Archive for April, 2012

Spring springs eternal….

Posted on Apr 29, 2012 by .

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The entire chart is a reminder of where we came from — the broken trendlines from October — and also the broken long term downtrend line from 07.  Trendline D, the last short term downtrend line is the star of the piece we often call the alpha-beta–gamma–zeta wave –except there was no gamma (or C) wave.  It appears that the little consolidation here may have taken the place of that wavelet.  Remembering always that sidewaves can take the place of up or down waves. Last week’s action was constructive as is the breaking of the D line.  This pattern was repeated in many indices and stocks.

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Revenge of the Apple…

Posted on Apr 26, 2012 by .

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It didn’t take Apple long to justify our last letter.  One day.  The huge earnings gap stuck a finger in the eye to doubters, and the long term approach we advocated was instantly vindicated.  The technical lesson here is that short extremely sloped trendlines have consequences appropriate to their length and slope.  This doesn’t mean the turbulence is over in Apple, but  it does emphasize the importance of prudent long term stops. For instance, look at the other trendlines in the stock.

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The Lesson of the century… watch closely…

Posted on Apr 21, 2012 by .

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Yes, of course, it’s AAPL.  And here is another way to look at it.

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Loves Labors Lost…

Posted on Apr 19, 2012 by .

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Maybe it would be best, Tarantulas labors lost.  The tone of the market is vividly illustrated by today”s price action in the SPX.  A top to bottom range of 20 points, which is enough to leave the casual observer dizzy, but within that  range 6  major waves, one of which reached 6 points itself on the 5 minute chart.  The 6 waves ground up 49 points.  What is going on here?  Well you could describe it as the dance of the tarantulas or as naked mud wrestling.  Whatever it is you don’t want to be involved in it.  We remarked a few letters ago that the unusually quiet volatility was about to be shattered by enlarged volatility and that truth — that volatility tends to revert to the mean — is amply demonstrated here.  And for all those labors?  Down 8.22 points, -0.59%.

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Musical chairs and the tarantella…

Posted on Apr 14, 2012 by .

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Or dancing with tarantulas.  The markets over the last week or so have had the fingerprints of the big hedge funds on them — trading aggressively as they grab seats for the musical chairs game.  Frankly the tarantella is not our dance — jotas we can stand and sambas but most of all waltzes — as in… Matilda.  But the last few days have a nasty resemblance in miniature to the bungee markets of last August to October.

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