Chart Analysis

[Show-me]

Chart Analysis

Chart Patterns >> http://stockcharts.com/education/ChartAnalysis/chartPatternsNode.html

[Show-me]

The quick and dirty on cup and handle.


Trend: To qualify as a continuation pattern, a prior trend should exist. Ideally, the trend should be a few months old and not too mature. The more mature the trend, the less chance that the pattern marks a continuation or the less upside potential.
Cup: The cup should be "U" shaped and resemble a bowl or rounding bottom. A "V" shaped bottom would be considered too sharp of a reversal to qualify. The softer "U" shape ensures that the cup is a consolidation pattern with valid support (http://stockcharts.com/education/GlossaryS.html#Support) at the bottom of the "U". The perfect pattern would have equal highs on both sides of the cup, but this is not always the case.
Cup Depth: Ideally, the depth of the cup should retrace 1/3 or less of the previous advance. However, with volatile markets and over-reactions, the retracement could range from 1/3 to 1/2. In extreme situations, the maximum retracement could be 2/3, which is conforms with Dow Theory (http://stockcharts.com/education/MarketAnalysis/dowtheory1.html).
Handle: After the high forms on the right side of the cup, there is a pullback that forms the handle. Sometimes this handle resembles a flag or pennant (http://stockcharts.com/education/ChartAnalysis/flagPennant.html) that slopes downward, other times just a short pullback. The handle represents the final consolidation/pullback before the big breakout and can retrace up to 1/3 of the cup's advance, but usually not more. The smaller the retracement is, the more bullish the formation and significant the breakout. Sometimes it is prudent to wait for a break above the resistance (http://stockcharts.com/education/GlossaryR.html#Resistance) line established by the highs of the cup.
Duration: The cup can extend from 1 to 6 months, sometimes longer on weekly charts. The handle can be from 1 week to many weeks and ideally completes within 1-4 weeks.
Volume: There should be a substantial increase in volume on the breakout above the handle's resistance.
Target: The projected advance after breakout can be estimated by measuring the distance from the right peak of the cup to the bottom of the cup.

[Show-me]

Bump and Run Reversal (Reversal)

http://stockcharts.com/images/blue_print.gif Print (http://javascript<b></b>:window.print();)

As the name implies, the Bump and Run Reversal (BARR) is a reversal pattern that forms after excessive speculation drives prices up too far, too fast. Developed by Thomas Bulkowski, the pattern was introduced in the June-97 issue of Technical Analysis of Stocks and Commodities (http://www.traders.com/) and also included in his recently published book, the Encyclopedia of Chart Patterns (http://store.yahoo.com/stockcharts/enofchpa.html).
The pattern was originally named the Bump and Run Formation, or BARF. Bulkowski decided that Wall Street was not ready for such an acronym and changed the name to Bump and Run Reversal. Bulkowski identified three main phases to the pattern: lead-in, bump and run. We will examine these phases and also look at volume and pattern validation.
http://stockcharts.com/education/chartanalysis/images/barr-intl.png

Lead-in Phase: The first part of the pattern is a lead-in phase that can last 1 month or longer and forms the basis from which to draw the trend line. During this phase, prices advance in an orderly manner, and there is no excess speculation. The trend line should be moderately steep. If it is too steep, then the ensuing bump is unlikely to be significant enough. If the trend line is not steep enough, then the subsequent trend line break will occur too late. Bulkowski advises that an angle of 30 to 45 degrees is preferable. The size of the angle will depend on the scaling (semi-log (http://stockcharts.com/education/GlossaryL.html#Logarithmic) or arithmetic) and the size of the chart. It is probably easier to judge the soundness of the trend line with a visual assessment.
Bump Phase: The bump forms with a sharp advance, and prices move further away from the lead-in trend line. Ideally, the angle of the trend line from the bump's advance should be about 50% greater than the angle of the trend line extending up from the lead-in phase. Roughly speaking, this would call for an angle between 45 and 60 degrees. If it is not possible to measure the angles, then a visual assessment will suffice.
Bump Validity: It is important that the bump represent a speculative advance that cannot be sustained for a long time. Bulkowski developed what he calls an "arbitrary" measuring technique to validate the level of speculation in the bump. The distance from the highest high of the bump to the lead-in trend line should be at least twice the distance from the highest high in the lead-in phase to the lead-in trend line. These distances can be measured by drawing a vertical line from the highest highs to the lead-in trend line. An example is provided below.
Bump Rollover: After speculation dies down, prices begin to peak and a top forms. Sometimes, a small double top (http://stockcharts.com/education/ChartAnalysis/doubleTop.html) or a series of descending peaks forms. Prices begin to decline towards the lead-in trend line, and the right side of the bump forms.
Volume: As the stock advances during the lead-in phase, volume is usually average and sometimes low. When the speculative advance begins to form the left side of the bump, volume expands as the advance accelerates.
Run Phase: The run phase begins when the pattern breaks support (http://stockcharts.com/education/GlossaryS.html#Support) from the lead-in trend line. Prices will sometimes hesitate or bounce off the trend line before breaking through. Once the break occurs, the run phase takes over, and the decline continues.
Support Turns Resistance: After the trend line is broken, there is sometimes a retracement that tests the newfound resistance level. Potential support-turned-resistance (http://stockcharts.com/education/GlossaryR.html#Resistance) levels can also be identified from the reaction lows within the bump.The Bump and Run Reversal pattern can be applied to daily, weekly or monthly charts. As stated above, the pattern is designed to identify speculative advances that are unsustainable for a long period. Because prices rise very fast to form the left side of the bump, the subsequent decline can be just as ferocious.

