Bull April - Market Analysis for 29th April 2011 by Singaporeseeds

Daily chart for Dow


Daily chart for S&P


Daily chart for NASDAQ


I'll be going to London to attend the Royal Wedding tomorrow. Will be there until next Monday. So here's my early market analysis.

The indexes made a new high yesterday. This is very bullish for the market. Looks like we are ignoring all bearish signs and going for another bullish month. Next resistance (and also target) for S&P is at 1420 with support at 1350.

Daily chart for the Dollar (UUP)


Quote from my 16th April post:
“The dollar broke to new lows and will continue to make new lows over the next few weeks. First support at 21.30 and then 21.10.”
UUP broke through both within the past 2 weeks. The final target is at 19.70.

Daily chart for Gold (GLD)


Daily chart for Silver (SLV)


Gold and silver made new highs with silver blasting through a series of fibo resistances. With inflation expectations running high and faith in the US dollar at an all time low, both gold and silver will be on an uptrend on the forseeable future.

Daily chart for Crude Oil (USO)


Though crude oil (USO) on daily chart is forming a bearish divergence, I’m beginning to think that it would not matter. Let’s see how this one turns out.

Daily chart for Natural Gas (UNG)


Natural gas (UNG) formed yet another bullish divergence. This one should bring it above its 200 day moving average at 12.

Decision Time for the Markets - Market Analysis for 18th April 2011 by Singaporeseeds

Daily chart for Dow


Daily chart for S&P


Daily chart for NASDAQ


Quote from my market analysis from 26th March 2011:
“It is very important that the indexes break these resistance levels. Should the indexes form a double top at these levels, we will be seeing some longer term downtrend in the indexes that should bring S&P down to around 1000.”

The market closed like a double top for the indexes with NASDAQ at its 2007 high. Although all 3 indexes are still slightly above their respective 50 day moving average and may just bounce back up, this looks like a failure to break above to me. We are now halfway through the most bullish month of the year and if the other half ends up like the first half, we might just end up at 1000 for S&P over the next few months.

Daily chart for the Dollar (UUP)


The dollar broke to new lows and will continue to make new lows over the next few weeks. First support at 21.30 and then 21.10.

Daily chart for Gold (GLD)


Daily chart for Silver (SLV)


Both gold and silver broke to new highs over the past 2 weeks. Both are moving inversely proportional to the dollar. This shows that there is a flight from the dollar to the safety of commodities, mainly gold and silver. With the mass printing of dollars by the Fed, we would see both gold and silver making new highs while the dollar falling for the foreseeable future. Resistance for gold would be at 156.15 and silver at 43.20. I expect both to blast through these resistance in a flash.

Daily chart for Crude (USO)


With the problems in the Middle East, expect crude to continue its rally. Next resistance at 48.

Daily chart for Natural Gas (UNG)


UNG had been forming bullish divergences for the last 12 months. There was another bullish divergence entry signal 3 days ago. We’ll see if this one works out. Target at 13.65.

Trading for Everyone by Adam Hamilton (Part 11)

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While sticking with trading will almost certainly make you rich eventually, the journey is truly more rewarding than the destination. You will see the world differently once you start trading stocks, everything will become more interesting. You will feel liberated and empowered. Life in general will be better as trading forces you to nurture your good traits while starving your destructive ones. And it is never too late or too early to start.



Adam Hamilton, CPA

Trading for Everyone by Adam Hamilton (Part 10)

The hardest part of starting trading is making the commitment to live below your means. Trading is seeded with surplus income. Everyone has areas of fat we can cut from our lives. For example, I love reading. It’s my favorite leisure activity. If I was a new trader and cash was tight, instead of buying new books I could simply check them out for free from my local library. If you think hard, almost regardless of your income today you can probably find a way to scrape some surplus together over a year or so.

Stock trading is intimidating when you are first starting, but so is everything else. Things like hobbies or interests you hold dear and really enjoy today were once overwhelming to you too. Think about how intimidating it would be to learn golf, or gardening, or photography from scratch. Everything new is intimidating, and trading is no exception. But also like everything else, the more you get into it the more comfortable you will grow. And you will have a lot of fun along the way learning about the markets and stocks.

We can certainly help you if you are interested in learning about stock trading. Every week I write essays like this one, discussing some aspect of the markets. A few years ago I wrote a popular essay called “Stock Trading 101”. It will help you grow your knowledge and accelerate your understanding of the key core fundamentals of stock trading. The more you read about the markets and stocks, even if you don’t understand everything (heck, I still don’t understand it all!), the faster your knowledge will grow.

