sell Warning should insure the S&P will fall to the lower green envelope currently around S&P 1048 over the next week or two. See the Feb 2 Post below for Arms discussion.

So a new "hard" decline is now likely that will not end until new lows are seen near the green channel envelope. That oversold condition needs to produce a solid buy for the run up to May. Mostly we will need to see a string of big numbers on the Arms like we saw yesterday.

Later I will introduce alternate constructions for the Short Range T # 3, but for today I will just continue with the next small T shown in red with the volume oscillator plot. In the days ahead we need to see a new cash build phase under the green line that can become the left side of a new small T. There is no way to project the next low via T Theory but there is evidence it could be messy and it is possible the AD Line will go back towards the early November low. That is an extreme case but the short term picture does call for risk reduction in the event of a worst case.

Now that I archive these daily posts I will start answering technical questions here and adding in a few mini-tutorials. For the next few weeks these topics fall into the category of controlling market risk with T Theory concepts.

Terry

So if you've got a bit of time in the mornings, you'll wane to keep an eye on Terry's updates. His update for today should be posted by 8:00 am Eastern Time. His updates include his chart. If you don't understand T Theory, just keep reading his stuff, you'll pick up at least enough to understanding what he's pointing to.

Of course right now, it's also a reason that I'm on guard for a more serious low and bounce if we see SPX 1048 today or Monday. Remember, this method can't directly line up with Tony Caldaro's Elliott Wave projections. Sometimes - but right now, Tony's methods point to a C wave down to retest SPX 667, and I'm not at all certain that fits with Terry's projections for where a low into perhaps early or mid-March might go. So I recommend remaining on guard fow how this will play out in price and time for the drop.

UNG have traced a positive (reverse) head-and-shoulders pointing to $12

2010-02-04T21:31:00.004-05:00

Can you believe that UNG (the ETF that somewhat tracks natural gas prices) closed slightly positive today?! I'd shown at my UBTNB3 blog that it's traced out a large reverse head-and-shoulders pattern - so haveen been expecting it to go up. But intraday I wondered, as it sagged, but later it moved up well. I'd sure like to see it remain above the most recent prior swing low point. Given that, the reverse h&s looks valid to me for getting UNG to the $12 level and maybe higher.

Bigger picture, natural gas should be in good shape to test and trend higher.

Today's carnage may require different wave count ideas for equities and some commodities & currencies

2010-02-04T16:38:00.005-05:00

Today's carnage in financial markets was surprising to many in various ways. Not so much here, as I've been warning that commodities including gold and oil may have more bearish paths to tread before they're ready to buy. And the yen came through with the move up we've been expecting - retesting that $111.49 long-term Fibonacci level in $XJY (ETF being FXY) and looking positive for a continuation move to new highs. The only other apparent refuges were natural gas, as UNG finally moved positive on the day, and Treasuries as TLT went higher but not to a new swing high (yet). I'm not cynical enough to suggest that any huge players would engineer a drop to help bolster Treasuries; I think the markets are able to make our unconscious fears come to life through our own collective behavior. We'll just have to see if Treasuries bust the wave count, delaying a C wave down via a triangle, or not.

Speaking of changing wave counts, we just may have to as some of the cycle-based ideas prove out instead. One example is the euro - some cycles analysts are suggesting it's already in a C wave down to test as far as $112 potentially. No wonder there was big volume in FXE today. Same thought goes for oil and other commodities; and maybe that would keep Treasuries afloat somewhat longer. But we may have to consider what kind of wave count can also allow for further weakness, with whatever kinds of bounces, into March. With that ultimate low providing a great buying opportunity for higher (equity) market highs into May/August, if Terry Laundry's T Theory with his "T #13" also proves to work out. Another reason to read his daily updates each morning.

For now, we'll start looking in the 1030 to 1055 areas in the SPX as soon as tomorrow. I'm really wondering if Mike Korell's ChartsEdge TCI is showing a low, rather than a high, for tomorrow or Monday. Should be a fun evening for reading everyone's ideas! For now, all I can think of for the low-into-March scenario is, either it's Tony's wave C with similar drastic moves down in commodities and euro ... with higher later this year, and wild card - higher into next year too. Or some type of wave a down, with wave b up to start soon for a great bounce, and then wave c down into March, maybe testing SPX 950 - with a round two of Tony's wave B coming later this year, and his C wave starting in say late August. (And this might fit with Andre Gratian and/or Jim Curry views too - will have to find time to look again at their analyses which we've posted here in recent days too.)