[Fivetears]

Encyclopedia of Chart Patterns - $79.00 :sick: Ouch.

[Show-me]

Pennies man, come on. lol :D http://tinyurl.com/l698j

Encyclopedia of Chart Patterns - $79.00 :sick: Ouch.

[ebbnflow]

Pennies man, come on. lol :D http://tinyurl.com/l698j

I asked a friend of mine a while back if he had any investment books and he gave me a disk containing e-books/pdfs instead. I checked the disk again and it contained The Encyclopedia of Chart Patterns, 5 Winning Chart Patterns Every Daytrader Needs To Know, Investing Online for Dummies, etc. I wonder if he got it cheaper since it's not hardbook cover. :)

[Show-me]

Here is the weekly s&p chart. Looks like it need a break to me.

http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=0&mn=6&dy=0&id=p06798009354

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:introducti on_to_cand

Doji

Doji are important candlesticks that provide information on their own and as components of in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns. Any bullish or bearish bias is based on preceding price action and future confirmation. The word "Doji" refers to both the singular and plural form.
http://stockcharts.com/school/data/media/chart_school/chart_analysis/introduction_to_candlesticks/candle2-doji1.gif
Ideally, but not necessarily, the open and close should be equal. While a doji with an equal open and close would be considered more robust, it is more important to capture the essence of the candlestick. Doji convey a sense of indecision or tug-of-war between buyers and sellers. Prices move above and below the opening level during the session, but close at or near the opening level. The result is a standoff. Neither bulls nor bears were able to gain control and a turning point could be developing.
http://stockcharts.com/school/data/media/chart_school/chart_analysis/introduction_to_candlesticks/candle2-doji2.gif
Different securities have different criteria for determining the robustness of a doji. A $20 stock could form a doji with a 1/8 point difference between open and close, while a $200 stock might form one with a 1 1/4 point difference. Determining the robustness of the doji will depend on the price, recent volatility, and previous candlesticks. Relative to previous candlesticks, the doji should have a very small body that appears as a thin line. Steven Nison notes that a doji that forms among other candlesticks with small real bodies would not be considered important. However, a doji that forms among candlesticks with long real bodies would be deemed significant.

Doji and Trend

The relevance of a doji depends on the preceding trend or preceding candlesticks. After an advance, or long white candlestick, a doji signals that the buying pressure is starting to weaken. After a decline, or long black candlestick, a doji signals that selling pressure is starting to diminish. Doji indicate that the forces of supply and demand are becoming more evenly matched and a change in trend may be near. Doji alone are not enough to mark a reversal and further confirmation may be warranted.
http://stockcharts.com/school/data/media/chart_school/chart_analysis/introduction_to_candlesticks/candle2-longwhite_doji.gif
After an advance or long white candlestick, a doji signals that buying pressure may be diminishing and the uptrend could be nearing an end. Whereas a security can decline simply from a lack of buyers, continued buying pressure is required to sustain an uptrend. Therefore, a doji may be more significant after an uptrend or long white candlestick. Even after the doji forms, further downside is required for bearish confirmation. This may come as a gap down, long black candlestick, or decline below the long white candlestick's open. After a long white candlestick and doji, traders should be on the alert for a potential evening doji star.

[vectorman]

The NASDAQ has a gap up that will need to get filled sometime in the future.

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:gaps_and_g ap_analysis

http://stockcharts.com/school/doku.php?id=chart_school:trading_strategies:gap_tr ading_strategi

2298

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=NASDAQ

[James48843]

I'm a "Point and figure" chart believer.

I didn't know much about P&F charts before about six months ago, but now find them incedibly useful.

http://www.stockcharts.com

then click on S&P500, and then look at the P&F chart.

It says it had a "high pole warning" on Oct 19th, indicitive of a lower price ahead.

[vectorman]

Take a look at the BKX (banking index chart). CNBC is not talking about this. But I did see a comment from http://stocktiming.com/Wednesday-DailyMarketUpdate.htm, that does have some free comments. The chart speaks for itself. The BKX, as of this post, has gone below the middle of AUG lows and still downtrending. This will continue to put a drag on the SPX.

2355

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=BKX

[vectorman]

There may be a bounce tomorrow as the VIX is in a deceasing wedge pattern. The VIX is above 20 and still in an uptrend, but it may drop to backtest 20 again. Until there is a breakout, moving forward start looking for big swings in the market again, like back in early AUG.

2354

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

[vectorman]

If the VIX holds above 24, there could be a retest back up to 25 to 30.