Trading for Everyone by Adam Hamilton (Part 9)

So trading is awesome, everyone should trade stocks. Easy for me to say, right? What if you don’t have any money? Believe me, that’s not a problem at all. Almost every trader in the world started out with nothing, zero. Traders start small, trading a tiny amount they can afford to lose when trades inevitably move against them. But gradually as your knowledge of the markets, stock trading, your own emotions, and market sentiment around you grows, so too will your success. There are endless accounts of traders starting out with a few-hundred dollars and ending up multi-millionaires a couple decades or so later.

Starting out small is actually really important. If you start out trading with a lot of money, odds are you will lose it and get discouraged. The great majority of traders lose almost all of their initial capital at some point in their first year or so of trading. It is par for the course. But the hard lessons learned, and the skillset developed through those early losses, scale beautifully to any amount of money as your trading prowess grows. Even if you are blessed with lots of surplus capital, start trading small with an amount you can easily afford to lose. As your confidence and skills gradually grow, only then should you start trading bigger.

The amount traded is totally irrelevant. If you can earn a 20% return on $1000 in your earlier years, you can earn a 20% return on $100k or $1m as your capital grows. The critical thing is just to get trading, start small and start learning the lessons stock trading teaches. Get your greed and fear under control and grow your understanding of the markets and stocks when you have little on the line. This foundation is essential to help you thrive someday in the future when you are risking a lot.

Trading for Everyone by Adam Hamilton (Part 8)

Open up a trading account for your kids. It really doesn’t matter how much money you can spare, the kids can gradually fund it themselves with cash gifts they receive on birthdays and Christmas and through doing odd jobs. As they slowly buy and sell a few shares in stocks they are interested in because they love the products those companies produce, they will learn the same trading lessons and develop the same awesome life-traits as adults. And starting young, even casual trading as a hobby can literally earn your kids fortunes over their lifetimes. This skillset will almost certainly radically improve their lives.

Teaching kids about business and stocks is very empowering for them, they naturally love to learn. It instills in them a broad practical worldview most people never experience, and increases the odds they will nurture their entrepreneurial side and ultimately do fulfilling work they love. The earlier anyone starts learning about trading, and all the necessary peripheral topics like sound money management, the more successful they will ultimately be.

On the other end of the age spectrum, trading is equally beneficial to the elderly. Sadly many people get bored in old age, it’s tragic. They don’t exercise their brains so gradually their minds turn to mush. Trading, since it demands endless learning, can seriously slow or even reverse this unfortunate deterioration. Trading provides excitement for elderly folks, helping them feel plugged in to the world again. It gives them something cool to talk about with their friends, kids, and grandchildren. I’m going to continue trading until the day I die to keep my mind in training and razor-sharp.

WMA 8 April 2011 - Interesting times...

TIP
Weekly is reversing uptrend. Indicators are attempting a second cross into bearish territory and both a bearish Setup and Countdown are in place.
Daily has the second lower high, and Sell signal (2A) is activated. Indicators are weakening into bearish territory.
Breaking support at 108.2 will see a confirmed breakdown.
BEARISH

JNK
Weekly has been consolidating in range for the past 6 months. No trend.
Daily appears to be bullish. Bullish SEtup in place. No signal.
POTENTIALLY BULLISH

/HG
Weekly has been ranging over a wide berth and is overbought on the Stochastics but RSI is coming up, while still in bullish territory.
Daily is in 3 candle for Bullish Setup, Buy signal (1A) was given on Thursday. MACD about to cross into bullish territory while RSI and FI have already crossed.
VERY BULLISH.

From the leading indicators, the S&P500 should be heading into bullish territory for the short term.


