aarc's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/280249/comments http://seekingalpha.com/article/178812-best-way-to-mask-economic-problems-make-all-numbers-too-big?source=feed#comment-812176 812176
$30, $60, $120, $180, $315, $3,150?

I will be more than happy with the lower numbers. I do wish for a mistletoe if not a diamond. Easier to achieve.

Short Citi right now and hope your mathematical prowess will prevail over the power of alchemy. And if you think that alchemy is impossible, think again. It is one of the fortes' of governments all over the world. Governments were not created for nothing or to obey the laws of mathematics.]]> Fri, 18 Dec 2009 10:28:03 -0500
$30, $60, $120, $180, $315, $3,150?

I will be more than happy with the lower numbers. I do wish for a mistletoe if not a diamond. Easier to achieve.

Short Citi right now and hope your mathematical prowess will prevail over the power of alchemy. And if you think that alchemy is impossible, think again. It is one of the fortes' of governments all over the world. Governments were not created for nothing or to obey the laws of mathematics.]]> http://seekingalpha.com/article/178812-best-way-to-mask-economic-problems-make-all-numbers-too-big?source=feed#comment-812147 812147
The US Government.

Power can create miracles and massive power can create much more.

And citi is not a tiny bank either. It is the biggest bank in the world back then with all their branches reaching out to the farthest corners of the world. They still have the means if not the power to make them the biggest and most powerful bank in the world. With Uncle Sam's assistance, it is not too far fetch miracles can happen to citi.

Never under-estimate the power of the government.]]> Fri, 18 Dec 2009 10:10:50 -0500
The US Government.

Power can create miracles and massive power can create much more.

And citi is not a tiny bank either. It is the biggest bank in the world back then with all their branches reaching out to the farthest corners of the world. They still have the means if not the power to make them the biggest and most powerful bank in the world. With Uncle Sam's assistance, it is not too far fetch miracles can happen to citi.

Never under-estimate the power of the government.]]> http://seekingalpha.com/article/178607-hidden-truths-from-citibank?source=feed#comment-810932 810932
There will be lots of government projects all over the world as it recovers from this severe recession. Those projects will require the assistance of banks. Who is in a better position to provide capital assistance both in the US and around the world?

With citi's global reach and the US government political, financial, and military clout all over the world. It is too easy who will be getting the choiced projects in the years ahead and possibly decades ahead.]]> Thu, 17 Dec 2009 13:17:07 -0500
There will be lots of government projects all over the world as it recovers from this severe recession. Those projects will require the assistance of banks. Who is in a better position to provide capital assistance both in the US and around the world?

With citi's global reach and the US government political, financial, and military clout all over the world. It is too easy who will be getting the choiced projects in the years ahead and possibly decades ahead.]]> http://seekingalpha.com/article/178274-why-merrill-lynch-is-bullish-on-2010-foreseeing-a-burst-of-the-pessimism-bubble?source=feed#comment-807973 807973
I attend a trading website dominated by rabid bears and perma-bear traders on a daily basis.

It is not easy trying to tell them that this rally is being supported by the most current positive economic fundamentals since late February and that the gargantuan problems create in the last 2 decades leading to the start of the collapse of the tech sector in year 2000 and that of the housing sector of year 2006 are getting better if not being prevented from getting worse.

It takes two whipsaws to learn a lesson most of the time. The meltdown of 2000 to 2002 did not teach us the lesson, more likely because of the 9/11 incident shifting policy makers' attention from economics to wars that agravated the situation. This massive meltdown of 2007 to 2009 should be more than enought to teach us a lesson. 9/11 Part II or not. Just look how the Dubai and Greece debacles were set aside in a hurry. Investors now are trying hard not to panic in any bad news coming their way. Traders do react instantaneously; but that is their nature.

Technical patterns are much earlier to form before most economists can get a handle of the situation. Traders do learn fast. Except for the few rabid bears and the perma's.

Since April to July, the technical patterns were very weak leading to the conclusion by most traders that the rally off March 2009 was a bear bounce rather than a true recovery. But the vertical rally of July to August caught them by surprice.

Since August, the technical pattern was of confusion but the dominating factor was that the rally was not getting weaker as weeks passed by but rather gathering strenght as indicated by the positve type of ongoing corrective patterns. It was a different type of correction and does not happen often; a trending correction of higher highs and higher lows instead of a counter-trend type of correction that usually happens which is the lower high lower low type. Hence, most traders cannot understand the low daily volume printout from August to November.

That corrective pattern has basically completed in November 2; and the 12 days rally happened as expected. Not a searingly hot rally since a rally off a 3 months correction is supposed to be composed of series of small rallies and corresponding minor corrections or consolidation ranges. It is better understood using Elliott Waves analysis than any other types of Technical Analysis.

In all probabilities; we may have already completed the first consolidation needed to support further rallies from the first rally off November 2.

Conservative target for the next rally is 1152 to 1170 range with the upper range as indicated by the most recent price structure on the daily chart.

It may or may not change depending on whether the current structure will morph into a prolonged consolidation range or goes straight into a sustainable rally. It is sustainable in that the last rally took 12 days and the ensuing correction or consolidation range took 14 days before the last 4 days of rally happened. 14 days is good enought to sustain another rally but will not be confirmed until the next rally off the last 4 green days actually happens. For now, the bulls are trying to consolidate the last 4 days rally in preparation for the next rally intraday.

Intraday using the 30min chart; a rally toward 1150 to 1164 is sustainable. But that will depend mostly on what will happen today after the FOMC meeting.

For now, the bears are struggling to form a complex Head and Shoulders on the 240min chart that is also visible on the daily chart with the first right shoulder resistance of 1114.53 that they immediate took advantage yesterday with the Spx.

But Spx or SnP500 is the lone ranger for the bears being affected mostly by the weak financials sector. Dow and Nasdaq are not forming such patterns together with their cousin DAX.

We are good to go for 1150 year-end target as was initially projected by the big guns such as GS a few months ago.

Most current price structures of the daily and intraday charts are capable of supporting such target and the fundamentals are not bad either.]]> Wed, 16 Dec 2009 08:03:35 -0500
I attend a trading website dominated by rabid bears and perma-bear traders on a daily basis.

It is not easy trying to tell them that this rally is being supported by the most current positive economic fundamentals since late February and that the gargantuan problems create in the last 2 decades leading to the start of the collapse of the tech sector in year 2000 and that of the housing sector of year 2006 are getting better if not being prevented from getting worse.

It takes two whipsaws to learn a lesson most of the time. The meltdown of 2000 to 2002 did not teach us the lesson, more likely because of the 9/11 incident shifting policy makers' attention from economics to wars that agravated the situation. This massive meltdown of 2007 to 2009 should be more than enought to teach us a lesson. 9/11 Part II or not. Just look how the Dubai and Greece debacles were set aside in a hurry. Investors now are trying hard not to panic in any bad news coming their way. Traders do react instantaneously; but that is their nature.

Technical patterns are much earlier to form before most economists can get a handle of the situation. Traders do learn fast. Except for the few rabid bears and the perma's.

Since April to July, the technical patterns were very weak leading to the conclusion by most traders that the rally off March 2009 was a bear bounce rather than a true recovery. But the vertical rally of July to August caught them by surprice.

Since August, the technical pattern was of confusion but the dominating factor was that the rally was not getting weaker as weeks passed by but rather gathering strenght as indicated by the positve type of ongoing corrective patterns. It was a different type of correction and does not happen often; a trending correction of higher highs and higher lows instead of a counter-trend type of correction that usually happens which is the lower high lower low type. Hence, most traders cannot understand the low daily volume printout from August to November.

That corrective pattern has basically completed in November 2; and the 12 days rally happened as expected. Not a searingly hot rally since a rally off a 3 months correction is supposed to be composed of series of small rallies and corresponding minor corrections or consolidation ranges. It is better understood using Elliott Waves analysis than any other types of Technical Analysis.

In all probabilities; we may have already completed the first consolidation needed to support further rallies from the first rally off November 2.

Conservative target for the next rally is 1152 to 1170 range with the upper range as indicated by the most recent price structure on the daily chart.

It may or may not change depending on whether the current structure will morph into a prolonged consolidation range or goes straight into a sustainable rally. It is sustainable in that the last rally took 12 days and the ensuing correction or consolidation range took 14 days before the last 4 days of rally happened. 14 days is good enought to sustain another rally but will not be confirmed until the next rally off the last 4 green days actually happens. For now, the bulls are trying to consolidate the last 4 days rally in preparation for the next rally intraday.

Intraday using the 30min chart; a rally toward 1150 to 1164 is sustainable. But that will depend mostly on what will happen today after the FOMC meeting.

For now, the bears are struggling to form a complex Head and Shoulders on the 240min chart that is also visible on the daily chart with the first right shoulder resistance of 1114.53 that they immediate took advantage yesterday with the Spx.

But Spx or SnP500 is the lone ranger for the bears being affected mostly by the weak financials sector. Dow and Nasdaq are not forming such patterns together with their cousin DAX.

We are good to go for 1150 year-end target as was initially projected by the big guns such as GS a few months ago.

Most current price structures of the daily and intraday charts are capable of supporting such target and the fundamentals are not bad either.]]> http://seekingalpha.com/article/178415-first-stocks-then-the-economy-is-job-growth-next?source=feed#comment-807879 807879
So, if you bought stocks based on lagging indicators, you will be left far behind.

That does'nt mean the top is already in place. More likely, the top for the current rally off March 2009 is just starting to be put in place.

More rallies to come in the months ahead.

Of course, rallies will have their corresponding corrections lasting weeks and months on many occations and sometimes years like the one we've just got.

After the next top has formed, we should suffer another recession in late 2010 or 2011 perhaps? Nothing goes up forever too, they say.

Mini-recessions do occur once in a while every few years while the great ones happen every few decades. Those are the buying opportunities for long term holders.

Small corrections will take less time to recover and big corrections will take much more time to recover. We had a big one last time, it is going to take a lot longer to recover too, not mere 9 months.

Each to it's own. Those who cannot or don't have the resources to time the markets will do whatever they can to join the party when it comes their way. Those that can may or may not be successful timing the markets correctly. But that is just the way life goes. There are ups and downs.

