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.

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.   

Radio check, over... 12 July 20012

It's been a while, and during this time, there has been a nice dead cat bounce.

Today's post is about a possible end to this dead cat bounce rally as we are technically at a decision point turnaround.

/ES

The weekly ES (S&P500 futures) chart show a bounce off the moving averages and a possible failure to make a new high. What is not seen is a reversal of a trend IF the ES closes at its current level or below this Friday. Zooming into the daily ES chart, a uptrending support line is just about to be broken. Having a Sell Signal earlier in the week, with extended indicators as well as a potential bearish crossover of the moving averages, a break of this uptrending support line would see the daily 200 moving average be the next support test, which coincides with the previous low. Price action beyond this low by Friday means a break of the weekly and daily uptrend.
In essence, it technically looks like a turnaround point... however, we are looking for trigger events to bring this successfully into fruition and with much further downside.

/DX

The USD futures weekly and daily charts are showing a renewed interest in a rally. With a new recent high made, it indicates a continuation of the rally un USD. With this, a drop in equities (ES) is correlated. The recent run up in the USD is technically supported by indicator as well as moving averages and the market fueling of the EUR/USD dumping to all time lows

/GC

This is a favourite... cos it is a tad challenging. So many people I know are so bullish on Gold, that it is about time Gold does some distribution. The weekly gold futures chart show the recent Gold double top peaks that had prices test 1550 on many occasions. There seems to be a traiangle formation and indicators are showing a potential divergence. Yet, gold is not breakout and have been ranging over the ast few weeks. The daily charts show that clearly and uite differently show prices below the moving averages with undecided price action and technicals. All said, the range bounadries are closing in and a breakout or breakdown is due... watch for this.

 

/CL 

Crude futures in recent weeks have had a tough time, and clearly breaking an uptrend. Expect a short term bounce and consolidating range between 80-90.

So there... things are at some decision point. My warnings of a fall in the markets since March 2012 had materialized in May 2012 and since the market has had a bounce... possibly a dead cat bounce. Between now and October, something might happen to pull the markets one way or another... something not seen. IF the markets rally, it is likely to overextend itself and not expecting it to be higher than the high at the beginning of the year. This may be a setup just like it was in July 2008 to September 2008. I am looking for the signs... it might do us all well to keep a look out too.

Fundamentally, everyone is yet again bailing and easing... this time, the markets aren't reacting with that much favour. One might ask oneself why so... and let's keep our eyes out for the answer.

Have a good weekend ahead!

The MadScientist

13 July 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