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CGTS DAILY FOR MONDAY 5 OCTOBER 2009

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Clark's
Gate Timing System
Monday 5 October
2009
 

 

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crises should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

 - Ludwig von Mises.

 

We had a lot of bad news this week -- and we even had some selling.  Does this mean that the markets are becoming rational again?  Not necessarily.  Ben Bernanke still has money to throw away in his attempt to levitate the stocks and bond markets back above the water.  But his act is getting old; and his limitatons are starting to show.  He even had a heavyweight speak out against him, when Paul Volcker told Charlie Rose that America is doing a lot of things wrong in its "Bailout Nation' response to insolvency.  This led to many pundits calling for Obama to fire Volcker.  Is this a football team we are talking about?  Did Volcker talk back to the quarterback in the huddle?  If we are on the wrong path (which a lot of us think WE ARE), someone needs to say it.  Volcker won't win any charisma contests.  But he has a track record of being willing to take the tough stand when needed.  We think Obama should be listening to Volcker, and marginalizing Ben Bernanke as much as is humanly possible.  Bernanke has been wrong at every turn is this economic collapse.


INDEX VIEW

BKX: Banking Index is at support and will likely go through support at 43.45.  The next support level is around 35.  Long term momentum (MA 40 Sum Plus, 4th pane, has just turned negative).

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DJT: The Dow Jones Transports are drifting lower, toward support at 3561.23.  The last two attempts at a rally have been dismal (M2F, black line, top pane).  Long-term Momentum (MA 40 Sum Plus, 4th pane) has just turned negative.  July lows will be the next support level.

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GDAXI: European indexes are finally getting involved in selling.  Germany has a small double-top and broke support; and is now moving to test 5263.11.  MA 40 Sum Plus has just turned down, which might be an indication of a sustained pullback.

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HGX: Housing Index has broken near-term support and looks to be heading down toward 72.67, the next level of support.  Momentum (intermediate- and long-term are both negative).

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HSI: The Hang Seng Chinese Index (Hong Kong).  Long term momentum (MA 40 Sum Plus, 4th pane, has just turned negative).  We'll watch to see if the near-term support 19425.85 can hold.

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N225: The Nikkei Index is probably the ugliest index we follow.  It has broken support and is heading lower.  Japan is in a lot of trouble.  Only Spain is in the kind of trouble that Japan is; but the Spain Index chart is not as ugly yet as the Nikkei is.  The next level of support is 9165.63.  News today on Bloomberg is that Toyota is 'praying for survival'...if Toyota is praying, then a lot of other companies are no doubt beyond help.

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SMSI: Madrid Index.  Finally, the Spanish index is finally pulling back.  The idea that Spanish stocks should be going up is a wonder for the mind to behold.

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UTY: Utility Index.  Broke through long-term support.  Looks like more selling coming.


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Commodity Indexes/ETF's.

DBO: Oil.  Doesn't look positive.  It's in a down-channel now and is overbought short-term (M2F, top pane, black line).  It had its rally and is now heading down toward 22.15 support.

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UGA: Gasoline USA.  Similar picture to DBO.  Short-term overbought, heading down toward 27.5 support.

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UNH.  Heating Oil.  Same picture: overbought, heading toward support at 21.

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FIO: Industrial/Office REIT ETF: Why did this ETF rally?  Is there any picture in America that is less positive at the moment than commercial real estate?



JJC: Copper.  Breaking down and heading lower.  If the global economy is recovering, why is copper declining? Next support is at 35.01.

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DBO: Oil.  Doesn't look positive.  It's in a down-channel now and is overbought short-term (M2F, top pane, black line).  It had its rally and is now heading down toward 22.15 support.


KEY: COLUMN 1: SYMBOL OF INDEX/ETF; COLUMN 2: M2F ALT = short-term momentum: above 70 = overbought; below 30 = oversold; COLUMN 3: 'TRADE" = current position using M4 Sum Plus Trade System.  COLUMN 4: "TREND" = short-term trend DIRECTION: above 0 is positive; below 0 is negative.  COLUMN 5: "M4 SP+" = issues with at least 2 consecutive days of positive M4 Sum Plus will register a 1.  COLUMN 6: 'M4 SP -" = issues with at least 2 consecutive days of negative M4 Sum Plus will register a 1.   COLUMN 7: "INT MOM" = M5 Average Sum Plus, which is an intermediate-term momentum indicator: 1 is positive; -1 is negative.  COLUMN 8: "LTERM MOM" = MA 40 Sum Plus, which is a long-term momentum indicator: +1 is positive; -1 is negative.  COLUMN 9: Name of Index. 

