“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.
As we previewed on Thursday, the biggest event of the week, and perhaps of the month, was not Friday's nonfarm payroll report, but the January update of China's FX reserves, which the PBOC released last night. The number came out at $3.2309 trillion, down $99.5 billion from the prior month, and $8 billion less than the December outflow of $107.6 billion.
And even as China added $3.4 billion to its gold reserves, which rose to $63.6 billion ...
An election has been described as two wolves and one lamb voting on what to have for dinner.
We’re going to make a difference on election day! Or maybe not…
Actually, there was never any doubt about what was on the menu. An election is really when the wolves scrap over who gets the choicest pieces. To bring new readers fully into the picture… It doesn’t matter who won in Iowa. Major policies are not determined by the voters but by the more or less permanent elite who run the government, aka the “Deep State.”
The Fed is an instrument of the Deep State, not of the people. This sounds conspiratorial. But it doesn’t require any hidden a...
Buying something at good value is a good approach, however it is another approach to know when to enter and exit the market, enter Wyckoff logic. If You 'know nothing' of Wyckoff logic is a good time to start.
Throughout the past 30 days of wild volatility, here’s what I didn’t do.
Panic. Worry. Sell.
In fact, the best I did was add to a couple of positions yesterday. The world was already in an uncertain state for the past 3+ years. It’s just that with the market rising, we pushed the issue to the back of our mind and ignored it.
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A number of systemic, structural forces are intersecting in 2016. One is the rise of non-state, non-central-bank-issued crypto-currencies.
We all know money is created and distributed by governments and central banks. The reason is simple: control the money and you control everything.
The invention of the blockchain and crypto-currencies such as Bitcoin have opened the door to non-state, non-central-bank currencies--money that is global and independent of any state or central bank, or indeed, any bank, as crypto-currencies are structurally peer-to-peer, meaning they don't require a bank to function: people can exchange crypto-currencies to pay for goods and services without a bank acting as a clearinghouse for all these transactions.
Last year, the S&P 500 large caps closed 2015 essentially flat on a total return basis, while the NASDAQ 100 showed a little better performance at +8.3% and the Russell 2000 small caps fell -5.9%. Overall, stocks disappointed even in the face of modest expectations, especially the small caps as market leadership was mostly limited to a handful of large and mega-cap darlings.
Notably, the full year chart for the S&P 500 looks very much like 2011. It got off to a good start, drifted sideways for...
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Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).
Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself.
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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