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Posts tagged ‘Technical analysis’

Current Position of the Market

By: Andre_Gratian

SPX: Very Long-term trend – The very-long-term cycles are down and, if they make their lows when expected (after this bull market is over) there will be another steep and prolonged decline into late 2014. It is probable, however, that the steep correction of 2007-2009 will have curtailed the full downward pressure potential of the 120-yr cycle.

SPX: Intermediate trend – SPX is in a limited intermediate uptrend which is estimated to end in the first week of Au

Market Overview

Ever since the SPX started its uptrend from 1267, I projected that the rally would end at about 1404. That was a target derived from a Point & Figure count taken across the base and confirmed by a Fibonacci measurement. While this is a preferred count, it is not an absolute, and there is a valid count to 1425 and some even higher. Last Tuesday, the index rose to 1407 before backing off and spending the rest of the week moving sideways in what could turn out to be a pattern of distribution — which would put an end to the rally, resulting in a subsequent decline, or one of re-accumulation, with an eventual break-out to the upside followed by higher prices

Next week should determine what path the market wants to follow over the near-term. Taking into consideration the cyclic configuration, the odds favor an end to the rally sometime this month, with a preference for the first part of August. Friday’s price action was caused by a minor cycle bottoming in the first hour which initiated a bounce into the close. Although that looks like the start of a move to higher highs, some important indices did not participate, bringing into question whether this was simply a test of the highs. On the other hand, XIV made a new high while the market did not — action which is potentially bullish (but not infallible). This is why we need to wait for Monday to clarify the market’s intention.

Whether or not we are ready for an intermediate correction, the odds of this being a major top which would put an end to the bull market are not great. During this uptrend, the weekly indicators of the SPX had a bullish move to the top of their range and are now overbought, a condition from which they normally correct, but not one from which they start a major decline. On the other hand, the NDX weekly indicators are less bullish and are beginning to show negative divergence

Full article at source: http://www.marketoracle.co.uk/Article36023.html

More Stock Market Interim Rally Ahead?

By: Andre_Gratian

Current Position of the Market

SPX: Very Long-term trend – The very-long-term cycles are down and, if   they make their lows when expected (after this bull market is over) there will   be another steep and prolonged decline into late 2014. It is probable, however,   that the steep correction of 2007-2009 will have curtailed the full downward   pressure potential of the 120-yr cycle.

SPX: Intermediate trend – Correction

Market Overview

The market correction which started in early April is not over and, based on   cycles, may run into late-July/early-August before it is. Six days ago, the SPX   completed a phase projection and has been consolidating since. From a cyclical   viewpoint, there are two possible scenarios for what lies directly ahead: there   is a cycle cluster due in mid-June which could turn out to be a high or a low   point for the market. I lean toward its being a high because of the more   dominant cycles that have recently bottomed, and are about to bottom in the next   few days, and which will be setting the trend for the following couple of weeks.   (If there is enough upward pressure from the longer-term cycle which has already   made its low, it is possible that SPX might even start extending its uptrend   past the recent highs right away.)

If this is the case, the current consolidation should end with an extension   of the interim rally to about 1340 or higher. It will be followed by the final   leg of the correction into the time frame mentioned above, and could reach as   low as 1235-1245 before it ends. If this turns out to be the completion of wave   4 from 1075, the index should then start wave 5 and rise to a new high before   completing it.

This forecast is a guesstimate based on cycles and structure. It will be   refined or modified, if need be, as the market trend evolves.

Chart analysis

On the Daily Chart, we see that SPX is now traveling in the blue   channel which defines its current trend. If the target which I have set for the   low of the correction is valid, the decline should end outside of the channel   and find support on the lower green line, just as it did on the upper one. For   now, the 200-DMA is also adding temporary support. It has already been violated,   but it does not matter even if it is decisively broken, providing that prices   can move back above it as they did during last year’s August to December   consolidation.

On the P&F chart, there were two separate phases of distribution which   formed at the SPX top. The shortest one, taken across 1411, gave us a count to   1304 which was slightly exceeded as the decline ran its course.

There is another count that could be taken at the 1397 level that has stored   enough negative energy to take prices down as low as 1235, although the likely   bottoming range should be somewhere between 1235 and 1255. I’ll be able to   refine this count as soon as the current consolidation is over.

full article at source: http://www.marketoracle.co.uk/Article34887.html

The CCI developed some divergence at the recent low, and this argues for an   extension of the interim rally before the correction continues. The MACD has no   such divergence, only slight deceleration. This suggests that lower prices will   be seen before the correction is over.

