Best of the Week
Most Popular
1.Trump Delirium Triggers Stock Market Brexit Upwards Crash Towards Dow 20,000! - Nadeem_Walayat
2.The Future Price Of Gold Will Drop Below $1000 In 2017 -InvestingHaven
3.May Never Get Another Opportunity to Buy Gold at this Level Again - Chris_Vermeulen
4.Delirium - The Real Reason Why Donald Trump Won the US Presidential Election - Nadeem_Walayat
5.Why Nate Silver / Fivethirtyeight is one of the Most Reliable Election Forecasting Indicator? - Nadeem_Walayat
6.Gold Price Forecast: Nasty Naughty November Gold Price Trend - I_M_Vronsky
7.Gold Mining Stocks Screaming Buy! Q3’16 Fundamentals - Zeal_LLC
8.Delirium of Trump Mania Win's Mr BrExit US Presidential Election 2016 - Nadeem_Walayat
9.The War On Cash Goes Nuclear In India, Australia and Across The World - Jeff_Berwick
10.Hidden Signs for Gold and Silver - P_Radomski_CFA
Last 7 days
Cheap Large Icicle Christmas LED Lights Review - B&M Stores - 9th Dec 16
US Interest Rates and the Toughest Man Who Ever Lived - 9th Dec 16
Amazon UK Christmas Shopping Useless Delivery Tracking Warning Alert - 9th Dec 16
Euro-zone Crisis - The Soon To Erupt Euro Experiment - 9th Dec 16
Global Market Perspective 3 Killer Charts, 2 Fast Looks at Politics - 9th Dec 16
Trump Could Fuel A Nuclear Energy Boom In 2017 - 8th Dec 16
Our Future Economy, Jobs, Banking, And Governance – Part2 - 8th Dec 16
Developing Knowledge-Intensive Society and Knowledge Industrial Hub in Kerala - 8th Dec 16
Crude Oil and Gold, Silver Precious Metals Link - 8th Dec 16
Stock Market and the Great Middle Class Revolt Gets Bigger - 8th Dec 16
Protectionist Trump Policies To Crash Dollar, Gold and Bitcoin to Soar - 8th Dec 16
The Jaws of Life : The Most Hated Stocks Bull Market in History! - 8th Dec 16
Infrastructure A Budding Asset Class - 8th Dec 16
Trump Stocks Bull Market Furious Rally Towards Dow 20k as Bear Mantra Persists - 8th Dec 16
More Talk About More Economic Growth and More Globalization - 7th Dec 16
Cracks In US Treasury Bond Market, The Japanese Factor - 7th Dec 16
The Rise of Anti-Establishment Italy - 7th Dec 16
Trump Likely to Drive Another Bump in Stock Market Buybacks — Here’s How to Hedge - 7th Dec 16
World War II and the Origins of American Unease - 7th Dec 16
Online CFD Trading for Traders on a Budget - 7th Dec 16
Silver Bullion Price Buying Opportunity for 2017? - 7th Dec 16
The Imminent Multi-Trillion Dollar Surge In Social Security & Medicare Costs - 7th Dec 16
Gold Bullion Price Buying Opportunity for 2017? - 6th Dec 16
Shariah Gold Standard Approved for $2 Trillion Islamic Finance Market - 6th Dec 16
THE Gold Play for 2017 - 6th Dec 16
Trump Sets The Stage For A Huge Gold Rally In 2017 - 6th Dec 16
BrExit Tsunami Claims Emperor Renzi's Scalp, Counting Down to End of the EU, Next? - 6th Dec 16
Failed EU - Means an Expanded Dictatorship - 6th Dec 16
Crude Oil Prices: "Random"? Hardly - 5th Dec 16
The Coming Stock Market Crash and WWIII - 5th Dec 16
This Past Week in Gold Market - 5th Dec 16
Stock Market Short-Term Correction Underway - 5th Dec 16
If Trump Doesn’t Do This, We Will Have the Great Depression 2.0 - 5th Dec 16
India’s Demonetization Could Be the First Cash Domino to Fall - 5th Dec 16
Our Future Economy, Jobs, Banking, And Governance - 5th Dec 16
Gold and Silver Bullion Buying Opportunity for 2017? - 4th Dec 16
First UK BrExit then Trump, Next BrExit Tsunami Wave to Hit Italy HARD Sunday! - 3rd Dec 16
The 10YR Yield and SPX Stocks Bull Markets - 3rd Dec 16
Gold And Silver – Do Not Expect Much Difference With Trump Compared To Obama - 3rd Dec 16
Gold, Currencies and Markets Critical 61.8% Retracements - 2nd Dec 16
Gold Junior Stocks Q3’16 Fundamentals - 2nd Dec 16
Adventures in Castro’s Cuba - 2nd Dec 16
We Are Putting Off the Inevitable - 2nd Dec 16
Macroeconomic Cycles & Demographics - A Fuse, An Explosive and The Igniting Catalyst - 2nd Dec 16
How Moving Averages Can Identify a Trade - 1st Dec 16
Silver Prices and Interest Rates - 1st Dec 16
America, is it Finally time for us to say Goodbye? - 1st Dec 16
Blockchain Technology – What Is It and How Will It Change Your Life? - 1st Dec 16
Burn the Flags, Can Trump Salvage The Sinking US Economic Ship? - 1st Dec 16
Will US Housing Real Estate Market Tank in 2017? - 1st Dec 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

$10000 Gold

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