Flags flying…
Posted on Oct 24, 2011 by WHC Bassetti.
This chart is deliberately not annotated. The reason is to call attention to the formation since Oct. 3. It looks suspiciously like a flag. To remind you, a flag appears on a flagpole halfway through the wave, implying that we will now see upside to equal the distance prices have come from Oct 3 to the flag bottom.
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Time to think of bull hedging…
Posted on Oct 22, 2011 by WHC Bassetti.
As prices in the SPX move out of the five day congestion — and perhaps out of the 53 day congestion — it is time to think about hedging against upside markets. Numerous commentators consider the piercing of 1230 significant. What we think of it is shown by the chart. Not yet. But close enough to think about. And certainly close enough to hedge — i.e., by venturing some longs or lifting some short hedges.
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No news…
Posted on Oct 21, 2011 by WHC Bassetti.
In the Spanish Civil war a fascist Colonel seized the Alcazar of Toledo when Franco led a military rebellion against the legal elected government. Republicans battered the Alcazar to pieces for weeks attempting to dislodge the fascists. Hundreds of lives were traded on each side. After some weeks of this the Colonel reported on the state of the siege: “Sin novedad en el Alcazar” (No news of interest from the Alcazar.) This was idolized as the height of sardonic courage.
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Watch closely as we break hallowed rules…for Halloween…
Posted on Oct 15, 2011 by WHC Bassetti.
First. The market blew away the two nearest highs, destroying the declining pattern. Someone referred to the Oct 4 low as a bear trap, as well it appears in retrospect. Didn’t trap us because we didn’t trust it anyway. In fact we don’t trust anything about these markets. Subsequent price behavior illustrated once again that a failed signal indicates the next signal in the opposite direction will be a profitable one (in general). In general that was true in spades as the S&P surged 13.9%, pinching the toes of bears. (Us, in general, though we caught a part of the wave on a trade.)
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Fool’s gold and fool’s euro…
Posted on Oct 13, 2011 by WHC Bassetti.
Jim Rogers said one time that people envied his ability to catch the top of markets. What they didn’t know he said was the 7 or 8 tries he made to do that. Color us Jim Rogers. On this thin chart pattern (broken trendline, broken horizontal line by a hair) we shorted the TLT by buying TBT. As we keep saying a fortune is going to be made short bonds, and we are going to squander a small fortune trying to catch the top.
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Noted technical analyst WHC Bassetti has over 40 years' experience in the financial markets and is Malcom S.M. Watts III Adjunct Professor of Finance and Economics at Golden Gate University. He is editor of the Ninth Edition of Technical Analysis of Stock Trends, widely considered to be one of the true classics of market analysis.
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