We going up right now, enjoy it while it lasts.]]> Wed, 16 Dec 2009 06:27:52 -0500
So, if you bought stocks based on lagging indicators, you will be left far behind.

That does'nt mean the top is already in place. More likely, the top for the current rally off March 2009 is just starting to be put in place.

More rallies to come in the months ahead.

Of course, rallies will have their corresponding corrections lasting weeks and months on many occations and sometimes years like the one we've just got.

After the next top has formed, we should suffer another recession in late 2010 or 2011 perhaps? Nothing goes up forever too, they say.

Mini-recessions do occur once in a while every few years while the great ones happen every few decades. Those are the buying opportunities for long term holders.

Small corrections will take less time to recover and big corrections will take much more time to recover. We had a big one last time, it is going to take a lot longer to recover too, not mere 9 months.

Each to it's own. Those who cannot or don't have the resources to time the markets will do whatever they can to join the party when it comes their way. Those that can may or may not be successful timing the markets correctly. But that is just the way life goes. There are ups and downs.

We going up right now, enjoy it while it lasts.]]> http://seekingalpha.com/article/178111-5-reasons-gold-is-going-to-rise-a-response-to-nouriel-roubini?source=feed#comment-807819 807819
The Chinese and the Indians believe they can live forever in the afterlife. They buy gold while on earth so they can take them to the afterlife (perhaps because they don't believe there are fiat money out there in heaven?).

But things are changing fast these past few decades. The new breed of generations are no longer steadfast on their religious belief. Like the Americans and the Europeans; the TV and the shopping malls are becoming their new religion. And with lots of consumerism brandished in these medium, there are lots more things in life to enjoy than a shiny "useless" metal. Videogames for one. Instant gratification is becoming the norm now in the developing countries and gold cannot satisfy such desire for the new generations. Going into the afterlife is now becoming a fantasy or a myth in many cases, so there really is not much need to hoard gold and other precious metals except for social occations. And that is changing too, designer clothes are becoming more expesive than the trinkets they wear, relatively speaking.

Long term. Precious metals will have their industrial and/or commercial applications. But then, they are recycable too.

So the gold bugs' dream of massive global demand for gold that will push it's price skyward into the next decades seems far fetch.]]> Wed, 16 Dec 2009 05:34:17 -0500
The Chinese and the Indians believe they can live forever in the afterlife. They buy gold while on earth so they can take them to the afterlife (perhaps because they don't believe there are fiat money out there in heaven?).

But things are changing fast these past few decades. The new breed of generations are no longer steadfast on their religious belief. Like the Americans and the Europeans; the TV and the shopping malls are becoming their new religion. And with lots of consumerism brandished in these medium, there are lots more things in life to enjoy than a shiny "useless" metal. Videogames for one. Instant gratification is becoming the norm now in the developing countries and gold cannot satisfy such desire for the new generations. Going into the afterlife is now becoming a fantasy or a myth in many cases, so there really is not much need to hoard gold and other precious metals except for social occations. And that is changing too, designer clothes are becoming more expesive than the trinkets they wear, relatively speaking.

Long term. Precious metals will have their industrial and/or commercial applications. But then, they are recycable too.

So the gold bugs' dream of massive global demand for gold that will push it's price skyward into the next decades seems far fetch.]]> http://seekingalpha.com/article/177078-10-reasons-the-equity-rally-is-over?source=feed#comment-798817 798817
The economic firestorm has already passed and the lingering winds are starting to taper down.

More importantly, the firewalls are already set in place and being strenghtened such as the $700B TARP, the $787B stimulus package, the $2T Fed liquidity fund, low interest rate regime, do-no-harm congress policy, etc.

Investors now have the time and energy to stop looking at fundamentals and start evaluating the most important parts of investing -- which are earnings, earnings, and earnings.

Corporate earnings should be the most important consideration for the next several quarters as the stock markets go into a recovery mode.

Not fundamental BS doom and gloomers are still trying to sell to the gullible public.

Sell me an umbrella before the rain or during the rain; not after.]]> Wed, 09 Dec 2009 19:15:44 -0500
The economic firestorm has already passed and the lingering winds are starting to taper down.

More importantly, the firewalls are already set in place and being strenghtened such as the $700B TARP, the $787B stimulus package, the $2T Fed liquidity fund, low interest rate regime, do-no-harm congress policy, etc.

Investors now have the time and energy to stop looking at fundamentals and start evaluating the most important parts of investing -- which are earnings, earnings, and earnings.

Corporate earnings should be the most important consideration for the next several quarters as the stock markets go into a recovery mode.

Not fundamental BS doom and gloomers are still trying to sell to the gullible public.

Sell me an umbrella before the rain or during the rain; not after.]]> http://seekingalpha.com/article/177283-markets-still-trending-up-despite-faltering-leaders?source=feed#comment-797773 797773
It is at double top.

Nothing goes up forever. Corrections or consolidations will be needed to refresh the rally and apple is in a 4-th wave process on the monthly chart.

Look at the 2-nd wave of AAPL. It consumed 3 years. 4-th wave usually consumes more time than the 2-nd wave. AAPL so far has expended almost 2 years preparing the 4-th wave. More to go.]]> Wed, 09 Dec 2009 09:00:47 -0500
It is at double top.

Nothing goes up forever. Corrections or consolidations will be needed to refresh the rally and apple is in a 4-th wave process on the monthly chart.

Look at the 2-nd wave of AAPL. It consumed 3 years. 4-th wave usually consumes more time than the 2-nd wave. AAPL so far has expended almost 2 years preparing the 4-th wave. More to go.]]> http://seekingalpha.com/article/177009-economic-indicators-suggest-investing-caution?source=feed#comment-797332 797332
Lets look at Dow Jones in particular:

- Dow monthly chart is now printing a fast MACD reading in the extreme of 1,170 by now. In May 1999 Dow was able to print 1,474 at a price of $11,130 before it topped out in Dec 1999 at a price of $11,750 with a divergence macd reading of 537. In June 2007, Dow was able to print a new momentum high of 1050 before the topping process happened in Oct 2007 at $14,200 price tag.

The good news is that when the momentum indicator such as the fast macd made a new momentum high; it will take a divergence signal for shorts to enter in or for big-time traders to start selling. Which means, Dow will have to print higher high prices above the last high of $10,513 for a divergence short to take effect. Sometimes, it can take several divergence signals before a bigger correction can happen or a sell-off/meltdown can start, which can take a very long time considering that it is the monthly chart that was able to print a new momentum high this time around.

- Dow Jones 14-month stochastic is now entering the 80 percent range which is the upper range. In a cyclical run, the stochastic will go for 100 percent but seldom gets there anyway before going down together with the price. That is bad news to many stochastic traders, it means Dow Jones is entering the over-bought territory and will soon go back to over-sold territory once it finished it's business above the 80 percent mark.

The good news is that a penetration of the 80 percent mark can result in an explossive rally that can last several months since we are using the monthly charts.

Here are some salient points:

- Dow Jones weekly RSI went down below the bearish territory of 40 percent since Sept 2008 and never left that territory until March 2009. During that period, Dow simply went into a melt-down thru and thru from a high reading of $11,483 in Sept 2008 toward the last low of $6,470 of March 2009.

These past few weeks, Dow Jones was able to penetrate the 65 percent mark of the weekly RSI. Above 65 percent is the bullish territory. Sometimes, but not all the time, it can stay up above 65 percent too just like the way it did staying below 40 percent. Which means, a sustained melt-up similar but opposite to the Sept 2008 to March 2009 melt-down can happen too before Dow Jones goes back below 65 reading and into the unknown territory in-between 65 and 40 percents. Last low reading was $9,879 before Dow Jones weekly RSI was able to break above the 65 percent mark. We still don't know how far a potential melt-up can go and for how long.

- Dow Jones 14-week stochastic is now gliding above the 80 percent reading. A very encouraging sign in most cases. Once this gliding path happens; it can take several attempts to push it down below 80 percent with resultant higher high prices to happen later on. Most of the time it will take 2 to 3 push downs of the stochastic below 80 percent followed by another gliding above 80 percent and subsequent higher high prices to happen before a final push down that drives the 14-week stochastic below the 20 percent reading can happen which corresponds to a major correction or a sell-off. It can take a very long time before a major correction or a sell-off can happen once the 14-week stochastic starts gliding above the 80 percent mark.

Momentum indicators do not provide a method to find potential price runs based on the different types of rallies and their corresponding corrections or consolidations ranges.

Elliott Waves analysis does provide this facility. Read my previous posts if you want to know what price projections EW is indicating now for the broader index SnP500.]]> Tue, 08 Dec 2009 23:44:08 -0500
Lets look at Dow Jones in particular:

- Dow monthly chart is now printing a fast MACD reading in the extreme of 1,170 by now. In May 1999 Dow was able to print 1,474 at a price of $11,130 before it topped out in Dec 1999 at a price of $11,750 with a divergence macd reading of 537. In June 2007, Dow was able to print a new momentum high of 1050 before the topping process happened in Oct 2007 at $14,200 price tag.

The good news is that when the momentum indicator such as the fast macd made a new momentum high; it will take a divergence signal for shorts to enter in or for big-time traders to start selling. Which means, Dow will have to print higher high prices above the last high of $10,513 for a divergence short to take effect. Sometimes, it can take several divergence signals before a bigger correction can happen or a sell-off/meltdown can start, which can take a very long time considering that it is the monthly chart that was able to print a new momentum high this time around.

- Dow Jones 14-month stochastic is now entering the 80 percent range which is the upper range. In a cyclical run, the stochastic will go for 100 percent but seldom gets there anyway before going down together with the price. That is bad news to many stochastic traders, it means Dow Jones is entering the over-bought territory and will soon go back to over-sold territory once it finished it's business above the 80 percent mark.

The good news is that a penetration of the 80 percent mark can result in an explossive rally that can last several months since we are using the monthly charts.

Here are some salient points:

- Dow Jones weekly RSI went down below the bearish territory of 40 percent since Sept 2008 and never left that territory until March 2009. During that period, Dow simply went into a melt-down thru and thru from a high reading of $11,483 in Sept 2008 toward the last low of $6,470 of March 2009.

