Tuesday, 2 November 2010
WHAT THE CHARTS ARE SAYING
We have 18 issues giving "bottom readings" today -- 57 issues giving 'top readings'.
Time Magazine has a very provocative article this week in its 'Curious Capitalist' Section, in which the writer, Stephen Gandel, asks the question: "WILL THE FEDERAL RESERVE CAUSE A CIVIL WAR IN AMERICA?
Readers who have read my endless posts on this website will know that I believe American history can be accurately divided into Expansionary Day-Cycles of 18 years followed by Contractive Night-Cycles of 18 years. Night-Cycles ALWAYS experience high-level social tension and the threat of civil war. 1857-1875 was a Night Cycle in the previous century, one that saw a ful-scale civil war in America. We remember the 1929-1947 Night Cycle as being one of depression and world war -- but it was also rife with civil strife, class-warfare, and social upheaval. The 1965-1983 Night Cycle saw American cities burned as a result of racial tension, saw America's campuses turned upside down as a result of social opposition to a (what many saw as a colonial, racist) foreign war in Southeast Asia, saw a full-scale culture war, and the momentary triump of communism in many parts of the world -- including anti-capitalist fervor in America and Europe, Marxist victories in Vietnam, Cambodia, Nicaragua....
The current Day-Cycle as just now ended, in a literal sense. Dusk occurs in 2010, this year. Midnight occurs in 2019. Dawn occurs in 2028. Noon occurs in 2037. When I write that the 'Night Cycle' began in 2001, I mean this: the expansion of Light/Matter/the Forces of Materiality ended in 2001. Light expands from Midnight to Noon; and contracts from Noon to Midnight. In 2001, the Light of Materiality began to contract, and the Dark Light of Anti-Materiality (the Night Cycle forces) began to slowly expand.
Is Civil War out of the question? No. A Day-Cycle is about the construction of the world, the creation of a New World, carved out of the anti-material Darkness; a Night-Cycle is about deconstruction of the world we have created. We construct the world; we deconstruct the world so that we can build a better model when the light returns again.
Deconstruction is what every Night-Cycle is about. And we are entering the most destructive (to material bodies and insitutions) season of the 36-year cycle, Dusk to Midnight. Previous Night-Cycles saw these periods in 1974-1983 and 1938-1947.
Somewhat related to this theme, the mid-term National Elections happen tomorrow. What can we expect? A profound turning away from the middle-of-the-road policies of the Democrats under Barrack Obama? Perhaps. Are the Republicans really the revolution party they claim to be -- are they going to be the party to cleans the corruption on Wall Street, and erect new behavioral guidelines to assure than the fraud and corruption of the past decade or so can never be repeated again in America? Or are the Republicans what they have almost always been -- at least recently -- Wall Streets' biggest partners, spokesmen, and lackeys? I would be all in favor of a Republican revolution in America if I felt it represented something other than a fascist partnership with business and a government designed to do nothing but support the power of Wall Street to rule over America. Wall Street's coup -- and its take over of the American government -- happened during the Day-Cycle of 1983-2001, a period of Republican rule (Clinton was a democratic-republican much as Nixon as a republican-democrat ruling in a Democratic era).
Another picture of what might happen tomorrow: the Republicans win a profound victory. And Obama and the Democrats respond by rejecting the current truce with Wall Street, forcing Bernanke to resign, and finally beginning the Obama-as-Teddy-Roosevel incarnation, a force-for-change that should have been inaugurated several years ago.
A strong showing by the Republicans tomorrow, might, in fact, polarize the Democrats into a revitalized historical position of regulators of Wall Street -- which, clearly, might bring the Civil War scenario back into focus in a big way.
M4 ACCUMULATION TOP AND BOTTOM WATCH LIST:
We like some of the bottoming issues, in fact: ARUN, AXP, DV, ELNK -- be careful with GAZ, as it might be head-faking -- HMY, KGN, GG...
VVUS fell back about 8% last night, trying to cover some of its up-gap from the day before. We still think this is a buy at this point and expect it to recover from the sell-off in a few days and start back up.
|SYMBOL||CLOSE||T11 Diff||M4 Sum Plus||Issue Name|
|^VIX_D||21.83||0.508||1||CRB Volatility Index Daily|
|FRO_D||28.95||-0.021||1||Frontier Limited Shipping|
|GAZ_D||7.98||0.107||-1||Natural Gas ETF|
|KGN_D||8.15||-0.004||1||Keegan Resources Gold|
|PPD_D||60.04||0.57||1||Prepaid Legal Services|
|SDP_D||17.12||-0.064||1||Short utilities ETF Daily|
|TSLA_D||21.41||0.069||1||Tesla Motors Daily|
|SYMBOL||CLOSE||T11 Diff||M4 Sum Plus||Issue Name|
|^SMSI_D||1,093.68||2.011||-1||Madrid General Index Daily|
|BP_D||40.77||0.138||-1||British Petroleum Daily|
|CHOP_D||6.07||0.026||1||China Gerui Adv Materials|
|COL_D||59.64||0.085||1||Rockwell Collins Daily|
|COP_D||58.95||0.121||-1||Conoco Philips Daily|
|EUFN_D||22.64||0.053||-1||Euorpean Financial Index|
|EWJ_D||9.92||0.007||-1||Japan Index ETF|
|FNMA.OB_D||0.374||0.008||1||Fannie Mae Daily|
|GNK_D||16.2||0.032||1||Genco Shipping Corp|
|HMC_D||34.33||0.068||-1||Honda Motor Company|
|HQS_D||3.28||0.015||-1||HQ Sustainable Maritime|
|JJM_D||42.54||0.101||1||Industrial Metals ETN|
|JOSB_D||42.23||0.135||-1||JOS A. Bank Clothiers|
|MRK_D||36.25||0.04||-1||Merk Pharmaceuticals Daily|
|O_D||34.45||0.062||-1||Realty Income Corp|
|PDLI_D||5.23||-0.014||-1||Protein Design Labs|
|PTP_D||43.31||0.047||-1||Platinum Underwriters Insur|
|RRGB_D||20.35||0.064||-1||Red Robin Gourmet Burgers|
|RY_D||53.41||0.153||-1||Royal Bank of Canada|
|SLG_D||66.41||0.193||-1||SL Green Realty|
|UPS_D||67.34||0.126||-1||United Parcel Service Daily|
|URR_D||30.96||0.081||-1||Double Long Euro|
We include a few charts below of issues we think especially interesting.
CHARTS OF INTEREST
VIX. CRB Volatility Index.
Have to show this one again. Pretty convincing basing pattern for at least a short rally off its bottom.
AXP, American Express.
Very nice rally off of recent lows. M2F (Bottom Pane, brown line) is showing a short-term overbought condition. This is just a warning. Otherwise, indicators are positive.
DV, Devry Inc.
Sharp rally back up to cover a down-gap seems possible here.
GAZ, Natural Gas ETF.
GAZ has been nothing but trouble this year, especially since mid-June. Look how the last two M4 Accum (Top Pane, black line) rallies have been unbelievably weak. The current M4 Accum rally is already more substantial than those two rallies. But M4 Sum Plus (Middle Pane, black line) is NOT confirming this rally; the two (red lines) trendlines are up, but both are in negative patterns, lower lows and lower highs. Not ready to jump for this one.
HLCS, Herlicos Biosciences.
It's been the best of time and the worst of times recently for biotech and pharmaceutical upstarts: some through the roof; others through the ceiling. Helicos is jumping up nicely here. We think it can go higher. M4 Sum Plus IS confirming this rally. But the rally can end quickly: note the M4 Accum bump-up in September: a false bottom that led to lower lows.
KGN, Keegan Resources.
Have to love this one: more advances seem to be a given for the gold stock companies. Had its selling spree; and now it's back for more gains.
TSLA, Tesla Motors.
I'm not sure that Tesla is the answer for the future in terms of American automotive responses to the new century; but it looks like it's ready for a trading rally at least.
BCRX, BioCryst Pharma.
This one does not look good. Each rally has been weaker than the last. Looks like it is getting ready to fall off the map. Short-term oversold. That just means there will be some buyers here. It doesn't suggest how many however.
EUGN, European Financial Index.
Somewhat negative picture. Selling being confirmed by M4 Sum Plus. The trends are still intact -- but the trends are almost always the last to go. Currently just a 'sell signal' -- take profits. I would not be at all surprised to see European banks in for more negative news, and more hard-core selling. They have dealt with their problems in Europe either. Just hiding bad debts doesn't cure anything.
FSLR, First Solar.
Look out below. Wonderful rally. You hate to see a spike top in the M4 Accum indicator. What it is saying is that buyers just disappeared at the top. Usually, a stock has a somewhat long drawn-out battle at tops and bottoms, represented by the extended flatlines at either +10 or -10. This one was more of a abandonment of positions by buyers. By the same token, it's nice to see (if you are going long), a spike down in M4 Accum because this means that sellers have no strength (gravity) to hold a stock price down. See the October bottom in M4 Accum as an example of this.
We've showed this a few times already. Note here the primary decline last week, followed by an attempt by buyers to reverse the decline. This buying spree ran out of gas. Now M4 Sum Plus (black line, Pane Two) and both trends (red lines, Pane Two and Pane Three) are negative. Nothing to stop this from going lower. Next support is at about 27.
HMC, Honda Motor Company.
Looks like an ugly fall is in order for Honda. A lot of negative momentum starting to build here.
KGJI, Kinggold Jewelry.
Gold stocks are doing well. But KGJI is heading lower. Everything is negative at the moment for this one.
LXRX, Lexicon Pharma.
Double-top: Is just a sell signal now, profit-taking. But I have an eerie feeling this one might fall apart the same way many other biotech/pharm issues have been lately. Watch this one closely.
RY. Royal Bank of Canada.
Seems to be trying to bottom here. M4 Accum should form a flatline here if this is a real bottom. M4 Sum Plus says take this decline seriously. But the price pattern does not look in danger at the moment.
Nothing too frightening here. Sell signal; take profits. Stock should go lower. How low? Keep watching. M4 Sum Plus is negative; and the short-term trend has gone negative.
VTAL, Vital Images.
Don't like this picture. Looks like it could fall all the way back to the last low. I hope people who were trading this one got out in time.
SPECIFIC TRADING IDEAS
CDXS, Codexis INC. BUY SIGNAL.
GGCRF.PK, Genco Resources. BUY SIGNAL.
HMY, Homestake Mining. BUY SIGNAL.
FDX, Federal Express. SELL SIGNAL.
Several trading ideas today. FDX is a sell here; and this is especially true if the radical Muslims have found a new strategy of exploding FDX and UPS planes which have always NO security system. How much will such security cost them? Billions.
Love HMY here. Also like CDXS and GGCRF,PK.
More information on the CGTS systems can be found at:
MICHAEL J CLARK
Clark's Gate Timing System
84 4 221 92210
Disclosure: NOTHING TO DISCLOSE