“The Professor” Corey Rosenbloom at Afraid to Trade offers us a longer term look at Gold. Although it’s breaking out on the shorter-term charts, the chart above clearly indicates there exists resistance above which must be cleared for the next bull rally to run. (Source: Afraid to Trade)
Gold Priced in Multiple Currencies
Precision Capital Management offers a very interesting look at Gold priced in multiple currencies. They state: “Gold is one of the leading indicators we follow at our website. Everyone seems to have noticed the spike up this week in gold, but how do we determine if the move is real, or merely a fakeout? To confirm that gold is advancing on its own merits as part of a longer term move, which is not the result solely of US Dollar weakness, we want to see confirmation of an up move in gold priced in other currencies. Above shows gold priced in the Canadian Dollar (CAD), Australian Dollar (AUD), Japanese Yen (JPY), and the Euro (EUR). When gold began its last advance in November 2008, the move was confirmed by higher lows in the commodity currencies of the CAD and AUD, as well as the EUR (even though there were lower lows in the JPY and USD gold). Eventually, there were higher lows in the JPY and USD gold at the beginning of December 2008. Accordingly, for the gold bull case, early confirmation would be to see current lows in AUD, CAD and EUR gold respected on the first pullback (especially in the former two as they are commodity currencies), preferably accompanied with a break through overhead resistance.” (Source: Precision Capital Management)
Gold with Fibonacci Indicators
Our partners over at RatioTrading bring us yet our third and final perspective on Gold: “As demonstrated in this chart, Gold has historically respected key Fibonacci Ratio levels and with Gold retesting all time highs, where could it be headed? Well as we look historically over the past year or so we see that in many instances when the GLD broke out and made a new low, it went right to either a 1.272 Fibonacci extension ($73)…
I wanted to highlight an interesting potential “Key Reversal” bar in the NASDAQ ETF QQQQ. Let’s take a look:
Take a look at the bar I highlighted on August 28. Price gapped upwards off the opening (due in part to the Consumer Confidence expectation) and formed a fresh 2009 high for the year… before reversing off the open and selling off almost the whole day.
Generally, a more ‘perfect’ key reversal bar would close lower than the prior bar, but what draws my attention to this bar is the logic behind it.
Imagine, you’re a bull and you see a long price advance and you’ve been sitting on the sideline, or have money you want to invest in the market that you’ve been holding. All of the sudden, a gap occurs and you can’t wait any longer so you rush in and put your money to work, excited and fearful that you’re missing the rising boat.
However, price begins to sell off just as you are most confident and you now become stressed and confused. Perhaps you hang on to your long position in hopes of a recovery (because now you are ‘underwater’) and if price continues to fall – like it is doing today (September 1st), then you ‘cry uncle’ and sell your shares at a loss.
Key reversal bars that gap up and then sell off all day are generally rare, but can be powerful short-term or even intermediate term trading signals, because it captures the euphoria of the bulls and then leads to downward movement as their hopes are dashed as they sell at lower and lower prices.
Beyond the key reversal bar drawn above, we see a critical negative momentum divergence as price tapped above the upper daily Bollinger Band – that’s enough reason to take a short-sale scalp/swing trade with a tight stop.
Study this pattern a little more and let’s see if we continue to get downside momentum from a possible ‘buying climax’ high.
First, let’s take a look at the monthly structure:
The 2000 high was a major peak (most likely a large scale Wave III) and virtually all Elliotticians agree we are in a long-term (10 year) expanded flat (ABC) which is shown on the graph above.
Whether or not we have completed the “C” wave is up for interpretation as will be shown below, but this is the generally accepted “Larger Elliott Picture” in a simplified version for you.
Now, let’s revisit the “Most Bullish Scenario” as described in May’s post which WOULD assume that Cycle Wave C (circled) is complete and that we are in a new bull market:
As a disclaimer, I am not yet in agreement with this count, and this would be known as a ‘minority’ wave count that few in the Elliott Community have as their primary count. However, I like to consider charts from all angles and remove bias when possible, so I am presenting this as a possibility.
