Santa Claus Is Coming To Town! - Market Analysis for 27th December 2011 by Singaporeseeds

Daily chart for S&P


Daily chart for Dow


Daily chart for NASDAQ


Market analysis from last week:
“We dipped after a huge rally that changed all my indicators from bearish to bullish. On Friday, the market closed around important support levels for all 3 indexes. This is 1215 for S&P.
Today, we shall see whether these support levels hold. If it holds, the chances that we will see a Santa Claus Rally would be much higher.
Currently, I believe that the market will hold these support levels and move up to 1350 by year end or early Jan 2012.”

Market analysis for this week:
The past week had been one of the most bullish for the past few months. This is just the start of the huge bullish divergence pattern that appeared on the charts a few weeks ago. This should bring the S&P up to around 1,350 over the next 2-4 weeks. This will be around 12,750 for the Dow.

Daily chart for the Dollar


Market analysis from last week:
“The dollar (UUP) made yet another bearish divergence in the market on daily charts. However on weekly charts, it seems that the dollar has more to go. At least around 2 more weeks of bullish movement before it finally give way. As the market movement is inversely correlated with the stock market, this might mean that we will have 2 more weeks of bearish market. This will directly cut into the Santa Claus rally. We shall see how it goes.”

Market analysis for this week:
Longer term weekly chart is showing that the dollar will continue to go up, but on daily, it shows down. We might see some weakness in the dollar over the next 2 weeks. First target at 22, second at 21.70.

Daily chart for Gold


Quote from my last market analysis:
“Gold broke out of the triangle last Monday and completed the breakout move by the end of the week. Price closed just below it’s 200 day moving average on Friday.
Today, we should see gold consolidate after a big move. Especially with a strong and rising dollar, we should see further lower prices over the next 1-2 weeks. Next support at around 1500 on gold futures.”

Market analysis for this week:
Gold is still consolidating after the huge movement. It may trend down to 145 on GLD over the next few weeks. It should move in a range between 145 and 158.50 for the next 1-2 months.

Daily chart for Crude Oil


Market analysis from last week:
“The uptrend did indeed end last Tuesday with a gap down and drop over the rest of the week.
Now with crude at it’s 50 day moving average, we should see either a consolidation or bounce before dropping further over the next few weeks. Next support at 35 and then 33.50 on USO.”

Market analysis for this week:
Crude oil is more bullish than ever, having bounced off it’s 50 and then 200 day moving average in the past week. I believe we should see a dip next week with support at around 37.50 on USO before breaking resistance at 39.50.
Final target will be around 45.20 in 3 month’s time. This will be around 113 on crude oil futures. Expect gasoline prices to increase.

Preparing for the Santa Claus Rally? - Market Analysis for 19th December 2011 by Singaporeseeds

Daily chart for S&P


Daily chart for Dow


Daily chart for NASDAQ


Market analysis from last week:
“Well, the markets closed as a doji this week. On Dow, it bounced off its 200 day moving average and on NASDAQ, the 50 day moving average. The market seems to be anticipating some kind of good news from the European Crisis as it shrugged off the bad news reports coming from the ECB discussion and slowly edged upwards this week.
It seems that we should be getting good news from Europe. We shall see about this soon.
Last week, market technical changed overnight from very bearish to bullish with the release of a single news report. We will be getting more of this over the next few months. This shows how news driven this market had become.
I have a target at 1,350 on S&P that should be hit before the end of the month. If the news from Europe is indeed good, we can reach this target overnight. In the meantime, we might just move more or less sideways.”

Market analysis for this week:
We dipped after a huge rally that changed all my indicators from bearish to bullish. On Friday, the market closed around important support levels for all 3 indexes. This is 1215 for S&P.
Today, we shall see whether these support levels hold. If it holds, the chances that we will see a Santa Claus Rally would be much higher.
Currently, I believe that the market will hold these support levels and move up to 1350 by year end or early Jan 2012.

Daily chart for the Dollar


Market analysis from last week:
“On weekly charts, the dollar closed as a doji. Everyone seems to be waiting for a news report from Europe to start a new trend. My market analysis is still the same. I’m expecting a double dip for the dollar to 21 on UUP.”

Market analysis for this week:
The dollar (UUP) made yet another bearish divergence in the market on daily charts. However on weekly charts, it seems that the dollar has more to go. At least around 2 more weeks of bullish movement before it finally give way. As the market movement is inversely correlated with the stock market, this might mean that we will have 2 more weeks of bearish market. This will directly cut into the Santa Claus rally. We shall see how it goes.

Daily chart for Gold


Quote from my last market analysis:
“Gold is still in the triangle. Without any significant movement in the markets and in the dollar, gold should not be moving much. We should be seeing a breakout (up or down) for gold, dollar and the markets all at the same time.”

Market analysis for this week:
Gold broke out of the triangle last Monday and completed the breakout move by the end of the week. Price closed just below it’s 200 day moving average on Friday.
Today, we should see gold consolidate after a big move. Especially with a strong and rising dollar, we should see further lower prices over the next 1-2 weeks. Next support at around 1500 on gold futures.

