Archive for December, 2012

Dancing along the cliff’s edge…the technical cliff

Posted on Dec 27, 2012 by .

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http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=4&mn=6&dy=0&id=p30028146067&a=239474174

Readers cannot but be exasperated by the kabuki show taking place in Washington — as evidenced by today’s price behavior. A range of 21 points in the SPX — with an actual change of less than 2 points. Like a monkey watching a puppet show the market sits on its cage fence with its ear cocked to the Washington sound track. All hope gone? SELL! SELL!! Clowns will return to Congress to (not) solve problem? BUY! BUY!! Whiplash.

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Heads and shoulders–upside down, or Kilroys

Posted on Dec 21, 2012 by .

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http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=7&dy=0&id=p10149991945&a=259588108

Recently analysts have been talking about a head-and-shoulders pattern in the SPX.  We can’t see a H&S but we see a Kilroy, or reverse head-and-shoulders which we have marked here.  S/H is shoulder/hand and H/N is head/nose (see the 9th or 10th edition Technical Analysis of Stock Trends).  The depth of this formation, 91 points, implies a target of 1525.    This may be a chancy interpretation, given that the Kilroy usually occurs at the end of a downtrend, but it fits with our analysis of higher highs.  Of course this assumes that the kabuki show in Washington will get all the clowns back into the clown car and then drive off the cliff.

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Fool’s gold, fool’s silver….

Posted on Dec 20, 2012 by .

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http://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=0&mn=9&dy=0&id=p15218233755&a=236108789

We traded the flag here in silver in August and made a little profit.  We remarked on it at the time.  The power bar at the end of the flag faked us out and we were in then out.  We thought all of the activity suspicious, though failure to challenge the old high should have provoked a short, especially on the gap.   Now it strikes us there is no doubt and we have shorted it with ZSL.  We don’t think this is a high priority.  But it certainly is a high priority not to be long.

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Bear baiting and naked mud wrestling…

Posted on Dec 16, 2012 by .

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http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=5&mn=0&dy=0&id=p54002857514&a=234104255

Sometimes we are amazed at what the analytical community (and talking heads, and nattering nabobs and beauty commentators) misses — as in this picture which shows prices bouncing off the most important trendline on the chart.  From that critical moment in 2009 when the parachute blossomed and the market stopped its freefall.  This is, of course, a numinous line.  Break it under the right circumstances and wake the bear — a veritable grizzly.

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Finally, movement!

Posted on Dec 11, 2012 by .

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http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p33682367285&a=214966864

After 8 days of shifting from one foot to the other the market finally took a step.  In the right direction.  Prices today crossed the resistance horizontal line.  And while we only include it for reference prices have broken above the 50 day moving average.  Many analysts consider this significant.  We always consider it in the context of the rest of the chart. This chart says “buy me”.

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