What the charts say

If we take a look at summation, we have not hit a sell signal in the market yet. As we have been saying, there is not reason to FALL IN LOVE WITH THE DOWNSIDE at the moment, no matter what others are saying or telling you to do.

When the charts tell you to buy dips, that is the smartest thing you should do. If you have been doing this and following your charts, you should be doing very well.  That is still what the summation is screaming at us for now. When we get to debt ceiling and fourth quarter reports, in a few weeks, that could be a different story but for now, that summation is still on a buy, and hinting to remain a bit cautious.










If you remember back a few weeks ago, we hinted that 1500 could be coming on the market. YOU CAN READ THE POST HERE . I called it a wild prediction, however with the fiscal cliff drama out of the way, it DOES NOT seem so much of a wild prediction any more.  Some readers did laugh off such claims, but see how 2 days can make a difference on the market.

Infact if we take a look at the weekly S&P chart, you can see how 1500 is not very far away at all now. The band-aid fix to the fiscal cliff did help alot and we would not be surprised to see 1500 come. I guess time will tell.

spx weekly chart

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fiscal cliff deal - the PERFECT storm coming

I bet you are getting sick of all the news and fiscal cliff saga going on in washington at the moment. 

Even though the market is closed today, I have to tell my readers something very important. The market right now is looking for excuses to buy and for commonsense to prevail. The market and the charts are hinting that a patch deal is done so again the Moron politicians can again 'kick the can down the road' for another few weeks. 

My thoughts right now are that a patch deal will be now made on the market, and it will bring a sigh of relief to the markets, and market participants for the short term, and we will probably see more buying in the next few weeks.

HOWEVER...

There could be a perfect storm coming, which will happen if a patch deal is done in the next day or so. 

In about 2 months time, you could get a situation where a perfect storm scenario could develop, due to the fact that this time period, FEB - MARCH 2013 the leaders of the US must really make serious decisions about cutting spending and increasing spending, also you have the US hitting their debt ceiling at the same time, and they will NOT be able to just patch these bigger problems, and they must put their foot down and make real hard core definite decisions. 

That could cause serious problems for the economy, employment and also the global STOCK MARKETS.

Right now the charts are still looking positive and should be ok, if a patch deal is done. But as traders we must keep a close eye on what happens in a month or so, as it is my belief the market is the most susceptible for damage or wild swings, and we must keep on our toes.

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Holiday Re-reversals

As said, the market has been in typical holiday reversal the last few weeks.

As the BS fiscal cliff is working itself out, the smart money is only just starting to come back into the market, the market pops up. :-) Exactly what we were expecting and posted a few days ago.

This is a great lesson to learn if you are new to trading to look for reversals, and then re-reversals after the holidays come to an end.

As we have been saying to NOT FALL IN LOVE with the downside. Now you can see why. :-D

It was not a good day for bears today, but the good news for bulls is that the smart money is not entirely back in the market, and leading breadth and indicators are suggesting there is more up coming. Today however, was a very good victory for the bulls, and confirming that they have not lost hope.

As you can see on the charts, we sold off in globex, but then snapped back hard by the end of the day. There is not much reason to count the last 2 weeks due to holidays and low volume. But the next few days are important, and suggesting there is more upside coming, and more positive news surrounding the fiscal cliff news.

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nasdaq daily chart

As with the previous post => FISCAL CLIFF PANIC we stated that the last few days have been classic holiday reversals, and EXTREMELY LOW volume

Have a look at the nasdaq daily chart.

As you can see we have sold off since the start of the holidays. We sold off on very thin volume, meaning right now the smart money is gone from the market.

Also the stochastics are confirming that we are now very oversold on the market and a bounce is due soon.

It seems we are still in holiday reversal time period and with the fiscal cliff talks that is also putting added pressure on the markets. The breadth and other market indicators are skeptical that these moves will hold for long, and there is a considerable sized bounce coming very soon.

