Monday, May 7, 2012

The Bulls have left the farm! 8 May 2012


Written on 6th May 2012 but due to technical fault, images were lost and post not updated.

About a month ago, there were clear sell signals in the S&P500 futures, /ES. This was highlighted in my last blog post, and then followed by a dead cat bounce. As of last Friday, after the non-farm payrolls, the bulls have little left and it is about time to watch the bears march in...

So far, the expectations have been playing out accordingly...


ES
The S&P500 futures weekly chart stalled in April, and last week ended with an indication of the start of a new trend... Down. The daily chart had a sell signal last Thursday, and Friday's close reaffirmed it. All other indicators are showing bearing inclinations, and price action targets the previous low as a break point for support. Once a lower low is registered over this week, a top is confirmed, and perhaps it would be a volatile ride down all the way till almost the end of this year.



VIX 
 The VIX charts are also reaffirming the ES outlook in that the next volatility cycle is upon us. A Buy signal on the weekly is valid and the daily breakout of the last high would confirm.



DX
The USD futures suggest USD upside in the near term. Hinting of lower equities prices.



GC
At this point, I want to specially mention one of two highlights. First being Gold futures. Regardless of what others say, I see that Gold is weakening and not ready for a rally. Strangely, a hint of a quick dip appears to be on the charts. This is observed in the weekly chart from the MACD, and the daily Buy signals that have been anulled.



AAPL
Apple is the other highlight... and this is one obvious tanker.
AAPL had gone parabolic and extreme. The stall was expected, and then we saw Sell signals which saw the daily price work its way to the 55EMA. Immediately after that, AAPL released its results and a huge gap opened. There was no "gap and run" and instead stalled. Then Sell signals appeared which coincided with the weekly trends. Last Friday clearly indicates that AAPL is heading much more down... next stop at 535.


Clearly, I have positions in AAPL.
And also see what one of my teachers wrote about AAPL a couple of days after position was taken:
http://www.marketwatch.com/story/apple-a-bearish-one-day-wonder-2012-05-07


Trade well and take care!

The MadScientist

8 May 2012


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


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