DAILY INDEXES              
2-Oct M2F Alt Trade Short Trend M4 SP+ M4 SP- Int Mom LT Mom Issue
^AORD_D 34.515 Long 16.27 0.00 0.00 -1.00 1.00 All Ordinaries Australian Index
^BKX_D 17.062 Flat -0.47 0.00 -1.00 -1.00 -1.00 Banking Index
^BVSP_D 57.172 Long 212.06 0.00 0.00 -1.00 1.00 BOLIVIAN INDEX
^DJI_D 7.148 Flat 22.73 0.00 -1.00 -1.00 -1.00 DOW JONES INDUSTRIAL AVERAGE
^DJT_D 0 Flat -24.80 0.00 -1.00 -1.00 -1.00 Dow Jones Transport Index
^DRG_D 22.222 Flat 0.48 0.00 -1.00 -1.00 1.00 Pharmaceutical Index
^FCHI_D 15.882 Flat 11.11 0.00 -1.00 -1.00 -1.00 CAC French Index
^FTSE_D 13.88 Flat 14.60 0.00 -1.00 -1.00 1.00 FTSE Daily Index
^GDAXI_D 16.101 Flat 14.44 0.00 -1.00 -1.00 -1.00 DAX German Index Daily
^GSPC_D 14.576 Flat 2.48 0.00 -1.00 -1.00 -1.00 S&P 500 Index
^HGX_D 0 Flat -1.53 0.00 -1.00 -1.00 -1.00 Philadelphia Housing Sector Index Daily
^HSI_D 35.535 Flat -157.46 0.00 0.00 -1.00 -1.00 HANG SENG INDEX HONG KONG
^HUI_D 31.762 Flat -11.96 0.00 -1.00 -1.00 1.00 Gold Stock Index Daily
^JPN_D 14.353 Flat -0.36 0.00 -1.00 -1.00 -1.00 Japan Index
^KS11_D 0 Flat 3.83 0.00 -1.00 -1.00 1.00 Kospi South Korean Index
^N225_D 10.138 Flat -27.92 0.00 -1.00 -1.00 -1.00 Nikei Japan Index
^NDX_D 17.117 Flat 4.30 0.00 -1.00 -1.00 1.00 Nasdaq Index Daily
^OEX_D 11.358 Flat 1.07 0.00 -1.00 -1.00 -1.00 S&P 100 Index
^RUT_D 7.216 Flat -5.06 0.00 -1.00 -1.00 -1.00 Russell SMall Cap Index Daily
^SMSI_D 9.884 Flat 3.52 0.00 -1.00 -1.00 1.00 Madrid General Index Daily
^SOXX_D 10.802 Flat -3.50 0.00 -1.00 -1.00 -1.00 Phildelphia Semiconductor Index
^SSEC_D 0 Flat -35.31 0.00 -1.00 -1.00 -1.00 Shanghai Composite
^SSMI_D 26.359 Flat 15.21 0.00 0.00 -1.00 1.00 Swiss Index Daily
^TWII_D 81.414 Long 27.04 0.00 0.00 -1.00 1.00 TAIWAN WEIGHTED INDEX
^TYX_D 31.048 Flat -0.02 0.00 0.00 -1.00 -1.00 30 YEAR TREASURY YIELD
^UTY_D 0 Flat 0.51 0.00 -1.00 -1.00 -1.00 Utility Index
^VIX_D 100 Flat 0.70 1.00 0.00 1.00 1.00 CRB Volatility Index Daily
^XAU_D 30.33 Flat -1.42 0.00 -1.00 -1.00 -1.00 Philadelphia Gold and Silver Index Daily
^XCI_D 16.562 Flat 2.01 0.00 -1.00 -1.00 1.00 Amex Computer Index Daily
^XOI_D 5.882 Flat -8.25 0.00 -1.00 -1.00 -1.00 Oil Stock Index
CUT_D 10.494 Flat -0.08 0.00 -1.00 -1.00 1.00 TIMBER ETF
DBO_D 90.761 Flat 0.19 0.00 0.00 -1.00 -1.00 OIL POWERSHARES DB
FIO_D 12.674 Flat -0.23 0.00 -1.00 -1.00 -1.00 Industrial/Office REIT ETF
GAZ_D 27.027 Long -0.121 0.00 0.00 1.00 1.00 Natural Gas ETF
IAU_D 71.937 Flat 0.149 0.00 0.00 -1.00 1.00 Gold Daily
JJC_D 31.974 Flat -0.331 0.00 0.00 -1.00 -1.00 Copper ETF
JJM_D 48.202 Long -0.111 0.00 0.00 -1.00 -1.00 Industrial Metals ETN
UGA_D 94.825 Flat 0.358 0.00 0.00 -1.00 -1.00 US Gasoline ETF
UHN_D 85.403 Flat 0.222 0.00 0.00 -1.00 -1.00 Heating Oil ETF
UUP_D 60 Flat -0.027 0.00 0.00 1.00 -1.00 US DOLLAR INDEX BULLISH ETF
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CURRENCY VIEW