These past few weeks, Dow Jones was able to penetrate the 65 percent mark of the weekly RSI. Above 65 percent is the bullish territory. Sometimes, but not all the time, it can stay up above 65 percent too just like the way it did staying below 40 percent. Which means, a sustained melt-up similar but opposite to the Sept 2008 to March 2009 melt-down can happen too before Dow Jones goes back below 65 reading and into the unknown territory in-between 65 and 40 percents. Last low reading was $9,879 before Dow Jones weekly RSI was able to break above the 65 percent mark. We still don't know how far a potential melt-up can go and for how long.

- Dow Jones 14-week stochastic is now gliding above the 80 percent reading. A very encouraging sign in most cases. Once this gliding path happens; it can take several attempts to push it down below 80 percent with resultant higher high prices to happen later on. Most of the time it will take 2 to 3 push downs of the stochastic below 80 percent followed by another gliding above 80 percent and subsequent higher high prices to happen before a final push down that drives the 14-week stochastic below the 20 percent reading can happen which corresponds to a major correction or a sell-off. It can take a very long time before a major correction or a sell-off can happen once the 14-week stochastic starts gliding above the 80 percent mark.

Momentum indicators do not provide a method to find potential price runs based on the different types of rallies and their corresponding corrections or consolidations ranges.

Elliott Waves analysis does provide this facility. Read my previous posts if you want to know what price projections EW is indicating now for the broader index SnP500.]]> http://seekingalpha.com/article/176768-global-market-outlook-improved-expectations?source=feed#comment-795572 795572
This has been shown with much greater clarity last Friday after the Jobs Report.

Early morning price actions resulted in the ES or SnP futures to jump up.

Usually (if you monitor euro$ and ES) they go in tandem most of the times during the last few months and the us$ goes the opposite way. euro$ melted down on friday all day despite massive gyrations of the Spx as index traders who were perplexed by the us$ strenght all day got whipsawed around with their own confusions.

Friday was the first day in a long time that ES and us$ went up together on a major economic report, albeit temporarily. But the meltdown of euro$ all day Friday based on the jobs report was the chink in the armour of the euro$ in short term-analysis which is basically the rise of euro$ from March 2009 to last week.

Technically speaking; the euro$ has an inherent weakness in the weekly and monthly charts that favors a run toward the 1.15 area to finalize a long running potential A-B-C down pattern in Elliott Waves parlance.

Euro$ spent the whole time from Oct 31, 2008 to last week trying to retrace the massive selloff that happened from July 18, 2008 to Oct 31 of the same year. The recovery effort is now almost 4x the initial time consumed by euro$ during it's run down from the high of 1.599 to the last low of 1.233.

A pitiful performance by the euro$ bulls unable to recover their lofty height last July 2008 despite spending almost 14 months doing so against the initial meltdown that consumed less than 4 months from July 18 to Oct 31 of year 2008.

That is basically an A-wave down followed by the time consuming B-wave up process and I will not fight the lessons of thousands of charts and tens of thousands of chart patterns mostly dominated by an A-B-C flat pattern.

The C-wave down toward the 1.15 equal move target for euro$ is the highest probability scenario at this stage. The only remaining question is how far the c-wave up of the a-b-c up pattern which will complete the B-wave up of the A-B-C pattern will finalize. It could end right after last week or still go for the 1.522 area which is much more an ideal terminal area for the euro$ B-wave up - technically speaking.

Current sentiment or whatever technical or fundamental analyses of the last few weeks or months will not change or alter the fact of what had happened since July 18 of year 2008 to the present time.

The massive amount of time, efforts, and money spent or traded by countless people across the world contributed toward that chart formation in the last 17+ months. A chart formation that can threaten the rise of euro$ since year 2001 of around 85 cents to the last high of 1.599.

For the euro$ bears; target would be 80 cents euro/us over the long run that should span several years if not more than a decade.

For short-term analysis using the weekly and monthly charts; a 4 to 8 months drop toward 1.15 is the most conservative way to trade the currency pair once the top on the daily chart has been finalized.]]> Tue, 08 Dec 2009 00:53:21 -0500
This has been shown with much greater clarity last Friday after the Jobs Report.

Early morning price actions resulted in the ES or SnP futures to jump up.

Usually (if you monitor euro$ and ES) they go in tandem most of the times during the last few months and the us$ goes the opposite way. euro$ melted down on friday all day despite massive gyrations of the Spx as index traders who were perplexed by the us$ strenght all day got whipsawed around with their own confusions.

Friday was the first day in a long time that ES and us$ went up together on a major economic report, albeit temporarily. But the meltdown of euro$ all day Friday based on the jobs report was the chink in the armour of the euro$ in short term-analysis which is basically the rise of euro$ from March 2009 to last week.

Technically speaking; the euro$ has an inherent weakness in the weekly and monthly charts that favors a run toward the 1.15 area to finalize a long running potential A-B-C down pattern in Elliott Waves parlance.

Euro$ spent the whole time from Oct 31, 2008 to last week trying to retrace the massive selloff that happened from July 18, 2008 to Oct 31 of the same year. The recovery effort is now almost 4x the initial time consumed by euro$ during it's run down from the high of 1.599 to the last low of 1.233.

A pitiful performance by the euro$ bulls unable to recover their lofty height last July 2008 despite spending almost 14 months doing so against the initial meltdown that consumed less than 4 months from July 18 to Oct 31 of year 2008.

That is basically an A-wave down followed by the time consuming B-wave up process and I will not fight the lessons of thousands of charts and tens of thousands of chart patterns mostly dominated by an A-B-C flat pattern.

The C-wave down toward the 1.15 equal move target for euro$ is the highest probability scenario at this stage. The only remaining question is how far the c-wave up of the a-b-c up pattern which will complete the B-wave up of the A-B-C pattern will finalize. It could end right after last week or still go for the 1.522 area which is much more an ideal terminal area for the euro$ B-wave up - technically speaking.

Current sentiment or whatever technical or fundamental analyses of the last few weeks or months will not change or alter the fact of what had happened since July 18 of year 2008 to the present time.

The massive amount of time, efforts, and money spent or traded by countless people across the world contributed toward that chart formation in the last 17+ months. A chart formation that can threaten the rise of euro$ since year 2001 of around 85 cents to the last high of 1.599.

For the euro$ bears; target would be 80 cents euro/us over the long run that should span several years if not more than a decade.

For short-term analysis using the weekly and monthly charts; a 4 to 8 months drop toward 1.15 is the most conservative way to trade the currency pair once the top on the daily chart has been finalized.]]> http://seekingalpha.com/article/176650-equities-update-volatile-day-leaves-week-s-gains-intact?source=feed#comment-791189 791189
After the jobs report release:

ES or SnP futures jumped up together with the beliguered financials and oil.

What was amazing was that the US$ jumped up too - courtesy of Euro$ dumpage since Euro$ affects the US$ more than anything. Euro$ used to keep pace with the ES futures in the past few weeks and months. Not today.

What was more amazing was that Oil kept jumping up before the open despite initial hesitation when US$ jumped up with no hesitation.

And the most amazing "unexpected" event was gold initially trying to catch up with ES since gold kept following or going ahead of ES most of the time in the past few weeks; but then gold suddenly melted down. Unexpected if we don't know that gold was due for a potential dumpage in exchange for liquidity shift-over to the US$ and the sudden jump in interest rate hike projection for April from 2% to 20% probability. Gold suffered the liquidity recall jitters and the dollar jumped up. Also, the 1200 resistance for gold gave lots of incentive to take off some profits. Dollar carry traders are now starting to feel the pinch with the new logic about low Fed rates.

The indeces meltdown right after the open was because US$ kept up it's pace to the upside thus causing jitters among traders who are used to countertrading oil and ES against the US$.

Well and good. A little consolidation later, and a late day recovery rally was able run without the US$ melting down. Courtesy of Transports, SOX, and the Financials saving the day as they refused to print new lows for the day while the Euro$ still as crippled as the day has started.

Now, the US$ has a good chance to rally together with the SnP, Dow Jones, and Nasdaq. Albeit with lots of hesitations and coutertrend runs or that the runs are starting to narrow with lesser dollar meltdowns during days of Spx rallies and vise versa. In the longer run as the run rates narrowed, they can go up together if not daily, then as the weeks progressed and traders start to accept that a strong economy begets strong currency. For now, the US economy is weak but the dollar is weaker still.

A weak but recovering US economy will help oil to rise further toward the $86 to $90 target range, if not $106. Seasonal factor and a global Christmas rejoice of averting Great Depression Part 2 will help oil price to go up.

Since the European economy seems to be not performing as expected; the Euro$ can start going down toward the 1.15 area and the US$ can rally accordingly. Caviat is that Euro$ still has a small un-resolved 5-th wave up on the weekly chart that projects a potential rally toward the 1.522/5 area where the weekly and monthly fibonacci resistance cluster resides.

In the end; I believe the good jobs report of today will provide the catalyst for an early Santa Claus' rally toward 1150 to 1168 range for Spx - despite traders' confusion regarding past and present relationships of dollar, oil, and the main indeces. A gold meltdown will more than help the rally for SnP, Dow Jones, and the Nasdaq. Profits from selling gold will provide extra liquidity for the indeces.

For gold, see my previous posts.]]> Fri, 04 Dec 2009 23:04:14 -0500
After the jobs report release:

ES or SnP futures jumped up together with the beliguered financials and oil.

What was amazing was that the US$ jumped up too - courtesy of Euro$ dumpage since Euro$ affects the US$ more than anything. Euro$ used to keep pace with the ES futures in the past few weeks and months. Not today.

What was more amazing was that Oil kept jumping up before the open despite initial hesitation when US$ jumped up with no hesitation.

And the most amazing "unexpected" event was gold initially trying to catch up with ES since gold kept following or going ahead of ES most of the time in the past few weeks; but then gold suddenly melted down. Unexpected if we don't know that gold was due for a potential dumpage in exchange for liquidity shift-over to the US$ and the sudden jump in interest rate hike projection for April from 2% to 20% probability. Gold suffered the liquidity recall jitters and the dollar jumped up. Also, the 1200 resistance for gold gave lots of incentive to take off some profits. Dollar carry traders are now starting to feel the pinch with the new logic about low Fed rates.