Meantime, enjoy your evening!

ChartsEdge equities forecasts - TCI update and BP map for Feb. 4

2010-02-04T07:43:00.002-05:00

Mike Korell with his ChartsEdge keeps things interesting - thanks again Mike! Today he's providing a Trader Confidence Index (TCI) update for swing traders, plus his BP map for daytraders (remember the BP is a more robust forecast when it synchs up with his Pattern Recognition map when available, plus today's portion of his weekly cycle-based forecast chart). The TCI pointing a high in 1-2 trading days implies that we may see a higher SPX level Friday or Monday. I'd started to wonder if we'd see a triangle rather than a zigzag abc to finish the pullback bounce before the next big downswing which could target 1030-1050 ... Will see! But back to the ChartsEdge forecasts - From Mike's Daily Maps site at http://www.chartsedge.com/wp/

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TCI and BP

Posted: February 4th, 2010 | Author: Mike Korell |

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

PIMCO's Bill Gross describes well the "Ring of Fire" for U.S. and other countries racking up big debt

2010-02-03T20:57:00.001-05:00

PIMCO's Bill Gross has long been known as the "bond guru" as an accomplished bond analyst and trader. And bond traders in general are considered among the best traders and keenest eyes on the economy, because interest rates are more closely reflective of economic conditions. So it's always interesting to know what Bill Gross writes and says - and his new February article on PIMCO's website is another good read. Below is a partial quote from his article, with one of his graphs, indicating the "Ring of Fire" he describes in which the U.S. and other countries fall due to massive debt - to piqué your interest in reading his full article on this alarming topic:

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2010/February+2010+Gross+Ring+of+Fire.htm
... These examples tend to confirm that banking crises are followed by a deleveraging of the private sector accompanied by a substitution and escalation of government debt, which in turn slows economic growth and (PIMCO's thesis) lowers returns on investment and financial assets. The most vulnerable countries in 2010 are shown in PIMCO's chart "The Ring of Fire." These red zone countries are ones with the potential for public debt to exceed 90% of GDP within a few years' time, which would slow GDP by 1% or more. The yellow and green areas are considered to be the most conservative and potentially most solvent, with the potential for higher growth.
A different study by the McKinsey Group analyzes current leverage in the total economy (household, corporate and government debt) and looks to history, finding 32 examples of sustained deleveraging in the aftermath of a financial crisis.

It's another description - more insistent, now that U.S. debt has ballooned yet more - of the deleterious consequences we should expect from piling more public debt onto the backs of the private citizens expected to pay for it, on top of the huge private debts they're already struggling with in this high-unemployment economy.

No wonder TLT is looking like it's going to follow through on the scenario we posted a few days ago here - saying, Got TBT? The scenario of a third wave down "wave 3 of c" that will sweep the prices of U.S. Treasury 10-year notes and bonds well under the prior lows of the range they've been trading in for months now. With bond yields (rates) pushing up to higher highs - and that won't be good for mortgage rates (which in turn will be bad for real estate prices, and ripple throughout the economy). It might be funny because in the past, it might mean stocks should rise. But it's really sad, because it's more likely the dire fundamentals will cause U.S. stock indices to decline (either into March, and/or after another rally leg cresting May/August) along with bond prices.

Recent swing lows are "canaries in coal mine" for most commodities

2010-02-03T17:22:00.004-05:00

Commodities' advance over the past year took place in a series of somewhat choppy waves. Tony Caldaro's Objective Elliott Wave labeling (from his public charts - see his OEW site in list at right) shows that he's considering a generally bullish outlook with series of first and second waves. For this to hold up, each wave must have a higher trough than the previous - i.e., higher lows. At some point commodities should kick into gear with a big wave 3 advance. The "canaries in the coal mine" to watch out for, are those prior swing low levels.

For illustration below are Tony's crude oil chart of $WTIC, and a chart I pulled from Stockcharts showing the ETF covering many commodities, DBC. I also placed Tony's chart of the Baltic Dry Index ($BDI) on top. Figuring the $BDI is also a way to chart for commodities' performance. And speaking of coal, I've added a chart of KOL, the ETF tracking coal! I'm warning that there are some cycles views predicting weakness ahead into March for many commodities, rather than higher highs. If that cycles warning is wrong, then commodities will remain above their prior swing highs. So keep an eye on any commodities you may be trading. Because the difference between higher highs, and lower lows, will be huge once commodities make a trending move out of the relatively channeled "range" they've been traveling in for the past several months.

