The Canadian Technician

A Series On Market Manias Through The Charts From 2000 To 2015. Part 4 - 2011 Commodity Charts

The individual commodities each took their turn on a launch pad at Cape Canaveral it seemed. The sequence of lift offs and tops was truly remarkable. However, most of them topped and did a major retracement just as quickly. That is usually how commodity tops work out.

This is the fourth article in a series of modern day Manias.  This is a specific article about all the commodity tops in 2011.

Part 1 can be found here. The Year 2000. 

Part 2 can be found here. The Year 2007.

Part 3 can be found here. The Year 2011.

Starting with Wheat, the move to the 2011 highs was lightning fast. Within 2 months, Wheat was up 86% for a torrid pace of 40% per month!! For the entire move over 8 months Wheat rose 110%. Within another 8 months it had given half back.

 

Next up was $COPPER.

Continue reading "A Series On Market Manias Through The Charts From 2000 To 2015. Part 4 - 2011 Commodity Charts" »

A Series On Market Manias Through The Charts From 2000 To 2015. Part 3 - 2011

I could have written a specific article on the price of oil going ballistic in 2007 and 2008, but I will try to correlate that 'oil' story with the 2014 fall in oil.  2011 will be remembered as the commodity top and that is what we will cover in this article. Many of the world's commodities topped in 2011, with the most obvious being Gold and Silver. 

This is the third article in a series of modern day Manias.  

Part 1 can be found here. The Year 2000. 

Part 2 can be found here. The Year 2007.

For consistency, I'll work through the same charts we had in the previous articles. The commodity top in Silver happened in March. It was central to the actual top with a number of ballistic moves in commodities from 2010 into the spring of 2011. Notice how there were 3 peaks on this commodity index. The trend line snap was pretty important. Notice the change in the MACD and some trend lines under the purple SPURS would have been valuable. The breaking of purple trend lines were indicative of a potential top. . Once the Relative Strength (SPURS) started to trend down, the commodity top was complete.

Continue reading "A Series On Market Manias Through The Charts From 2000 To 2015. Part 3 - 2011" »

A Series On Market Manias Through The Charts From 2000 To 2015. Part 2 - 2007

This is the second article in a series of modern day Manias. Part 1 can be found here. The Year 2000.

2007 was a market top that will be remembered for a long time. It started with a market mania in the housing sector, created a mania in the banking sector and caused a series of events that fell like dominoes as they relentlessly tumbled one after the other.

Let's bring up the chart showing how the topping structure looked. Compared to the 2000 top, this market was remarkably different. The tops were still close to each other. The Russell 2000 ($RUT) made its top in July but the other three, the S&P 500 ($SPX), the Nasdaq Composite ($COMPQ) and the Dow Jones Industrial Average ($INDU) all topped within a few weeks of each other. The Dow and the $SPX as well as the Wilshire 5000 ($WLSH) all had the high close on October 9th and an intraday high on the 11th that was higher. The Nasdaq and the Nasdaq 100 ($NDX) both topped on October 31. However, in 2000, the Nasdaq pair both fell away quickly.  In this 2007 market top, all the markets rolled over together with relative unison which made the top much easier to spot. It was probably still difficult at the time. That rollover move is tight compared to the 2000 top where they had a lot of sideways movement in some indexes while the others were making church spires. All the markets dropped at least 50% so that is huge. That means an investor needs 100% to get back to where they started. Notice the amazing similarity of all the price patterns.

Continue reading "A Series On Market Manias Through The Charts From 2000 To 2015. Part 2 - 2007 " »

A Series On Market Manias Through The Charts From 2000 To 2015. Part 1 - The Year 2000

I want to review some of the major market peaks and what made them roll over. Part of the analysis is the way the rollover happens. It is a changing of mood and of circumstance that eventually affects a wider audience. So let's go to the charts and explain the 2000 top.

The 2000 top was characterized by a specific sector breaking down. After having what anyone would call a boom, the technology sector imploded. Many companies that had no earnings were building out the world with new ideas. Massive sums were paid for companies with no earnings. The AOL merger was the classic buy at the peak. AOL, the internet upstart, was valued more than the vast brand of Time Warner and they were 'merging'. Valued at $350 Billion, it is a story that should be studied by every business student. More importantly it should be understood by investors. The deal was announced January 10, 2000. They did not know it at the time but Y2K was this massive technological pinnacle that they were all striving to get through.

Continue reading "A Series On Market Manias Through The Charts From 2000 To 2015. Part 1 - The Year 2000" »

What Effect Does A Drop In Oil Have? A Ripple, A Wave Or A Tsunami?

Today I'll be doing a webinar at 4:30 EST on the effect of oil's drop. If you live in an oil producing region, you'll have some ideas, but these charts will bring it home. If you aren't living in an energy hub, this could be a huge perspective change for you. I think you'll find the narrative compelling. This will cover off Canada and the US situation.

Continue reading "What Effect Does A Drop In Oil Have? A Ripple, A Wave Or A Tsunami?" »

Are There Any Clues To A Top In The Sector Rotation Cycle?

I want to start the article to reset our boundaries, our framing, our paradigm on the markets.

When we see the S & P 500 ($SPX) make higher highs we continue to assume everything is just fine. But underneath is a massive sector rotation that used to be very complex. Why is it no longer complex? The liquidity of the 9 sector ETF's is remarkable. To move massive amounts of money from sector to sector, in less than 10 clicks of a mouse you can redeploy huge positions from XLE to XLP. Here is how we think of Sector Rotation.

Continue reading "Are There Any Clues To A Top In The Sector Rotation Cycle?" »

Gold Finally Moves Above The Trend Line

The Gold Tracking ETF (GLD) finally broke above a downtrend line today. On Chart 1 we can see it broke above the 6 month downtrend line. However, it is still trying to break above the red trend line which would mark a breakout above a basing area for GLD.


Chart 1

Continue reading "Gold Finally Moves Above The Trend Line" »

Canada's Big Three Oil Companies Look To Find Support

The oils are being bought today even as Western Canada Select Crude price falls. Both Suncor and Cenovus had spinning top days. (Spinning top =opened,  traded higher and lower and closed in the middle near the open). CNQ was weaker and looked to close near the lows.

Here are the top three big oil producers. Starting with Suncor.  

Continue reading "Canada's Big Three Oil Companies Look To Find Support" »

$TSX Continues To Stall Under The 200 DMA - A Volume Analysis

The $TSX is at a very pivotal point on the chart. Why is this so pivotal? I laid out a scenario in the December 17th article, The $TSX Has A Huge Day. We have spent a few holiday weeks trying to change the view. Here is why this is so important.

.
Chart 1

On Chart 1, we recorded a very strange volume candle since the December 17th article.

Continue reading "$TSX Continues To Stall Under The 200 DMA - A Volume Analysis" »

The Year Of The Long Bond

It was exactly a year ago on December 31, 2013 that the long bond bottomed.

It continues to make higher highs and higher lows. Even the MACD shows no divergence yet. It was an interesting year. Who would have thought the 2 biggest leaders in the bond world would be leaving PIMCO? This chart surprised a lot of people every month.

Wishing you a happy and healthy, prosperous 2015,
Greg Schnell, CMT