Technical Analysis of Stock Trends

Speculations on the pattern and Bill Gross

Posted on Apr 23, 2015 by WHC Bassetti in Letters

http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=4&dy=0&id=p22824069931&a=404779364

Here is a different way to look at the SPX — a line chart which just connects closes with a line.  This almost looks like a triangle.  It can of course be contained within a rectangle, especially if candle shadows are included.  But the important thing is the coiling nature of the pattern — getting tighter and tighter.  Foreshadowing fireworks.  Professionals sometimes buy option straddles in cases like this. Propulsive power is built up in patterns like this — a confirmed breakout would carry price a minimum of 80 points.

But that’s nothing compared to the short of a lifetime (so says Bill Gross).  Short the German Bund.

Strange.  The pattern is certainly spectacular but why would Gross tell the unwashed and unworthy?  Bear trap?  We will start watching it.  It is certainly no secret amongst traders that short bonds (anybody’s) will be a career move.  Being too early might be a career ending move.

Tags: apr15, bund, spxline