The indeces meltdown right after the open was because US$ kept up it's pace to the upside thus causing jitters among traders who are used to countertrading oil and ES against the US$.

Well and good. A little consolidation later, and a late day recovery rally was able run without the US$ melting down. Courtesy of Transports, SOX, and the Financials saving the day as they refused to print new lows for the day while the Euro$ still as crippled as the day has started.

Now, the US$ has a good chance to rally together with the SnP, Dow Jones, and Nasdaq. Albeit with lots of hesitations and coutertrend runs or that the runs are starting to narrow with lesser dollar meltdowns during days of Spx rallies and vise versa. In the longer run as the run rates narrowed, they can go up together if not daily, then as the weeks progressed and traders start to accept that a strong economy begets strong currency. For now, the US economy is weak but the dollar is weaker still.

A weak but recovering US economy will help oil to rise further toward the $86 to $90 target range, if not $106. Seasonal factor and a global Christmas rejoice of averting Great Depression Part 2 will help oil price to go up.

Since the European economy seems to be not performing as expected; the Euro$ can start going down toward the 1.15 area and the US$ can rally accordingly. Caviat is that Euro$ still has a small un-resolved 5-th wave up on the weekly chart that projects a potential rally toward the 1.522/5 area where the weekly and monthly fibonacci resistance cluster resides.

In the end; I believe the good jobs report of today will provide the catalyst for an early Santa Claus' rally toward 1150 to 1168 range for Spx - despite traders' confusion regarding past and present relationships of dollar, oil, and the main indeces. A gold meltdown will more than help the rally for SnP, Dow Jones, and the Nasdaq. Profits from selling gold will provide extra liquidity for the indeces.

For gold, see my previous posts.]]> http://seekingalpha.com/article/176598-jobs-report-an-actual-green-shoot?source=feed#comment-791119 791119
This jobs report is only an icing to the cake.

The $600B and $787B stimulus by China and the USA are still in effect and will still be good to go for 5 quarters for China and 6 quarters for the USA. They will keep impacting corporate profits across the world specially the two countries. That translate to stock markets continued rally for several more quarters with corresponding minor corrections.

The trillions of global liquidity tsunami is still in the works and will keep slushing all over the world until concerted efforts by central banks to recall those excess liquidity forced their holders to sell what-ever they bought before and are still buying right now. Money makes the world go round.

The side-lined wait and see investors are rearing to get go for the Christmas rally after 2 successive years of drought.
Not everybody is happy waiting in the sidelines specially during Christmas time.

Unless we get something like or worst than 9/11; the direction is definitely up Dubai debacle or not.

There are so many lingering problems still. But are they not being addressed appropriately one way or the other? Somehow, somewhere, despite early struggles, those involved with the gargantuan problems of old will find a way to solve them if not immediately then into the future.

Time will heal most wounds. Sometimes, it is more the recuperation that matters rather than the medication. And constant exercise will help the most toward faster recovery.

Scepticism and inaction will only make matters worse.

We also need the doom and gloomers to join our ranks in order to hasten the economic recovery. Let's worry later of another bubble or collapse or what nots.

For today and tomorrow, we worry more of how to recover faster and how to prevent old problems from deteriorating further. We can tackle more and bigger problems when healthy rather than when sick.

The Emerging Markets had done a good job of recovery 2/3rd of the way up.

It is time the US and European markets show some determination to recover as well. Half-way is not good enough example.]]> Fri, 04 Dec 2009 20:06:38 -0500
This jobs report is only an icing to the cake.

The $600B and $787B stimulus by China and the USA are still in effect and will still be good to go for 5 quarters for China and 6 quarters for the USA. They will keep impacting corporate profits across the world specially the two countries. That translate to stock markets continued rally for several more quarters with corresponding minor corrections.

The trillions of global liquidity tsunami is still in the works and will keep slushing all over the world until concerted efforts by central banks to recall those excess liquidity forced their holders to sell what-ever they bought before and are still buying right now. Money makes the world go round.

The side-lined wait and see investors are rearing to get go for the Christmas rally after 2 successive years of drought.
Not everybody is happy waiting in the sidelines specially during Christmas time.

Unless we get something like or worst than 9/11; the direction is definitely up Dubai debacle or not.

There are so many lingering problems still. But are they not being addressed appropriately one way or the other? Somehow, somewhere, despite early struggles, those involved with the gargantuan problems of old will find a way to solve them if not immediately then into the future.

Time will heal most wounds. Sometimes, it is more the recuperation that matters rather than the medication. And constant exercise will help the most toward faster recovery.

Scepticism and inaction will only make matters worse.

We also need the doom and gloomers to join our ranks in order to hasten the economic recovery. Let's worry later of another bubble or collapse or what nots.

For today and tomorrow, we worry more of how to recover faster and how to prevent old problems from deteriorating further. We can tackle more and bigger problems when healthy rather than when sick.

The Emerging Markets had done a good job of recovery 2/3rd of the way up.

It is time the US and European markets show some determination to recover as well. Half-way is not good enough example.]]> http://seekingalpha.com/article/175686-5-reasons-to-expect-a-near-term-selloff?source=feed#comment-785163 785163
Economic fundamentals are good for the politicians and the 80% of voters come election time.

The stock market is more about earnings, earnings, and earnings. It is ruled by the 20% of population who presumably owned 80% of the nation's wealth. They listen more to their accountants than to their economists.

Last earnings estimate had narrowed down to 15 percent loss last quarter on a YOY QxQ basis. This quarter, it could narrow down half of that with some analysts expecting a full recovery. That will put SnP 1300 if a full recovery. 1100 to 1300 in between for the gray area.

With interest rate in the US expected to remain low; there is not much anything for investors to fear except an act of god like 9/11 disaster.

With massive liquidity tsunami on a global scale still in the works not finding good enough reasons for a permanent home; they will keep rotating big portions of that cash with equities around the world with US equities a better choice when considering temporary or medium term home base with old Uncle Sam. Not until central banks around the world start recalling those temporary liquidity with gusto will savvy global investors start selling equities to pay back their respective central banks. Enjoy it while it lasts. And it can take 6 months to a year before fear of liquidity re-call starts creeping in.

China and US $600B and $787B stimulus packages are still in the works. Remember, they were allocated for 2 years' worth of programs and I haven't read any article saying those stimulus programs had been recinded nor the money re-allocated somewhere else nor have they been spent already just 3 quarters off China and 2 for the US out of the supposed 8 quarters of stimulus programs. 5 quarters for China and 6 quarters more for the US. Press it hard enought and long enough and it will stick.

Technically speaking; DAX and SPX had just completed an 8-days consolidation range after the last 12 days rally.
This is the first time since early August that Indu, Spx, and Compq were able to sustain a rally with shallow consolidation range instead of a minor meltdown. A big time relief as far as the whole August, September, October and half part of November roller coaster is concerned.

This last 8 trading days of consolidation range has given investors and traders alike more time to analyze the market than what they got used to = panic buying on dips and panic selling on rips since August. This time around, they did not do the usual panic sell after a rip up and instead supported SnP right into the daily 20ma support for a shallow correction despite the Dubai World fiasco. An excellent welcome sign for the bulls waiting at the sidelines.

It may or may not be enought pullback but DAX is now projecting a 6200 rally target and 1150 for SnP short term.

Wanna short the markets now? You could be at almost the exact wrong time to do so with technical patterns favoring another rally then another minor pullback then another rally before we go for a bigger pullback or the expected selloff.

Short the Emerging Markets on their pullbacks. They had been rallying vertically for most of the last 6 months. They will need rest and global investors will need to rake in profits and re-allocate those cash funds into .... more likely the US and European indeces that are now poised for a vertical rally.]]> Tue, 01 Dec 2009 18:37:18 -0500
Economic fundamentals are good for the politicians and the 80% of voters come election time.

The stock market is more about earnings, earnings, and earnings. It is ruled by the 20% of population who presumably owned 80% of the nation's wealth. They listen more to their accountants than to their economists.

Last earnings estimate had narrowed down to 15 percent loss last quarter on a YOY QxQ basis. This quarter, it could narrow down half of that with some analysts expecting a full recovery. That will put SnP 1300 if a full recovery. 1100 to 1300 in between for the gray area.

With interest rate in the US expected to remain low; there is not much anything for investors to fear except an act of god like 9/11 disaster.

With massive liquidity tsunami on a global scale still in the works not finding good enough reasons for a permanent home; they will keep rotating big portions of that cash with equities around the world with US equities a better choice when considering temporary or medium term home base with old Uncle Sam. Not until central banks around the world start recalling those temporary liquidity with gusto will savvy global investors start selling equities to pay back their respective central banks. Enjoy it while it lasts. And it can take 6 months to a year before fear of liquidity re-call starts creeping in.

China and US $600B and $787B stimulus packages are still in the works. Remember, they were allocated for 2 years' worth of programs and I haven't read any article saying those stimulus programs had been recinded nor the money re-allocated somewhere else nor have they been spent already just 3 quarters off China and 2 for the US out of the supposed 8 quarters of stimulus programs. 5 quarters for China and 6 quarters more for the US. Press it hard enought and long enough and it will stick.

Technically speaking; DAX and SPX had just completed an 8-days consolidation range after the last 12 days rally.
This is the first time since early August that Indu, Spx, and Compq were able to sustain a rally with shallow consolidation range instead of a minor meltdown. A big time relief as far as the whole August, September, October and half part of November roller coaster is concerned.

This last 8 trading days of consolidation range has given investors and traders alike more time to analyze the market than what they got used to = panic buying on dips and panic selling on rips since August. This time around, they did not do the usual panic sell after a rip up and instead supported SnP right into the daily 20ma support for a shallow correction despite the Dubai World fiasco. An excellent welcome sign for the bulls waiting at the sidelines.

It may or may not be enought pullback but DAX is now projecting a 6200 rally target and 1150 for SnP short term.

Wanna short the markets now? You could be at almost the exact wrong time to do so with technical patterns favoring another rally then another minor pullback then another rally before we go for a bigger pullback or the expected selloff.

