Monday, February 25, 2013

Ke Belakang Pusing! - 25 February 2013

Ke belakang pusing. Army use: A parade square command in Malay (literally 'go to the back and turn around'), meaning to turn around.

In last (week's) post, I ended with "...followed by more downside over the coming days..."

Yesterday's action firmed up that view as well as technically shows a chagne in trend.

/ES (S&P500 futures)

The weekly ES charts show a trend exhaustion after euphoria, with a weekly divergence on the MACD. The daily chart has already given a Sell signal on 22nd February, the day after my last post. Yesterday's price action firmed that it is likely to be a down week with the ES looking to correct at least to 1400-1425 range.


The VIX spiked. The weekly VIX MACD is about to breakout into bullish area and this is a worrying indication for some. The daily VIX spiked out of boundary into an extreme area and from previous patterns, tends to be out of the bands for some time before moderating. This time is particuarly strong(er) and can expect more downside correction in the overall markets as the volatility spikes for a couple of days.

/DX (USD futures)

While the S&P500 tanked, the VIX spiked, the USD had already been rallying over the last couple of weeks. Again, with a higher USD, we tend to see more downside on the S&P500.

TLT (Bond ETF)

The TLT ETF already clocked in a weekly Buy signal.
Go figure.

Time to be cautious...

The MadScientist

25th February 2013
Note: ALL material posted here is from my personal opinion, and my opinion may differ or change without notice. These do NOT constitute as solicitation, investment nor financial advice. By reading the materials presented here, Readers acknowledge the awareness that the materials are intended for educational purposes only. For investment(s) advice, related decisions and/or actions pertaining to investments, always consult your own qualified financial advisors, brokers, etc.

Charts are from TD Ameritrade Thinkorswim platform

Friday, December 21, 2012

The end of the... dead cat bounce - 22 Dec 2012

I have a short note to add for those still reading and following my blog...

Firstly, the last day of the world isn't quite the last day of the world.
See this PAGE

Secondly, for those who have heard, a number of us traders have been saying that it jolly well could be the end of the financial world as we know it... and so it seems, the end of the dead cat bounce was just a couple of days ago, SELL signals given in the daily charts in the last two days, and just now it looks like a confirmation reversal is in play.  There goes Santa...

Finally, I am writing from Perth, Australia.
For those who know the significance of me being overseas... good on ya. Do leave a message if you happen to read this, and just stamp chop your agreement that what I had told you before is true.
Well, what is it?  Instead of the markets dropping a whopper when hair is cut (like Conrad Alvin Lim)... the markets tends to tank real hard when I am away. This is an estimated 70-80% accuracy since 2009. Initially identified by my brother, and then my spouse and close friends also began to realize it happening.
For the times I can remember...
I was in Tokyo, Japan in Nov 2008
I was in Melbourne, Australia in Jan 2009
I was in Berlin, Germany in Aug-Sep 2009
I was in Kansai region, Japan in August 2010
I was in Perth, Australia in Nov 2010
I was in Santa Fe, New Mexico, USA  in February 2011 and then in Melbourne, Australia in March 2011 when the massive Japanese earthquake struck
I was in Bangkok, Thailand in early October 2012
and I am now in Perth, Australia... December 2012.

Take a look at these periods... definitely no bull (run) there. Either turnaround times, or retracement, or some downward shifts in the market.

An intriguing correlation there...

Meanwhile, as I take my time analyzing charts in my holidays (if at all), I'd like to wish all readers a Happy New World, Merry Christmas and Happy New Year!
Live life to the fullest and do something different everyday.

The MadScientist
22 December 2012

Tuesday, August 14, 2012

Beauty and Grandeur of Niagara Falls

Niagara Falls from the Canadian side

Downstream of Niagara Falls

Monday, August 13, 2012

Near the Highs of the Year - Market Analysis for August 13th 2012 by Singaporeseeds

 The past 2 weeks had been really exciting. I traveled to Detroit where I met with my friend and we surveyed Michigan properties together. It was mind-blowing to see properties selling at 30 cents to the dollar and going for yields at around 25%. He had been flipping properties there since 2008 and as of today, he had made 20,000% returns on his money.
Afterwards I drove to Niagara Falls through Ontario, Canada and struck the majestic Falls off my bucket list. Will post a video of it later.
Then it was to Kingston, New York where I met my long-time trading buddy who is working there and then onwards to New York City.
At New York City, I was gazing at the big banks there and fooling around with the ex-Merrill Lynch bull and wondered how it would be like to run a bank. Over the next few days, I just can’t get the thought out of my mind. It will be really fun to make money from nothing but obviously you will need expertise, knowledge and the capital for it. And I’ve not checked but I assume you need a license for it.
Anyway that was exactly a week ago. Over the last 7 days, I thought that if I am to start a bank and also succeed, it cannot start it in a developed country. The established players will destroy me before I can start an office. So it has to be somewhere unsaturated, where people are still foreign to the concept of leverage and then get someone who has experience in bank operations into this with me. And if it is not a developed country, I would definitely need someone with connections to get the license. Lastly would be the capital.
For the capital, I’ve come up with a list of people whom I can call up. So that part’s settled. I’ve also decided on the country and also know a couple of people whom I know have the power and connections to get almost anything they want. So what’s lacking now is someone with expertise but as a person who believes in divine intervention and believes that he’s doing God’s work, I just have a feeling that I will meet this person soon.