2411

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

[vectorman]

Another look.

2412

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

[vectorman]

Never know about chart patterns until after the fact, but something to watch...

2414



http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=NASDAQ

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_t

[vectorman]

Current Banking Index, classic Head and Shoulders Pattern, after the fact. Now trying to find support.

2415

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=BKX

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_t

[vectorman]

One, might wonder with oil over 90 dollars, if the Dow Theory is being thought about. Below, the current DJTA Index, just something else to watch while the market looks for direction.

2416

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=DJTA

http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:dow_theor y

http://www.dowtheory.com/pr/Is%20the%20Dow%20Theory%20now%20on%20a%20sell%20si gnal%20-%20DTF%20-%20MarketWatch%20-%208-15-07.pdf

[vectorman]

With all the banking/credit woes, I find it interesting that the banking index (BKX) is getting very little press. The index is trying to find support, but any more negative or uncertain banking/credit news increases the chance for more downside risk.

2418

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=BKX

[vectorman]

Here's a 10 yr shot. This includes the MACD, showing that it is possible for the index to drop more. Also check out the index swings leading into the last recession. If anyone is wondering why I'm talking about the BKX index, is because this may effect the SPX, and right now there is a devergence between the two indexes.
2419

Sorry for the small chart, but you can go to BigCharts.com, click on the interactive setting for BKX and play with it.

http://bigcharts.marketwatch.com/interchart/interchart.asp?symb=BKX&time=8

[Sunnyskies]

Vectorman -- thanks for the charts and explainations.

[vectorman]

Possible chart pattern today. Inverse Head and Shoulders neckline test. Previous neckline resistence becomes support. If support test holds, TA's see this.... then the money starts pouring in. Hopefully this will not be a DCB and the previous trend will continue.

2446

" Resistance Turned Support: Once resistance is broken, it is common for this same resistance level to turn into support. Often, the price will return to the resistance break, and offer a second chance to buy. "

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_b


http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=DJIA

[vectorman]

Same pattern using the SPX chart.

2447

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_b

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=SP500

[vectorman]

Talking heads on CNBC are confused why financials reversed. The BKX index found support at 90, which probably was the target the Big Boys were waiting for. Look above at post #18. If 90 doesn't hold then markets will be in big trouble. 90 gives us a good support to test, so the market may look at this as a positive and go up from here, especially if the neckline support I talked about above on the DJIA and SPX hold. If these supports end up failing, then the markets may be telling us there is big trouble ahead. Be careful listening to the noise on the TV. If you are a timer, use your indicators and stops.

2448

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=BKX

This site spoke about the BKX index also this morning on their free link.

http://stocktiming.com/Thursday-DailyMarketUpdate.htm

[vectorman]

DJTA found some support today too. If oil starts dropping then it may hold.

2449

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=DJTA

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_t

[vectorman]

Talking Heads on 'Fast Money' on CNBC saying "stay out of the market", " don't buy ", " wait". " Look for markets to go lower".

I don't know? Could be the market about to take off with Big Boys buying. They like retail investers to buy last at higher prices. Retail investors sell at the bottoms and buy at the tops.

The SOXX index even made a nice kangaroo tail today. In the past the SOXX usually has a good run up in November leading into December. If this is close to a bottom, watch to see if support holds and it takes off. Tom says TSP Sentiment Survey on a buy again. Watch the volume and moving avgs in the indexes tomorrow and next week. Might be a good time to start thinking about falling alittle into the funds for at least a short play. Too many people where I work are sitting in the G fund. SPX...STO, RSI and MACD close to a buy. Watch the VIX for a downtrend.


2450

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=SOXX

VIX http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

[RPM]

350Z and Vector:

I just started to look at the Weekly chart of the indexes, is there anything in the SLOW STO as a signal to buy/sell, e.g. for the S&P500? especially if you only want to do so once in a few weeks? I tried to set up a spreadsheet to look at historical trends, but it's beyond me!!!

Appreciate your analysis! TIA

[FUTURESTRADER]

I like slow stochs on a daily basis. If it falls down out of 80 (out of overbought), it tends to continue lower. Likewise if it breaks out up over 20, (out of oversold), it tends to continue higher. 'Whats oversold/overbought, can stay oversold/overbought' is an old adage to keep in mind. I haven't backtested stochastics on weekly charts, but I would guess you would get 'relative' results. Slow Stochs seem to give you a feel for 2 day momentum, while fast stochs give you one day momentum, which is too fast for TSP deadline.

[350zCommTech]

350Z and Vector:

I just started to look at the Weekly chart of the indexes, is there anything in the SLOW STO as a signal to buy/sell, e.g. for the S&P500? especially if you only want to do so once in a few weeks? I tried to set up a spreadsheet to look at historical trends, but it's beyond me!!!

Appreciate your analysis! TIA

Sorry, I don't use it. I use a lot of different indicators but not that one.

[Bullitt]

RPM,

Slow Sto currently stands at 50 on the Weekly Chart. Anything between 20 and 80 is considered normal price movement, therefore not on a buy using Slow Sto indicator today. Check out the sell signal the weekly Slow gave in mid October, right around the 1525 level.