Short the Emerging Markets on their pullbacks. They had been rallying vertically for most of the last 6 months. They will need rest and global investors will need to rake in profits and re-allocate those cash funds into .... more likely the US and European indeces that are now poised for a vertical rally.]]> http://seekingalpha.com/article/175565-yen-gold-and-the-perfect-desert-storm?source=feed#comment-780719 780719
Triangles usually result in a vertical run or "thrust" after the triangle has formed.

For a non-limiting triangle. Usual target is 1193 to 1197 with an upper limit of 1358. Not much help here with the target range since it is too wide for comfort and can't be narrowed down. For now, gold is at or approaching the usual target range.

Triangle scenario before the vertical rally will make the whole pattern on the weekly and monthly charts a potential expanding flat with target to the downside of 550 area if the usual upside target holds and gold starts going vertically down for 6 to 8 months.

For now, the triangle scenario is not confirmed. Confirmation will come if gold goes back to the apex of the triangle which is at 970.

Until then, trend traders will try to keep chasing the gold run on pullbacks even on a major pullback back to the old 1034 major resistance which is now a major support. Only a hard break below 1034 support can trigger a panic selloff.

Happy hunting, if you can make the correct timing. Or get crushed if the triangle scenario does not pan out as expected.]]> Sat, 28 Nov 2009 13:40:30 -0500
Triangles usually result in a vertical run or "thrust" after the triangle has formed.

For a non-limiting triangle. Usual target is 1193 to 1197 with an upper limit of 1358. Not much help here with the target range since it is too wide for comfort and can't be narrowed down. For now, gold is at or approaching the usual target range.

Triangle scenario before the vertical rally will make the whole pattern on the weekly and monthly charts a potential expanding flat with target to the downside of 550 area if the usual upside target holds and gold starts going vertically down for 6 to 8 months.

For now, the triangle scenario is not confirmed. Confirmation will come if gold goes back to the apex of the triangle which is at 970.

Until then, trend traders will try to keep chasing the gold run on pullbacks even on a major pullback back to the old 1034 major resistance which is now a major support. Only a hard break below 1034 support can trigger a panic selloff.

Happy hunting, if you can make the correct timing. Or get crushed if the triangle scenario does not pan out as expected.]]> http://seekingalpha.com/article/175496-is-dubai-s-default-a-black-swan-event?source=feed#comment-779809 779809
While the US and European had been languishing in an undecided higher high higher lows corrections since early August. Higher highs and higher lows but a correction none-the-less with no vertical rally similar to the Emerging Markets'. Bouyed by the tide but not the bigger waves that propelled the EMs into a vertical rally.

This is a welcome catalysts for most global investors to rake in some profits and start looking elsewhere for better bigger profit potential as the EMs start a long overdue pullback or correction.

US and Europe come into the spotlight since they had been in a consolidation higher highs higher lows running correction pattern for more than 3 months already.

1150 to 1182 is still the conservative target for SnP500 with 1270 to 1330 higher range for the SPX in case this Emerging Markets' crisis turned into flight to quality vertical rally for SnP500 and the DAX.

Global stock markets rotation in the works?

Similar to the US and European stock sectors' rotation played in the US and Europe long before the Emerging Markets start making their marks.

This could be a better way to sustain global rallies for the next decades than a synchronized method.

China and most EMs were able to print their last bottom in November 2008 while the US and European markets were the laggards being able to reverse their downside momentum in early March 2009. There is a 3-4 month differential that has to be addressed with.]]> Fri, 27 Nov 2009 13:33:30 -0500
While the US and European had been languishing in an undecided higher high higher lows corrections since early August. Higher highs and higher lows but a correction none-the-less with no vertical rally similar to the Emerging Markets'. Bouyed by the tide but not the bigger waves that propelled the EMs into a vertical rally.

This is a welcome catalysts for most global investors to rake in some profits and start looking elsewhere for better bigger profit potential as the EMs start a long overdue pullback or correction.

US and Europe come into the spotlight since they had been in a consolidation higher highs higher lows running correction pattern for more than 3 months already.

1150 to 1182 is still the conservative target for SnP500 with 1270 to 1330 higher range for the SPX in case this Emerging Markets' crisis turned into flight to quality vertical rally for SnP500 and the DAX.

Global stock markets rotation in the works?

Similar to the US and European stock sectors' rotation played in the US and Europe long before the Emerging Markets start making their marks.

This could be a better way to sustain global rallies for the next decades than a synchronized method.

China and most EMs were able to print their last bottom in November 2008 while the US and European markets were the laggards being able to reverse their downside momentum in early March 2009. There is a 3-4 month differential that has to be addressed with.]]> http://seekingalpha.com/article/175314-how-to-trade-the-rest-of-the-year-goldman-sachs?source=feed#comment-777691 777691
Compare apples to apples and oranges to oranges.

They were harping in August of a September since Sept was on average a bad month.

But they made erroneous statistical analysis of Sept and Oct lumping all Septembers and Octobers in all market conditions.

Bullish preceding months usually results in bullish Sept, Oct, Nov and Dec and usually last up to early January.

Bearish preceding months like last year resulted in a meltdown Sept to Nov.

That is the major problem with most statistical analysis: they lump up all the chickens, pigs, camels, elephants, etc. in one measuring machine and say this is the average weight and average height, etc.

Then if you try to build a cage for each of them using the average findings; you end up doing the wrong thing.]]> Wed, 25 Nov 2009 16:17:27 -0500
Compare apples to apples and oranges to oranges.

They were harping in August of a September since Sept was on average a bad month.

But they made erroneous statistical analysis of Sept and Oct lumping all Septembers and Octobers in all market conditions.

Bullish preceding months usually results in bullish Sept, Oct, Nov and Dec and usually last up to early January.

Bearish preceding months like last year resulted in a meltdown Sept to Nov.

That is the major problem with most statistical analysis: they lump up all the chickens, pigs, camels, elephants, etc. in one measuring machine and say this is the average weight and average height, etc.

Then if you try to build a cage for each of them using the average findings; you end up doing the wrong thing.]]> http://seekingalpha.com/article/174623-25-reasons-we-will-not-have-a-depression?source=feed#comment-770958 770958
Not too badly hurt, but somehow, the market seems to know where it is headed despite massive opposition by many who either do not believe a recovery is underway or had simply been left behind holding empty bags.

Baby steps. We are retracing where we had come from. Somewhere along the way we will face the old demons that plunged us into this darkness and face them head-on.

That will require the participation of the majority to win this war against the Great Recession and possibly avoid another Great Depression.

The emerging markets are clearly in the recovery mode having retraced 2/3-rd or more of their loses incurred during 2007 to 2008/9 including the BRIC. Some of them suffered worse than the US such as China's Shanghai and Szenshen indeces going down 72% as compared to 58% by SnP500. But they forged ahead and recovered more than 62% of their massive loses.

US who is the one responsible for this "Made in America" financial crisis of the century is still in self flagelation mode unable to recover even half it's loses and help the whole world recover faster. Much less lead the world as it used to be.

A faster recovery in the US will give more hope to others around the world who look to the brighter side of life and the re-establishment of co-operative lifelines despite each other's shortcomings in the past.

Another major drawback in the US stock markets and the whole world will suffer again but hopefully not as bad as before as they have already recognized that the american-made crisis need not be their own - and the severance further of what had been achieved during the last 2 to 3 decades before the current crisis reared it's ugly head.

Hopefully, more americans will see through the dark side of the equation and treat it as it is, a bad side not worth forging ahead.]]> Sat, 21 Nov 2009 19:24:33 -0500
Not too badly hurt, but somehow, the market seems to know where it is headed despite massive opposition by many who either do not believe a recovery is underway or had simply been left behind holding empty bags.

Baby steps. We are retracing where we had come from. Somewhere along the way we will face the old demons that plunged us into this darkness and face them head-on.

That will require the participation of the majority to win this war against the Great Recession and possibly avoid another Great Depression.

The emerging markets are clearly in the recovery mode having retraced 2/3-rd or more of their loses incurred during 2007 to 2008/9 including the BRIC. Some of them suffered worse than the US such as China's Shanghai and Szenshen indeces going down 72% as compared to 58% by SnP500. But they forged ahead and recovered more than 62% of their massive loses.

US who is the one responsible for this "Made in America" financial crisis of the century is still in self flagelation mode unable to recover even half it's loses and help the whole world recover faster. Much less lead the world as it used to be.

A faster recovery in the US will give more hope to others around the world who look to the brighter side of life and the re-establishment of co-operative lifelines despite each other's shortcomings in the past.

Another major drawback in the US stock markets and the whole world will suffer again but hopefully not as bad as before as they have already recognized that the american-made crisis need not be their own - and the severance further of what had been achieved during the last 2 to 3 decades before the current crisis reared it's ugly head.

Hopefully, more americans will see through the dark side of the equation and treat it as it is, a bad side not worth forging ahead.]]> http://seekingalpha.com/article/174614-market-volume-still-an-unanswered-question?source=feed#comment-770576 770576
During rallies and selloffs, maximum volume happens during the end of the 3-rd wave and spike again during the the 5-th wave with less amount than the 3-rd.

Study the monthly chart of SPY which is one of the easier to study and which is the one that represents the broader index SnP500.

The highest volume spike happened in Oct 2008 and price went lower in Nov 2008. That means the iii-rd of the 3-rd happened in Oct and the 3-rd ended in Nov.

There is also a volume spike in March 2009 but of less quantity than that of Oct 2008. Then followed by tapering of the volume in succeeding months during the bear market bounce or recovery depending on which side of the fence you belong. It means the 5-th and final wave down has been completed. Some call it divergence which happens most of the time at bottoms.

On the monthly and quarterly charts; SPY is clearly a double top pattern. We call it one of the several forms of Flats or A-B-C patterns. SnP500 is a Normal Flat while Indu or Dow Jones is an Expanding Flat.

Flats do have violent C-waves with expanding flats having more violent C-wave than that of normal flats.

