Ace Stock Trader- Sector SPDR ETF and IBD 50 Charts! Bonds and Gold Warn! Updated Feb. 28th
-0.1b-Dow Jones Industrial Average ($INDU)-A look at the Devil's Cross
The 3 most recent Devil's Crosses (20-100 down-cross) led to significant sell-offs....in fact, each of the previous 3 Devil's led the Dow down to the 400 moving average line. The 400 MA line is the long-term bull/bear line, and usually not well known by amateur technicians. You can see how each Devil led to the 400...and how each tag of the 400 zone led to a bounce-back for the Dow. In some cases over the years, the 400 MA line failed to hold support...examples include the 1987 and 2008 crashes. The 20-100 was the final warning to get out before those two crashes occurred. WARNING ISSUED ON FEBRUARY 6, 2014 EVEN AS THE DOW RALLIED 170 POINTS THIS DAY. THE DEVIL'S CROSS IS APPROACHING QUICKLY (20-100). USE EXTREME CAUTION WITH LONG BETS NOW.
-0.1c-Dow Jones Transportation Average ($TRAN)- dow theory stock
The bearish channel in the Dow Transports is confirming a potential bearish channel in the Dow Industrials as of late February. Though the S&P and Nasdaq 100 remain bullish, this divergence with the Dow Industrials and Dow Transports is issuing a warning by the famous and classical Dow Theory. (2/28/14)
-0.1d-S&P 500 Large Cap Index ($SPX)-Anatomy of a Market Top
-0.2a- Copper Futures - COMEX (EOD)/Gold - Continuous Contract (EOD) ($COPPER:$GOLD)
As the Federal Reserve debates it's planned tapering policy, one should look closely at how the S&P has tracked a much wider divergence from the Copper-Gold ratio since Operation Twist and QE3 got under way. QE3 is where the Fed buys $85 billion in US long bonds and MBS each month while expanding its balance sheet, which means the Fed is simply printing money. The Fed has been trying to convince the markets that tapering is not going to have the same effect as raising short term interest rates would have....I would buy their argument, except this ratio seems to tell us that the Fed is dreaming if they they think that the stock market has not been leveraged by QE3 policy. So, what happens to the S&P once tapering gets under way? And somehow, if stocks do levitate higher as the Fed seems to want, does this lead to a more prominent crash once people realize the stock market has levitated on air? -Ace
-0.2B- iShares Barclays 20+ Year Treasury Bond Fund (TLT)
April 13, 2013: 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 cleared on a re-test. This also warns that stocks could be in trouble as investors seek US treasury safe haven relief.
-0.3a-$SPX - Default Style
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
-01c-Shanghai Stock Exchange Composite Index (EOD) ($SSEC)-Historic
The growing crisis with local Chinese Trust Funds could prove to be China's Lehman moment! Keep an eye on the Chinese stock market in Shanghai! (posted 11/23/14)
-02- US Dollar Index - Cash Settle (EOD) ($USD)
US dollar fails to survive its 2 year uptrend line! It also fails to hold an intermediate Head and Shoulders pattern in early October 2013. This could put markets on edge. For more insights, visit my blog and our trader's forum at www.blog.acestocktrader.com ...or simply google these 3 words: ace talking stocks.
-03- NYSE - Short-Term Trading Arms Index (TRIN) ($TRIN)
I also find TRIN very useful for intra-day entry and exit points, but that chart is not shown here. This is a daily view chart.
-04- Treasury - EuroDollar Spread ($TED)-daily
The TED SPREAD ($TED) -- sometimes affectionately called 'the TEDDIE'-- tracks the yield spread between the historically 'safe' 3 month US Treasury Note interest rate and the 3 month LIBOR Rate, which is the European base lending rate for banks around the world. Generally, when the spread is low, stock markets tend to perform well. In 2008, the Teddie rose dramatically which foretold of a significant and damaging credit event which eventually came to pass and led to a generational low in stocks in early 2009.
In mid-2012, we saw here that the TEDDY was falling dramatically, which led to the general call to get bullish in stocks. Since then, we have seen the US stocks (and other global stock markets) rally considerably in that time, even as many investors remained on the sidelines cubby-holed into US treasuries and other debt instruments.
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My stock charts are offered as an example of my current trade ideas and are intended for illustrative purposes only. Investing/ trading in stocks is speculation!