Daily Stochastics moved below 20 again today, but take a look at that negative divergence from the last move below 20 level on Oct. 22. From Oscillator standpoint, not good.

If you're looking to do minimal IFT's, the Slow Sto with another indicator would work well on a weekly chart. That way it should filter out the day to day gyrations. Perhaps weekly stochostic with the TSPTalk Sentiment Survey would compliment eachother.

[Oldcoin]

350Z and Vector:

I just started to look at the Weekly chart of the indexes, is there anything in the SLOW STO as a signal to buy/sell, e.g. for the S&P500? especially if you only want to do so once in a few weeks? I tried to set up a spreadsheet to look at historical trends, but it's beyond me!!!

Appreciate your analysis! TIA


RPM, hope you don’t mind my sticking my nose into this; I’ve been using a daily chart with MACD and RSI with the Slow STO as an indicator. I’ve found that it’s a little late into the market and very early getting you out. If you couple your tech indicators with a good knowledge of the market you can enhance your use of the indicator. It’s not an end-all but a good tool. BTW it has worked well with the S and I funds, I just keep getting clobbered by that FV thing they throw at us.

Good luck.

[RPM]

RPM, hope you don’t mind my sticking my nose into this; I’ve been using a daily chart with MACD and RSI with the Slow STO as an indicator. I’ve found that it’s a little late into the market and very early getting you out. If you couple your tech indicators with a good knowledge of the market you can enhance your use of the indicator. It’s not an end-all but a good tool. BTW it has worked well with the S and I funds, I just keep getting clobbered by that FV thing they throw at us.

Good luck.

Thank you. I looked at the daily chart, and it's too much whipsaw for me. So when I looked at the weekly chart, it seems to be a lot more stable, you only get in/out of the market once a few weeks. You don't get all the gains, and don't miss all the loss, but you still might be able to do better than the market. Appreciate any input. TIA.

[vectorman]

VIX is still in an up trend. I wonder if 25 will hold. Sets up for a big move tomorrow, unknown if it will be positive or negative. Sentiment is still bullish on a relief rally. CNBC big on declaring a bottom last night, looking to get retail investors back in the game and away from the exits. Volume still not much on the Dow yet.

2521

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=DJIA

[RPM]

I plotted SPY on Yahoo Finance and Stockcharts today, with SLO STO at the bottom of both, weekly plot. For the weekly charts on Yahoo, you need to go to 3 yrs to get to weekly (move the historical chart time frame to the left until you see "Week of ..." at the top chart. I am seeing different values for %K and %D for this week from the 2 charts, and wonder whether anyone might have any explanation for it. TIA.

[Show-me]

It could be that the default parameters are different. Not every chartist use the same number of day for the parameters. It can be manipulated to make the indicator more volatile or to smooth out the volatility. The default for stockcharts is 14,3.

[RPM]

It could be that the default parameters are different. Not every chartist use the same number of day for the parameters. It can be manipulated to make the indicator more volatile or to smooth out the volatility. The default for stockcharts is 14,3.

Show-me:

Thank you. No, I plot both of them at 14,3...very weird...

From Yahoo: http://finance.yahoo.com/charts#chart5:symbol=spy;range=20040830,20071115;i ndicator=sma(20,50,200)+rsi+stochasticslow(14,3);c harttype=line;crosshair=on;logscale=on;source=unde fined

From Stockcharts: (as pdf, the stockchart is too big, and I don't know how to resize it).

TIA

[Show-me]

Yes, that is a enormous difference and I don't have a answer.

[vectorman]

In the last ten years the SPX was only downtrending once through the Thanksgiving Holidays, in 2000. There's alot of pressure on Dow 13000 right now, we just need to break through it and really shake out the market.

2605

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=SP500

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=DJIA

[vectorman]

VIX shows a big move shaping up, this afternoon or for sure tomorrow. The Fed made the difference in Sept. If there is not another leg down in the market, then this will be a good temp bottom.

2606

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

[vectorman]

Bottom fishing going on with the Banking index. Setting up for a big move, which might explain the move we will see in the VIX. If 90 doesn't hold look for more downward pressure on the SPX.

2607

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

[vectorman]

VIX is still in a triangle pattern. It broke out to the up-side yesterday and today is backtesting the uptrend support line. It's still in an uptrend. At the close, lets see if buyers will keep coming in or if there will be profit taking (sell strength, in a bear market). The MACD on the VIX had a bearish cross over, if it holds the VIX will trend down and the market will keep working its way up. Up or down the VIX is setting up for another breakout soon.

2696

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

[vectorman]

Here's a five day 15 minute chart of the VIX. If there isn't a big sell off this afternoon, that may mean that buyers feel the market is at or near a bottom, and are less fearful of what may happen while the market is close tonight. They may see the five year bull channel holding up a while longer. But if there is profit taking...:blink:.....Risk vs reward.

