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Saturday, January 2, 2010

Charts and Stuff

When I suggested this weekend that you can "stick a fork  in it", obviously I think P2's goose is cooked or nearly over.  Sure there can be some more spasms up and there may well be divergences created between indexes.  A big rotation in the new year can create a lot of "cross-currents". For instance the SPX may be truly done and perhaps the NASDAQ has one more spasm for an example.  We'll see soon enough. No use in fretting over it.  However, Thursday's late afternoon drop actually did a great deal of technical damage for such a tiny cut.

Take a look at this chart again I posted a few days ago: There are serious technical warnings in that chart particularly something as simple as the RSI.  The last rise was rejected as where was predicted on the red line which had been in place. In my limited technical experience, a double negative divergence is a sign its ready to roll over. We have that now.

What would it take to change opinion on that P2 is about over?  Well take a look at this chart below.  Look at the Up volume ratio and how each Intermediate zigzag had its own "kickoff"  spike(s).   Yet each one was weaker as compared to the other.   Until there are more telltale spikes of significance, I have to assume the internals are telling me its ready to rollover. There can be no more than 3 zigzags in theory. The up ratio patterns play perfectly within EW theory.

When that last 18:1 day occurred I quickly changed counts to a triple zigzag and it proved true so far.  At the time it wasn't popular or people were suggesting I keep changing counts, but I had no choice as the market was telling me it wasn't "done". Maybe there is one final spasm higher in a weaker up move than 18:1. If it happens, we'll talk about that for sure.

 But for now, I have no reason to make up new theory.  Or else what good would it be?

Here are some other charts, most of them are followup's on what I have presented over the last few months.
Amazon is looking creaky.   A head and shoulders is developing.

Apple hit my $213 wave (5) target. The weekly candle looks potentially ominous. The RSI is seriously waning and warning.

Whats interesting about Bonds is that now that there has finally been a long-term down trend in place, you finally see the general media "talking" about it.  This is the psychology of wave 5's.  Finally the trend becomes strong enough where people will be confident to make predictions of that trend continuing.  And that is happening now (Bill Gross, etc). I seen the media talking this morning about how rates are going up and you have to buy housing now along with the tax break (no worries - they'll extend it again or double down next year).

In the long run right I think they are right. But for now I think it indicates a bottom soon.... And what would cause 30 years prices to go back up?  The good old "flight to safety" and the fact that they are oversold a bit. Note the mini-H&S that has formed within wave (4). That red line marks the target.

The monthly chart shows some potential support areas.   Note the massive head and shoulders developing. There may be a double set of shoulders on each side of which there needs another rise for the second right shoulder to form. Also note that a Wave [3] down in bonds will not mean equities goes up.  This will be about the point where EWI's "all the same markets" kicks in. Thats when there is no safe havens and everything sells; stocks, bonds, and commodities.  We seen glimpses of this on the big drop area in P1.

Global Dow makes excellent waves. It shows "global asset mania."  The RSI is a big fat warning a wave [3] down is coming.

Gold followers won't like my call in gold. I show a cycle wave high in place.  Its at some key trendlines now. I think the willingness to buy dips all the way down will ensure it sells off lower than anyone expects. I have targets that go lower than EWI's.

This is not to say that black market physical gold won't be selling higher.  I don't want to get into a discussion about the merits, etc.  All I am saying is that this chart, in EW terms, could be "cooked". In my opinion, most of the "paper gold" sold on indexes, etc. is a big fat fraud anyway.   A big drop will help flush out that fraud....

UPDATE: If Gold has put in a Cycle wave high as I suggest, then the selling of assets in P3 in order to raise cash and pay debts will cause paper gold, per this chart, to head back to the blue box area in the middle of wave [3]. Price target $450-500.  Thats a long ways from now so it isn't going to be a straight shot down obviously.   If side physical markets are selling much higher that would not surprise me...

Natural gas finally had that C wave I was looking for.  Negative divergence. Natural gas, I think, has probably entered a long term low trading range and it may be at the top of that range.

I have talked in this post about a DOW/Nikkei relationship.
This was my first followup and the leading diagonal was an option

The Nikkei could very well make a new squeaker high. Its close. Essentially it would be a doubeltop. Either way, it had a hellava rally the last few weeks to "catch up" with the world markets.

Oil is a wildcard. I still show a potential $85+ target.  Would this viewed to be good for the market? Hrmm. At above $80, I think high oil can be viewed as bearish for the market if your a follower of fundamentals. What good is high oil to small businesses?

Again the weekly shows that oil may want to challenge that big down candle directly. Also note the 3 white candle patterns. It suggest a new squeaker high is coming. As a side note, I read recently on Mish how oil is just STACKED up in ships and the oil trade is running a huge risk  Oil has the potential, in due time, to crash very low with the excess "hidden" inventory. This could be the final spasm trade higher to protect all the will all fail though...

Hey my charts aren't all biased to the short side...Here is Google. Since the drop from 2007-2009 looks like one giant corrective "three" (ala APPLE), I suppose the waves are suggesting its making a run at a new high. How does this fit potentially into the rest of the market?  I suppose Google's high could come down the road on an Intermediate (2) retrace back up for the markets.  Just a guess. None of this may be correct.

I show in this recent past chart how it seems to want to avoid this RSI trendline.

I'm keeping an eye on it.

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