Best of the Week
Most Popular
1.The Trump Reset, US Empire's Coming Economic, Cyber and Military War With China (2/2) - Nadeem_Walayat
2.Now Is the Time to Buy Gold - 5th Jan 17 - John Grandits
3.CIA Planning Rogue President Donald Trump Assassination? Elites "Manchurian Candidate" Plan B - Nadeem_Walayat
4.The Trump Reset - Regime Change, Russia the Over Hyped Fake News SuperPower (Part1) - Nadeem_Walayat
5.Most Popular Financial Markets Analysis of 2016 - Stock Market Crash Postponed Again - Nadeem_Walayat
6.No UK House Prices Brexit Crash 2016 Despite London Weakness, Forecast 2017 - Nadeem_Walayat
7.President Trump Understands the NSA, CIA... LIE, America's Intelligence Agencies Crime Syndicate! -Nadeem_Walayat
8.President Donald Trump's 2017 New Year Message, BBC Fake News, Was 2016 a Dream? - Nadeem_Walayat
9.Major Stocks Bear Market Still Looms - Zeal_LLC
10.Biased 2017 Forecasts - Debt, Housing and Stock Market (1/2) - James_Quinn
Last 7 days
US Stock Market Update as the Trump Inauguration Approaches - 17th Jan 17
The American Crisis - Common Sense 2017 - 17th Jan 17
Obama Leaves, Hope Arrives, Will Stupid Stay? - 17th Jan 17
Damage Inflicted by Precious Metals Manipulation Is in the “Multi Billions” - Keith Neumeyer - 17th Jan 17
Gold Price Forecast 2017 Update - Video - 17th Jan 17
The Story of the U.S. Regime Change Plan in the Philippines - 16th Jan 17
Gold Price 2017 Trending Towards $1375 as Forecast - 16th Jan 17
'Deep State' CIA Director States We are Not NAZI's, Warns Trump Does Not Understand Russian Threat - 15th Jan 17
UK House Prices Forecast 2017 - Crash or Bull Market? - Video - 15th Jan 17
SPX Stocks Bull Market Update - 14th Jan 17
President Trump vs the Deep State that Hides in Plain Sight - 14th Jan 17
The Impact of Sir Alex Ferguson's Retirement on Man United's Share Price - 14th Jan 17
What Can Stock Market Tell You About Politics? - 13th Jan 17
Big Gold Buying Coming 2017 - 13th Jan 17
A Bullish Case for Gold 2017 - 13th Jan 17
Will Stocks Bull Market Continue to Charge or is it Time to Sell the News - 13th Jan 17
Gold and Silver Off To Shining Start to 2017 - 13th Jan 17
Gold’s Fundamental Outlook for 2017 - 13th Jan 17
Is trading stocks and shares just as luck-based as roulette? - 13th Jan 17
Trump CIA Like Nazi Germany - Fake MI6 Intelligence leaked to Fake News Mainstream Media - 13th Jan 17
USD in Decline. SPX and TNX May Follow - 12th Jan 17
CIA War On Trump - Leaks Fake MI6 Intelligence to Fake News Broadcast Media - 12th Jan 17
Registered Address.co.uk London Business Registered Office Address Mail Forwarding Review - 11th Jan 17
13 Contrarian Economic Predictions For 2017 - 11th Jan 17
10 Potential Black Swans and Opportunities for the US Economy in 2017 - 11th Jan 17
How to Get a Bird of Paradise Plant to Flower - UK Growing Video - 11th Jan 17
The No.1 Energy Stock To Buy Right Now - 10th Jan 17

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

What Can Stock Market Tell You About Politics?

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

© 2005-2016 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

Catching a Falling Financial Knife