Daily chart for Crude Oil


Market analysis from last week:
“Crude (USO) formed a support at 37.77 and bounced. This is also the 200 day moving average and meeting point for 2 trendlines.
On candlesticks, it seems to have formed a piercing pattern. Monday has to close as a bullish candle for this pattern to be reliable. The uptrend from early October 2011 should be ending this week.

Market analysis for this week:
The uptrend did indeed end last Tuesday with a gap down and drop over the rest of the week.
Now with crude at it’s 50 day moving average, we should see either a consolidation or bounce before dropping further over the next few weeks. Next support at 35 and then 33.50 on USO.

Just about there... Market Analysis 16 Dec 2011

While the rest of my buddies are in a Christmas gathering, I am here rushing out an update to my mid-week analysis before the CPI data comes online... and before I rush down to join that Christmas Gathering for the finale.

Basically, the daily chart is looking at a potential (possible but weak case) bounce day. The past three days indicate increasing volatility breakdown. and I am expecting a burst downside by next week Wednesday.  Otherwise, all bets are off.

30min chart (right) is showing a second test of the 200MA. MACD indicators are not encouraging for a bull case, but it would also depend on CPI data in 30 mins time. This level is also resistance level as well as a Fibo retracement level. Am expecting downside.... otherwise, a relook is in order.

Quick nips...
On the Gold charts, a bounce is due.
On USD futures, a retracement is due.
Today is options expiry day!

Have a great weekend ahead!


The MadScientist
16 December 2011

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

It's elementary! - WMA 14 December 2011

Ah! Its been two weeks, and it is time for analyses again!
My last post was about a sucker rally on 28th November, a post I did through my iPad.
Since then, I had been really bogged down with work and other things in life that the little time I had reading news and watching through my mobile devices all did not seem to make much sense. Hence, I abstained... from taking any positions.

A quick review... since my last post, major events include the central banks easing the swap rates, and the Euro Summit. The former fired off a very strong rally but it fizzled as people started to realize that it was a bleed to let off some pressure. This means that there is more time added, hence kicking the can further down the road. While that happened, the bond yields of the European sovereigns actually receded enough to ease tensions, giving the central bank measures some punch for its efforts.
Then there was optimism fuel from the Euro Summit anticipation, as well some seemingly decent economic data out of the US.
Despite the above, the market rallies were short and stunted. A look at the charts reveal the behaviour and psychology of the current market.

Below is a snapshot of what I saw today... click on image to get a larger view.

The ES weekly chart (left panel) appears to be forming a HUGE bear flag, which suggest a deeper downside going forward into 2012. While this is may include some upside as the turn of the year, for now, looks like Santa may have crashed en route to the rally party IMHO...

The daily chart (middle panel) has some very omnious technical aspects. Notice the while downtrending line from August 2011? That trendline has been tested and failed five times. For technical chartists, this is significant as the more times the trendline is tested and failed, the stronger that trendline becomes. Furthermore, see the dark green 200MA line, which has been tested and failed three times in the past two months. Although there has not (YET!) been a Sell signal, there may be one coming along soon if Santa does not rally the market. The dismal outcome of the Euro Summit and developments over the past months in Europe is certainly showing a trend... that hopeful promises will be made, and will yet to be delivered, if at all. These promises will result in powerful bear rallies. In any case, the red arrows outline my baseline expectations in the near term, where the S&P futures should break 1220 and then test 1200. A breakdown of 1200 this time would be really bad. Before this happens, I am expecting a Sell signal in the coming week, barring no new jolting developments from European leaders (which I suspect is unlikely). I am actually looking for the end of the review period of the rating agencies to help in downgrading the sovereigns (and tank the markets).

In the 30 min charts (right panel), it is clear that there is a current downtrend... this would be the first to change if there is a reversal rally, so it is worth keeping an eye on it.

In other charts, not shown here today...

/DX, the USD futures is looking bullish.
/GC, the Gold futures is ranging in a large area and is looking bearish. So is silver. Same for copper.
/CL, the Crude futures, strangely appear bullish to me, and this does not fit into the overall scheme of things. I do wonder as I keep an eye out on crude.

Meanwhile... as US economic and employment data, together with Leading Economic Indicators (LEIs), are looking good for a mild US economic recovery. That is without a doubt. However, a European breakdown is more than enough to overwhelm all that good news and improvement. For now, it appears to be a bear market, and the bull really needs to work real hard in the weeks to come.

Be safe, be wise.


The MadScientist
14 December 2011

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

Waiting for Good News from Europe - Market Analysis for 12th December 2011 by Singaporeseeds

Daily chart for S&P


Daily chart for Dow


Daily chart for NASDAQ


Market analysis from last week:
“What a difference a week makes!
http://www.bloomberg.com/news/2011-11-30/treasuries-set-for-monthly-gain-as-eu-struggles-to-stem-contagion-concern.html
On Wednesday, the US Federal Reserve and five other central banks cut the cost of emergency dollar funding for European banks in response to the continent’s sovereign-debt crisis.
This sparked a huge rally on Wednesday that smashed through all resistances on my charts. Non-farm payrolls on Friday was also expected to be good (which also turned out good) and this added to the euphoria.
On the S&P, we are just below the 200 day moving average and the down channel that we had been in since June 2011. If we break above the 200 day MA, it would be the start of another rally that might bring us back up to the all-time high around 1,550.
The direction of the market this week will determine the direction of the market over the next few months.”

