ACE: Dow/ S&P find support again at 400 day line! Gold setting up for major move in June? (5/25/1

Mike Carlton Has Had Over 50 Followers Rank: 17 Followers: 99 Votes: 51 Years Member: 8 Last Update: 26 May 2016, 20:23 Categories: Momentum Stocks
Trend Analysis
Ratio Analysis

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Three (3) new features of my Chart List are my favorite hand-picked IBD 50 Stocks, the Spyder Sector ETFs and the 13 Wonders known as the Internet of Things stocks!

The first two pages contain charts that measure perceptions of the overall markets. The main equity indexes (S&P500/ Dow Industrials/ Nasdaq) and key measures of bond markets, the TED Spread, Gold, Currencies, and special ratio charts in the special 'Ace way' that makes things clear and simple to see.

The 10 major Sector SPDR ETFs are tracked with Ace's favorite trend indicators and oscilators! If one understands the trends and cycles of these charts, then they will have a very good grasp of the major rotations of the smart money traders. These charts show up on Page 19 of my Chart List and their symbols begin with the letter 'X'.

The second new feature is a hand-picked selection of the IBD 50 stocks. I use many of my favored indicators on these DAILY charts, including the dynamic 13. 50, 100 and 200 MA lines. (IBD usually shows WEEKLY charts-- you can see DAILY here!) I show the proper bases on these charts as base theory is critical in the IBD 50 stock selection and CANSLIM systems. Of course, IBD 50 and CANSLIM are successful trading systems developed by Investor's Business Daily. These charts start on Page 10. I am not associated or affiliated with the IBD in any way and my charts are interpretations based on IBD theory, Please visit their website to learn more at www.investors.com .

Finally, I have added a section known as 'the Internet of Things.' These are the 13 wonders identified by many investors as the key stocks leading the internet revolution as we enter the middle years of the 21st century. The Internet of Things is expected to be the most profound tech revolution in the next several years.Now, track these stocks with me beginning on Page 12.

Finally, I thank you for YOUR VOTES!

Less

-0.1 a Dow Jones Industrial Average ($INDU)-400 day line and its meaning

UPDATE: May 24, 2016. Once again, totally unnoticed by the popular pundits is that the 400 day line was tested and held once more. The Bull Market remains alive for now. However, do note that the 400 day line has flattened out and is no longer rising. That is a sign of a tired bull market, imho.

UPDATE: April 30, 2016. The Dow has suffered a corkscrew pullback that has the markets under pressure. View this chart and more!

UPDATE: April 11, 2016. The down-trend line has been penetrated and is a Bullish result. The rally may remain sustained for awhile.

UPDATE: February 5, 2016. Well, for many months, I warned traders and investors about a nasty stock market to come. And on the first day of the NEW YEAR, I warned that early 2016 had a very ominous look to it on the charts. And, here we are, about 5 weeks after that call and the year 2016 is off to the worse start of any year in the modern era! Stay tuned with ACE, as he has made great calls in bear markets before. Unlike so many who proclaim they saw 2000 and 2008 bear markets coming, ACE has a proven track record at calling the Bear Markets before they begin, and while they occur. And guess what, folks? This Bear Market of 2016 is still in the early innings, according to ACE.


UPDATE: August 20, 2015. As expected, a bounce did follow the 400 day tag, but as I also expected, this one didn't last because it occurred AFTER a Death Cross. Today, the Dow broke the 400 day line support decisively!

UPDATE: August 15, 2015, the Dow Industrials tagged the 400 day line again this past week. I would caution that unlike the last 3 tags of the 400 day, this one occurred after a Death Cross. But so far, the Dow has lifted higher after that 400 day tag. Will the 400 day be the turnaround point like it has been the last several years?

Previous comments about the 400 day tags: The 3 most recent Devil's Crosses (13-99 down-cross) led to significant sell-offs....in fact, each of the previous 3 Devil's led the Dow down to the 400 moving average line. The

-0.1 a- Nasdaq 100 Index ($NDX)-Dynamic Buy-Sell INVESTOR Signals

This chart is designed for INVESTORS, not traders. Using the popular Nasdaq 100 Index, there are certain buy-sell signals I watch for in terms of LONGER TERM TRADES or INVESTMENTS. This Index should offer good clues as to when to be long in the market....and when to exit or go short the market.

