Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
The Past Stock Market Week Was More Important Than You May Understand - 31st Mar 20
Coronavirus - No, You Do Not Hear the Fat Lady Warming Up - 31st Mar 20
Life, Religions, Business, Globalization & Information Technology In The Post-Corona Pandemics Age - 31st Mar 20
Three Charts Every Stock Market Trader and Investor Must See - 31st Mar 20
Coronavirus Stocks Bear Market Trend Forecast - Video - 31st Mar 20
Coronavirus Dow Stocks Bear Market Into End April 2020 Trend Forecast - 31st Mar 20
Is it better to have a loan or credit card debt when applying for a mortgage? - 31st Mar 20
US and UK Coronavirus Trend Trajectories vs Bear Market and AI Stocks Sector - 30th Mar 20
Are Gold and Silver Mirroring 1999 to 2011 Again? - 30th Mar 20
Stock Market Next Cycle Low 7th April - 30th Mar 20
United States Coronavirus Infections and Deaths Trend Forecasts Into End April 2020 - 29th Mar 20
Some Positives in a Virus Wracked World - 29th Mar 20
Expert Tips to Save on Your Business’s Office Supply Purchases - 29th Mar 20
An Investment in Life - 29th Mar 20
Sheffield Coronavirus Pandemic Infections and Deaths Forecast - 29th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

JPM “Tentative” On Balance Volume Sell Signal

Companies / Technical Analysis May 12, 2009 - 02:51 AM GMT

By: Brian_Bloom

Companies Best Financial Markets Analysis ArticleIn terms of Joseph Granville’s original argument, an On-Balance-Volume sell signal needs to manifest as a saw-tooth pattern, i.e. There needs to be a lower low following on from falling highs. This has not yet happened. (See second chart)


However, it may well happen in context of other developments which may be leading indicators. The charts below (courtesy BigCharts.com) are showing the following tentative signs of bearishness:
  1. The “false” break up out of the rising wedge has now reversed, although there has been no sell signal yet
  2. The rising wedge emerged after an upside gap which has not yet been fully covered. The price needs to fall to $28 for that to happen.
  3. There has been a sideways penetration of the rising trend line on the OBV
  4. The Rate of Change (ROC) chart is showing a series of three falling tops. Usually, following this type of pattern, it turns negative.
  5. The rising prices within the rising wedge occurred within the context of falling volume (except for the false breakout – which might well have been engineered)

Below is a P&F chart (3% X 3 box reversal) of JPM, courtesy StockCharts.com


It needs to be emphasized that the April 30th “buy” signal in the chart above should be treated with extreme caution if the Primary Trend of the market is “down”.

Technically, the gap in the second bar chart above needs to be covered. If it is covered at 28, then the most recent bull move will not only be negated, a new sell signal will manifest which will give rise to a downside target of between 25.23 (horizontal count target) and 22.4 (vertical count target). Further, if the Primary Trend is indeed down, then the vertical count is the more believable target.

But 22.4 – should it be reached – will represent a breakdown through the rising blue trend line.

It can be seen from the following chart (5% X 3 box reversal) that if the blue trend line in the chart above is penetrated on the downside, the price could fall all the way back to 15.08 based on the vertical count target below.


Conclusion

This is a VERY dangerous market! The integrity of a technical (trading) signal is dependent on the direction of the Primary Trend, and there is a raging debate regarding whether the old Primary Bear Market has ended and a new Primary Bull Market has commenced. The majority of day traders and technicians out in the market today have never lived through a savage bear market. Those who are managing “Other People’s Money” are predisposed to blindly believe the technical (computer algorithm and chart) signals which are telling them what they want to hear – which is why there has been so much volatility. The “rush” into the market in recent weeks has had an SOS feel to it.

Author’s note

I have tried to be as clear and as articulate as possible in the past few weeks. Based on fundamentals (underlying values) it is my view that there is no way that we are entering a new Primary Bull Market. In my view, what we are experiencing is a technical reaction within a Primary Bear Market. Current share prices are discounting future corporate earnings two years into the future – assuming the economy doesn’t unravel from here. Share prices will not rise for any “logical” reason in the face of this fact and it is very hard to make a case for an economy which is going to get back to “business as usual” in the foreseeable future. For example, GM closing 2600 dealers – which is 42% of its total supply chain – and the likely brouhaha litigation that will follow – is certainly not a bullish development. (Source: http://www.thetruthaboutcars.com/gm-declares-war-on-gm-dealers/ ) For example, That the Fed has been forced to buy treasuries because there are not enough takers for the US’s confetti debt is certainly not a bullish development. Trying to keep interest rates from rising under conditions where the Fed is now, literally, printing money will be like pushing on a string. Rates will rise and the dollar will fall if the Fed continues to print money, and rates will rise if they stop buying the US’s confetti debt. In short, rates will rise over time because “time” has now become the enemy.

None of this will be good for the derivatives industry and the reason I have been focusing on JPM in recent weeks is that they are the largest player, world-wide, in the derivatives industry and the majority of their risk exposure is “off balance sheet”. The typical argument relating to derivatives is this: “We don’t know whether we are going to make a profit or a loss on these instruments, so how can we show them as either an asset or a liability on our balance sheet?” Until the answer to that question is known, JPM must be judged to be reasonably well capitalized – which is almost certainly why it passed the stress test. But I am the proverbial “reasonable man”. No reasonable man will accept that the world’s largest player in the derivatives industry is going to come face-about into the headwinds of rising interest rates and a falling dollar and not get dashed onto the rocks.

Here are two of the risks being faced by JPM:

The charts above show that yields are wanting to bottom out and that the dollar is wanting to roll over and head south.

Can this be averted? Of course anything is possible and, if the authorities are going to fail to avert a catastrophe, it won’t be for want of trying. That’s why the chart of JPM is so important.

By Brian Bloom

www.beyondneanderthal.com

Beyond Neanderthal is a novel with a light hearted and entertaining fictional storyline; and with carefully researched, fact based themes. In Chapter 1 (written over a year ago) the current financial turmoil is anticipated. The rest of the 430 page novel focuses on the probable causes of this turmoil and what we might do to dig ourselves out of the quagmire we now find ourselves in. The core issue is “energy”, and the story leads the reader step-by-step on one possible path which might point a way forward.  Gold plays a pivotal role in our future – not as a currency, but as a commodity with unique physical characteristics that can be harnessed to humanity's benefit. Until the current market collapse, there would have been many who questioned the validity of the arguments in Beyond Neanderthal. Now the evidence is too stark to ignore.  This is a book that needs to be read by large numbers of people to make a difference. It can be ordered over the internet via www.beyondneanderthal.com

Copyright © 2009 Brian Bloom - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Brian Bloom Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules