Archive for July, 2011

Market Turning Points | Andre Gratian | 2011-07-31

Posted in education, technical analysis on 2011-07-31 by Strategesis

From Safehaven.com:

The market indicators are a mixture of positive and negative signals. They probably exemplify a market which is in an incomplete corrective mode. The faction which eventually gains dominance will determine the direction in which the market emerges from this correction.

Near-term, a favorable resolution of the political crisis in Washington will probably favor the bulls, but that may not mark the end of the correction.

Patience! This too will pass!

Continued

Market Turning Points | Andre Gratian | 2011-07-24

Posted in education, technical analysis on 2011-07-24 by Strategesis

From Safehaven.com:

The rally which started last Monday at 1296 was not able to generate enough momentum in the weekly and daily indicators to confirm that an important uptrend had started. I had voiced my concern about the weekly indicators before, and in the last newsletter, in reviewing the weekly chart, I stated that “Neither the MSO nor the MACD has given a confirmed buy to the uptrend which started at 1265.”

By the end of the week, the daily indicators – especially the breadth indicators – were giving a non-confirmation of the uptrend with some very visible negative divergence appearing in all time frames.

My Thursday Market Summary stated the following:

“With the kind of weakness which is beginning to show in the weekly and daily indicators, there is no guarantee that the various projections will be reached, and we should be very cautious when a projection is reached and we start reversing in earnest, especially after we break trend lines (any trend line).”

The base pattern that was created on the Point & Figure chart around the 1296 low gave a potential count to 1402, which was divided in various phase projections. The phase projection that the SPX was trying to attain on Thursday and Friday was about 1353. After reaching 1347, it could go no further and started to trade sideways. By the end of the day, on Friday, it started to trade outside its trend line. Strength in the QQQ, which made a new bull market high on Friday, suggested that the SPX might follow, since QQQ has a strong tendency to lead. It did not!

In the afternoon, the announcement that the budget talks had come to an impasse is not likely to be received very well by the financial markets, and the second phase of the rally from 1265 which started at 1296 has undoubtedly come to an end. This could be averted if some renewed hope for a deal emerges over the week-end, but since the indicators are calling for a correction, what happens may only be a matter of degree.

Where does that leave us? One of my assessments was that we had been in an intermediate correction since the February high which was taking the form of a diagonal triangle. I thought that it had ended with the 1296 low. It is now likely that it has not and my current diagnosis is that the index is now in the process of completing the triangle pattern. I have reasons to believe that the bull market has not yet come to an end.

Chart Analysis

Continued

Point & Figure Charting: A brief tutorial

Posted in education, technical analysis on 2011-07-24 by Strategesis

Figure and Then Point Your Way to Major Profits by readtheticker at Safehaven.com:

Why use Point and Figure Charts?

Your stock went up $1.00 on Monday and continued down $.63 on Tuesday. It went back up $1.40 on Wednesday while falling down $.30 on Thursday. When you take a look at the intraday charts you see something frustrating and erratic. No price at which to sell is clear. If only there were a method to eliminate some of the noise perhaps the stock trend would be somewhat clearer. For this, many turn to point and figure charting, because it aids in reducing noise and elucidating market tendencies. Point and figure charting displays the interplay between these two fundamental forces of the marketplace, while at the same time not tracking relatively insignificant changes.

Continued

Martin Armstrong: The Strange Case of the Jailed Market Genius

Posted in great traders, technical analysis on 2011-07-07 by Strategesis

From Safehaven.com:

Investors may have been at a loss to explain the panic that befell financial markets at the end of last month, but one man saw it coming from a mile off. Financial forecaster Martin A. Armstrong predicted the beginning of the current jitters to the very date, 27 February – and it’s just the latest in a long line of spectacular predictions.

Continued

Market Turning Points | Andre Gratian | 2011-07-04

Posted in education, technical analysis on 2011-07-06 by Strategesis

From Safehaven.com:

Last week, the stock market got into the spirit of Independence Day early, and created its own fireworks! In my last article, I concluded that the bulls could not declare victory just yet, and it must have struck a nerve because, starting on Monday, they decided to show me! The SPX was up strongly every single day, closing on its high at the end of Friday with a 71-point ramp for the week.

That may be just about all you get for now! Instead of following through next week, the odds are that equity indices will have to do a little consolidating before moving higher. We’ll find out as early as Tuesday. After that, another limited move up before a deeper correction into the middle of the month, and the 9-mo cycle low. My thinking was that the SPX was making a correction in the form of a triangle. After last week, I am not so sure, but it could still happen. We’ll have to see what the entire pattern looks like after mid-July.

There are some other factors which support my view: the weekly chart has not yet made a confirmed break out, and both the chart pattern and the indicators need to pull back before they can extend their moves.

The UUP (dollar ETF) may be making a triangle consolidation pattern before going to a new low. It looks like it’s ready to embark on the “e” wave, which would temporarily send the market in the opposite direction.

The VIX looks like it’s ready for a short-term rally; and then there is the MSCI, which responded to the market rally with a big yawn. That index has a pretty fair history of accurately calling the market moves ahead of time. There are more indications, but this is enough to show that I have some good reasons to think that, whatever pattern is made in the end, we may have to wait out the first half of July before resuming the rally.

Let’s look at some charts!

Continued