2698

[vectorman]

Point of decision, will there be profit taking or more accumulation?
The VIX is sitting on support and looks really to snap back up if investors get nervous. There might be one more push down with the Employment Report tomorrow , but its looking questionable. There are two gaps left open. I circled previous gaps, and has you can see they all were eventually filled.

2765

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

[vectorman]

The SPX index looks to be at the top of a down trending channel that includes an unfilled gap. The gap is probably what trapped alot of Short investors thinking of a quick reversal, but it looks like the Big Boys really put the screws to them. Looking at the VIX, if not tomorrow, then sometime next week there may be some profit taking. This outlook may fit well with the TSPtalk Sentiment Survey showing a Sell.

2766

[vectorman]

Now for my " this may be a stretch outlook". I see a possible Head and Shoulders forming on several indexes. The NASDAQ has a couple of gaps to fill and it may be in the process of forming a right shoulder in a Head and Shoulders pattern. The Fed is fighting to keep the country out of recession, so with the interest rate cuts this may bring this pattern to a quick failure.

2767

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_t

[clester]

1490 is now a very strong support level. The "Fast money" guys are all on buy and they seem to give good advice (not self serving). So, the downside should be limited at 1490. A lot of folks will buy it there. Limited downside risk. We may test 1490 today. Sentiment survey may be early again.

[Bullitt]

I thought I saw a reverse head and shoulders formation as well.

[vectorman]

I thought I saw a reverse head and shoulders formation as well.

Your right, I should have included it, but I didn't see the volume normally associated with that pattern. With the bearish sentiment I also thinking a some want double bottom pattern also. If there is a right shoulder forming the market will still go down to form it. Probably another backtest off the previous inverse H&S neckline, this will also set up for a good start for a higher low to start the process for an uptrend confirmation. SPX chart below:

2773

[vectorman]

DJIA chart. With the interest rate cuts, I don't know why the first inverse H&S failed. IMO the Fed and Washington Talk is the only thing that is keeping this market from tanking. But the Market is always right no matter what anyone else thinks or says.:)


2774

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=DJIA

[poolman]

DJIA chart. With the interest rate cuts, I don't know why the first inverse H&S failed. IMO the Fed and Washington Talk is the only thing that is keeping this market from tanking. But the Market is always right no matter what anyone else thinks or says.:)


2774

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=DJIA


I'll be honest with you.

This market has rallied 600 points on a federal rate cut for next Tuesday.

Risk/Reward IMO.... I may just stay in the G fund right through it. I don't see a .50% rate cut. It is not warranted. Could it happen ? Yes, Will the dollar tank ? Yes....

I will say this. The parking lot's for the shopping mall's and Big name stores are not busy like they were this time last year. :sick:

[vectorman]

I'll be honest with you.

This market has rallied 600 points on a federal rate cut for next Tuesday.

Risk/Reward IMO.... I may just stay in the G fund right through it. I don't see a .50% rate cut. It is not warranted. Could it happen ? Yes, Will the dollar tank ? Yes....

I will say this. The parking lot's for the shopping mall's and Big name stores are not busy like they were this time last year. :sick:

http://www.wisegeek.com/what-is-stagflation.htm

[Bullitt]

Vectorman,
That reverse head and shoulders didn't take long to develop either. Patterns that set up quick fade quick and lack the desired power. Also, if the reverse H&S happens, in theory it would only take us up to around our prior highs.

[Tempest]

I will say this. The parking lot's for the shopping mall's and Big name stores are not busy like they were this time last year. :sick:

They're buying from online. Cheaper then driving around.

Har.
http://img.photobucket.com/albums/v348/Tempest555/icon_pirate.gif

[clester]

1485-1490 is major support. If we bounce now after the FED sell-off we're off to the races. IMO. This may be what the Dr. ordered. Here comes Santa claus, here comes Santa Claus.....

[vectorman]

1485-1490 is major support. If we bounce now after the FED sell-off we're off to the races. IMO. This may be what the Dr. ordered. Here comes Santa claus, here comes Santa Claus.....

From Fed statement...

" Readings on core inflation have improved modestly this year, but elevated energy and commodity prices, among other factors, may put upward pressure on inflation. In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully. "

They have seen the numbers for PPI and CPI coming out Thursday and Friday, the numbers may be a little hotter than what's expected.

http://www.usatoday.com/money/economy/2007-12-11-statement_N.htm?csp=34

http://www.tsptalk.com/mb/showpost.php?p=136658&postcount=41

[clester]

The economy isn't as bad as everyone thinks. At least that is what the FED is saying. That should be good for stocks. "Here comes Santa Claus..."
I can dream can't I?

[vectorman]

The economy isn't as bad as everyone thinks. At least that is what the FED is saying. That should be good for stocks. "Here comes Santa Claus..."
I can dream can't I?

I did alot of dreaming in 2001 and 2002.

2802

Take a look at the link below. Compare the rate cuts from Jan 2001 to Nov 2002 and how the market enjoyed those cuts.

http://www.the-privateer.com/rates.html

[vectorman]

I'll let the chart speak for itself.

2804

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=NASDAQ

[Wolverine]

Are you thinking with the current situation that, the 2001-2002 situation could be coming back according to that chart?

