Goldman Sachs

Head and shoulders top ? The range up was 144 points,the square of 12 and an important Gann cycle.

Gold in sterling

IBM

Ftse showing relative strength

Ftse still trading above 50% retracement,Dax and S&P still trading below it.Some traders sell when markets break down from this 50-61.8% "box",not even reaching it (eg Nikkei,CAC) is a sign of weakmess.

Euro

Dax-2 different perspectives

European markets definitely look weaker than the US and we are approaching critical levels.I have posted charts reflecting 2 different perspectives of how things might turn out.I suspect for the bullish outlook to develop we need to see the euro rally against the dollar,and the euro has reached a potential support level (0.618% retracement)Nevertheless the weekly candle chart still looks bearish and we have posted a monthly bearish engulf in January.Yearly cycles are approaching,and the 200 dma is potential support,so contrary headwinds !!

Apple/Baidu

I noticed a few days ago how similar these 2 charts were.Baidu had a battle around 400 which eventually resulted in a massive breakout,while Apple is struggling with the 200 level.I dont believe a similar breakout is likely but we need to keep an open mind.The bullish weekly engulf is a warning to the bears,but I suspect the bearish 3 black crows pattern and the fact that the last 4 weeks were all inside weeks,contained within the extremes of the 3rd black crow, will prove too much of a headwind.6th March is a 1 year anniversry of the low for this move so a high this week would likely be significant.For those more bullish this week's low is an obvious stop-loss fo rlong positions.I believe Apple rallied on talk of a possible stock-split,which would enhance liquidity by attracting small investors.

Google

Decline appears to be resuming after a weak rally.

CAC

The French index failed to retrace 50% of its bear market range.Gann said you can use 50% retracements to judge the strength of the market.Failure to reach the 50% level tells us that the market is in a weak position.

Cocoa

Cocoa rallied after our last post but fell hard today.Should head into the retracement zone at a minimum.

Lower top ?

Weakness in the markets this morning may be producing a lower top.On the Dax for instance we have a lower low than yesterday,turning the 1 day swing chart line down.
The first range down,which was 5 waves on the hourly chart,was 661 points.There was a swing high at 5733 (wave 4?) followed by a decline (w5?) to 5433 and a 3 wave rally to a high of 5743 yesterday.Thus a possible double top (5733 and 5743) The 50% retracement of the decline was 5763,so a double top below this important level would be significant.We are also below the 50% level of the 3rd bull section (5703) (These prices refer to the cash index.The charts I sometimes post are nearest future so there may be a slight difference in the levels)

Proshare ETF

This is an ETF that enables you to short the S&P.The daily chart formed a lower today.Risk/reward looks very attractive with a stop under the higher low.

HSBC

Testing the 50 dma and the previous swing high.

Gold doing well despite strong dollar

1080 now support ? Perhaps doubts about the viability of the euro are reinforcing the case for gold as an alternative reserve currency.

Rio weekly cycles,Gann lines

These weekly Gann angles seem to be working well.The 0.5 per week line caught the June 2009 high and the intersection of 2 angles caught the recent high.The 30,60,90 week Gann cycles are catching highs and lows,so we would watch 120,150,180 etc.

qqq's

Monthly charts

Cable ...gathering steam

When a range of swing lows are broken the market tends to accelerate.......

Rio,RRS

Rio is testing the broken trendline and 50% level.Failure here would produce a lower high.
Randgold has pushed higher the last few days.There is a new swing high.I would turn neutral/bullish if this were broken....gold is still a tough call for the next few weeks !

Dax

Gann believed that bull phases had 3 or sometimes 4 sections,(not unlike Elliott's 3 waves) and that you could measure the strength of the market by whether the ranges were expanding or contracting.This bull phase has demonstrated weakness in that the second section (1573 points) was less than the first(1590) and the third (784) was less than the second.The corrections within the second section also came back below the previous highs,another sign of weakness.The first and second waves both had corrections that found support at 38%.The 3rd section has broken below 50%,showing weakness.This level may now prove to be resistance.Ranges can be used to establish resistance,with 50% and 100% being the important milestones.1590 added to the first low gives 6111 and 50% of the 2nd range (686) added to the 2nd low gives 6002.The high was 6100.

The 50 point per week Gann angles have provided good support and resistance in both the bull and bear phases.The recent rally has so far been contained within the range of the big move down 3 weeks ago ie we have had 2 inside weeks to consolidate.

yen/dollar

This is an update of the yen chart posted recently.The higher low buy signal for the dollar has been confirmed now with the big white weekly candle.

Dow

Cable - bear flag ?