Market analysis for this week:
Well, the markets closed as a doji this week. On Dow, it bounced off its 200 day moving average and on NASDAQ, the 50 day moving average. The market seems to be anticipating some kind of good news from the European Crisis as it shrugged off the bad news reports coming from the ECB discussion and slowly edged upwards this week.
It seems that we should be getting good news from Europe. We shall see about this soon.
Last week, market technical changed overnight from very bearish to bullish with the release of a single news report. We will be getting more of this over the next few months. This shows how news driven this market had become.
I have a target at 1,350 on S&P that should be hit before the end of the month. If the news from Europe is indeed good, we can reach this target overnight. In the meantime, we might just move more or less sideways.

Daily chart for the Dollar


Market analysis from last week:
“Instead of breaking through the 22.50 resistance, the dollar made a bearish divergence on both MACD and RSI. Fundamentally, the Fed boosting liquidity for Europe and the expectation of a 3rd round of stimulus in US is not giving much boost to the value of the US dollar.
http://www.bloomberg.com/news/2011-11-30/oil-rises-in-new-york-as-central-banks-led-by-fed-cut-dollar-funding-costs.html
I’m expecting the start of a new downtrend down to 21 over the next few days.”

Market analysis for this week:
On weekly charts, the dollar closed as a doji. Everyone seems to be waiting for a news report from Europe to start a new trend. My market analysis is still the same. I’m expecting a double dip for the dollar to 21 on UUP.

Daily chart for Gold


Quote from my last market analysis:
“Gold is still within the triangle. However I’m expecting a movement (can be either up or down) this coming week. With the dollar expected to drop over the next few weeks, and the Fed boosting liquidity, Gold is set to make a new high soon.”

Market analysis for this week:
Gold is still in the triangle. Without any significant movement in the markets and in the dollar, gold should not be moving much. We should be seeing a breakout (up or down) for gold, dollar and the markets all at the same time.

Daily chart for Crude Oil


Market analysis from last week:
“Crude oil formed an inverse head and shoulders pattern on daily charts. This should bring USO up to 42.50 over the next few weeks. With the US dollar expected to fall, this should not come as a surprise.”

Market analysis for this week:
Crude (USO) formed a support at 37.77 and bounced. This is also the 200 day moving average and meeting point for 2 trendlines.
On candlesticks, it seems to have formed a piercing pattern. Monday has to close as a bullish candle for this pattern to be reliable. The uptrend from early October 2011 should be ending this week.

Decision Week! - Market Analysis for 5th December 2011 by Singaporeseeds

Daily chart for S&P


Daily chart for Dow


Daily chart for NASDAQ


Market analysis for this week:
What a difference a week makes!

http://www.bloomberg.com/news/2011-11-30/treasuries-set-for-monthly-gain-as-eu-struggles-to-stem-contagion-concern.html

On Wednesday, the US Federal Reserve and five other central banks cut the cost of emergency dollar funding for European banks in response to the continent’s sovereign-debt crisis.
This sparked a huge rally on Wednesday that smashed through all resistances on my charts. Non-farm payrolls on Friday was also expected to be good (which also turned out good) and this added to the euphoria.
On the S&P, we are just below the 200 day moving average and the down channel that we had been in since June 2011. If we break above the 200 day MA, it would be the start of another rally that might bring us back up to the all time high around 1,550.
The direction of the market this week will determine the direction of the market over the next few months.

Daily chart for the Dollar


Market analysis for this week:
Instead of breaking through the 22.50 resistance, the dollar made a bearish divergence on both MACD and RSI. Fundamentally, the Fed boosting liquidity for Europe and the expectation of a 3rd round of stimulus in US is not giving much boost to the value of the US dollar.
http://www.bloomberg.com/news/2011-11-30/oil-rises-in-new-york-as-central-banks-led-by-fed-cut-dollar-funding-costs.html
I’m expecting the start of a new downtrend down to 21 over the next few days.

Daily chart for Gold


Quote from my last market analysis:
“Gold had been forming a triangle pattern since August 2011. A triangle pattern is formed when volatility and price movement had been decreasing gradually. This pattern usually results in a surge of activity together with a large movement in price. This can be either up or down. With the problems occurring around the world, I would expect a surge up in price soon.”

Market analysis for this week:
Gold is still within the triangle. However I’m expecting a movement (can be either up or down) this coming week. With the dollar expected to drop over the next few weeks, and the Fed boosting liquidity, Gold is set to make a new high soon.

Daily chart for Crude Oil


Market analysis for this week:
Crude oil formed an inverse head and shoulders pattern on daily charts. This should bring USO up to 42.50 over the next few weeks. With the US dollar expected to fall, this should not come as a surprise.