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

Anyway nothing much has happened over the last 2 weeks. We are still overbought with low volume. Seems like this has been the case over the last 5 weeks and the market is waiting for something to move it in either direction. From my charts, the uptrend has ended last week but I think we should only see movement after this Wednesday.

Daily chart for the Dollar

The dollar dropped as expected and is starting to get oversold. There is a strong support around 81.6. We should see it stay above.

Daily chart for Gold

Gold is still forming a base with no breakouts either way. However my longer term charts is telling me that the chance of a breakout upwards is more likely. 

Sunday, August 5, 2012

Conrad and the WAT course

Just found out that my blog was selected by Conrad's Appreciation post on Pattern Traders. So just want to reply to his post.

Conrad's WAT course was the defining course in my business & trading career. I started doing business 2005 when I was still in university. Went full scale into it in 2007 when I graduated. Took Conrad's course in early 2008 and it was from Conrad and his WAT course that I found out the scale of the market panic that was going to happen later that year. I dare say that if I had not known about Conrad and the stock market cycle, I would had went bust. Having the ability to make sense of stock charts and market cycles saved me from financial ruin. And I have Conrad to thank for that.

The WAT course is not just for stock traders. It is much much more than that. It is about making sense of the financial world and learning to play the money game. If you are interested in financial success, I would definitely recommend Conrad's WAT course.

Saturday, July 28, 2012

Lonely New High – Market Analysis for July 30th by Singaporeseeds

Daily chart for S&P

As I’ve mentioned in my previous post, the start of the downtrend will be when the MACD Histogram turns red. It looked like so until last Thursday when we moved higher on very light volume hence a lonely new high supported only by a few players.  We are 2 days left before the end of the trading month and it is still green so I suppose this is not the time yet. In fact, it looks like we are going to make a new high for the year.

From what I see on my charts, as long as we stay above support at 1366, we will remain bullish. First support at 1366, then 1310.

Daily chart for the Dollar

The Dollar (UUP) failed to break resistance at 83.7 and made a failure movement. If it ends down on Monday, it will confirm the downtrend. First support at 81.6, then 79.

Daily chart for Gold

Gold broke the wedge that it had been in since December 2011. This is the start of the next leg up for gold. We might dip a bit over the next few days but we should see gold (GLD) rally over the next few weeks. Support at 156.73. Resistance at 164.5 and 174.

Daily chart for Crude Oil

Crude Oil (USO) just made a bullish set up. Confirmation will be when it breaks about the 50 day moving average at around 34.6. Before that happens, it is still technically bearish.

Tuesday, July 24, 2012

Just before all hell breaks loose - Market Analysis for July 24th 2012 by Singaporeseeds

It’s been more than a month since I last wrote my market analysis. I went to Myanmar, got to know some really good friends, met up with many old ones and in the process, got to know myself a lot better. I was told this year will be a year of opportunities for me, but I would prefer to say that this is the year I broke my own limitations and realised there were actually nothing stopping me except for those in my own head. From the long cold journey to catch the aurora borealis in March to planning a retail outlet in Myanmar, all these were unimaginable 2 years back when I can barely go out of my house for more than an hour before I started feeling giddy and weak. Just last week, I recovered from gastric flu after a good night’s sleep when usually it would have taken me a week to do so.

As for the one month hiatus, it happened because I had to travel to Myanmar and without the readily available internet connection; I had to exit all my positions. But I was so busy over the next few weeks that I did not have time to look at the market until now. And luckily I did.

Monthly chart for S&P

The monthly chart for the market rarely forms bearish divergences but when it does, it goes down in a bad way. As you can see from the yellow trendlines on MACD, it had happened twice since 1996 and both times the market dropped for more than a year. Just based on chart symmetry, I can say that we will be going down to around 600 on the S&P in within a year’s time from now. Right now, the MACD histogram is shortening and when the month ends in a down red histogram, it will be the signal for the start of this year-long downtrend.

I’ve spent the whole of last week arranging to sell off all my stock certificates, unit trusts and accumulating cash on the sidelines. When the drop happens, property will also be hit and I’m waiting to scoop up at least one property in UK when that happens.

Anyway be prepared for another round of global recession. We are now halfway through a major 20 year sideways cycle that will end in 2019. 

Daily chart for S&P

Daily chart for Dow

Daily chart for NASDAQ

On daily charts, all three indexes are showing a bearish divergence. However we are now at a range of support levels and I’m looking for follow through after 2 down days. We should be around 1,286 by end of this week.

Daily chart for the Dollar

There is a bearish divergence for both dollar index futures and UUP. The dollar usually moves in the opposite direction of the market and with the very bearish outlook of the markets, I believe it should rally very soon. So I’ll be looking out for failure signal for this bearish divergence.

Daily chart for Gold

Gold seems to be forming a base around 1550 for a year now. I have a wedge pattern on daily with volatility decreasing. Whichever way it breaks out from, it’s going to be a big movement.