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Michael J. Clark was born and raised in Sinclair, Wyoming. He is a poet, novelist, artist, historian, and market analyst. His fine arts portfolio can be found at the following address: http://www.hoalantrangallery.com/MJC2.htm His writing portfolio can be found at:... More
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Clark's Gate Timing System ©
  • CGTS UPDATE: RALLY ENDING? GET READY FOR MORE SHORT POSITIONS 4 comments
    Aug 27, 2011 5:32 AM
    CGTS DAILY TRADING SIGNALS
    FOR MONDAY, 29 August 2011


    Ben Bernanke speaks, says nothing, and stocks go up.  Well, it wasn't really Ben.  We were in the last leg of the current 'snap-back' rally expansion.  Stocks wanted to go up, no matter what Ben said -- and, of course, Ben said nothing.  Ben has become an international political liability.  So he is now bound and gagged.  His QE policies outraged foreign governments for exporting inflation to the entire world and generating revolution and unrest in many parts of the world (so much for another asset price bubble) and also outraged domestic conservatives.  He is now being called a 'traitor' and being threatened with a public hanging by outraged Texans -- so he better cool the 'I'm going to save the world' hubris or he'll become an even heavier albatross around the neck of Obama.

    Remember, Ben was George Bush's appointment -- Obama just kept him there, probably because of powerful suggestions from Golden Sachs executives and others.

    Obama has to unload Bernanke -- who is making his presidency look like a version of "Wall Street Knows Best," -- a cliche television show from the Fifties -- something which will eventually lead to his demise in the eyes of disappointed democrats.

    So, is the rally ending?  I think it is.  The charts I include with this posting show pretty clearly that the momentum is still negative long-term -- AND that the rally back from recent lows is just about spent.  And a pretty weak rally it proved to be -- some very impressive up-days by also some very powerful down-days, tending to neutralize the overall move.

    Lets look at BKX, the Banking Index -- American Banks.  It is giving us a shortsell signal for Monday.  Note the brown-line overlay in the top pane: this indicator [M2F Alt] is giving an 'implied top' reading.  Note the other points in the chart where M2F Alt reached overbought levels, a decline generally followed.  Also, a bull market is defined technically as higher-highs in prices AND higher lows.  Look at the small-term trend (blue line) in the third pane down.  This shows a continual and contuinuing period of lower lows and lower highs.  The 'implied top' is implying another turning down of this indicator below resistance, which will be negative for banking stocks.

    The Dow Jones Industrials chart also shows an implied trading top in the making.  In fact, the decline started yesterday.  The short-term trend indicator did not (so far) turn positive during this rally.  It did try to turn up -- but there was not enough buying power to flip the switch back up.  The implied top is suggesting the next move down will challenge support at 10719.94.  If this floor breaks, then the Bear Market is still on.  If it does not break, then we'll need a new top to confirm that an 'attempted' bottom has been put in.  Next week should be a down week on the Dow.


    How does France look?  Not good.  France's rally was feeble -- and its trend is clearly down more.


    Germany?  Even worse than France.  Nothing to stop the DAX from making a new low.

    How about the VIX, the Volatility Index?  The VIX tends to rise as stocks sink.  The VIX has made an implied bottom, and looks to be ready to make its next move up.  The trend of higher highs and higher lows is still intact.


    What are our CGTS trading readings telling us?