[Birchtree]

Turn the chart upside down for directional clarity.

[vectorman]

Are you thinking with the current situation that, the 2001-2002 situation could be coming back according to that chart?

No, I'm not saying that. But the market is what it is. No matter how much I dreamed or said the market will come back up in 2001 and 2002, the charts clearly indicated ( using MA, RSI, MACD, etc...) problems in the market. Depending on your timeframe, if you dollar cost avg like Birchtree, it doesn't matter what the market does because it will eventually go up. But time is you biggest obstacle. Just an added note...clester and I are great buds, I wasn't taking a shot at him. We talk about this stuff all the time.:)

[vectorman]

Turn the chart upside down for directional clarity.

Thanks :laugh:

2805

http://www.fxwords.com/b/bearish-shooting-star-candlestick.html

[Birchtree]

Sorry, that's the wrong chart - but thanks just the same.

[vectorman]

The next few days of news ( PPI, CPI..) will be very important in determining the trend direction of the VIX. I wonder if the Big Boys will still be upset with Ben. With the low volume rally, if the market can't pull itself up or starts a downtrend, many TA's will be eyeing a possible Head and Shoulders pattern. But there looks to be some upside room, and it may take a while before any right shoulder top forms looking at the NASDAQ. http://www.tsptalk.com/mb/showpost.php?p=136663&postcount=43

2806

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_t

[Wolverine]

No, I'm not saying that. But the market is what it is. No matter how much I dreamed or said the market will come back up in 2001 and 2002, the charts clearly indicated ( using MA, RSI, MACD, etc...) problems in the market. Depending on your timeframe, if you dollar cost avg like Birchtree, it doesn't matter what the market does because it will eventually go up. But time is you biggest obstacle. Just an added note...clester and I are great buds, I wasn't taking a shot at him. We talk about this stuff all the time.:)

Ok thanks with clearing that up. It is interesting with all that though.

No problem with Clester either. LOL Had not even concerened myself with those types of things you are getting at.

Anyhoo, thanks for all the chart info and all. Good stuff.

[vectorman]

Custer's last stand? Its all about the banks. Big support that needs to hold. MACD, STO and RSI showing more down side risk unless investors step in to bottom fish. VIX still has a big gap to fill.

2816


http://bigcharts.marketwatch.com/quotes/default.asp?NewSymbols=efa&SubmittedType=ADD&lasturl=%2Fquotes%2Fupdate.asp&fontsize=&LaunchedWindow=FALSE

[vectorman]

5 yr chart of BKX. Strong higher lows needs to be established, followed by higher highs.

2817


Link from a paid site with free comments.
http://stocktiming.com/Thursday-DailyMarketUpdate.htm

[vectorman]

It's all about the banks.:)

2847

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=BKX

[vectorman]

The VIX gapped down and is now sitting at support. But there may be room to move down if everyone gets into the Christmas mood. I'm still concerned about the BKX and SOXX index, not much buying there today. DCB?

2853

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=BKX
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=SOXX

[Birchtree]

Any time the VIX moves below the 89 day SMA Bollinger band, we've had some nice bull moves.

[vectorman]

Bank of America recommended a sell of some chip stocks yesterday. Near bottom? Big Boys sold along time ago. Why recommend selling now? Better buying price.:)

2976

http://www.marketwatch.com/news/story/chip-stocks-close-losses-b/story.aspx?guid=%7B53762D65%2DC34D%2D4298%2DB7DE%2 DA21262349C57%7D

[Bullitt]

Why recommend selling now?

Brokers are incredible aren't they? Sell recs mean it's time for the dumb money to sell so the smart money can load up without causing a drastic uptick. Of course, a buy reccomendation is just the opposite.

[vectorman]

SPX Dead Cat Bounce? I don't know. SPX broke below an uptrend support line and is today back testing to get back above it. The MACD had a bearish cross-over and showing a slight down trend. The RSI slipped below its uptrend and is now back testing to get back above it. 50 day MA is below the 200 day MA. There is still a gap that may or may not get filled. I will add, that all this is on light volume, so there really isn't any fear in the market.

2977

[vectorman]

PANIC? Banking Index trying to find good support.:blink: Look at the length of fall in 1998, we're about to match that. Great buying opportunity. Need some capitulation, VIX still shows investors haven't given up yet.

10 year BKX chart

2989

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=BKX

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

[lochaven]

I really need to start learning how to read these and learn what they mean..... thanks.

[nnuut]

I really need to start learning how to read these and learn what they mean..... thanks.
Try this lochaven::D
http://stockcharts.com/school/doku.php?id=chart_school

[clester]

Looks like the vix has a couple of lower gaps to fill.

[clester]

Looks like the vix has a couple of lower gaps to fill.
Looks like one gap filled. We still have one below 22 to around 21 to fill.

[vectorman]

The Banking Index needs to find some support. It's about to match the correction it had in 1998. The saying is " The market is always right ". The BKX downtrend started right before the first big drop in China, and has been falling ever since. China still has not had the big crash that some had been calling for. If China were to have a crash anytime soon, it might be said the BKX index is close to factoring it in. Maybe.