Without getting too technical, this count would assume that the required 5 “Primary” Waves of the Cycle C have all completed, and that we are now on the cusp of a Brand New Bull Market.
I noted that I am skeptical of this count because the 5th wave does not subdivide properly into 5 waves, and is shorter than the 1st wave which is unusual. That being said, Wave 5 did make a lower low than the 3rd wave, so this is most definitely a plausible count.
It would assume that Waves 1 and 2 of a fractal new Primary Wave 1 Up have formed and that we would be in a powerful third wave up here.
We will know this count is wrong if we make a new low beneath 666 in the near future, and will know that this count is correct if we have a powerful rally up from current levels…
I’ve tended to focus a lot of my analysis on the S&P 500, but let’s take a step back to look at the Dow Jones Index for possible clues and an interesting pattern that *could* be forming on the daily chart.
As much as I hesititate to believe it, there is a possibility that the Dow is forming an expanding triangle or broadening formation, with an upside target near 9,000 (which would be a retest of the January highs).
We still have a negative volume divergence and a negative triple-swing momentum divergence which the bulls are going to have to overcome, and I think it will be difficult to do, particularly given the “Summer Seasonality” (stocks tend to experience seasonal weakness in the summer months, or at least a flat, trading range as volatility/volume is expected to decrease).
I’m mainly posting this as a “Hmm. This is interesting” and basing it off the swing highs and lows and the trendlines that originate from the May highs and lows which seems a natural fit.
Without effort, price shattered overhead EMA confluence resistance thanks to Intel’s (INTC) earnings surprise and the market’s reaction to it.
Keep this as a possibility as we get more information.
The simmering cold war involving the NYPD and various elements of New York's population just went nuclear when a little before 3:00 PM, reports hit that two NYPD officers were shot in their patrol car, and subsequently died, in what has been dubbed an "execution style" ambush in Brooklyn's Bed-Stuy area. The alleged shooter was chased by police and subsequently died of a self-inflicted gun wound.
Two Police Officers have been shot in the 79 pct. please pray for them
Analysts at Oppenheimer initiated coverage of Twitter Inc (NYSE: TWTR) Friday by issuing a Perform rating and setting a $36.00 price target. Twitter is a global social networking platform with over 280 million active users.
While Oppenheimer analysts fully recognize the strength in Twitter as a company, they believe that Twitter’s stock is appropriately priced at current levels. “While TWTR is the best Internet platform for real-time content discovery, we believe that the stock’s current valuation of 10x 2015E sales, a 52% premium to peers, fully reflects future prospects based on current growth rates.”
Between November and December 2014, Twitter insiders have sold more than $...
Those who took advantage of markets at Fib levels were rewarded. However, this looked more a 'dead cat' style bounce than a genuine bottom forming low. This can of course change, and one thing I will want to see is narrow action near today's high. Volume was a little light, but with Christmas fast approaching I would expect this trend to continue.
The S&P inched above 2,009, but I would like to see any subsequent weakness hold the 38.2% Fib level at 1,989.
The Nasdaq offered itself more as a support bounce, with a picture perfect play off its 38.2% Fib level. Unlike the S&P, volume did climb in confirmed accumulation. The next upside c...
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Stocks have needed a reason to take a breather and pull back in this long-standing ultra-bullish climate, with strong economic data and seasonality providing impressive tailwinds -- and plummeting oil prices certainly have given it to them. But this minor pullback was fully expected and indeed desirable for market health. The future remains bright for the U.S. economy and corporate profits despite the collapse in oil, and now the overbought technical condition has been relieved. While most sectors are gathering fundamental support and our sector rotation model remains bullish, the Energy sector looks fundamentally weak and continues to ran...
Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...
I officially bought 250 shares of EZCH at $18.76 and sold 300 shares of IGT at $17.09 in Market Shadows' Virtual Portfolio yesterday (Fri. 11-21).
Click here for Thursday's post where I was thinking about buying EZCH. After further reading, I decided to add it to the virtual portfolio and to sell IGT and several other stocks, which we'll be saying goodbye to next week.
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Well PSW Subscribers....I am still here, barely. From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.
First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices. Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment. Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer. For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at firstname.lastname@example.org with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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