ACE: Was Friday's mid-day reversal for real? Maybe so. Watch for follow-thru to confirm (10/4/1
-0.1 a $SPX - The Big Picture Chart
I thank you for your votes and support. On this board, WE are here to make profits in the stock market--pure and simple! By the way, I am an Associate Member of the Market Technicians Association (MTA). -Mike
-0.1 a NYSE Composite Index ($NYA)- Fast turn signals
This chart of the New York Stock Exchange composite has shown good back-testing results in calling turns in the markets. The 3 EMA line acts as the primary signal and is supported/ confirmed by the Fast MACD (settings at 4,10,6) and the Fast ADX (7 day setting) and Fast Setting RSI.
-0.1 a Russell 2000 Small Cap Index ($RUT)
The Russell 2000 attracts many traders for its high beta stocks, mostly small caps, and many in fast-growth sectors of the market.
-0.1 aa US Dollar Index - Cash Settle (EOD) ($USD)
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 to fall, and that the H&S pattern may be validated with a neckline break below 93. WHAT COULD CAUSE THE US$ to FALL? Perhaps the FED delays the expected September rate hike, or China and Japan sell US Treasuries in an effort to support their currencies and markets? The set-up on the US $ chart is suggesting that such pressures are likely to cause the FED to hold or for China and/or Japan to sell treasuries, or a combination of the two. The FED meets in mid-September.
Update on March 28, 2015:The latest trading action in the US Dollar Index indicates that a possible top is in...also, the signs of a blow-off top. The huge volatile swing in the dollar index in mid-March is an early warning sign that the correction phase in the dollar has begun, imho.
-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.
-0.1 aaa Direxion Daily Gold Miners Bull 3x Shares (NUGT)-Fast RSIs view
NUGT tracks a group of Major Gold Mining stocks at a 3x levered ratio on a daily basis. It is a popular ETF among traders who like to ride a fast momentum trading vehicle.
-0.1 aaa Dow Jones Industrial Average ($INDU)-400 day line and its meaning
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 (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. In early February, 2014, the Devil's Cross was narrowly avoided. However, keep an eye on this in case it should change again.
-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 iShares iBoxx High Yield Corporate Bond Fund (HYG)
UPDATE September 20, 2015: HYG reversed off the topside of its down-trend channel this past week and shows signs of deteriorating further. Notice the sinking histogram on the MACD graph. About 15% to 20% of high yield borrowers are US oil and gas explorers, although the percentage of HYG of this segment seems lower than the average. Nonetheless, HYG is being dragged down by sympathy in this market segment (i.e., toss the baby out with the dirty bath water'). Banks, who are also significant lenders to oil and gas outfits, are expected to tighten conditions on them in October. This could put further pressure on the junk bond space.
-0.1 aaa NYSE Summation Index (Ratio Adjusted) (EOD) ($NYSI)
Sept 6, 2015 UPDATE- The RSI just barely cleared 30 on the Friday before Labor Day, despite a 272 pt (Dow) sell-off that day. Typically, US stock markets rally when the NYSI RSI clears the 30 mark, so long as the new trend can continue.
May 31, 2015: UPDATE - The RSI double dip on $NYSI is a rare and ominous occurrence. Note that NYSI continues to move lower and form a divergence against the stock markets, but for how long can this charade last?
The Summation Index ($NYSI) is an accumulation of McClellan Oscillator readings which helps to smooth out the volatile swings found in the McClellan. The Summation Index is popular with sophisticated traders for spotting significant tops and bottoms in recent trends.
For me, the key graph on the Summation has always been the RSI(14) oscillator...as you can see, the oscillator tends to call tops and bottoms off of significant multi-day trends.
I watch for readings under 30 (oversold) and over 70 (overbought) and the confirmation is usually provided by a break back toward the middle as the RSI line crosses over the 30 or under the 70 mark. Keep in mind that the NYSI can remain overbought (or oversold) for a very long time. This is because major TRENDS can over-ride the cyclicality of the markets, which is what RSI tracks. When trend continues higher (which reflects herd trading), a mistake that some amateur chartists make is to assume a long or short position as soon as the overbought or oversold position is reached on the RSI. The proper time to go long or short is when the RSI begins to climb back toward the middle space (between 30 and 70), at least with the $NYSI chart, imho! That's why I watch for the confirmation signal (again, over 30 or under 70) to confirm the move out of the extremes. Often, the NYSI moves can mark a divergence from the actual movement of price on the New York Stock Exchange (NYSE), thus offering an early warning system.