/ES
Weekly is overbought with bullish Setup in second week, breaking a Sell signal (2A), which is very bullish.
Daily is approaching a likely breakout to achieve a higher high by next week. No buy signal - yet.
The S&P500 futures are indicating a very bullish picture.
BULLISH

/DX (USD futures)
Weekly has broken very longstanding support and is showing very bearish signs. Bearish Setups and Countdown are in place.
Daily is also very bearish with berish setup in candle 7 and bearish Countdown in 12. Some sort of bullish divergence may be developing as the indicators are not as bearish as they should be.
BEARISH

/CL (Crude futures)
Weekly is very bullish, in period 8 of bullish Setup. While the XOP at 117 is in sight, the overbought conditions may not allow it in the short term.
Daily is in bullish Setup period 7. However, there is concern for this bull run as the FI, stochastics are indicating a possible bearish divergence. Price is near mania at 112. MACD is very overbought although RSI is strengthening.
BULLISH (for short term)

/GC (Gold futures)
Weekly is VERY BULLISH although price is mania, with a bullish Setup just starting.
Daily at perido 7 of bullish Setup, period 11 of bullish Countdown. Price is in mania with MACD bearish divergence. This is bullish BUT has a high probability of a correction by mid next week once the Setup and Countdown ends on Tuesday. This brings forth a very large bearish divergence on Gold in the weekly chart.
BULLISH for now, BEARISH divergence warning.

DBC (Commodities)
Weekly is very bullish in a very long trend, currently in the last week of the Countdown. Indicators are very overbought and RSI, FI bearish divergence is observed. Price is at double mania.
Daily is in mania with some bearish divergence, at period 6 of Setup. This is likely to be the last push for commodities and should have a trend reversal wave pattern for a huge weekly correction.
BULLISH till correction

The MadScientist - 8 April 2011

Note: Any material posted here is of my sole opinion, and my opinion may differ from others. It is definitely NOT a solicitation to do anything else as a consequence of reading this material. The material presented here is intended for educational purposes only.

Trading for Everyone by Adam Hamilton (Part 7)

Trading builds honor and integrity like few other things can. Why? You are completely at the mercy of your own decisions. When you make a trade that doesn’t work out, and it happens often as losing is a major part of trading, you have no one to blame but yourself. Sadly we live in an era where personal responsibility and accountability are dying, people prefer to blame others for their own poor decisions. But when trading you have no choice but to be fully responsible and accountable. Nourishing these positive traits greatly impacts all areas in your life and relationships for the better.

Trading hones diligence and perseverance, maybe the most important life skills of all. Like life, trading has many setbacks so opportunities to get discouraged are legion. But if you stick with it, keep your nose to the grindstone for months, then years, and then decades, you will succeed. The single most-important ingredient for success is to simply stubbornly keep doing something until you naturally learn enough to get good at it! Most elite traders, CEOs, athletes, or any professionals became that way not because they had advantages up front, but simply because they never gave up despite the inevitable setbacks.

Incredibly, trading also helps you socially! Not only does its built-in achievement bolster self-confidence, it makes you more interesting to everyone you meet. Over the decades I’ve talked one-on-one with many hundreds, maybe thousands, of people about trading stocks. And 99% of them are utterly fascinated by the prospect. And who wouldn’t be? The markets are endlessly fascinating, and the allure of divorcing income earned from time on task is great. It is really fun sharing what you are doing in the markets with others, helping them see and seize the same stock opportunities you are.

If you are a parent, I’m sure you want your kids to excel in all these critical life traits. Trading is a great way to teach them! Start your kids out young, it’s easy and fun. When you take them out to their favorite restaurant, talk with them about the process of getting the food to their plates. Tell them about all the workers from the farmers to the truckers to the cooks, who labor hard and earn a profit for their part in the food chain. If the restaurant is publicly-traded, explain to your kids that they can own a small piece of this business themselves!

Trading for Everyone by Adam Hamilton (Part 6)

Trading demands discipline, which has unimaginably-big benefits in all aspects of life. In order to trade, you first have to generate some surplus income. The only way to do this is spend less than you earn. The longer that you live below your means in general, the more you save, the richer you get. This trading-forged discipline virtually ensures you will never have debt problems, never be in an ugly situation where you risk losing a major asset like your house. It leads to a much-happier and less-stressful life.

Living below your means, regardless of what they are, also loosens the hold of money (greed) on your heart. There is nothing wrong with building wealth, but the Bible is crystal-clear on the dangers of greed. In his first letter to young pastor Timothy, the great Apostle Paul wrote, “For the love of money is a root of all kinds of evil, for which some have strayed from the faith in their greediness, and pierced themselves through with many sorrows.” Paradoxically even though trading’s goal is to build wealth, greed is its mortal enemy.