One new position: Short USDCHF (Swiss Franc).  A lot of people are writing that the US Dollar is getting ready to rally.  In our charts, we see the only currency the Dollar is set to rally against is the British Pound.  We want to look at a couple charts of other US Dollar pairs to see if the Dollar looks about to rally.  Longer-term the USD is positive against the British Pound, the Canadian Dollar (just bottoming), and the Vietnamese Dong.  All other relationships seem decidedly negative, AT THIS TIME.


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KEY: COLUMN 1: Currency Pair Symbol; COLUMN 2: Closing Price; COLUMN 3: New Short-Term Trade; COLUMN 4: Current Short-Term Position; COLUMN 5: New Long-Term Trade; COLUMN 6: Current Long-Term Positon; COLUMN 6: Currency Pair Name



CURRENCY              
10/2/09              
CUR PAIR CLOSE NEW ST TR ST POS NEW LT TR LT POS ISSUE  
               
AUDCAD=X 10/2/09 0.937   Flat   Long Australian Dollar/Canadian Dollar
AUDCNY=X 10/2/09 5.92   Flat   Long Australian Dollar/Chinese Yuan
AUDJPY=X 10/2/09 77.907   Flat   Long Australian Dollar/Japanese Yen
AUDNZD=X 10/2/09 1.207   Flat   Short Australian Dollar/New Zealand Dollar
AUDUSD=X 10/2/09 0.865   Flat   Long Australian Dollar/US Dollar
CADJPY=X 10/2/09 83.142   Flat   Long Canadian Dollar/Japanese Yen
CHFJPY=X 10/2/09 86.978   Flat   Short Swiss Franc/Japanese Yen
EURAUD=X 10/2/09 1.684   Flat   Short Euro/Australian Dollar
EURCAD=X 10/2/09 1.578 Enter Long Long   Long Euro/Canadian Dollar
EURCHF=X 10/2/09 1.508   Flat   Long Euro/Swiss Franc
EURCNY=X 10/2/09 9.969   Long   Long Euro/Chinese Yuan
EURGBP=X 10/2/09 0.914   Flat   Long Euro/British Pound
EURJPY=X 10/2/09 131.199   Flat   Short Euro/Japanese Yen
GBPCHF=X 10/2/09 1.651   Flat   Short British Pound/Swiss Franc
GBPJPY=X 10/2/09 143.556   Flat   Short British Pound/Japanese Yen
JPYCNY=X 10/2/09 0.076   Flat   Long Japanese Yen/Chinese Yuan
NZDJPY=X 10/2/09 64.537   Flat   Short New Zealand Dollar/Japanese Yen
NZDUSD=X 10/2/09 0.717   Flat   Long New Zealand Dollar/US Dollar
USDCAD=X 10/2/09 1.083   Flat   Long US Dollar/Canadian Dollar
USDCHF=X 10/2/09 1.035 Enter Short Short   Short US Dollar/Swiss Franc
USDCNY=X 10/2/09 6.841   Short   Short US Dollar/China Yuan
USDEUR=X 10/2/09 0.686   Short   Short US Dollar/Euro
USDGBP=X 10/2/09 0.627   Flat   Long US Dollar/British Pound
USDJPY=X 10/2/09 90.035   Flat   Short USDollar/Japanese Yen
USDVND=X 38,626.00 17,850.00   Flat   Long US Dollar/Vietnamese Dong
USDXAU=X 10/2/09 0.001   Flat   Long US DOLLAR/GOLD
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TODAY'S NEW TRADES

