Wednesday, 31 March 2010
Tuesday, 30 March 2010
Here is another TAS formation(see IBM chart) This stands for 'trading against a spike' and is credited to Bill McLaren,who wrote 'Gann Made Easy')After a counter-trend reaction the market spends at least twice as long in a resumption of the main trend ,but is unable to make a new high (or low) A reversal pattern is then awaited in anticipation of trend reversal.Breaking the low of the gravestone doji could be regarded as a completed reversal.
Has failed to make a new high,showing non-confirmation with the Dow Industrials.An approximate 3 week decline has been followed by a 7 week rally (ie more than twice the time factor)that has failed to break the high which is also a bear setup .MACD negative,multiple tops.
Sunday, 28 March 2010
Am annoyed I have only just spotted this,especially as I was aware of the 10 year cycle on the Nasdaq.This makes earlier speculation of a possible 7 week "death zone" rally even more intriguing (ie we could be exhausting into a longer term cycle) This is only speculation,the trend is up, but any reversal on the weekly chart would have greater significance and could be acted on with a stop above the high. We have negative divergence on the RSI,a possible 5th wave,signs of life in the Vix and breadth indicators starting to roll over (eg MacClellan oscillator)
Saturday, 27 March 2010
As far as Im aware the fundamentals for sugar remain very positive so I assume we have seen panic liquidation by hot money due to the strong dollar ? 5 waves up,vicious decline has reached potential support zone for aggressive traders who like the fundamentals ? ! I would prefer to wait for a reversal pattern.15 should be strong support (half the high)
May or may not be significant but we have a 720 point range (2 Gann circles of 360) in a Fibonacci 34 days.(2 days sideways would have a squaring of price time at 36/720)
Thursday was a shooting star,if not a strong example as the body overlapped with Wednesday.Friday was an inside day,signifying indecision (but not a harami because it was not within the real body of the previous day.)The bear pattern would be confirmed by a close below the low of the shooting star.
7 weeks can be a termination cycle(Gann called the fast 7 day or 7 week move the "death zone" rally.The gaps on this chart may be supportive of this,indicating possible exhaustion.
On the weekly chart,as with most indices,last week was 55 weeks from the low,another Fibonacci number,and another reason to think we could reverse.
After posting this I had a look at the s&p to see if there was a potential squaring of time and price to fit the 7 week exhaustion cycle and noticed a perfect 360 degree move on the square of 9.This means price moved one whole revolution on the Gann wheel (or square of nine) from its low point to the high and indicates a possible complete cycle
Mathematically a 360 degree move can be calculated by taking the square root,adding 2 and squaring.Thus 360 degrees from 144 would be 196.There are many uses of the square of nine and it is somewhat esoteric, but combining time cycles with price cycles, eg 3 months and 360 degrees in price,often yields reversals.
Friday, 26 March 2010
The Dax broke above its January high yesterday.Critical resistance (nearest futures contract ) lies in the 6160-6180 range which covers the high from May 2006 (and 2 subsequent lows )and the measured move projection of the previous major range as measured from the Feb low.The Dax has a strong seasonal tendency to make major highs and lows in March.
Wednesday, 24 March 2010
Important support at 48 mirrors the important support at 1080 on bullion.The dollar is strengthening again but I suspect gold will rally anyhow.
Am finding the equity indices frustrating like many others.I still feel we may be near an important top but at the moment the US indices continue to grind higher on low volume despite being very overbought and numerous negative momentum divergences.US markets seem to be holding others up at the moment despite more sovereign debt concerns in Europe and despite the fiscal implications of the healthcare bill.End of quarter window dressing may be partly responsible ? The stronger dollar will be an issue for the markets I think,and volatility looks to be ready to pick up (vix chart)
The chartpatterntrader.com website does very good daily analyses of the US markets,including intraday charts and educational material
Sunday, 21 March 2010
Saturday, 20 March 2010
The s&p posted a bearish engulf after a doji in a potential evening doji star reversal pattern,with volatility at extreme lows and possibly poised to reverse.It has made new highs, which is bullish so the next few days will be very important - do we correct to support and rally or do we break support and leave a false breakout? Note most European indices did not confirm the breakouts.The stronger looking dollar chart may pose problems for the stockmarket and there are growing fears about higher taxes if the Healthcare bill is pushed through.
Lots of reversals on Friday,led by tech and energy,with the dollar strong again,renewed concerns about Greek debt,US Healthcare Bill and quadruple witching...here is the ftse250,which may finally be reaching exhaustion at the 66% retracement,10000 psychological level and backtest of the 2 trendlines.
Thursday, 18 March 2010
Wednesday, 17 March 2010
The Dow managed to push thnrough the upper trendline of the wedge yesterday in a possible "overthrow" and is extremely overbought on the RSI,as well as being only a few points short of the Jan high at 10730.I am surpised markets have managed to keep edging higher past the in fluence of the 1 year cycle and am wondering if the cycle is being slightly extended to merge with the 10 year cycle for the nasdaq high which comes in around the equinox this week.
The s&p has reached the 100% of 1st range projection and is backtesting the broken trendline.
Sunday, 14 March 2010
Saturday, 13 March 2010
Here is an interesting blogspot I found today,expounding my worst fears.........a continuing liquidity-fuelled explosion of asset prices that surprises even the bulls,causes commodity price inflation and sets the stage for an even bigger bust-up than 2008............lets hope he's wrong (but buy some more gold anyway !)
On the s&p chart we can monitor the long term mvg aves to determine whether a correction is just a correction in a bull market or whether a new bear phase is developing.In 2007 after the 2nd top the market broke below the ma's and made a high below them as they crossed.If this happens again we can anticipate a bear phase,but if we correct and hold above the ma's the bull trend is not over.
The Ftse indices have exceeded their previous highs,unlike other European indices(setting up a possible negative divergence for Dax,Cac etc)Of course in constant sterling prices the picture would be different.The next couple of weeks will be critical in determining whether this breakout above fibonacci resistance is sustained.Upward sloping consolidations are usually bearish and it is hard to imagine UK growth statistics over the next few months supporting a continuation of the bull trend at least for the more domestic 250 and 350 indices.Nevertheless for the moment the trend remains up.
Here is the Vix chart,courtesy of Maurice Walker's public chart list on Stockcharts.com.Note the Vix is at 19 month lows,and shows a falling wedge pattern with various momentum divergences.This is suggesting there may be too much complacency after stockmarkets' strong performance since March 2009.