More than 70 percent of charts do produced violent vertical C-wave downs in the past in any timeframe, in any market, and in any country. And violent C-waves do produce violent volume spikes too. That is where the maximum volume happens, at or very close to the final bottom of a secular bear market or any particular stock for that matter that went through a progressive sequence of corrective sell-off (A-wave which is years 2000 to 2002 for SPY, bear rally (B-wave or 2002 to 2007), and final capitulation sell-off (C-wave or 2007 to 2009) to complete the A-B-C pattern or a Flat in EW terminology. C-wave is the double dip, technically speaking for flat patterns.

The ensuing bounce or recovery after March 2009 is being hampered by low volume. That was, is, and will be the usual case in most recoveries after a violent C-wave sell-off. There will be some volume spikes but they will be far from as strong or stronger than those produced during the C-wave.

Violent C-wave creates massive shock waves that stun market or stock participants that can last for a long long time. It happens all the time in stocks and indeces in different time frames and with different degrees of impact. But we can't seem to recognize and learn them despite years of experience.

True volume comparable to those produced by the C-wave down will appear only far far above the double top or the last high of an expanding flat when the 3rd wave rally happens. We are presumably still in the 1-st wave up with perhaps 70 to 80 percent probability. Some A-B-C patterns do morph into triangles, complex flats, or complex corrections when problems don't get solved within certain time limits.

But for the sake of trading or investing, buying the C-wave of an A-B-C is one of the highest probability ways of making money and the most common or the most frequent occurence.

But then it requires a study of Elliott Waves to learn and can take years and thousands of charts to finally learn a simple pattern such as what we have now for Dow Jones and SnP500 due to the complexity of the other 20 to 30 percent corrective patterns that intrude with the recognition of a simple pattern. Only after many years and thousands and thousands of chart patterns do we recognize that the simple patterns dominates over the complex ones. K.I.S.S. we say.

So don't expect volume to pick up commensurate to Oct 2008 and March 2009. Volume spikes of equal or greater magnitudes will happen far above 2007 levels during the 3rd wave part of an ongoing rally. Consider 1932 as the start of the count when Dow Jones practically died at $42 and resurrected toward $14,200 then suffered a heart attack.

For August to Present volume conumdrum; please see my previous comments.

Hope this helps.]]> Sat, 21 Nov 2009 13:22:26 -0500
During rallies and selloffs, maximum volume happens during the end of the 3-rd wave and spike again during the the 5-th wave with less amount than the 3-rd.

Study the monthly chart of SPY which is one of the easier to study and which is the one that represents the broader index SnP500.

The highest volume spike happened in Oct 2008 and price went lower in Nov 2008. That means the iii-rd of the 3-rd happened in Oct and the 3-rd ended in Nov.

There is also a volume spike in March 2009 but of less quantity than that of Oct 2008. Then followed by tapering of the volume in succeeding months during the bear market bounce or recovery depending on which side of the fence you belong. It means the 5-th and final wave down has been completed. Some call it divergence which happens most of the time at bottoms.

On the monthly and quarterly charts; SPY is clearly a double top pattern. We call it one of the several forms of Flats or A-B-C patterns. SnP500 is a Normal Flat while Indu or Dow Jones is an Expanding Flat.

Flats do have violent C-waves with expanding flats having more violent C-wave than that of normal flats.

More than 70 percent of charts do produced violent vertical C-wave downs in the past in any timeframe, in any market, and in any country. And violent C-waves do produce violent volume spikes too. That is where the maximum volume happens, at or very close to the final bottom of a secular bear market or any particular stock for that matter that went through a progressive sequence of corrective sell-off (A-wave which is years 2000 to 2002 for SPY, bear rally (B-wave or 2002 to 2007), and final capitulation sell-off (C-wave or 2007 to 2009) to complete the A-B-C pattern or a Flat in EW terminology. C-wave is the double dip, technically speaking for flat patterns.

The ensuing bounce or recovery after March 2009 is being hampered by low volume. That was, is, and will be the usual case in most recoveries after a violent C-wave sell-off. There will be some volume spikes but they will be far from as strong or stronger than those produced during the C-wave.

Violent C-wave creates massive shock waves that stun market or stock participants that can last for a long long time. It happens all the time in stocks and indeces in different time frames and with different degrees of impact. But we can't seem to recognize and learn them despite years of experience.

True volume comparable to those produced by the C-wave down will appear only far far above the double top or the last high of an expanding flat when the 3rd wave rally happens. We are presumably still in the 1-st wave up with perhaps 70 to 80 percent probability. Some A-B-C patterns do morph into triangles, complex flats, or complex corrections when problems don't get solved within certain time limits.

But for the sake of trading or investing, buying the C-wave of an A-B-C is one of the highest probability ways of making money and the most common or the most frequent occurence.

But then it requires a study of Elliott Waves to learn and can take years and thousands of charts to finally learn a simple pattern such as what we have now for Dow Jones and SnP500 due to the complexity of the other 20 to 30 percent corrective patterns that intrude with the recognition of a simple pattern. Only after many years and thousands and thousands of chart patterns do we recognize that the simple patterns dominates over the complex ones. K.I.S.S. we say.

So don't expect volume to pick up commensurate to Oct 2008 and March 2009. Volume spikes of equal or greater magnitudes will happen far above 2007 levels during the 3rd wave part of an ongoing rally. Consider 1932 as the start of the count when Dow Jones practically died at $42 and resurrected toward $14,200 then suffered a heart attack.

For August to Present volume conumdrum; please see my previous comments.

Hope this helps.]]> http://seekingalpha.com/article/174275-dr-copper-spots-a-monster-crash?source=feed#comment-770100 770100
Patience.

They buy, they stockpile, they have patience. They have huge land mass. No problem with stockpiling. Some giants do have patience; and China is a giant waking up after several decades under Mao-Tze-Dong communism.

Centuries of confusian patience.

No JIT or Just-In-Time B.S. for them.

At 8 to 11 percent proven to be sustainable GDP during the last decade or so; they do not want to run out of non-perishable commodities just-in-time when they needed them most in the near and far future.

They have cash now. What is wrong with buy low at or during major global stocks and commodity market crises? Buy when everything has just crashed down.

Stockpile and use them later, but don't buy high later on when the whole world reaches new boom times like 2006/7. Remember, China is already the consumer goods manufacturing country of the world. Also, those US global manufacturing companies who have just re-located to China will not go back to US soil in a hurry. They and China's local industries will need basic materials for decades to come.

They spent lots of money for the 2008 Olympics, did'nt they? Buying lots of commodities at sky high prices in 2006 to 2008 in preparation for the Olympics. They must be stupid enought not to learn their lessons. Obviously, they learned their lessons the hardest way regarding buying non-perishable commodities.

They had been in a buying frenzy since early 2009. It is only now that their purchases are being noticed with increasing scrutiny with commodity prices going up.

A pullback maybe, a crash maybe, we still don't know.

A global economic revival will most likely prevent another commodity price meltdown. China, most visibly, is the first to buy commodities in huge volumes; who will be next?

Wanna buy from the Chinese later at high prices? They may not sell you a few tons of copper. They will need them more than you do.

Buy the pullback after China slowed down their purchases.]]> Fri, 20 Nov 2009 21:48:16 -0500
Patience.

They buy, they stockpile, they have patience. They have huge land mass. No problem with stockpiling. Some giants do have patience; and China is a giant waking up after several decades under Mao-Tze-Dong communism.

Centuries of confusian patience.

No JIT or Just-In-Time B.S. for them.

At 8 to 11 percent proven to be sustainable GDP during the last decade or so; they do not want to run out of non-perishable commodities just-in-time when they needed them most in the near and far future.

They have cash now. What is wrong with buy low at or during major global stocks and commodity market crises? Buy when everything has just crashed down.

Stockpile and use them later, but don't buy high later on when the whole world reaches new boom times like 2006/7. Remember, China is already the consumer goods manufacturing country of the world. Also, those US global manufacturing companies who have just re-located to China will not go back to US soil in a hurry. They and China's local industries will need basic materials for decades to come.

They spent lots of money for the 2008 Olympics, did'nt they? Buying lots of commodities at sky high prices in 2006 to 2008 in preparation for the Olympics. They must be stupid enought not to learn their lessons. Obviously, they learned their lessons the hardest way regarding buying non-perishable commodities.

They had been in a buying frenzy since early 2009. It is only now that their purchases are being noticed with increasing scrutiny with commodity prices going up.

A pullback maybe, a crash maybe, we still don't know.

A global economic revival will most likely prevent another commodity price meltdown. China, most visibly, is the first to buy commodities in huge volumes; who will be next?

Wanna buy from the Chinese later at high prices? They may not sell you a few tons of copper. They will need them more than you do.

Buy the pullback after China slowed down their purchases.]]> http://seekingalpha.com/article/174572-why-the-market-s-set-to-move-lower-for-the-rest-of-the-month?source=feed#comment-769881 769881
This was attested by the low volume rallies and high volume selloffs and the "unusual" rallies of VIX in Sept and Oct during rally days. Investors were buying protections during rallies and selling as much stocks as they can during selloffs at that time period.

At this stage; perma-bears should be running out of capital already with the repeated short squeezes they suffered if not many of them bankcrupt already.

Perma-bulls, at the same time, will be running out of cash and holding lots of stocks and may run out of patience if a vertical rally does not happen soon. They may decide to sell and take as much profit as they can while the going is still fairly good if not great at all.

Most TA's failed to recognize that the volume spikes during sell-offs are divergence signals. During normal lower high lower low corrections; high volume sell-offs sustain further downsides. From August to Oct, high volume sell-offs resulted in higher prices later on. Those are the divergence signals.

Those undecided investors will be the deciding factor.

They kept reducing their holdings and many of them too disgusted with themselves by now that the markets are still going up. They are holding too much cash for nothing and can't buy at lower prices since the stock market just simply and plainly kept on going up.

Any sign of volume pickup during rallies will start a stampede of those left-behind investors too tired of waiting for the market to give them a reasonable 10 to 20 percent pullback or discount.

If we get a strong stampede; then 1270 to 1330 not too far away.]]> Fri, 20 Nov 2009 19:50:25 -0500
This was attested by the low volume rallies and high volume selloffs and the "unusual" rallies of VIX in Sept and Oct during rally days. Investors were buying protections during rallies and selling as much stocks as they can during selloffs at that time period.

