Archive for June, 2014

Two out of three (ain’t bad)

Posted on Jun 26, 2014 by .

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0626spxrule7

 

http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=5&mn=0&dy=0&id=p38441387569&a=321281297

While absent-mindedly noodlying in Oct 12 it occurred to us to run a rule of seven analysis on the SPX.    (http://www.edwards-magee.com/ggu/ruleofseven.pdf.) The market was about 1450 at the time, and our analysis set target objectives of  1634.56, 1955.3 and 2602.33.  In Oct 13 we updated the chart as the first objective was met.

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Gold, silver, Miners and how to sit still

Posted on Jun 19, 2014 by .

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0619gld

 

http://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=0&mn=9&dy=0&id=p79177025382&a=255869372

Screaming signals.  Gold gaps and a power bar.  Actually we don’t think there is an explanation for this action.  Peripatetic pundits natter on about inflation, Iraq, tea party terrorists –but to us it looks technical.  Gold was pressed down and pressed down and finally it sprung (spranged?) back up and so we added on to our gold position — already being long gold as we laid out  in a previous letter.  We also added on to our silver position:

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Strangely quiet…

Posted on Jun 18, 2014 by .

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0618spx

 

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=10&dy=0&id=p53999843979&a=214966864

We are told that the market has now traversed 42 days with out a move exceeding 1%.  And, furthermore that 82 weeks have passed since the Dow touched the 200 day moving average.  Naturally this makes traders nervous, as they feel they are skating on thin ice.  Given the number of black swans paddling about the lake we never trust the thickness of the ice.  That’s what stops are for.  We have just recomputed the long term trend stops for the major indices: here in the SPX 1706.80.

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Presto changeo — Metamorphosis, gold bear to bull

Posted on Jun 15, 2014 by .

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0614gldhttp://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=2&mn=6&dy=0&id=p46848720526&a=234983962

We have been struggling with the gold chart for hours and hours trying to understand what we are seeing.  We have  been bearish on gold for some time and even made a rule of seven analysis which looked for a price of 880.  We just closed  a GLD short — minimal loss– and a short miners (DUST) (about 15% profit).  Now we are wondering if that was a bear trap.  If so we still have all our toes.  But our faith in the past analysis has been shaken by a lengthy reappraisal of the entire relevant chart.

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Parabolic markets, flags flying…

Posted on Jun 09, 2014 by .

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0607indu

 

http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=7&dy=0&id=p59103334454&a=298224028

After five months of sideways markets prices broke out and are now accelerating.  It appears that the present markets are being characterized by many flags.  Here in the Dow F marks what might be a flag.  The interpretation is reinforced by patterns in the other indices:

0607spxflag

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p90011170908&a=266691158

 

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