Michael Clark's  Instablog

Clark's Gate Timing System
Tuesday 6 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.

 

Our paying subscribers have asked what they are paying for if we publish all our trades online for free?  We have to agree with them.  What are they paying for?

We will continue to publish our 'Index View" and some selected buy signals -- and some sell signals -- but not our entire volume of trades.

Today, we got a lot of buy signals again -- as the market attempts to scale Mount Everest (Mt. Bernanke) one more time.  We are going to show some stock index charts using two different templates, the first that we have been using for some time, chock full of information about buyer and seller strength and long-term and intermediate-term momentum -- and a second template with a very scaled down, simple form, for the sake of simplicity.

One thing I noticed immediately, comparing the two charts: European Indexes look quite strong using the first template, but not nearly so strong using the second template.  We'll talk a little more about that as we go along.

We expect a few days of buying; and then another leg of the pullback.  But we think we can still make money from a broad topping formation.

Also, never underrate a fanatic armed with trillions of dollars whose historical reputation is now based on his ability to keep markets from going down.  Ben Bernanke is not slinging money from a helicopter, but from a hot air balloon.  He doesn't realize that his own bubble can also burst.

INDEX VIEW

BKX, the Banking Index, is the first chart we look at, using our simplified chart. BKX has bounced off of resistance, and is rallying back toward overhead resistance.  However, M5 (brown line, top panel) is in a decidely negative trend.  This makes us think BKX will not rally back to resistance.



DJIA, Dow Jones Industrials: a similar picture, with a rally back toward resistance (9918) coming.  But M5 is quite negative.  This makes us think the rally might be short-lived.



DJT, Dow Jones Transports, in our original template: a rally is beginning.  This is essentially a positive chart, since the support and resistance levels have not been broached.  But notice the short-term momentum indicator (M2F alt -- black line in Pane 1): two previous rallies have been VERY WEAK (see the bottom right of Pane 1).  There is no guarantee that this attempt will be any more forceful that the last two.



DRG, Pharmaceutical Index: This one is oversold (M2F alt, black line, Top Pane) but it has had trouble getting through and staying above overhead resistance.  Intermediate-term momentum has been weak for some time (Pane 4) -- BUT, there has been remarkably little selling in that time of weakness.  Never underestimate the will of the man printing all the money.




FCHI, French CAC Index: has been remarkably strong until recent selling -- and is rallying today.  Ordinarily I would assume strength for this index, as the trend pattern is still positive.  But M5 momentum (top pane) is 'predicting' weakness.  If today's rally is a one-day rally, then support is at 3535.49, and then at 3396.6.



GDAXI, German DAX Index: this is another European index that has resisted selling quite well.  But recent momentum (M5) is horrible.  The last M5 rally lasted two days.  The one before that lasted one day.  Support is at 5263.11.



HGX, Housing Index: This index is at a bottom.  But the last rally (M2F alt, top pane, black line) was rather dismal.  HGX has already broken support -- and there is a long fall possible once it attempts this rally unless a lot of buying comes in suddenly.



HUI, Gold Stock Index: HUI is holding right at support and attempting to rally.  We think it WILL rally from here, mainly because of the simpler view of the IAU, Gold ETF we are also including, which we think is ready to explode upward.





KS11, South Korean KOSPI Index.  Has been very strong, but is coming under some selling now.  The last M2F ALT rally was a failure (Pane 1, black line).  Intermediate Momentum is negative.



SMSI, Madrid (Spain) Index: This index SHOULD NOT be rallying.  Spain is a basket case, heading for a decade of pain.  But investors are piling money into all stocks.  Today's rally is trying to take the index back to overhead resistance.  Our new simpler template (not shown) shows a LOT of momentum deterioration in SMSI.



SOXX, Semiconductor Index: This chart looks very negative when looking through the prism of M5.  This makes us think this rally will be short-lived, and lower prices will follow.



SSEC, Shanghai Index: trying to bottom here, to rally back toward the old high (3064.23).  If it can't penentrate this level, it will probably take out the low made in August (2639.76).



VIX, CRB Volatility Index: It's hard to read this chart, but VIX has put in a bottom in terms of the short-term trend (red line, top pane), and has broken through overhead resistance.  This is bulish for VIX, and bearish for stock index funds.



GAZ, Natural Gas, ETF: we want to show this last index picture because it is VERY POSITIVE.  We think the price of Natural Gas is going to explode upward short-term.  The red-line downtrend in Pane One is ready to buckle and break upward.  GAZ should take out overhead resistance easily and make a new high in the next few days.


DBO, Oil ETF: Overbought short-term (see M2F Alt, black line, top pane).  We thinkg DBO is going under 23.