At this stage; perma-bears should be running out of capital already with the repeated short squeezes they suffered if not many of them bankcrupt already.

Perma-bulls, at the same time, will be running out of cash and holding lots of stocks and may run out of patience if a vertical rally does not happen soon. They may decide to sell and take as much profit as they can while the going is still fairly good if not great at all.

Most TA's failed to recognize that the volume spikes during sell-offs are divergence signals. During normal lower high lower low corrections; high volume sell-offs sustain further downsides. From August to Oct, high volume sell-offs resulted in higher prices later on. Those are the divergence signals.

Those undecided investors will be the deciding factor.

They kept reducing their holdings and many of them too disgusted with themselves by now that the markets are still going up. They are holding too much cash for nothing and can't buy at lower prices since the stock market just simply and plainly kept on going up.

Any sign of volume pickup during rallies will start a stampede of those left-behind investors too tired of waiting for the market to give them a reasonable 10 to 20 percent pullback or discount.

If we get a strong stampede; then 1270 to 1330 not too far away.]]> http://seekingalpha.com/article/174572-why-the-market-s-set-to-move-lower-for-the-rest-of-the-month?source=feed#comment-769789 769789 Fri, 20 Nov 2009 18:50:08 -0500 http://seekingalpha.com/article/174572-why-the-market-s-set-to-move-lower-for-the-rest-of-the-month?source=feed#comment-769787 769787
Probabilities in that order.

Highest probability is still the consolidation range of higher highs and higher lows that has formed since August is either a regular flat or a running flat. An A-B-C pattern with the C-wave down finalizing at 1029 for SnP500 which was the last low in Oct 2.

Target for a normal flat will be 1150 to 1182 range while a running flat scenario can support a rally toward 1270 to 1330 range.

My comment of Oct 31, 2009 still stands as is.

Running Flat failure can result in 957 as the most obvious support for the bulls if panic selling happens on the weekly chart. Vertical selloff usually happens when the running flat results in traders and/or investors running out of patience with the prolonged period by which the stock or the market not being able to produce a vertical rally despite their repeated attempts to drive it higher.

Timing is everything when this type of higher highs higher lows start forming on the daily chart after a potential bottom has been established such as the one we had in March 2009.

So far; my analysis at 1020 when Spx first tested the daily 50ma had been correct and at 1030 area on Oct 31.

Either we go vertical rally on the weekly chart or traders and investors will run out of patience at this critical time period.

The 12 days of rally will require 12 to 18 days consolidation range preferably a shallow one and not too much time doing nothing with the run from 1029.37 of Oct 2 low to the last high of 1113.69 as the defining range. An attempted rally toward 1121 fibo extension resistance is also not out of the question but more likely will result in a headfake.

1081 and 1071 are the most obvious fibonacci supports on the 60min chart with the current wavecount structure. The daily 20ma can also provide a viable support for the bulls.

As long as the bulls can keep preventing a sudden death meltdown and/or a prolonged indecision trading range; we are good to go for 1150/82 range and if time permits 1270 to 1330 range before the next earnings season starts January 2010.

A potential panic selloff after the re-entry below 1101 is the last best hope for the bears for their meltdown agenda.]]> Fri, 20 Nov 2009 18:48:39 -0500
Probabilities in that order.

Highest probability is still the consolidation range of higher highs and higher lows that has formed since August is either a regular flat or a running flat. An A-B-C pattern with the C-wave down finalizing at 1029 for SnP500 which was the last low in Oct 2.

Target for a normal flat will be 1150 to 1182 range while a running flat scenario can support a rally toward 1270 to 1330 range.

My comment of Oct 31, 2009 still stands as is.

Running Flat failure can result in 957 as the most obvious support for the bulls if panic selling happens on the weekly chart. Vertical selloff usually happens when the running flat results in traders and/or investors running out of patience with the prolonged period by which the stock or the market not being able to produce a vertical rally despite their repeated attempts to drive it higher.

Timing is everything when this type of higher highs higher lows start forming on the daily chart after a potential bottom has been established such as the one we had in March 2009.

So far; my analysis at 1020 when Spx first tested the daily 50ma had been correct and at 1030 area on Oct 31.

Either we go vertical rally on the weekly chart or traders and investors will run out of patience at this critical time period.

The 12 days of rally will require 12 to 18 days consolidation range preferably a shallow one and not too much time doing nothing with the run from 1029.37 of Oct 2 low to the last high of 1113.69 as the defining range. An attempted rally toward 1121 fibo extension resistance is also not out of the question but more likely will result in a headfake.

1081 and 1071 are the most obvious fibonacci supports on the 60min chart with the current wavecount structure. The daily 20ma can also provide a viable support for the bulls.

As long as the bulls can keep preventing a sudden death meltdown and/or a prolonged indecision trading range; we are good to go for 1150/82 range and if time permits 1270 to 1330 range before the next earnings season starts January 2010.

A potential panic selloff after the re-entry below 1101 is the last best hope for the bears for their meltdown agenda.]]> http://seekingalpha.com/article/174365-unl-a-better-natural-gas-etf-than-ung?source=feed#comment-768194 768194
What happens if and when Nat Gas goes into backwardation?

UNG will shine a lot better than UNL with backwardation.]]> Thu, 19 Nov 2009 18:42:53 -0500
What happens if and when Nat Gas goes into backwardation?

UNG will shine a lot better than UNL with backwardation.]]> http://seekingalpha.com/article/171549-charlie-gasparino-another-crash-has-to-happen-again?source=feed#comment-751142 751142
Those who invested during the 1929-32 stock market crash are long dead already if not few are still living their last gasps of life. Dow Jones went down 470 to 42 at that time and is now hovering at 10,000 levels these days.

Those who invested during the 1965-80 secular bear markets saw Dow Jones unable to break 1,000 level and went down 470-500 levels before ramping up to 12,000 of year 2000 and 14,200 of year 2007. Many of them are still living but will die soon enough.

I will be long dead or in my old age, and will have better knowledge and wisdom for the latter if not senelity, in order to enjoy the fruits of my labour long before the next "financial crisis of the century" comes along.

Why wait for the next CRASH to happen?]]> Sun, 08 Nov 2009 14:20:41 -0500
Those who invested during the 1929-32 stock market crash are long dead already if not few are still living their last gasps of life. Dow Jones went down 470 to 42 at that time and is now hovering at 10,000 levels these days.

Those who invested during the 1965-80 secular bear markets saw Dow Jones unable to break 1,000 level and went down 470-500 levels before ramping up to 12,000 of year 2000 and 14,200 of year 2007. Many of them are still living but will die soon enough.

I will be long dead or in my old age, and will have better knowledge and wisdom for the latter if not senelity, in order to enjoy the fruits of my labour long before the next "financial crisis of the century" comes along.

Why wait for the next CRASH to happen?]]> http://seekingalpha.com/article/171951-friday-roundup-commodities-emerging-markets?source=feed#comment-751017 751017
That is just the way it is; otherwise Dow Jones could be at 100,000+++ by now or be close to zero if it was so predictable or too easy to understand.

Another analysis could be this:

The SnP500 has a high side of 1300 at the start of July-Sept 2008 quarter. Before the earnings season started in Oct 2009, it was able to reach 1100. A 15% difference YOY high on a QxQ comparison.

Viola! SnP500 is on tract for a 15% YOY drop in earnings.

Big investors had been pricing in the 15% difference before the start of the earnings season or was it co-incidence? And on the high side of July-August 2008 quarter?

This bodes well for the next quarter stock market run from an investor's point of view.

Going forward:

If they believe that the Oct-Dec 2009 quarter will get better; then move the parameters back YOY going back into April-June 2008 QxQ SnP levels which has a high side of 1400. Then SnP could be at the 1300 area just assuming the 15% profit differential will narrow down to half or be at 1400 if their estimates show full recovery within this year.

Then SnP could be at the 1300 to 1400 area before the start of the earnings season in Jan 2010.

On the downside; if something realy bad happens like that of 9/11 episode. Then backtract YOY going forward to Oct-Dec 2008 QxQ then SnP could drop hard to the 800 area before the next earnings season starts in Jan 2010.

Does this analysis makes sense or what?]]> Sun, 08 Nov 2009 13:55:28 -0500
That is just the way it is; otherwise Dow Jones could be at 100,000+++ by now or be close to zero if it was so predictable or too easy to understand.

Another analysis could be this:

The SnP500 has a high side of 1300 at the start of July-Sept 2008 quarter. Before the earnings season started in Oct 2009, it was able to reach 1100. A 15% difference YOY high on a QxQ comparison.

Viola! SnP500 is on tract for a 15% YOY drop in earnings.

Big investors had been pricing in the 15% difference before the start of the earnings season or was it co-incidence? And on the high side of July-August 2008 quarter?

This bodes well for the next quarter stock market run from an investor's point of view.

Going forward:

If they believe that the Oct-Dec 2009 quarter will get better; then move the parameters back YOY going back into April-June 2008 QxQ SnP levels which has a high side of 1400. Then SnP could be at the 1300 area just assuming the 15% profit differential will narrow down to half or be at 1400 if their estimates show full recovery within this year.

Then SnP could be at the 1300 to 1400 area before the start of the earnings season in Jan 2010.

On the downside; if something realy bad happens like that of 9/11 episode. Then backtract YOY going forward to Oct-Dec 2008 QxQ then SnP could drop hard to the 800 area before the next earnings season starts in Jan 2010.

Does this analysis makes sense or what?]]> http://seekingalpha.com/article/170285-reality-hits-q3-gdp-growth-breakdown?source=feed#comment-738881 738881
There are 2.5 Billion consumers in the developing countries alone including the BRIC. That is 2,500 Millions of potential customers by international based manufacturing companies that are US-owned that has re-located into the developing countries since the early 2000 to take advantage of cheap labor abroad and be able to compete anywhere in the world without the shackles of exorbitant US labor costs.

And that will funnel back to the US government tax receipts in the future as the developing countries start their recovery sans the "Made in the USA" financial crisis.

2.5 billion consumers vs. 300 million they used to cater to.

