China's a buy baby!

Alright today was a rough day for being short EURO and SLV. China looks good as noted in chart below. Weekly chart is also bullish. You can see all my charts at the link above, as always.

The activity in Japan tonight and the futures currently look bullish for tomorrow. Im thinking I jump in to FXI at the open. I generally like to buy at the close but I should have bought at the close today. Depending how china opens will determine how big my position is, if it opens strong it will be smaller as I will view myself as somewhat late in getting in.

My thesis on this trade is that FXI looks bullish so there is a high probability that china is going to catch up to the US market (as fxi has lagged recently), thus this trade should be a good one. If this trade doesnt work out my Euro short should produce results.

Trendlines on the Sectors and SPX are broken

The following is a chart that is not so bullish for the US market. However the trendlines arent broken hard. Trendline breaks are not neccesarily bearish they can also imply sideways action. If the market is strong tomorrow these trendlines will still have significance. Generally we want to see a bigger break than we have currently before positioning accordingly. The reason I am interested in the break is because momentum has been bearish on the US market recently and bearish momentum followed by a trendline break is usually a good short.

I am hesitant about the short side though with EURO, Precious metals, and commodity strength today.

Out of SLV, China and Oil Look Good

I closed out SLV trade today. SLV looks strong. GLD is range trading with upward momentum. Euro is unbelievably strong today but at hefty resitence at 1.35 ish level.

Euro trade will stay on as that trend is down and trendlines are in tact.

China and Oil look good, both are trending up on daily and weekly (china is very close to confirming weekly uptrend)

Thinking of putting on a small FXI(china trade).

Silver... Hmm

Here is a silver chart. Silver snapped back to TWO trendlines today. Silver has a habbit of trading back to trendlines before making the big move.

One of my trend indicators is in the lower end of range trading and my other is uptrending on the daily. My signal is on a buy. Basically I have to cut my position. There is two reasons why I still have my position today 1) my stop is around 17.75, which is really close to the current price, as this would violate trend lines, push my trend indicators up and change the pattern of lower highs and lower lows on a short term basis and 2) the weekly is in a range trading mode and the daily kind of is as well(hence the indicators really arent telling me there is a bullish trend here to be fearful of, "yet"), therefore given reason 1) and the fact that bearish trendlines are in tact I am going to hold.

I have a position in Silver because gold is bearish on my indicators and the dollar is bullish on my indicators and Silver was as well now its neutral. However I evaluate trades (i.e. include other influencing factors). Silver currently has lower highs and lower lows and bearish trendlines in tact. 17.75 and I am out, or SLV gets a sharp turn down and I am going to ride the roller coaster.

FXI (China) Looking Ripe for the Bears

In my experience of using my system, assuming no strong price action on Monday, FXI is going to sell off.

General Commentary

I dont like that CHINA, OIL, EURO and GOLD on sell signals and the market is looking like its running out of steam. Often technicians point to stock market breadth for health of direction, I believe in this however I believe breadth of the Risk-On trade across asset classes is extremely important. Right now the only Risk-On that is On is the Stock Market. Risk-On Breadth is weak.

USO and WTIC

USO etf is on a sell signal and in a confirmed daily downtrend. WTIC is on a sell signal and a daily downtrend may be confirmed today (WTIC chart on stockcharts updates at the end of the day, its not live).

SPX Update

As mentioned yesterday, the trendline up since the february low is still in tact and the daily trend models and buy signal remains intact.

When anticipating a correction one must be patient and wait for confirmation.

Currently we have bearish momentum divergences and bearish candle sticks (reversal day yesterday, and an inside day today). I use the SPY and DIA etfs for candlestick analysis as the opening of the ETF's is more indicative of the indices' price action.

However bearish candlesticks and bearish momentum are only relevant if price confirms. Currently not taking a neutral or bearish stance until we see some price breakdown. SPX longs are still a hold but caution is warranted because if price breaks down one will need to act fast. My trigger signal is so far above the signal line that a reasonable amount of profit could be lost waiting for a sell signal to get out. I think a trendline break and a range trading mode on the daily chart will be a good time to exit. Buy back in if trend models turn back up and signal is on a buy. As always you can check the live charts at the link above.

SPX still holding trendline but Momentum Looks Unfriendly

Update on China and Treasuries

China is looking like a daily down trend is about to emerge. 30 yr treasuries have gone from being close to confirming a weekly uptrend to an absolute daily downtrend and a downtrend in the weekly could be confirmed soon.

NYSE Analysis

I have had an uptrend signal on the daily and weekly for a while now and the trend signals are still going strong. However, I decided to do some textbook technical analysis using some of my CMT knowledge.

In the short-term I think a correction is coming soon i.e. between now and tuesday, however one must be cautious because the trend is up. Trading for corrections is not always the best move because the trend is up. I am predicting new highs after a correction. The reason I am putting an analysis together for a correction is I want to be mentally ready for one and I want to mentally be ready for the zone where the market could potentially turn back up. Its all about being mentally prepared.

Here's my chart, bearish comments and lines in red, bullish in green. I like that the MACD RSI and ROC are all making high readings, it shows me this market has muscles to flex and the market has the ability punch the shorts really hard with those muscles. So shorts better watch out and not get too excited on this correction, if it happens.

Potential Euro Target Zone

I am not a huge target guy because I try my best to let winners run and not limit my thinking of their potential. I always have a conservative voice in my head playing down my expecations of how far I believe something can run.