A parallel trait greatly enhanced by trading stocks yourself is stewardship. We are all blessed with financial assets, and how we manage them is of paramount importance for our futures. No one cares more about your financial future than you do! Trading stocks forces you to take more responsibility for growing your assets, gets you deeply involved in what you invest in and why. While it is important to seek wisdom on investing from wise counselors, trading gives you the knowledge to ultimately make informed decisions yourself. This leads to radically-better stewardship of your financial assets and entire future.

Trading for Everyone by Adam Hamilton (Part 5)

Trading also yields great insights into other people. Sentiment, how the majority of other traders view the stock markets or any given stock at any particular time, is the most important driving force behind price movements. Trading success demands buying low and selling high, right? The only times stocks are low is when they are unloved and out of favor among the majority of traders. Conversely, stocks only get high when they are popular and the majority of traders want to buy them. Observing others’ sentiment gives you fantastic insights into life in general, and human nature, that are extremely valuable.

Trading also develops the wonderful ability to take the long view. The tyranny of the present is intense in this Information Age, everyone worries incessantly about today while carelessly ignoring the past and the future. Trading forces you to transcend today’s worries to see the big picture. In order to buy low and sell high, you have to consider any stock’s history and future potential. This grows into a universal life-wide ability to keep the present in proper perspective, to not dwell on today’s challenges out of proper context.

I’ve always viewed trading as analogous to the wondrous Age of Discovery when great tall ships plied the world’s oceans with exotic trading goods. They would sail to Asia at great risk and expense, and bring back spices to Europe that would fetch a fortune. Traders bought goods where the supply was plentiful to transport them to where demand was great. Stock trading today is like sailing the oceans of time. We buy trade goods (stocks) today, and hope that demand for them (and hence their prices) will be higher in the future.

Trading for Everyone by Adam Hamilton (Part 4)

Trading feeds your brain, as it demands constant yet fascinating learning. I call myself “a student of the markets” as I continue to learn new things every day even after decades of trading. If I lived and traded through 10 lifetimes, I’d still be a student of the markets. We humans are all hard-wired to love to learn, to expand our horizons. And trading provides learning in droves. There are always new market situations to observe, new companies to analyze, and new factors driving the performance of stocks.

The more you trade, the more you will learn about the world around you. You will gradually start to better understand the global economy, national economy, business in general, and how things work. Traders view the world in a different light, pondering how the goods and services we need and want are created and ultimately delivered to us at a reasonable profit. Every time you buy something, every time you interact with someone, your mind will constantly be sifting everything for trading opportunities.

Learning is naturally empowering and self-feeding, the more you know the more you want to know. And knowledge and diligence ultimately lead to success, which builds self-confidence. Once you start making money trading stocks, and you will if you apply yourself and stick with it, your whole worldview starts to change. As your income becomes less dependent on your time on task, as the markets reward you for the merit of your own decisions, I guarantee you will feel better about yourself and life in general.

And this gift of learning extends far beyond the external, markets and stocks. The greatest challenges for trading lie in your own heart. Your success depends on harnessing your own internal greed and fear, your greatest enemies. As naturally-emotional creatures, mastering our own emotions isn’t easy. But the more you trade, the more you will learn about yourself. It literally forces you to look deep into your own heart, to try and dispassionately analyze the motivating forces driving your buying and selling decisions.

The more you learn about yourself, the deeper you journey into your own emotions, the happier you will ultimately be. This quest for emotional mastery yields benefits far beyond the trading realm. The longer you trade, the better you become at stepping back and calmly analyzing life situations that make you angry, sad, frustrated, whatever. Controlling your own greed and fear helps you better control all your emotions, making you more even-keeled and slower to get upset in the future. Imagine the benefits this has for marriages, family interactions, business relationships, and everything else!

Trading for Everyone by Adam Hamilton (Part 3)

Trading is a great equalizer, shattering all the limiting preconceptions that we burden ourselves with and others impose on us. The world is tough and unforgiving, and often we feel inadequate. The reasons are infinite. Maybe the world teases you about something, looks down on you for some reason, or doesn’t respect you for who you are. All these crushing limitations that saddle real life are obliterated in trading.

The markets could not care less about your background, your education, your faith, your age, your appearance, your sex, or any real or perceived shortcomings in your life. All that matters is your own decisions. Trading may very well be the last true meritocracy on the planet, where everyone is free to thrive or fail based solely on their own drive. If you diligently strive to learn the art of trading, you can and will grow successful regardless of where you came from, where you are, or what limitations have burdened you.