The 13-50 moving average crossovers are one such signal--this crossover serves as the accleration signal on my Mo-celerator charts, but it is also an important buy signal for INVESTORS who don't want to chase every short term signal.

Also, I watch for the 13 day EMA line on the Chaikin Money Flow (CMF) Indicator with the CMF set at a 34 day lag on INDEX charts. I have found over time that when the 13 ema line on this graph crosses above the zero line, that this serves as confirmation of stronger, longer trend. It works especially well to the long (buy) side, and a negative crossover is often 'a final get out' signal if somehow you have not listened to earlier exit signals, which many investors do not do because they don't want to miss the next surge higher....I understand this as part of my portfolio is invested for the long term too.

Also, the Dynamic chart shows the Accumulation-Distribution (A-D) line with a 13 day EMA line...the crossovers on the 13-dma serve as an additional tandem confirmation along with CMF as to whether money is flowing into the momentum stocks of the Naz 100....or flowing out. Often, the 13 ema crossover of the A-D line will occur before action shows in the CMF, because CMF captures heavy money moves, while A-D captures the early trend setters whose cash flows are not easily detectable. The CMF then serves as a confirmation of the early trend-setters' A-D signals.

Finally, my charts always include the ADX graph, which is 'the holy grail' graph for me. For investors, the signal to watch is at least a 5-pt move of the black ADX line in the direction of the new trend...once you have a 5-pt move, the trend is considered solid and firm for investors. 7/14/12

-0.1 aa $SPX - The Big Picture Chart

UPDATE; May 24, 2016. Once again, totally unnoticed by the popular pundits is that the 400 day line was tested and held once more. On the SPX chart, the 400 day line has been drifting near the 2040 mark. Each time, the 2040 line has proved to be supportive to the SPX when tested in 2016. The Bull Market remains alive for now. However, do note that the 400 day line has flattened out and is no longer rising. That is a sign of a tired bull market, imho.


I thank you for your votes and support. On this board, WE are here to make profits in the stock market--pure and simple! By the way, I am an Associate Member of the Market Technicians Association (MTA). -Mike

-0.1 aa ProShares Ultra VIX Short-Term Futures ETF (UVXY)

The VIX ETN, UVXY, saw record volume on the last day of April 2016, despite only a modest move. Traders seem to be anticipating some 'bad' events approaching.

-0.1 aa US Dollar Index - Cash Settle (EOD) ($USD)

Update on May 24, 2016: The dollar rally has been strong the last few weeks. Notice it broke free of the deep downtrend channel in mid-May and then pushed through the influential 50 day line. It appears to have more room to run, but should encounter strong resistance at the long term dominant down-trend line (yellow-dashed) at about the 96 level. Keep in mind that as the $ rises, it also pulls the Chinese Yuan up with it since the Yuan is pegged to the $. This could create tremendous pressure on the CNY in the coming weeks. Watch for a possible, sudden devaluation in the Yuan by mid- to late summer--especially if the FED raises rates in June or July-- and that could play havoc with global stock markets. Look back at the reaction of global stocks on August 24th, the last time the Chinese did a meaningful devaluation of the CNY currency.

Update on April 30, 2016: US $ is in free-fall, as noted in the previous two weeks, the 13 EMA line was guiding down in advance of this move.

Update on February 5, 2016: The US dollar index has collapsed in the past week, breaking down through the 50 and 200 day lines very quickly! When one sees this type of breakdown occur swiftly, it is a bad sign for the US $. The market is telling the FED not to raise interest rates again. At the same time, gold is now flying higher. The gold market has suddenly entered a new bull market, and of course, ACE saw this coming too. It is not that he has a crystal ball, but because the charts told him this was coming. It's all rather scientific, if one understands what to watch for on www.StockCharts.com. Stay tuned.