ChartsEdge Pattern Recognition map for 2/3

2010-02-03T07:01:00.003-05:00

Thanks to Mike Korell and his ChartsEdge - here's his Pattern Recognition map for today. Maybe today we'll find out if the equities indices need to poke a new high on this move (although they could also postpone the "decision" by some more intraday consolidation). Normally I'd expect a second wave up from this drop to take another day or so and get a bit higher, to 1110 or 1120 areas, but that doesn't have to be the case. Also, the move can take that extra time and not go higher; conversely, we could see the move continue into next week (and move higher, or not); and I could see 2 ways the SPX may go lower before another move higher - all from my Elliott Wave understanding. So - here's today's map from Mike's ChartsEdge Daily Maps site page, http://www.chartsedge.com/wp/

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Pattern Recognition

Posted: February 3rd, 2010 | Author: Mike Korell |

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

Let gold prove above $1162 to be sure it's pushing higher again

2010-02-02T21:40:00.003-05:00

Gold clearly needs above $1162 to help confirm a bullish view. (Note - I see that Tony Caldaro points out that $1150 should be high enough to give a good advance signal it's heading up again.). Conversely a move under $1074 should be more bearish. I also posted about the $HUI at my UBTNB3 blog. I still think we won't see a confirmation whether or not gold is heading higher next, unless we do that move over that significant swing high. I'm not seeing positive divergence yet. So for now gold needs to show it clearly can get above resistance. Otherwise that 200 dma may be called upon; or lower if it fails the 200-day MA.

The lower scenarios could either be that it's making a wave 2 pullback if the $1200+ was a large wave 1 up from $681. Or that the $1200+ high was a large B wave up from $681 as a wave A, with wave C to retest that $681 low. While I'm long-term very bullish on gold, my Elliott Wave read of it plus my understanding of its cycles from other cycles analysts is that gold may very well have more weakness over the next couple of months, before its next great buy entry.

So it remains possible that equities surprise with another bout of strength from March into May and/or August, with gold doing roughly the opposite. Then equities doing their bigger drop with gold doing its higher rise. Actually, even Terry Laundry mentioned these timing ideas about gold in some of his recent commentaries at his T Theory website (though my other cycles source needs to be confidential for purposes of this post). Therefore, these other cycles-based ideas reinforce my Elliott Wave interpretation that gold may not be ready for its next bull run - yet.

Biotechs bucking the bearish ideas to look like bullish potential

2010-02-02T20:31:00.003-05:00

I've been bullish on biotech for a while though I don't track it often. But it's hard to ignore right now that they're once again showing more bullish than the broad market. I don't keep an Elliott Wave count on biotech and can't guarantee it won't have pullbacks along the way. But in general I view pullbacks in this sector as buying opportunities. And a breakout here should be another buy point. Still and always a good idea to use some stop protection and position management of course. My approach for this sector is long-term position, adding more at buy points and only trimming if it looks clearly overbought. Long-term it's a smart sector to remain in and even increase.

Technically, the StochRSI remains in the upper positive/momentum readings, and the slower-moving DMI-ADX is positive too (and is poised to move higher which would place it into trending territory). And the daily chart is perking up now. A breakout that holds recent swing low support should place first the StochRSI and then the DMI-ADX indicators into positive trending territory too. Those are just a couple of ways that indicators can help corroborate that upward movement has strength. Showing that in both daily and and monthly supports the view that the uptrend should remain intact for a long time to come.

Using ETFs makes a lot of sense here unless you really do homework to pick individual companies. BBH is one well-known biotech ETF, and there are others.

TRIN says get your Arms around the idea the equities indices may be overbought

2010-02-02T16:37:00.004-05:00

Nice moves today, up in the S&P 500 and other equities indices, fitting according to various of the methods we use and refer to - nice! Other markets also moved sharply against their trends from last week including crude oil, with USO (an oil ETF) testing its 50 dma from below. Nice snapback all around. Next, we see if it can sustain or if consolidation takes hold. While there are reasons the SPX can get to around 1110, or even around 1120, it isn't guaranteed. And depends also on what wave count it wants to express. For example, if it only put in a "wave a of 2," we could conceivably have a triangular wave b that essentially consolidates for a little while before its wave c finished that move up. There are also more bearish possibilities that can play out, so I don't want to be out there recommending that traders expect the SPX will get to 1110 or 1120 anytime soon. The real focus most of us should have is preparing for the next leg down - because as best I can determine, that's what we'll get in a matter of days.