3018

[Birchtree]

Look at that move from 1995 to the middle of 1998 - might that happen again as the Fed continues to lower rates? We could also see a nice V recovery in the financials once the dust finally settles. I've been buying the industry this week with individual stocks looking for good dividend income for reinvestment purposes.

[vectorman]

IMO the market is setting up for a move higher soon. The VIX has filled a gap from Nov 28th, and bounce back from upper resistence. There is a 'gap up' from Dec 28th that may get filled soon. The STO is heading down, and the RSI may cross below 50. All this means the market going higher at least short term.

3045

[vectorman]

Finally looks like the Banking Index is about to reverse trend. Using the Financial Select Sector SPDR Fund, XLF, (AMEX) you can see a possible Inverse Head and Shoulders pattern forming. I'm showing the XLF index because it also shows what the volume has been doing. I'll show the BKX index in the next post.

3047

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=XLF

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_b

[vectorman]

BKX ( banking ) Index.

3048

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=BKX

[Bullitt]

Reverse H&S. Now we're talking.

[vectorman]

NASDAQ looks like its ready to move higher. I may be wrong, but the way I see it, next week is setting up to be a big market mover. There's either going to be alot of gain or a whole lot of pain. Many indexes are sitting near critical support. The strange thing is that you don't really see the fear in the VIX like back in August..... maybe because of what helicopter Ben said Jan 10th....... " Federal Reserve Chairman Ben Bernanke yesterday gave the clearest indication yet that the central bank will move aggressively to cut interest rates to try to prevent a serious economic downturn. " http://www.newsday.com/business/ny-bzleft5533132jan11,0,6109634.story


3049

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=NASDAQ

[vectorman]

The DOW is also holding up pretty good. Testing the 12,600 area. Check out the volume. Perhaps, weak hands selling, strong hands buying.

3050

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=DJIA

[vectorman]

DJTA index. http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=DJTA


3051

[vectorman]

DJTA index 10yr chart.

3052

[vectorman]

Nobody knows what next week will bring. I can only look at the charts and try to figure out what might happen. With the Fed showing their cards of aggressively cutting rates as needed, what will the dollar likely do next week? This may be a stretch, but for the EFA index ( used my some to track the I fund ), how about a ' Falling Wedge Reversal' pattern.

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:falling_wedge

3053

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=EFA

[Show-me]

Luv your analysis vectorman! Looks like we need to look at picking up some bank.

[pogo]

vectorman great charts any chance you have a chart of the markets when the fed cuts and the reaction before and after the cuts

[Show-me]

Now on the C fund there is a "perfect" "Bearish Harami" and I pasted a explanation to follow. Now I did not know that was coming until after the close and was able to identify it. The current short term trend is up with the bounce so the Harami is signaling a down reversal.

Here is the S&P chart to look at: http://stockcharts.com/h-sc/ui?s=$SP...d=p26694867262 (http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p26694867262)



Bearish Harami
http://i.investopedia.com/inv/dictionary/1.gifA trend indicated by a large candlestick followed by a much smaller candlestick whose body is located within the vertical range of the larger candle's body. Such a pattern is an indication that the previous upward trend is coming to an end.

http://i.investopedia.com/inv/dictionary/terms/bearishharami.gif
http://i.investopedia.com/inv/dictionary/2.gifA bearish harami may be formed from a combination of a large white or black candlestick, and a smaller white or black candlestick. The smaller the second candlestick, the more likely the reversal. It is thought to be a strong sign that a trend is ending when a large white candle stick is followed by a small black candlestick.

[Show-me]

I will add that the S fund has a bearish Harami also, just not as perfectly centered in the prior day candlestick.

[FUTURESTRADER]

wilshire 4500 100 ema crossing 200 ema today, been above since 10/2004.
S&P 500 about to do the same, signaling downtrend in 11/2000 then crossing back up signaling bull market in 6/2003.

Looks like a good 'Birchtree' indicator :)

[vectorman]

I still look for the markets to finish higher at weeks end. This environment is not for the faint hearted. I can only take comfort in reading the charts and seeing the markets are basing for a move higher. But if it doesn't happen I'll use my stops and take the loss, looking for another set up.

VIX chart.

3078

[vectorman]

BKX ( Banking Index) still holding above support, at post.

3079

[vectorman]

SOXX chart ( Semiconductors) still holding at support at post.

3080

[vectorman]

Unless China tanks tonight, EFA ( I fund) looks good for a big pop. Notice the decreasing volume; running out of sellers.

3081

[vectorman]

DJTA still holding above a major critical support. Its in a wedge and will be breaking out probably tomorrow. Up or down??? If your a Dow Theory fan , if it goes down through support, the rest of the markets may follow.

http://www.tsptalk.com/mb/showpost.php?p=142418&postcount=86

http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:dow_theor y


3082

[vectorman]

Are we near a short term playable bottom?

3096

[vectorman]

As bad as it seems, we may be about to bottom. The VIX is now near the top of a down trending channel. But we may break above that if more panic and capitulation sets in. Which, brings us closer to a short term bottom.