Stock Market Downtrend May Have Bottomed

By: Tony_Caldaro

Markets rebounded this week after last week’s nasty selloff. Last week’s decline of SPX/DOW 3.9% was the largest weekly decline in six months. The previous one was the week of November 21, 2011: a 4.75% decline that marked the end of Major wave 2. Thus far, it looks like the recent selloff may have marked the end of Major wave 4. For the week the SPX/DOW were +1.20%, and the NDX/NAZ were +2.05%. Asian markets were flat, European markets were +0.6%, and the DJ World index gained 0.7%. On the economic front it was a mixed week. All five the publicly watched indicators were higher: existing/new home sales,

FHFA housing prices, durable goods orders and consumer sentiment. Yet, four of the not so publicly watched indicators we track were all lower: the M1- multiplier, new home sale prices, the monetary base and the WLEI. The last week of May starts off with a US holiday, then is followed by a slew of economic reports. Q1 GDP, the Payrolls report and PCE prices highlight the week.

LONG TERM: bull market

While we entertained some alternates counts for the medium term last week. None of them suggested this Mar 2009 bull market was over. Even though the market hit a level which was about 2% lower than expected. It did hit a medium term oversold level that has only occurred once in each of the past four years. Each time this has occurred, the market has rallied about 100 SPX points within two weeks. Currently the market has only risen 36 points, 1292-1328, with a week to go. If this pattern prevails this week could be quite interesting.

full article at source: http://www.marketoracle.co.uk/Article34868.html

High Risk of Near Term Global Financial, Stock Market Crash

By: Steven_Vincent

Deutsch: Bulle und Bär vor der Frankfurter Bör...

Deutsch: Bulle und Bär vor der Frankfurter Börse von Reinhard Dachlauer English: Bull and bear in front of the Frankfurt Stock Exchange (Photo credit: Wikipedia)

At each juncture, I look at the available information as represented in the market price and technical data. I approach the body of evidence without preconception and with an open “beginner’s mind”. I see what I see. I analyze. I develop a set of probabilistic outcomes and then rank them. Then I write my report. I simply report my findings.

There is an extraordinarily high risk of some variety of global market panic in the relatively near term. In fact, I would say that there is a extant setup that is as perfectly aligned for an extreme market event as could be dreamed of by the most bearish of permabears. I’m no permabear, but a thorough review of the current price and technical charts has revealed an inordinate confluence of data points which collaborate to represent a very high risk profile. The current extreme risk profile is amplified by a nearly total lack of recognition on the part of market participants. A deflationary episode, potentially on the scale of the 2008 event, is presently on the table. Investors would do well to at least consider the facts, analysis and conclusions of this report.


I generally place Sentiment and Psychology at the bottom layers of my analysis since it it the softest and least reliable data to consider, but in this case I am going to lead with it simply because there appears to be not merely a significant gap between perception and reality but apparently a widening chasm. Bulls are repeatedly citing “excessive” or “extreme” Bearishness as a primary basis for an ongoing Bullish outlook, but the evidence strongly suggests this is not only not warranted but that the exact opposite conditions prevail.

There appears to be nearly total complacency in the present market environment. Few if any analysts are currently willing to consider a market top of any kind, much less a crash. Based on the findings in my current BullBear Market Report, the continued bold bullishness of the overwhelming majority is simply not supported by the technicals of the market

Full article at source: http://www.marketoracle.co.uk/Article34664.html

The Stock Market Correction is Not Over

By: Andre_Gratian

Current Position of the Market

SPX: Very Long-term trend – The very-long-term cycles are down and, if   they make their lows when expected (after this bull market is over) there will   be another steep and prolonged decline into late 2014. It is probable, however,   that the steep correction of 2007-2009 will have curtailed the full downward   pressure potential of the 120-yr cycle.

SPX: Intermediate trend – The intermediate uptrend is still intact and   so is the extended short-term correction.

Market Overview

It looks like the traders and investors took the “sell in May” mantra   seriously this week. (John Murphy)

In last week’s newsletter, when many EW analysts were heralding the coming of   wave 5, some – including yours truly – expressed skepticism that this was the   case. There were just too many technical factors that did not support it. What   happened this week, on Friday in particular, should convince even the most   entrenched bulls that the correction which started at 1422 in the SPX is not   over. Next week should leave no more doubt that what could be an important   decline has started.