The TRIN chart at bottom shows that the Arms index closed at 0.66 after a few days moving down. And most of its MA's are under 1.20. Meaning the Arms index isn't oversold. And the Nasdaq advance/decline volumes data (middle chart) moved up but still looks puny. So I'm doubting whether the SPX has the strength yet to get above its own MA resistance (see top chart, of the SPY). Notice also the volumes today and yesterday were relatively low - not the recipe for a meaningful rally. Pattern-wise I'd expect another day or so struggling before the next leg down - probably the indicators' changes during the next couple of days can give us a heads' up whether the next big swing move will be up or (as I tend to suspect) down.

If oil has trouble with that MA level as resistance, it can also be vulnerable to a further drop. And the VIX dropped today towards its own 50 DMA; another clue that this move may have been just a breather before we see a resumption of the stock market move down. That 1050/1060 area in the SPX may be waiting.

ChartsEdge intraday cycle map for the equities markets Feb. 2

2010-02-02T06:59:00.003-05:00

Welcome to 2/2, which some like to call "turnaround Tuesday" as I saw on Twitter yesterday .... Except that actually, next week is not opex, options expiration will occur the following week. So I think next Tuesday is the "turnaround" one - anyone correct me if that's wrong. Anyway we've already seen a small turnaround yesterday. As Ray Merriman phrased it in his weekly preview on Friday, a counter movement correcting the short-term trend. It may give an opportunity for some traders to re-initiate shorts. But we can't be 100% certain if today will be the rest of a wave 2 up before wave 3 down starts; or if it's a type of small fourth wave within the wave 1 down. I'm thinking we need to be a little flexible on wave count just yet (there's even an idea some have, of a bounce to complete the target levels discussed before, higher than 1150 ... I don't know that works in terms of cycles or EW though, compared to moving lower into March). If we get consolidation with wave 1 still finishing, before a bigger wave 2 later, it may be daytraders who reap in both directions during these days. And if today's ChartsEdge BP map "works", we should see a trend day up today in equities - can it really be so easy today?! We'll see - so, happy market navigating today! And here's today's map from Mike Korell/ChartsEdge, at http://www.chartsedge.com/wp/

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BP Chart

Posted: February 2nd, 2010 | Author: Mike Korell |

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ChartsEdge TCI - Trader Confidence Index - update

2010-02-01T22:41:00.002-05:00

Mike Korell updated his TCI graph atoday at his site, at http://www.chartsedge.com/wp/

It would help point to today as a low. And his comment previously posted, was that Tuesday (tomorrow) should produce a high; followed by more consolidation later this week and early next week.

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Trader Confidence Index

Posted: February 1st, 2010 | Author: Mike Korell |

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

Of banks, bonds, equities and things; and the contra-contra-trend moves this week

2010-02-01T18:13:00.003-05:00

Okay, we rallied well today - maybe it's Ray Merriman's planetary influences, or the 1075 support Bill Luby of VIXandMore tweeted about on Friday afternoon. And let's not overlook Andre Gratian's 9-month cycle low. We've been expecting a bounce so we'll see if we get the 2-3 day bounce we've wanted, and whether it can get to around 1100, 1110 or 1120-ish. Based on Fibonacci retraces of .382, .50 and .618 back to 1150, as well as the 89-hour ema, 34-day ema and 50-day ma, or even the Bollinger Band midline. If we're right, then this bounce becomes a nice rally for another bounce of selling into lower levels into March.

Banks - can you believe how close the $BKX is to its rally highs?! At this point I could hardly be surprised if the did poke to new highs, like $50 in the $BKX. Well, surprised on one level. We'll just see where it gets by, say, Wednesday.

Bonds - there were twitters about HYG and maybe LQD dropping along with interest payments. My charts below include monthly LQD and daily TLT. I think LQD hit symmetry target resistance, and bonds generally can weaken. Ultimately with Treasury bond rates spiking to higher highs.

The VIX interestingly was dropping a few days, moved up Friday, and down again today. Maybe it spiked "too high" after it moved so low into VIX futures expiration. Anyway, there's support not far below for the VIX, which goes along with our thesis of the equities rally here. An interesting move to open the week - if you're taking our approach of remaining aware of price AND time, you should still be enjoying the moves. Catching each turn can be dicey sometimes, but being there for good moves from one turn to the next can be where you make the most with swings, then be flexible as we negotiate along. Or if you're taking a slower approach, in cash or short from 1130/1150, enjoy with us the tracking of where the market turns next to roll over again!