Ask the US government for a commonwealth policy once those giga-corporations start repatriating their profits in perhaps 2 to 3 years time since the US will remain shackled with high unemployment rates.

Those giga-corporations are not coming back to the US after spending trillions relocating their operations to the developing countries.


On Oct 31 10:07 PM DormRoom wrote:

> Most of you bears use a 'stack the deck' argument. You pick and
> choose data to suit your argument, while ignoring leading indicators,
> which point to a recovery.
>
> Look outside the U.S (except Britain), and most of the world is in
> a modest V-type recovery. But SA commentators are so U.S. centric
> they ignore the other 750 million+ consumers outside the U.S.
>
> S&P500 @ 1214 by year end. see you there.]]> Sun, 01 Nov 2009 02:20:44 -0500
There are 2.5 Billion consumers in the developing countries alone including the BRIC. That is 2,500 Millions of potential customers by international based manufacturing companies that are US-owned that has re-located into the developing countries since the early 2000 to take advantage of cheap labor abroad and be able to compete anywhere in the world without the shackles of exorbitant US labor costs.

And that will funnel back to the US government tax receipts in the future as the developing countries start their recovery sans the "Made in the USA" financial crisis.

2.5 billion consumers vs. 300 million they used to cater to.

Ask the US government for a commonwealth policy once those giga-corporations start repatriating their profits in perhaps 2 to 3 years time since the US will remain shackled with high unemployment rates.

Those giga-corporations are not coming back to the US after spending trillions relocating their operations to the developing countries.


On Oct 31 10:07 PM DormRoom wrote:

> Most of you bears use a 'stack the deck' argument. You pick and
> choose data to suit your argument, while ignoring leading indicators,
> which point to a recovery.
>
> Look outside the U.S (except Britain), and most of the world is in
> a modest V-type recovery. But SA commentators are so U.S. centric
> they ignore the other 750 million+ consumers outside the U.S.
>
> S&P500 @ 1214 by year end. see you there.]]> http://seekingalpha.com/article/170285-reality-hits-q3-gdp-growth-breakdown?source=feed#comment-738880 738880
The question is: When will the stimulus program be removed?

As far as I know, the $787B package is for 2 years of stimulus program that has started last April 2009 after it was approved under the Obama Administration, if my memory serves me right.

Q2 stimulus kick off was able to turn GDP from negative to positive. Q3 stimulus turned it into a stunner.

Two quarters with 6 more to go.

Bye, bye Great Recession!]]> Sun, 01 Nov 2009 02:03:07 -0500
The question is: When will the stimulus program be removed?

As far as I know, the $787B package is for 2 years of stimulus program that has started last April 2009 after it was approved under the Obama Administration, if my memory serves me right.

Q2 stimulus kick off was able to turn GDP from negative to positive. Q3 stimulus turned it into a stunner.

Two quarters with 6 more to go.

Bye, bye Great Recession!]]> http://seekingalpha.com/article/170280-friday-roundup-commodities-emerging-markets?source=feed#comment-738777 738777
Either we keep breaking down toward the 992 area for SnP500 as indicated by the volume spike on daily chart by DIA, SPY, and QQQQ last Friday;

Or, we go straight up toward 1270 to 1330 area if a reversal happens by Monday and a strong rally starts unfolding on Tuesday to Wednesday by using the daily chart.

For the bears, they may still try a Head and Shoulders pattern with 957 downside target if the volume spike last Friday failed to sustain a vertical selloff.

For the bulls, a potential Running Flat has formed last Friday on daily chart after the very confusing run from late August has started.

A running flat (as opposed to the most common counter-trend lower-high lower-low flat correction) is a dream pattern for the bulls during the process of recovery rally after an 18-month selloff from 1576 high of Oct 2007 to 667 of March 2009.

Running Flats usually result in a vertical run and mostly found during rallies and much less so during sell-offs. This type of hesitant run before the decisive rally is most likely the main reason why they call recovery rally as climbing the walls of worry. It goes higher highs and higher lows. But then a very precise technical pattern has to be satisfied which Friday has provided and only if we reverse Monday and a vertical rally follows.

For the bulls, the Running Flat that has formed since late August should not worry about a potential bearish HnS pattern. Bigger problem is the 1150 to 1182 area by using the daily chart.

On the weekly chart, a sustained run above 1196 will give considerable high probability of at least 1285 to 1384 run rate before SnP will require several months of correction and go for the last rally toward 1384 to 1542 range.

After that, a year or two of technical correction or a garden-variety type of recession should follow before the next multi-year rally can be sustained.

1573/6 is the triple top for SnP on the monthly chart and is the usual patern that develops after the double top of Oct 2007 resulted in a run down toward 667.

Timeline is still on or before Sept 2013 for a triple top price target after the 667 bottom.

This type of rally is among the less common occurence during recovery rallies; initial bounce off a sustained selloff usually results in a deep pullback before the next decissive rally similar to that of Oct 2002 to March 2003 for which most traders are accustomed to.

This time around, Indu, Spx, and Compq failed to provide more than 38.2% retrace from March to May rally toward July low before going for the 3rd wave using Elliott Waves price and time analysis. The subsequent rally becomes too tedious and hesitant.

But this type of pattern is among the less common type and usually requires pricise chart formations and subsequent price actions to be successful.

We will know by next week if this pattern is dead wrong or has a good chance to succeed after several weeks of price runs if a reversal happens Monday.]]> Sat, 31 Oct 2009 20:06:43 -0400
Either we keep breaking down toward the 992 area for SnP500 as indicated by the volume spike on daily chart by DIA, SPY, and QQQQ last Friday;

Or, we go straight up toward 1270 to 1330 area if a reversal happens by Monday and a strong rally starts unfolding on Tuesday to Wednesday by using the daily chart.

For the bears, they may still try a Head and Shoulders pattern with 957 downside target if the volume spike last Friday failed to sustain a vertical selloff.

For the bulls, a potential Running Flat has formed last Friday on daily chart after the very confusing run from late August has started.

A running flat (as opposed to the most common counter-trend lower-high lower-low flat correction) is a dream pattern for the bulls during the process of recovery rally after an 18-month selloff from 1576 high of Oct 2007 to 667 of March 2009.

Running Flats usually result in a vertical run and mostly found during rallies and much less so during sell-offs. This type of hesitant run before the decisive rally is most likely the main reason why they call recovery rally as climbing the walls of worry. It goes higher highs and higher lows. But then a very precise technical pattern has to be satisfied which Friday has provided and only if we reverse Monday and a vertical rally follows.

For the bulls, the Running Flat that has formed since late August should not worry about a potential bearish HnS pattern. Bigger problem is the 1150 to 1182 area by using the daily chart.

On the weekly chart, a sustained run above 1196 will give considerable high probability of at least 1285 to 1384 run rate before SnP will require several months of correction and go for the last rally toward 1384 to 1542 range.

After that, a year or two of technical correction or a garden-variety type of recession should follow before the next multi-year rally can be sustained.

1573/6 is the triple top for SnP on the monthly chart and is the usual patern that develops after the double top of Oct 2007 resulted in a run down toward 667.

Timeline is still on or before Sept 2013 for a triple top price target after the 667 bottom.

This type of rally is among the less common occurence during recovery rallies; initial bounce off a sustained selloff usually results in a deep pullback before the next decissive rally similar to that of Oct 2002 to March 2003 for which most traders are accustomed to.

This time around, Indu, Spx, and Compq failed to provide more than 38.2% retrace from March to May rally toward July low before going for the 3rd wave using Elliott Waves price and time analysis. The subsequent rally becomes too tedious and hesitant.

But this type of pattern is among the less common type and usually requires pricise chart formations and subsequent price actions to be successful.

We will know by next week if this pattern is dead wrong or has a good chance to succeed after several weeks of price runs if a reversal happens Monday.]]> http://seekingalpha.com/article/170280-friday-roundup-commodities-emerging-markets?source=feed#comment-738727 738727
But then daily chart pattern went as crazy as can be to most traders since August 25.

By Sept 11, a new chart pattern started forming very few TAs know: that of either a running triangle or a terminal triangle and the scenario kept forming up to Oct 21 almost predictably toward the 1090 level for SnP500. Maximum limit run from Oct 2 1020 low was 1108 and it proved that that limit run was not violated with SnP only able to reach 1101 before going down to last Friday]]> Sat, 31 Oct 2009 18:41:16 -0400
But then daily chart pattern went as crazy as can be to most traders since August 25.

By Sept 11, a new chart pattern started forming very few TAs know: that of either a running triangle or a terminal triangle and the scenario kept forming up to Oct 21 almost predictably toward the 1090 level for SnP500. Maximum limit run from Oct 2 1020 low was 1108 and it proved that that limit run was not violated with SnP only able to reach 1101 before going down to last Friday]]> http://seekingalpha.com/article/170235-market-spooked-today-but-panic-attack-is-likely-temporary?source=feed#comment-738069 738069
However, before the open, the news of CIT impending bankcrupcy again started the selloff and the later news of Carl Ican rescue started another rally attempt only to be dashed down when the rescue was not a rescue after all.

Could CIT be another silent killer Bear Stern type of bankcrupcy?

BS bankcrupcy was not supposed to start AIG and FNM failures that led to Lehman collapse.

What will happen if CIT goes BK? Will it cause another domino effect in the banking and finance industry?

Why is this bankcrupcy not being analyzed at all? This is supposed to be bigger than Bear Stern bankcrupcy and more people or industries will be affected specially small and medium ones?]]> Sat, 31 Oct 2009 01:19:49 -0400
However, before the open, the news of CIT impending bankcrupcy again started the selloff and the later news of Carl Ican rescue started another rally attempt only to be dashed down when the rescue was not a rescue after all.

Could CIT be another silent killer Bear Stern type of bankcrupcy?

BS bankcrupcy was not supposed to start AIG and FNM failures that led to Lehman collapse.

What will happen if CIT goes BK? Will it cause another domino effect in the banking and finance industry?

Why is this bankcrupcy not being analyzed at all? This is supposed to be bigger than Bear Stern bankcrupcy and more people or industries will be affected specially small and medium ones?]]>