However, I thought I would put a target zone together so that I could get an idea of where a strong bounce may lie so that I am mentally prepared to reduce my position or cut it entirely if a strong bounce begins to materialize.

Gold with US Dollar Stripped Out

Here is a chart of Gold without US dollar (divide by inverse of US dollar (UDN ETF)). This chart is on a sell signal with a range trading mode. The range trading mode is close to confirming a daily downtrend. A breather in the markets and a rallying US dollar could be the catalyst to take the wings off of the gold bugs. The charts not as bearish as the actual gold chart but its certainly not bullish.

Gold Ready to Head South

Leading Technical Indicators have rolled over. Minor trendlines are broken, next step is support at current levels. Time will tell. With USD index trending higher the break down could be imminent.

30 Yr Bonds Almost in UpTrend on Weekly

30 Yr Treasury Bonds are already in an uptrend on the daily and now they are about to confirm an uptrend on the weekly.

Short Gold, I shorted Silver myself

With Euro rolling over this week and in a weekly down trend and ever so close to confirming a daily down trend, the USD Index is likely to be under pressure.

Gold is in a weekly range trading mode and on a daily downtrend. See charts below. I put SLV(because I am hungry for risk) puts on friday at the close (i like to trade near the close).

Note my EURO short and SLV short positions are posted in the right column.

CAD - HOLD

The CAD/ USD is uptrending and recently broke up through resistence and verified an ascending triangle. This week's candle stick has range trading characteristics, it closed where it opened (range trading characteristic) and it closed near the low of the week (bearish) and it also held the breakout (bullish).

I think this ties in nicely to my thesis that Risk-Off will be back in moderation in the next week while the stock indexes and other strong risk-on assets like the CAD take a breather while the EURO falls.

CAD would be a hold unless it breaks below resistence, rolls over, and goes in to a range trading mode.

General Commentary

To be very clear the trend modes of the various assets do not indicate whether one should be long or short currently, if an asset is in an uptrend it does not mean one should be long but it does mean that one should definitely not be short on a swing trade or intermediate trading basis. In a range trading mode, the side lines are your best bet.

What we are looking at currently is a down trend in the EURO / USD, a range trading mode in the precious metals and the indexes making new intermediate highs and uptrending.

The precious metals have had a strong correlation with the "risk-on trade recently" it seems that risk-on is pulling the precious metals up with the stock indexes and the EURO-USD is pulling them down resulting in a range trading mode for the precious metals.

This week, the Euro rolled over and burst down with volatility expanding signalling the sideways trading in the euro was likely over and the down trending mode was ready to get going again. The risk-on trade in the market recently has done very little to move the EURO higher against the USD. Could the EURO/USD be signalling risk-off is back? Is the failure of EURO/USD and EURO/JPY to rally and precious metals not making new highs be a major non-confirmation for the market? I dont know.

Maybe the Stock Indexes are in for a breather / sideways or moderate down price action while EURO USD heads south?

As always this site is a hobby and is for illustrative purposes only. Nothing on this site should be viewed as advice or a recommendation to buy or sell any securities. Please consult your investment advisor before making any decisions.

OEX (MID CAP) Uptrend

The OEX is in an uptrend, clearly. Yes, the intermediate uptrend was broken, but it was unrealistically steep. There is an uptrend line that is holding well on the OEX currently and look at the beautiful retest of the bear market trendline after it was broken.

There is low volatility and therefore fuel in the tank for a trend, and trend models indicate the uptrend is a go.

CHINA WEEKLY, GREAT TECHNICAL INDEX

I find the FTSE XINHUA 25 to be a very technical index much likely commodities and currencies versus the S&P and Dow.

The Trendlines on FXI ETF are beautiful. My trend models are neutral, and trendlines are neutral as the major bear market trend line was broken and now FXI has broke a recent uptrend line, it is holding on to a short term down trend line, and has yet to break the current intermediate uptrend line.

The intermediate trendline is close to the price, if it breaks and trend models role over we can be in for a good short, low Volatility (pink line) indicates their is "fuel" in the tank for a new trend.

Euro Heading South

Here we see Euro is in down trend based on trendlines, and my indicators. Volatility has been ticking up but has pulled back lately. There is enough fuel (volatility isnt too high) in the tank for a next leg down, also we have not seen volatility spike to the point where we should weigh heavily on the possibility of the down trend coming to an end.

What's a Silver Post without a Gold Post?

Here is a gold analysis similar to the silver post below. There is fuel in the tank for a trend with low volatility (pink line). But Uptrend is still not confirmed and we have not seen gold take out that trendline from underneath so that we can dismiss the trendline break. Gold is an range trading regime, it has been around the $1100 mark for a while now. Lets wait and see. Neutral chart with a slight bearish bias given trendline break down.

Silver Weekly - Ranging

This post is a weekly chart of silver. The pink line is volatility, the red and green are volatility indicators. When the red and green lines are above the upper blue line there is an uptrend, when they are below the lower blue line a downtrend and inbetween a range trading regime.

Low volatility is fuel for a the pervailing trend.

Currently we are in a range trading regime with the red and green lines not yet confirming an uptrend. Uptrend lines have broken and retested. Currently neutral on silver, but dont be shocked if Silver takes a beating in the coming months if it cannot dismiss the trendline it is testing from the bottom and if it cant get in to and sustain uptrend territory soon.