Cable appears to be forming a bear flag consolidation below the broken support levels.I have divided the range into eigths.The 3/8 and 5/8 support/resistance levels coincide closely with the 0.382 and 0.618 levels Fibonacci analysts use,(1/2 and 0.5 obviously being the same).In Gann analysis all 8 levels can be used but 3/8,1/2 and 5/8 are most important.(3/8-5/8 is considered to be the range where a market will normally find equilibrium in a retracement move) 3/4 and 0.786 fib level are also close.

crash count ?

If this wave count is correct we can expect a fast move down very soon.I have labelled it as a possible 3rd of a 3rd.The 3rd wave is always violent and the 3rd wave of a 3rd wave is particularly so.This is not a forecast but a possibility to be aware of.There are other reasons to be short even if this particular wave count proves to be mistaken.If we break above the wave 1 low the count is likely incorrect.

Randgold

The 2 day swing chart is very clear on this chart.This has been a great performer but we have a clear double top pattern and lower high on the swing chart.Better buying oppurtunities at lower levels no doubt lie ahead.

S&P swing charts

One criticism of Gann analysis is that it can be too complicated or esoteric.We have all seen charts cluttered with too many Gann angles,retracement levels,square of nine levels,cycle projections etc
My view is that Gann can be as simple or complicated as you want to make it.At its most basic chart reading is about identifying trends,getting on board,and sticking with the trend.The swing chart is one of the best ways of doing this,and like p&f charts removes the noise from the chart.Swing charts also yield clear levels for stop placement.Gann's favourite chart for trading was reputedly the 2 day swing,which requires two consecutive lower highs or higher lows on the daily bar chart before the swing line can be drawn.Inside days are ignored.Marc Rivalland's book covers the construction of swing charts.
On the 2 day swing chart I have drawn in some natural Gann circle levels,720,900 and 1080 which the market seems to be respecting.
The 3 day swing chart shown here covers a longer time period.It would have kept you on the right side of the market in both the bear and bull phases.Unlike the 1 and 2 day charts it has not given a sell signal yet.It is less sensitive but less prone to whipsaw/false signals.You can see how sharply the market broke when multiple swing lows in the 1200-1240 area were broken.

Emerging Markets

This is Mark Mobius's rightly acclaimed Templeton emerging markets trust.The monthly chart shows a breakout with a bearish engulfing candle.On the weekly there is a bearish 3 black crows pattern with the last "crow" a bearish engulf.Looks like only a matter of time before we confirm a false break pattern

"Dr Copper"

Copper rallied 225 points from Dec 26 2009 to 7 Jan 2010,pretty well "squaring"
a one year cycle at a ratio of 0.618 (365x0.618=225) and has broken a well established trendline.Copper is regarded as the most economically sensitive commodity,and has been attributed a PhD in economics for its forecasting ability,hence the name sometimes attributed to it !A trend change could therefore be signalling slower growth ahead.

Ftse triangles ?

Yen/dollar

Possible bull setup for the dollar.Wait for confirmation of a higher low ("safest place to buy")

Dax ...drawing a roadmap

This is the nearest futures chart.I have drawn a trend-channel and put some simple Gann cycles in.The coincidence of time cycle and channel support comes in around 5000 (circled area).The Dax likes to make ranges that respect the Gann circle numbers (360,540,720 ,900 etc) 6099 minus 1080 gives 5019. 3588 plus 1440 gives 5028. Fibonnaci targets from the 2 main ranges yield targets of 4843 and 4858 (50% of major range,78.6% of 2nd range)
This suggests we could spike down to 4850 area in early March,with 5000 as likely closing support.

Biliton chart update

New lower high evident.Stops can be placed above.I have added a new trendline.
I have also added a yearly chart.Last year's low was 10.25.We could decline to 10.26 without damaging the long-term uptrend !

Dax

This is an update of the chart posted on the 20th Dec and is good evidence of how powerful using a few simple Gann forecasting tools can be ! The high came in a few days late from the yearly cycles forecast although using the July low and a 6 month time cycle was almost perfect.Forecasting and trading are not the same thing and should not be confused.I am told most successful traders do not try to pick tops.However,a Gann roadmap is a useful tool,so long as it remains only a roadmap and not an object of faith.Ultimately,as in this case price action needs to confirm the forecast before action can be taken.
Looking at price action alone as most technical analysts do,would have made you bullish on Dec 20,which is why Gann and other systems that throw time into the equation can put you one step ahead of the crowd (in my view).....

Gold

Have attempted an Elliott count.The short term gyrations are difficult,reflecting,I think the contradictory nature of gold's status...on the one hand a vulnerable reflation play (given the current environment of rising dollar,risk aversion),on the other the ultimate hedge in a time of ultimate uncertainty, a time of great confusion and mistrust of government finances/currencies.Ultimately I believe there is only one end game...gold goes a lot higher...in the short-term gold is vulnerable to the stronger dollar and this is reflected in the weekly bearish engulfing candle.My count suggests limited downside though,within a bullish wave count.I would be looking for reversal signals around 1025....