Charts are just saying this is a dip before a larger move higher. If you are a bear, do not fall in love with the downside, doing that in holiday reveral time periods can sometimes be very dangerous.

Enjoy you weekend and we will come back next week and monitor things closely.


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Mini Apocalypse 2012 flash crash in the ES

Mini Apocalypse 2012 flash crash in the ES

You gotta hand it to these guys, they run the S&P down on small volume, very small volume on the announcement that House vote on Speaker John Boehner's proposed Plan B will be delayed until after Christmas! Bullishit does not even begin to explain what this is.

Lets go to the charts.

First the S&P 500 daily charts. It dropped 50 points. But the trend remains up for now.

Have a look at the mini flash crash created in globex. The S&P went down 50 pts in just a matter of moments on small volume. It really smells of Bullshit. So be careful. 

Take this into account. 

1) This happens before opex FRIDAY!

2) This happens on the end of the world DATE! HAHA LOL. :-)

3) This happens at the end of the week right before xmas. 

If it smells like BS......it looks like BS......well then it probably is. Manipulation at its finest. 

I know this going to be hard to believe, but I still think 1500 is coming soon on the SPX. I know with this FLASH CRASH type action people will be laughing at a statement like this, however I will stick to my guns for now. 

The market is still not open, so we will wait and see what friday brings! Are they just trapping traders shorts before blasting us up higher. Well I guess we will wait and see. 

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Say Hello To Opex

Well we only have one days trade left before OPEX week is over. If you are not aware 73% of the time, OPEX week is usually bullish or the market closes on average GREEN! So there is no surprises if we get a little more up.

But if you have been reading our previous posts, you would not be surprised. We have been fairly bullish since the MIDDLE OF NOVEMBER - SEE HERE!

The market breadth and leading indicators we choose to use, have been saying buy the dips, and that has been spot on!

Have a look at the russell since our middle of november call. LOL. There has been a very nice run up, and only a few red days inbetween. WOW!

As you can see, the russell is in a nice upwards bullish channel. This week has been very good on the russell and other indicies in OPEX and our stance remains the same.

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SPX Weekly Chart

I was unable to post this chart yesterday, so I will do it today.

After Mondays trade, we had a very nice green day, but still again, I ask you to look at the weekly chart. There is nothing in here saying the market is about to crash!!!! Lots of moron newsletter writers are talking about crashes, fiscal cliffs, death crosses, what we do is actually look and study the charts properly, that is why we have been able to call the market very accurately this year! :-)

Have a look at the weekly chart. We are at 1430 on the SPX, and I feel that 1470 will be coming sooner rather than later. (Possibly even higher)

We also have divergences in the MACD histogram, and that is giving the bulls the edge they need. The Stochastics is also pointing to higher in the coming weeks.

SPX Weekly Chart

We have been having a lot of fun watching pundits and so called analysts say the market will CRASH and CRUMBLE, when the summation is saying that is not very likely. That is very dangerous. 

Again since the 15th of November WITH THIS POST HERE, and also HERE we were giving lots of warning of a rally coming. The rally did come :-) and we were almost spot on. We still remain long, because the summation is still on a buy and looking strong, we feel this rally is not finished, and as above we are targeting 1470 in the coming weeks. 

summation chart

Let us enjoy this rally and then once we get to the 1470 - 1480 level, re-evaluate things and what the market is telling us.



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fiscal cliff cuts & Tax hike 2013 coming

fiscal cliff cuts & Tax hike 2013 coming

What exactly is the fiscal cliff?

The term refers to a combination of forced cuts and tax increases worth more than $500 billion. The best-known parts are the expiration of the Bush-era tax cuts and the automatic across-the-board cuts to federal spending.

fiscal cliff cuts

Whether you like it or not, since 2008 the govt have their sneaky way of telling you they are shafting you. No matter if you are a trader or not, you will recognize some of the following terms ; FAT FINGER!, QUANTITATIVE EASING, CDO'S, BAILOUT! and now we have the word FISCAL CLIFF !

