Indice and Metal charts…and some thoughts on them.
Posted by MC on May 26, 2009
The Nasdaq may be leading paper markets higher.?. It’s already back into that bearish channel while other indices are still stuck in range. I’d be interested to see a test of that resistance turned support and the channel to play out to the upside. Keep in mind it’s a BEARISH channel so as the market moves the slope degrades and damages profit potential from longs. Don’t be a full on bull unless and until that channel gives way to a new upward slope. Cut longs at obvious resistance and reduce exposure.
Notice how the 3 indices are stuck at the 38.2% fib level. (Well on my charts it shows the 61.8% because I draw them backwards to get my extensions projected in the direction of the current trend.) All this hype and hooplah and we’ve only regained 38.2% of the violent wave down. Amazing how the news can twist things to make people feel the way they want them to feel.
ES and YM both have room to go before that 50ma. That ma is going to match up with the bigger downward channels lower trendline soon.
Silver and gold are both looking strong. You can see Gold holding and having the market excess defended pretty well here. A test of the 100% if not the 121% fib is pretty likely IMO…especially given the USD woes with Russia and what not.
If silver can break this trendline it has a great upside potential. Metals may be making some headlines soon.
Posted by MC on May 17, 2009
A monthly chart shows a reversion to the bearish upper trendline from the Y2K recession.
Long term the bailout inflation will catch up…but for now that seems to be propping the market up and could cause some very interesting times ahead. JMHO.
Posted by MC on May 17, 2009
Again…pointing out that sexy NAHL divergence as a very good case for a bottom longer term. I still am anticipating lower volume tests of lows or some new lows at some point but I would be careful betting against this rally just yet without more confirmation. If you rode the rally this isn’t a horrible place to take partial profit and reduce exposure though…just in case. 
Posted by MC on May 13, 2009
IMO VIX has shown it’s hand. Channel broke up…5 min version of this chart shows a test of the channel that was held up as resistance turned support.
Also note how they gapped below all that support this AM. That’s a bearish shook n’ jive. We’re coming into resistance here…not a bad spot to look to get short IMO.
I moved 38% of my 401k to stable value funds expecting the worst at some point. Saving some to transfer should the rally continue after a pullback which is possible of course. The order executed at close yesterday so it’s lookin like a pretty good move at this point.
A pullback test to that trendline we broke up from is ideal if one expect the rally to continue IMO. The macd histo divergence indicated a correction was likely…volume confirmed the modest and declining participation.
I have little doubt long term we test lows if not lower…that’s why I shifted the 401k around.
Weekly update too.
What are you guys thinkin?
Posted by MC on May 1, 2009
121% fib extension hit, drag the fibs down and look for a retracement.
With the fibs drawn out to new lows you can see where a retracement could put us…we could very well have some distance to go on this rally.
