Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Weekly SPX & Gold Price Cycle Report - 17th Oct 19
What Makes United Markets Capital Different From Other Online Brokers? - 17th Oct 19
Stock Market Dow Long-term Trend Analysis - 16th Oct 19
This Is Not a Money Printing Press - 16th Oct 19
Online Casino Operator LeoVegas is Optimistic about the Future - 16th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - Video - 16th Oct 19
$100 Silver Has Come And Gone - 16th Oct 19
Stock Market Roll Over Risk to New highs in S&P 500 - 16th Oct 19
10 Best Trading Schools and Courses for Students - 16th Oct 19
Dow Stock Market Short-term Trend Analysis - 15th Oct 19
The Many Aligning Signals in Gold - 15th Oct 19
Market Action Suggests Downside in Precious Metals - 15th Oct 19
US Major Stock Market Indexes Retest Critical Price Channel Resistance - 15th Oct 19
“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools - 15th Oct 19
British Pound GBP Trend Analysis - 14th Oct 19
A Guide to Financing Your Next Car - 14th Oct 19
America's Ruling Class - Underestimating Them & Overestimating Us - 14th Oct 19
Stock Market Range Bound - 14th Oct 19
Gold, Silver Bonds - Inflation in the Offing? - 14th Oct 19
East-West Trade War: Never Take a Knife to a Gunfight - 14th Oct 19
Consider Precious Metals for Insurance First, Profit Second... - 14th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - 13th Oct 19
The Most Successful IPOs Have This One Thing in Common - 13th Oct 19
Precious Metals & Stock Market VIX Are Set To Launch Dramatically Higher - 13th Oct 19
Discovery Sport EGR Valve Gasket Problems - Land Rover Dealer Fix - 13th Oct 19
Stock Market US Presidential Cycle - Video - 12th Oct 19
Social Security Is Screwing Millennials - 12th Oct 19
Gold Gifts Traders With Another Rotation Below $1500 - 12th Oct 19
US Dollar Index Trend Analysis - 11th Oct 19
China Golden Week Sales Exceed Expectations - 11th Oct 19
Stock Market Short-term Consolidation Does Not change Secular Bullish Trend - 11th Oct 19
The Allure of Upswings in Silver Mining Stocks - 11th Oct 19
US Housing Market 2018-2019 and 2006-2007: Similarities & Differences - 11th Oct 19
Now Is the Time to Load Up on 5G Stocks - 11th Oct 19
Why the Law Can’t Protect Your Money - 11th Oct 19
Will Miami be the First U.S. Real Estate Bubble to Burst? - 11th Oct 19
How Online Casinos Maximise Profits - 11th Oct 19
3 Tips for Picking Junior Gold Stocks - 10th Oct 19
How Does Inflation Affect Exchange Rates? - 10th Oct 19
This Is the Best Time to Load Up on These 3 Value Stocks - 10th Oct 19
What Makes this Gold Market Rally Different From All Others - 10th Oct 19
Stock Market US Presidential Cycle - 9th Oct 19
The IPO Market Is Nowhere Near a Bubble - 9th Oct 19
US Stock Markets Trade Sideways – Waiting on News/Guidance  - 9th Oct 19
Amazon Selling Fake Hard Drives - 4tb WD Blue - How to Check Your Drive is Genuine  - 9th Oct 19
Whatever Happened to Philippines Debt Slavery?  - 9th Oct 19
Gold in the Negative Real Interest Rates Environment - 9th Oct 19
The Later United States Empire - 9th Oct 19
Gold It’s All About Real Interest Rates Not the US Dollar - 8th Oct 19
A Trump Impeachment Would Cause The Stock Market To Rally - 8th Oct 19
The Benefits of Applying for Online Loans - 8th Oct 19
Is There Life Left In Cannabis - 8th Oct 19
Yield Curve Inversion Current State - 7th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

Stock Market On the Edge of Something Very Big, Crash?

Stock-Markets / Financial Markets 2010 Jun 09, 2010 - 07:02 PM GMT

By: Anthony_Cherniawski

Stock-Markets

Diamond Rated - Best Financial Markets Analysis ArticleU.S. stocks lost their gains Wednesday as Federal Reserve Chairman Ben Bernanke voiced cautious optimism about the economy and the central bank's Beige Book also noted modest improvement.

"Everything is universally moving in the right direction, but we already knew that," said Jeffrey Kleintop, chief market strategist at LPL Financial of the Fed's June report, which noted improvement across all 12 districts.


Backlash at BP

The cost to protect BP Plc’s bonds against default soared to a record, more than nine times the level before one of its wells exploded in the Gulf of Mexico, as pressure on the company to suspend its dividend intensified.

Credit-default swaps on BP climbed 126.1 basis points to 386.9 basis points, according to CMA DataVision prices. More than 40 U.S. lawmakers called today for the London-based company to suspend its dividend and Interior Secretary Ken Salazar told a Senate committee that “significant additional” safety requirements will be imposed on oil and gas companies drilling in the Gulf.

Why Did The U.S. Refuse International Help on The Gulf Oil Spill?

(ZeroHedge) Despite the vow by President Obama to keep the Gulf oil spill a top priority until the damage is cleaned up, 50 days after the BP rig exploded, a definitive date and meaningful solution is yet to be determined for the worst oil spill in the U.S. history.