We closed some losing positions today, with relatively small losses.  When the market changes trends, trading gets a bit dicey.  We closed 14 trades, with 6 winners, 8 losers, the biggest loss being 7.64% and the biggest gain being 21.33%.

We're showing charts of three stocks that gave intermediate term sell signals and look like possible short-sell candidates.  NOTE: we aren't recommending short-selling these stocks, since their long trends haven't turned down yet.  But they will have some selling coming in to them -- at least they should.

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2-Oct-09          
Friday          
M2F Alt Trading System        
Symbol Issue Price Position Shares  
PG_D Proctor & Gamble 56.75 Enter Long 176.21  
RHT_D Red Hat 26.73 Enter Long 374.11  
SJPNX_D DWS Japan Inx 8.89 Enter Long 1124.86  
STD_D Banco Santander 15.22 Enter Long 657.03  
           
M5 10 TRADING SYSTEM        
Symbol Issue Price Position Shares  
AAPL_D Apple Comp 184.9 Enter Long 54.08  
IBM_D IBM 119.02 Enter Long 84.02  
Issue Close @ Position Open @ Date % Gain
None          
           
M2F ALT LT 2        
None          
Issue Close @ Position Open @ Date % Gain
EWV_D 53.79 Exit Long 50.57 8/12/09 6.37%
DJT_D 3692.73 Exit Long 3688.91 9/3/09 0.10%
MA_D 199.68 Exit Long 206.74 9/29/09 -3.41%
XOM_D 66.58 Exit Long 69.18 9/4/09 -3.76%
AMGN_D 58.58 Exit Long 58.95 9/4/09 -0.63%
UPS_D 54.94 Exit Long 52.83 9/3/09 3.99%
XME_D 43.23 Exit Long 45.99 9/29/09 -6.00%
QCOM_D 41.44 Exit Long 44.87 9/22/09 -7.64%
ACH_D 26.14 Exit Long 27.39 9/30/09 -4.56%
HD_D 26.03 Exit Long 27.26 9/28/09 -4.51%
RHT_D 26.73 Exit Long 22.03 8/10/09 21.33%
HMY_D 10.23 Exit Long 10.66 9/29/09 -4.03%
EWM_D 10.1 Exit Long 9.73 9/3/09 3.80%
SJPNX_D 8.89 Exit Long 8.45 7/15/09 5.21%
           
M5 D Study          
Symbol Issue Price Position Shares  
PG_D Proctor & Gamble 56.75 Enter Long 176.21  
KS11_D Kospi Korean Idx 1644.63 Enter Long 6.08  
BAC_D Bank America 16.34 Enter Long 612.00  
DWSN_D Dawson Geophysical 25.85 Enter Long 386.85  
FXE_D Euro vs Dollar 145.59 Enter Long 68.69  
GS_D Goldman Sachs 179.61 Enter Long 55.68  
MSFT_D Microsoft 24.96 Enter Long 400.64  
           
M4 SUM REVERSE TRADING SYSTEM      
Symbol Issue Price Position Shares  
GSPG.OB_D Goldspringn 0.1 Enter Short -100000.00  
HOV_D Hovnanian Housing 3.5 Enter Short -2857.14  
           
M5 Average Sum Plus Trading System      
Symbol Issue Price Position Shares  
None          
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More information on this system can be found at

home.mindspring.com/~mclark7/CGTS09.htm

A draft of the book Turn Out the Lights can be found at the website below.  This book is a description of the metaphysical causes of the economic cycles of expansion (Day) and contraction (Night).

www.hoalantrangallery.com/Turnoutlights.htm

 

Michael J. Clark's Gate Timing System
Hanoi, Vietnam

84 4 221 92210