Update on Sept. 6, 2015: The long term Head-n-Shoulders pattern (with triple right shoulder) remains intact. More interesting of late is the ADX (65) signal has tripped to negative (red line up-cross) with the $ value under the 50 day line. This is a sell signal in my system, but of course, the new trend is early and could still cancel out. However, should this sell signal hold, it is a hint that the $ is about

-0.1 aaa - Crude Oil - Spot Price (EOD) ($WTIC) Daily

Daily chart for West Texas Intermediate Oil

UPDATE on 4/10/16: Sharp reversal occurred this past week, and now the pattern becomes more clear as a Bullish Flag reversal. Breakout of the flag occurred on Friday, thus confirming the wedge line breakout of about two weeks ago. Next target is the firm resistance at the 200 day line ($41).

UPDATE on 3/28/16: This chart shows that WTI is caught in a pocket between a rising 13 EMA line which is supporting price, and trapped by a descending 200 SMA line which has shown resistance. Also, price is re-testing a wedge line that it broke free of a few weeks ago. Bulls would view this pocket as a Bull Flag.

Bears would point to the Descending 200 day which has acted as resistance and also, they would point to the longer term weekly chart which shows WTI being held down by a longer term down-sloping wedge line.

-0.1 aaa - Light Crude Oil - Spot Price (EOD) ($WTIC)

Weekly chart for West Texas Intermediate Oil

UPDATE: on 4/12/16 Break-through of down-trend wedge line is bullish for both oil and stocks. See daily chart for more precise positions, resistance and support lines.

UPDATE on 3/28/2016: The Weekly Chart shows WTI trying to break up through a steep down-trend line (blue-dashed), but so far, the strong resistance of that down-trend line is holding. OIL is at a crossroads--depending on how it breaks, will likely determine the direction of equities and commodities in the next few weeks. One can see that if WTI should break higher, that the next key resistance area would be $48. See the daily chart for more precise day-to-day projections.

-0.1 aaa db X-Trackers Harvest CSI 300 China A-Shares Fund (ASHR)

This popular China A-shares ETF shows a bearish descending triangle on the daily chart. Though there may be strong rallies at times, the longer term projection is calling for a potential crash of the Shanghai stock market.See my comments on the US dollar chart for further insight.

-0.1 aaa iShares Barclays 20+ Year Treasury Bond Fund (TLT)

Update Sept. 13, 2015: Is TLT trapped in a bearish down-trend? or is it in a Bull Flag pattern? It could be either as the world awaits the FED's decision on Sept. 17th. All eyes will be focused on the reaction in US Treasuries. Also, keep an eye on gold for any reaction there, especially if TLT should RAPIDLY collapse in price. (A slow drop in price would not be favorable to gold, but a rapid disintegration would be positive for gold.)

Update: August 30, 2015: We learn that China dumped over $100 billion in US Treasuries last week to prop up their currency and stock market. Heavy selling volume is visible on TLT's chart even as it was topping out after a recent rally. Now, TLT looks precariously propped up....notice the rapid drop in accumulation (A-D) and cash flow (CMF). Watch to see if this can hold up!?

Update April 2015: The TLT bond fund broke decisively through the neckline of a prominent Head-n-Shoulders on September 14th in the wake of the Federal Reserve's decision to begin QE3. However, powerful forces, including the Federal Reserve itself, have managed to support the right shoulder and create a TRIPLE RIGHT SHOULDER as we entered year 2013. Nonetheless, the general H&S pattern remains intact with no change in the general pattern. Major moving average down-crosses have reversed by April 2013 suggesting that the long bonds will be a good bet going forward. If so, then the US stock market could be in trouble. It's no surprise as the Fed is struggling to keep rates low at least until Year 2016 so that they don't have to sell off long bonds at market rates. (See my blog on 'the Twist' by googling 'Ace Talking Stocks' and click on the blog link.) So, will the Fed managed to keep bonds at low interest rates for a long time (as in Japan)?

UPDATE: February 27, 2014: The new up-trend is confirming. US long dated treasuries are making a big comeback, just the opposite of what most market pundits have been predicting for year 2014. The lateral high of the W-bottom has been clea

-0.1 aaa ProShares Ultra Oil And Gas (DIG)

DIG is an ETF that tracks oil and gas stocks at a 2x daily leverage.

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