Archive for October, 2014

Kill the chickens… to scare the monkeys

Posted on Oct 31, 2014 by .

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1131spx

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p22775897357&a=266398464

The old Chinese proverb regarding mind control is “Kill the chickens to scare the monkeys.”  We have just witnessed an example of this, complete with spurious trendline breaks.  Meanwhile we have scared the pants off uneducated investors — and some sophisticated investors too.  Smart money (?) seized on oversold prices and lit a rocket which is still soaring.  Our analysis of the pattern proved dead right on.  It is an alphbetaetc.  Naturally there has to be a short term reaction to prices which have boomed like this, but the long term appears clear.  In fact the PnF method looks for a target of 2380.

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Alpha beta gamma …etc…etc…zeta

Posted on Oct 24, 2014 by .

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1124spx

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p22775897357&a=266398464

Readers, investors, traders — everybody — is (are) taking a deep breath and nervously looking over his shoulder to see if the Halloween market is gong to serve up some more tricks.  The first seven or eight days of this drama were like a boxing match — take a punch to the head which would sideline Ray Rice, then get revenge the next day, everything back to normal — but no, another punch to the head.  File this period in your mind and keep the chart.  You may be staggering around, but  you’ve lived through some historic market action.  And we are back to markets we can at least analyze.

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Pivot on a pfennig…maybe

Posted on Oct 17, 2014 by .

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1117spx

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p45656388815&a=266398464

After quite some contemplation and analysis we concluded that  the down wave is over — for the moment at least.  How long “over” lasts is now the question.  Could be a wave, could be a ripplet (a day or two).  At any rate, as someone remarked, the “taper tantrum” appears to have exhausted itself.

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Many ominous signals…

Posted on Oct 13, 2014 by .

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1113indu

http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=9&dy=0&id=p64175392383&a=371393763

The trendline is from mar09.  Broken.  The upper  moving average line is the 50 day SMA and the lower line is the 200 day SMA.  Broken.  We record them because many non technicians consider them important.  What is really important here is the trendline — and the growing volume.  The more we look at this the worse it looks.  In our personal accounts we  have been near perfect hedged, but we lifted the hedge today expeccting a short term bounce.  Very short term.  Depending on the rest of the week we may just go outright short.

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