I mentioned that two events could have a significant effect on the market:   the first was the jobs report which came on Friday morning and triggered the   biggest decline of recent weeks, and the other, the French election (and perhaps   even more important, Greece‘s) will take place tomorrow. Should there be a   radical change to the political status quo of either or both countries, we could   have a repeat of Friday’s scenario.

To me, the SPX activity during the last three weeks in March looked very much   like distribution. The fact that the index did not collapse immediately created   some uncertainty which caused the bulls to regain their conviction that new   highs were imminent. After Friday, it appears that a second phase of   distribution was created over the past month. On the Point & Figure chart,   the two combined make an impressive top with potential projections which, if   realized, could bring about a loss of at least one hundred more points before   the SPX can regain its footing.

P&F counts are not always realized fully, so we’ll let the market tell us   how far down it wants to go but, judging by the fact that the weekly chart   indicators just gave a sell signal this past week, it could take a while before   they get back in a buy position. In order to confirm that a serious decline has   started, the SPX has to break its 1357 support. Since it closed at 1369 on   Friday, this could be achieved in the first hour of trading on Monday if the   Eurozone election results spook the market and, if that happens, the first   target will be 1342, the level of the last wave 4 of lesser degree. Beyond that,   there are good P&F counts – supported by Fibonacci – down to 1245.

full article at source: http://www.marketoracle.co.uk/Article34527.html

Bank of America stock (up-date on trading)

Trading up-date with Machholz

Well my friends we are losing our shirts on our protective puts and there is no more value but time now, however we have as a result of the Bank of America stock ( Total stock 3500 )movement up from a purchase price of $5.01- $5.15  we are experiencing a very healthy profit and to offset any losses in these puts total gains for month so far is approx **$9,875 +$ 672 to offset the losses on the puts.

All in all a nice months work and this should pay for my rent in Lubeck for the coming year! Nice one!

Have purchased new protective 8$ puts up until April Just in case the bottom falls out of the market

Remember always be hedged I am still holding on to my  stock as I believe we have a way to go but if I am wrong I make a few bob on the way back down !But I think we are going to see at least a move up to the 200 MDA and maybe beyond!


**This includes all trades that includes other stock and option trades not highlighted in trading posts.

Trading with Machholz

Well those of you that were waiting for our first instalment of up-dates on my trading I have the current January trades to announce.

Dec : Entered 3 contracts  (calls) on the 5 and 6$ BAC these were Jan Calls and we were under water for the last two weeks with losses of 1200$

As of last Friday sold out of said contracts with a net gain of 89% on one contract, a 37.5% net  gain on the second contract and a break even on the third contract.

Reason for sale .The approach of expiry (never hold options up to expiry)

Entered 2 Feb contracts BAC( puts) at the strike of 5 and 6$

Currently under the water but will be averaging down in the next few days as I believe we will have a catalyst by way of earnings we are gaining as the stock price goes up and we should be able to make a few bob as the stock retreats back on or before earnings .Either way we have until Feb. 15th to be able to make on the puts .

Bought 500 shares of BAC at $5.01 .Current price is 6.20$.

we are heading up to the top of the current pivot point around 7.50$  before a return to test the recent lows  (4.91$) In any case I am Hedged and so I only need the stock to move to make money ! If we get ther before the expiry date in Feb, I will treat myself to a trip to Paris !T

Overall profit target for January has already been achieved.

I hope to announce the start of a new trading course in the coming months for my German Friends.

Golden rules to keep in mind!

As always wait for the market to present an opportunity.

Don’t just place trades because you think you should be in the market.

Capital preservation is paramount.

Never put on a position without been Hedged.

Give yourself enough time to become right.

Place small trade amounts that will not break the bank

Remember you may have to wait to get a better pricing for your hedging so have at least the same amount value contracts as you have in chosen asset.

Use only in the money options

Watch volatility and remember you need to buy low volatility.

Buying options is like buying ICE they waste away in value from the moment you buy them.

For my system to work you need to have a volatile oversold asset that you want to buy and hold for at least two years .So our up and coming course on (An  Introduction To Technical Analysis )would be a good start for any would be trader !


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