So, you would think if someone is willing to handle the clean-up with equipment and technology not available in the U.S., and finishes the job in shorter time than the current estimate, the U.S. should jump on the offer. But it turned out to be quite the opposite.

The VIX tested intermediate-term Support.

-- All of the see-sawing in the VIX confirms the uptrend, even though it closed below short-term Trend Support at 34.19 today. The rally in stocks that completed today was at a smaller-degree than the rally which topped on May 12th. However, the VIX is giving this pause in the decline a higher-degree pullback. This is something that I have only observed for the first time, and suggests a very strong move is about to happen.

The CBOE Put-Call Ratio for equities ($CPCE) stayed neutral at .92 today. The pros have increased the $CPCI to 1.62 (more bearish) at the end of the day. The 10-day average is still 1.52. The NYSE Hi- Lo index closed down 32 points today to -108. The Hi-Lo index remains in bearish territory. Bullish territory starts at 95.

SPY retested short-term Resistance.

Action: Sell/Short/Inverse -- The saying goes, “The markets always rally before a crash.” SPY is no different as it approaches the Head and Shoulders Neckline illustrated in the chart. This will be the third attempt to break 104 since the Flash Crash in May. It may just be the charm.

The probability of some event causing the market to gap through support overnight is very high. The H&S pattern sets up a target of 86.64, which is very close to the July 8 low of 85.77. My model suggests that we may see the markets meet their downside targets early next week.

QQQQ makes its lowest close since February.

Action: Sell/Short/Inverse -- QQQQ closed lower as it traces out a complex Head & Shoulders pattern with a neckline roughly corresponding to the lower trendline of the Broadening Top formation. It appears that the very next target for QQQQ will be the lower trendline of the Broadening Top. However, I am looking for a “normal” wave 3 that may cut through the trendline on its way to 37-38.00 or lower. A likely target may be its (last) July low at 34.17.

XLF is prepared to plunge through its neckline.

Action: Sell/Short/Inverse -- XLF now appears ready to drop below the Head & Shoulders neckline which gives us a target of 10.50 – 11.00. Head & Shoulders patterns work best at the beginning of a third wave, which describes the situation perfectly. The July, 2009 low was 10.73, which is the next support level.

The brief spike to 14.37 this morning before XLF turned back down played out as expected. We are now starting the most powerful move of the series today.

FXI appears ready to cross intermediate resistance.

Action: Buy/Long -- FXI rallied briefly above intermediate-term Trend Support at 39.40 today. It also had an upside breakout, even though it settled below Trend Support at the close. This is very bullish action and should be encouraging for those who have doubted the upside reversal until now.

$SSEC made a pretty substantial move today, as well, closing just below short-term Trend Resistance at 2590.

GLD stumbled, but maintained its uptrend.

Action: Maintain Longs, looking for an exit -- GLD stumbled after its breakout, but is still advancing in a “wave c” of a probable final zig-zag on its way to my model target of 126.00.

Yesterday’s breakout is still being tested, but a more convincing emergence above 122.24 should bring the buyers back. It is doubtful that the volume will increase appreciably, however, since it will be the retail buyers pushing up the final spike in price. GLD is already in nosebleed territory, so it may not be wise to stay too long. I will keep you posted if a reversal pattern emerges.

USO is completing a wave (ii).

Action: Sell/Short/Inverse -- Today’s rally in USO cleared up the wave pattern as it spiked toward intermediate-term Trend Resistance at 35.93. This has two implications. First, it may spike even higher as it completes a higher degree (to 35.93, perhaps?) second wave. Second, wave (iii) may take USO below 18.00 in wave (iii). There is no “alternate count” in USO at this time.

TLT has finished a pullback to short-term support.

Action: Maintain Longs, Look for an exit early next week. -- TLT found support at the shortterm Trend Support at 97.25. It appears that the next rally attempt should break above the prior highs and potentially target the 103.00 area. Once that target is reached, it may be advisable to start taking profits, unless you can watch the pattern like a hawk.

The U.S. is now one of the top 5 sovereign deriskers as CDS activities are picking up. This does not bode well for our bond market. The perceived risk of default is now rising.

UUP also finds support at the 13-day moving average.

Action: Buy/Long -- UUP pulled back to its short -term Trend Support at 25.44 instead of accelerating as I had expected. Nothing has changed, though. Wave iii of (iii) could go substantially higher, targeting somewhere above 28.00 in the move immediately before us.

Tomorrow the pivot window for UUP opens, so we may see fireworks starting in the next move higher.

Have a great evening!

Tony

Traders alert:  The Practical Investor is currently offering the daily Inner Circle Newsletter to new subscribers.  Contact us at tpi@thepracticalinvestor.com for a free sample newsletter and subscription information.

Our Investment Advisor Registration is on the Web

We are in the process of updating our website at www.thepracticalinvestor.com to have more information on our services. Log on and click on Advisor Registration to get more details.

If you are a client or wish to become one, please make an appointment to discuss our investment strategies by calling Connie or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at tpi@thepracticalinvestor.com .

Anthony M. Cherniawski, President and CIO http://www.thepracticalinvestor.com

As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

Disclaimer: The content in this article is written for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

Anthony M. Cherniawski 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