What a rose bud of vocabulary they choose to use. But again all they are doing is merely trying to smear the truth and tell use these terminologies to give things a sense of order, when behind the scenes they know about the nightmare coming to the US and its people. Its only a matter of time now. 

Again we have to deal with a group of men, or shall we call them boys who could not even organize themselves out of a brown paper bag, and here they are pretending to actually care. Take a glimpse just for a minute at what Obama has done over the last few years! Nothing, and now we have the same president and same problems. You do not have to be Einstein to see that!

tax hike 2013

fiscal cliff cuts this......   fiscal cliff cuts that ? but....

What happens if the parties can’t agree and we go over the fiscal cliff?

Well that is a pretty good question, and it could infact happen. But if it does, please do not be SHOCKED!

In the short term, probably not very much since the world will not end at the beginning of the new year. However, longer-term, the parties are flirting with  another round of recession. Cuts in government spending, coupled with higher taxes that decrease consumers’ purchasing power, usually mean a drop in production and a loss of jobs.

The Congressional Budget Office has projected that the economy would contract 0.5% in 2013, with the biggest shrinkage in the first half of the year. The unemployment rate is projected to rise to 9.1% by the fourth quarter.

But forget unemployment for a minute, because the traders out there are waiting for some sort of news. Whether it is good or bad news we still do not know, right now the govt seems to be hanging everyone in limbo. I guess we all want to know just some sort of news, or even a hint about the outcome. 

All the government are doing is using their keywords, and keeping everyone in the FEAR mentality, and it seems to be working. What I am here to say to you is that no matter what the outcome is, realise what they are doing and why. And do not become victim to their scare tactics or give in to the fear they seem to be spreading around using these specialized tactics.

I think we can look at the prices of the S&P right now (which seem to be holding) as a sign things might be more on the positive side or a positive resolution will eventuate regarding the fiscal cliff issues. But that is just a stab in the dark guess, many people have mixed opinions regarding this matter. 

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russell 2000 chart - russell 2000 chart in channel

russell 2000 chart

Looking at the russell 2000 chart below we can clearly see that the russell 2000 chart has held pretty well over the last few days.

Ever since our bottom call the russell 2000 chart has remained in a nice skinny upwards trend channel. It is still inside and has not broken down or out of this channel right now.

The market is a tough call right now, but our VIP MEMBERS HERE are doing quite well.

Bare in mind that there is much controversy and talks surrounding the FISCAL CLIFF problems right now, and they still have not sorted out a solution.

It is almost like the market is shuffling its feet waiting for some sort of fiscal cliff news to rare its head!. All we can do is wait and study the charts. Normally the news always comes out in the charts first. The russell 2000 chart below is interesting, but all we can do is watch and wait!

russell 2000 chart

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fiscal cliff - how to trade the fiscal cliff news

fiscal cliff news is all the talk of the town, yet no matter what fiscal cliff news is coming, traders are still not looking at their charts.

The bulls were not able to print a higher high today compared to last Friday. I am kind of sounding like a broken record, lol, but until this happens the bears remain in control and caution should be exercised.

fiscal cliff news

I have been warning to watch the leader "The NASDAQ" in the next few days. I saw many other pundits get excited about a bounce in early trading, however it did not last, and traders who were long got caught yet again!

Fiscal Cliff this! LOL

Look at the nasdaq chart below. I was not surprised to see fresh lows get hit today, as I cannot see any strong buy signals at the moment, even though there were lots of traders screaming to get long. So we watch and we wait. 

There is lots of news tomorrow FOMC news minutes. Sentiment is still bearish for now. These markets do not seems like they are settled yet, and there are lots of talk about about Obama and this fiscal cliff and whether there will be some sort of decisions made, but one thing I do know is that no matter the fiscal cliff news these markets are still quite unstable. 

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