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Frank started market timing in 1982 when the Federal Reserve cut interest rates and sparked the 1980’s bull rally. Realizing that this rally could have been forecasted, he began to search for indicators which had similar forecasting ability. Within a year, his first newsletter was launched,... More
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  • Trouble at Resistance for the S&P 500 Index (SPX)

    May 14, 2010

    Both the S&P 500 Index (SPX) and it’s tracking ETF the S&P Deposit Receipts (NYSE: SPY) have moved higher this week, but both stopped short of surpassing important short-term resistance.

    Last week’s huge intra-day selloff took place on the day after both the SPX and the SPY had closed below their 50-day moving averages. The 50-day average is used by traders as a measure of short-term strength for the S&P 500. Above and the markets are in an advance and below there is danger of lower lows in coming weeks.

    After the Thursday craziness, both the SPX and SPY recovered to just below their 50-day moving averages. On Tuesday and Wednesday, may 12-13, the 50-day was reached intra-day but the SPX and SPY were unable to surpass them.

    On Thursday may 13, the SPX and SPY again moved up to their 50-day averages and did not surpass them. This time they reversed and fell 1% by the close.

    Even a close above this average does not make everything well with the stock market, but certainly an inability to close above even this short term average does not bode well near-term for the U.S. markets.

    Disclosure: The ( ETF Timing Strategy has a position in the S&P 500 SPDRs.
    May 13 5:12 PM | Link | Comment!
  • Break Out for Shares of Starbucks Corp (NASDAQ: SBUX)

    May 13, 2010

    Yesterday we wrote that Starbucks Corp (NASDAQ: SBUX) broke out to new highs back on April 22, and since that date, with the exception of the two days affected by last week’s mini-crash, have held above $26.00 a share.

    We also wrote that if Starbucks could close decisively above $27.42 it will be a new breakout. With strong support at $26.00 and a potential breakout at $27.42, Starbucks is a strong candidate for a bullish trade here with a stop just below $26.00.

    On Wednesday May 12, Starbucks made that breakout rising well over 4% on heavy volume.

    The new target for Starbucks is $32.95, the 78.6% retracement for the bear market declines. Though it is a bit early to look for, Starbucks may be headed for its old highs at $40.00 a share over coming months.

    Disclosure: The ( Stock Timing Strategy holds a position in Starbucks.
    May 12 5:55 PM | Link | Comment!
  • Volatility but No Trend for Powershares QQQ Trust (NASDAQ: QQQQ)

    May 11, 2010

    Shares of the ETF Powershares QQQ Trust (NASDAQ: QQQQ) lost 5.8% on Thursday through Friday last week, with intra-day lows at much lower levels. On Monday, May 10, the Q’s gained 5.2%. What’s next for this volatile and widely traded ETF?

    The Q’s losses last week, whether caused by an errant trade, a computer program error, or whatever, began after the Q’s were already below their 50-day moving average and nearing their 200-day average.

    The Q’s were also below two important levels, the June 5, 2008 bear market rally high at $50.61 and the August 15, 2008 bear market rally high at $48.57. The June level reversed a long running advance but the August level, which was near the 50-day moving average, should have offered support. It did not.

    Now the Q’s are below all these levels and though they had a huge rally today, the possibility of a resumption of the selling is very real.

    Maybe it would be asking too much, but the losses were not erased today.

    There is no safe way to make money in the market. Every trade carries huge risk. We would stay in cash until a trend develops and then enter in the direction of the trend.

    Disclosure: The ( ETF Timing Strategy holds a position in the Powershares QQQ Trust.
    May 10 4:54 PM | Link | Comment!
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