             
    8/26/11 STOCKS      
    Friday GSPC BIAS: NEUTRAL/POSITIVE      
             
      TRADING SYSTEMS      
    EPV MJC Close/Mdpt REV FX 54.71 LONG Short Europe
      TRADING SYSTEMS      
    AMAT MJC Close/Mdpt NEW 8/11 11.06 SHORT  
    CRM MJC Close/Mdpt NEW 8/11 117.5 SHORT  
    GES MJC Close/Mdpt NEW 8/11 32.07 SHORT  
    YOKU MJC Close/Mdpt NEW 8/11 23.31 SHORT  
    EEV EMERG MJC Close/Mdpt NEW 8/11 36.85 LONG Short Emerging
      TRADING SYSTEMS      
    EPV EUROPE MJC Close/Mdpt LT 8/11 54.71 LONG Short Europe
    DXD MJC Close/Mdpt LT 8/11 19.56 LONG Short Dow
    QID MJC Close/Mdpt LT 8/11 54.43 LONG Short NASDAQ
    BKX MJC Close/Mdpt LT 8/11 38.12 SHORT  
    ACH MJC Close/Mdpt LT 8/11 16.85 SHORT  
    ADBE MJC Close/Mdpt LT 8/11 24.54 SHORT  
    BEAV MJC Close/Mdpt LT 8/11 33.4 SHORT  
    CAT MJC Close/Mdpt LT 8/11 85.16 SHORT  
    COL MJC Close/Mdpt LT 8/11 47.48 SHORT  
    DHI MJC Close/Mdpt LT 8/11 9.68 SHORT  
    FITB MJC Close/Mdpt LT 8/11 10.05 SHORT  
    FSLR MJC Close/Mdpt LT 8/11 0.71 SHORT  
    GVA MJC Close/Mdpt LT 8/11 18.45 SHORT  
    HON MJC Close/Mdpt LT 8/11 45.48 SHORT  
    JEC MJC Close/Mdpt LT 8/11 35.25 SHORT  
    JPM MJC Close/Mdpt LT 8/11 36.21 SHORT  
    KRE MJC Close/Mdpt LT 8/11 20.96 SHORT  
    LIFE MJC Close/Mdpt LT 8/11 39.35 SHORT  
    MLM MJC Close/Mdpt LT 8/11 66.48 SHORT  
    NOC MJC Close/Mdpt LT 8/11 52.16 SHORT  
    OIL MJC Close/Mdpt LT 8/11 21.653 SHORT  
    ORCL MJC Close/Mdpt LT 8/11 26.65 SHORT  
    PNC MJC Close/Mdpt LT 8/11 46.84 SHORT  
    QLGC MJC Close/Mdpt LT 8/11 13.29 SHORT  
    ROK MJC Close/Mdpt LT 8/11 59.84 SHORT  
    TER MJC Close/Mdpt LT 8/11 11.84 SHORT  
    VLO MJC Close/Mdpt LT 8/11 20.87 SHORT  
    WFC MJC Close/Mdpt LT 8/11 24.59 SHORT  
    XHB MJC Close/Mdpt LT 8/11 14.31 SHORT  
      TRADING SYSTEMS      
    EEV M4 ACCUM 00 14  36.85 LONG Short Emerging
    TIP M4 ACCUM 00 14  114.85 LONG  
      TRADING SYSTEMS      
    UAL M4 ACCUM 21 ORIGINAL2 17.92 SHORT  
      TRADING SYSTEMS      
    EPV MJCF Close vs Midp Trend REV FX 54.71 LONG Short Europe
    RGLD MJCF Close vs Midp Trend REV FX 74.83 LONG  
    GES MJCF Close vs Midp Trend REV FX 32.07 SHORT  
    YOKU MJCF Close vs Midp Trend REV FX 23.31 SHORT  
      TRADING SYSTEMS      
    AMGN M4 ACCUM LT 7/11 3 54.08 LONG  
    HD M4 ACCUM LT 7/11 3 34 LONG  
    SINA M4 ACCUM LT 7/11 3 97.93 SHORT  
    UAL M4 ACCUM LT 7/11 3 17.92 SHORT  
    ARUN M4 ACCUM LT 7/11 3 20.55 SHORT  
      TRADING SYSTEMS      
    UTY M4 ASP TRADER 5/11 2 54.08 LONG  
    GAZ M4 ASP TRADER 5/11 2 6.45 SHORT  
    SDP M4 ASP TRADER 5/11 2 13.48 SHORT  
    UAL M4 ASP TRADER 5/11 2 17.92 SHORT  
    ARUN M4 ASP TRADER 5/11 2 20.55 SHORT  
      TRADING SYSTEMS      
    KO M4 SPIKE NEW 7/11 2 68.5 LONG  
    GAZ M4 SPIKE NEW 7/11 2 6.45 SHORT  
    P M4 SPIKE NEW 7/11 2 13.41 SHORT  
      TRADING SYSTEMS      
    UAL M4 SPIKE NEW 7/11 2 17.92 SHORT  
    ARUN M4 SPIKE NEW 7/11 2 20.55 SHORT  
             


    We have other charts to show, those stocks and ETFs showing up as signals under the "Close/Midpoint LT 8/11" trading system.

    ACH, Aluminum Corp of China.  Shortsell. Note the perfect pattern of T5 Short-Term Trend 'stepping down' in the third pane from the top, making lower lows and lower highs.  This means no bottom yet.


    ADBE, Adobe.  Adobe is really tring to build a bottom here.  It 'almost' put in a higher low; and it is threatening to break to a new high.  I would probably not short ADBE because of this inherent strength -- however the implied top makes it likely ADBE will trend lower in the next week to 10 days.

    Remember: the M2F Alt indicator 'implies' a top.  But M2F Alt can remain overbought for a significant time IF the underlying trends are positive.  The 'implied' top is much more likely to actually be a top when trends (pane 3 below) are negative, as they are in the case of ADBE.