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
5-Oct	M2F Alt	Trade	Short Trend	M4 SP+	M4 SP-	Int Mom	LT Mom	Issue
^AORD_D	10.976	Flat	15.81	0.00	-1.00	-1.00	1.00	All Ordinaries Australian Index
^BKX_D	19.459	Flat	-0.25	0.00	0.00	-1.00	1.00	Banking Index
^BVSP_D	65.125	Long	228.76	0.00	0.00	1.00	1.00	BOLIVIAN INDEX
^DJI_D	14.763	Flat	24.22	0.00	0.00	-1.00	1.00	DOW JONES INDUSTRIAL AVERAGE
^DJT_D	17.083	Flat	-18.32	0.00	0.00	-1.00	-1.00	Dow Jones Transport Index
^DRG_D	15.099	Flat	0.49	0.00	0.00	-1.00	1.00	Pharmaceutical Index
^FCHI_D	6.066	Flat	11.34	0.00	0.00	-1.00	1.00	CAC French Index
^FTSE_D	8.21	Flat	14.95	0.00	0.00	-1.00	1.00	FTSE Daily Index
^GDAXI_D	6.452	Flat	14.86	0.00	0.00	-1.00	1.00	DAX German Index Daily
^GSPC_D	15.189	Flat	2.69	0.00	0.00	-1.00	1.00	S&P 500 Index
^HGX_D	8.571	Flat	-1.28	0.00	0.00	-1.00	-1.00	Philadelphia Housing Sector Index Daily
^HSI_D	31.354	Flat	-122.39	0.00	0.00	-1.00	1.00	HANG SENG INDEX HONG KONG
^HUI_D	22.672	Flat	-2.76	0.00	0.00	-1.00	1.00	Gold Stock Index Daily
^JPN_D	0	Flat	-0.37	0.00	-1.00	-1.00	-1.00	Japan Index
^KS11_D	0	Flat	3.28	0.00	-1.00	-1.00	-1.00	Kospi South Korean Index
^N225_D	0	Flat	-28.30	0.00	-1.00	-1.00	-1.00	Nikei Japan Index
^NDX_D	7.682	Flat	4.44	0.00	0.00	-1.00	1.00	Nasdaq Index Daily
^OEX_D	14.711	Flat	1.16	0.00	0.00	-1.00	1.00	S&P 100 Index
^RUT_D	13.019	Flat	-3.29	0.00	0.00	-1.00	1.00	Russell SMall Cap Index Daily
^SMSI_D	17.862	Flat	3.87	0.00	0.00	-1.00	1.00	Madrid General Index Daily
^SOXX_D	11.644	Flat	-2.25	0.00	0.00	-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	3.075	Flat	15.17	0.00	-1.00	-1.00	1.00	Swiss Index Daily
^TWII_D	77.572	Long	30.39	0.00	0.00	1.00	1.00	TAIWAN WEIGHTED INDEX
^TYX_D	43.446	Flat	-0.02	0.00	0.00	-1.00	-1.00	30 YEAR TREASURY YIELD
^UTY_D	12.045	Flat	0.55	0.00	0.00	-1.00	-1.00	Utility Index
^VIX_D	81.508	Flat	0.42	0.00	0.00	1.00	1.00	CRB Volatility Index Daily
^XAU_D	21.42	Flat	-0.91	0.00	0.00	-1.00	1.00	Philadelphia Gold and Silver Index Daily
^XCI_D	7.07	Flat	2.06	0.00	0.00	-1.00	1.00	Amex Computer Index Daily
^XOI_D	16.999	Flat	-5.19	0.00	0.00	-1.00	1.00	Oil Stock Index
CUT_D	16.495	Flat	-0.06	0.00	0.00	-1.00	1.00	TIMBER ETF
DBO_D	77.737	Flat	0.17	0.00	0.00	-1.00	-1.00	OIL POWERSHARES DB
FIO_D	14.153	Flat	-0.17	0.00	0.00	-1.00	1.00	Industrial/Office REIT ETF
GAZ_D	51.452	Long	-0.034	0.00	0.00	1.00	1.00	Natural Gas ETF
IAU_D	71.992	Flat	0.17	0.00	0.00	-1.00	1.00	Gold Daily
JJC_D	16.117	Flat	-0.249	0.00	0.00	-1.00	-1.00	Copper ETF
JJM_D	21.945	Long	-0.098	0.00	0.00	-1.00	-1.00	Industrial Metals ETN
UGA_D	92.938	Flat	0.357	0.00	0.00	-1.00	-1.00	US Gasoline ETF
UHN_D	66.408	Flat	0.197	0.00	0.00	-1.00	-1.00	Heating Oil ETF
UUP_D	54	Flat	-0.028	0.00	0.00	1.00	-1.00	US DOLLAR INDEX BULLISH ETF

TODAY'S NEW TRADES
We had many buy signals today.  We're showing two: GAZ, Natural Gas ETF, which gave a buy signal on Friday, in fact -- but we think it still has room to move.  MTL, Mechel Open Joint Stock Company.

We closed some positions we're trading with our M2F alt LT #2 system: a bunch of small losses (8) and 2 small wins.

We near the top and long gains are getting harder to come by.




M2F ALT TRADE LT 2

Issue	Close @	Position	Open @	Date	% Gain
HUI_D	410.37	Exit Long	410.67	9/29/09	-0.07%
IBB_D	78.87	Exit Long	78.99	9/4/09	-0.15%
JNGJ_D	59.82	Exit Long	60.32	9/4/09	-0.83%
DE_D	42.12	Exit Long	42.92	9/30/09	-1.86%
GG_D	39.32	Exit Long	39.77	9/29/09	-1.13%
ROK_D	41.29	Exit Long	39.34	8/19/09	4.96%
BBY_D	37.1	Exit Long	38.45	9/22/09	-3.51%
SNE_D	27.17	Exit Long	26.51	9/4/09	2.49%
KSU_D	25.61	Exit Long	26.56	9/28/09	-3.58%
ORCL_D	20.39	Exit Long	21.17	9/18/09	-3.68%

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

Disclosure: the author owns no issues about which he writes.