    CAT, Caterpillar.  Everyone loves Caterpillar -- right?  Well, not at the moment.  Another leg down here pretty much guaranteed.  The flat 'implied top' [M2F Alt, top pane, brown line] means it is trying to sustain this rally.  But the buying power in this rally has been really insignificant.  This looks like a sell rallies story, as do most of the stocks I'm showing you today.


    GVA, Granite Concrete.  Very negative picture especially because of the lack of an attempt to really bottom during this rally.  The short-term trend picture (blue line, 3rd pane down) is very negative.



    HON, Honeywell.  Implied top; short-term trend making lower lows and lower highs.  Shortsell.  Although the note in the second pane is cut off -- the second pane indicator trends above zero and the BULL ZONE and below zero and the BEAR ZONE.  When the long-term trend is negative, and the M4 Sum Plus indicator jumps above zero, this is a good time to look to buy the Bear Market rallies.  This was the case in late June -- but now the indicator remains in the placid lower waters of the BEAR ZONE.


    NOC, Northrup Grummon.  I'm long September put options on NOC.  I'm expecting lower prices here also.


    OIL, Oil ETF.  Oil has made a higher bottom; so it now must make a higher top to confirm a serious bottom attempt here.  Will it?  I think not.  The 'implied top' has already begun to move lower with the prices.  They key now for OIL will be holding above the old support level of 20.47.


    XHB, Housing ETF.  Dismal picture just keeps getting more and more dismal.  The Housing Bubble just keeps on taking, and taking, and taking.... I hope we remember this the next time we're tempted to cheat the devil (2037).  I'm long September puts on XHB.  Nothing positive in this chart either.


    HUI, Gold Stock Index.  Gold stocks have had their sell-off.  Note the implied bottom in the first pane.  Note the presence in the BULL ZONE in the second pane down.  Note the trends in pane 3 are making higher highs and higher lows.  This is what a BULL PATTERN picture looks like.


    IEF, 7-10 TBond ETF.  If gold is still good, what about TBonds.  All the news on Friday was negative.  GDP is lower than expected.  GDP in Germany this week was also lower.  France is not growing.  Greece is sinking.  Stocks are teetering on the brink of collapse.  TBonds pay almost nothing -- still they are, along with gold and the Swiss Franc and the Japanese Yen, they only safe havens left.  TBonds had their selloff.  Now they are ready to resume their rally.


    DXD, Short Dow ETF.  Has had its pullback; and it is making an 'implied bottom'.  In fact, made the first leg up on Friday, despite the frantic Bernanke rally at the end of the trading day.  If support at 19.16 breaks, then we might have a story.   Otherwise, stocks lower; gold and TBonds higher


    EEV, Short Europe ETF.  Implied bottom put in yesterday.  Next leg up has already begun.


    QID, Short Nasdaq Index ETF.  Seems to be saying that rally is over.  Sell off in technology stocks (Nasdaq Index) should resume.



    Good luck everyone on the East Coast with an angry Irene coming to visit.  The first girl I loved was named Irene.  I wouldn't want to see her mad.  Well, this is a Night-Cycle.  During the Night-Cycle, it's Nature against Man (and also Woman against Man), so be prepared for more suffering until about 2019.


    More information on the CGTS systems can be found at:
    home.mindspring.com/~mclark7/CGTS09.htm
     
    MICHAEL J CLARK
    Clark's Gate Timing System
    Hanoi, Vietnam

    cgts@mindspring.com
     

     
     
     
     
     
     
      
     








    CGT
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Comments (4)
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  • Good article Michael. Isn't it amazing how fast gold rebounds every time there is a hellacious raise in margin?
    27 Aug 2011, 04:23 PM Reply Like
  • Author’s reply » Nothing is going to keep gold down until the clock turns inside out again. 2001, clock turned outside in; 2019, the clock will turn inside out again. Waiit until the 2017-2019 period when worthless gold stocks like LODE and SLGLF.OB go from pennies to $100 a share. That will be the final blow-off. Go back to 1980-83 and see what happened then. We are NOT in a gold bubble yet.
    28 Aug 2011, 12:54 AM Reply Like
  • Michael,
    Glad I caught your post. Any feel for rare earth metal stocks like AVL and QRM? I added them a couple of weeks ago when they got beaten down.
    28 Aug 2011, 02:07 PM Reply Like
  • Author’s reply » I can add these two to the stocks I follow. I'll let you know how they look.
    28 Aug 2011, 10:30 PM Reply Like
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