3097

[vectorman]

SPX chart. Good volume showing as capitulation kicks in from those who cannot stand the pain any more. Some bottom fishing starting to show up. Markets are in a down trend and still high risk. If you can't stand losing 1-3% in a few days, just wait for the MACD to turn Bullish ( black line moving up through the red line on the MACD mini chart). The Full STO is near a buy. Look at the VIX chart above and compare movement from late Nov to mid Dec to SPX chart. Note: I'm not telling you to buy. I'm just telling what may happen from looking at the charts. If you looked at my ITF moves, you'll notice I did not go all in at once, but just fell into the market buying dips. Still keeping 25% in G in case I'm wrong about the bottom. We still may have a ways to fall.:blink:


3098

[vectorman]

I talked about a Head and Shoulders pattern in previous post. Should have listened to myself, instead of trying to pick up a few coins looking for a short up move. Any whooo, if you feel like your stuck in the market. Normally after a neckline break at some point there will be a retest back up to the neckline now resistence, where you may have another opportunity to sell. Be carefull.

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_t


Free comments from a paid site.

http://stocktiming.com/Thursday-DailyMarketUpdate.htm

[vectorman]

Well, the VIX broke above the down trending channel I drew above. Some investors use a break above 30 with market capitulation to buy in. Looks like we're just about there. Problem is for those who are in, there is no telling how much more downside will be involved.

3103

[weatherweenie]

Sobering article/charts posted in nnuts page:
BEAR MARKET RULES APPLY
Chart Spotlightby Carl Swenlin
DecisionPoint.com
January 18, 2008

On January 8 the 50-EMA crossed down through the 200-EMA on the S&P 500 daily chart, generating a long-term sell signal and declaring that we are now in a bear market. This was confirmed this week when the weekly 17-EMA crossed down through the 43-EMA. Let me say that these signals are not 100% reliable, but there is a ton of additional supporting evidence, such as the decisive violation of the long-term rising trend line, and the violation of the double top neckline, seen on the chart below.
http://www.financialsense.com/editorials/swenlin/2008/images/080118_bear-1.gif
The next chart presents a long-term view, which makes it more clear how serious the situation is.
http://www.financialsense.com/editorials/swenlin/2008/images/080118_bear-2.gif
An important point is that this long-term sell signal is not so much an action signal as it is an information signal. What this means is that we need to begin interpreting charts and indicators in the context of a bear market template. For example:
* Oversold conditions should be viewed as extremely dangerous. Whereas in bull markets oversold lows usually present buying opportunities, in bear markets they can often resolve into more heavy selling.
* Overbought conditions in a bear market are most likely to signal that a trading top is at hand.
* While bear market rallies present great profit opportunities, long positions should be managed as short-term only.
The questions remain as to how far down prices will go and how long the bear market will last? In the shorter term we have a minimum downside projection from the double top neckline of about 1160 on the S&P 500 Index. That could mark a medium-term low from which a bear market rally could rise. For the longer-term, let's look at the 4-Year Cycle chart below. As you can see, the last cycle low was in mid-2006, so the next projected low is in mid-2010. Assuming that the cycle low and bear market low will be the same, we have a long, bloody road ahead. The most obvious downside target is the support at the 2002 lows, about 750 on the S&P 500. http://www.financialsense.com/editorials/swenlin/2008/images/080118_bear-4.gif

http://www.financialsense.com/editorials/swenlin/2008/0118.html

[Weather_n_Leather]

I just found this thread and think the information being presented here is great. I read the TSP Talk Market Commentary almost every morning. I must tell everyone there has been more than one day that I was unsure what was being said about market trends and what the various charts indicated. I especially like the information on chart patterns that has been presented in this thread.

I will definitely add this to my morning reading. When I have questions about analyzing the various market charts, would this be the place I ask them?

Thank you for your help in advance. :D

[vectorman]

Well, the VIX broke above the down trending channel I drew above. Some investors use a break above 30 with market capitulation to buy in. Looks like we're just about there. Problem is for those who are in, there is no telling how much more downside will be involved.

3103


VIX High: 37.57 with a hugh gap up.

3135

[vectorman]

Big breakout on the VIX this afternoon. Direction, unknown ???


3171

[vectorman]

I agree with James P&F chart for today, but unsure on how much actual up side we'll have.
http://www.tsptalk.com/mb/showpost.php?p=147212&postcount=82

VIX looks to show continued down trend, more up side for market, but could be choppy.

3207

[vectorman]

XLF Inverse Head and Shoulders Pattern still looking good, after a slight adjustment with the head. Cannot predict future, pattern may still break down, but so far looking good.

http://www.tsptalk.com/mb/showpost.php?p=142412&postcount=80

3211

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_b

[Bullitt]

Good job Vectorman. So far I like that XLF setup you propose. The longer it takes for any pattern to form, the more staying power it has. In other words, this one could be setting up for a big move to the upside.

[vectorman]

Good job Vectorman. So far I like that XLF setup you propose. The longer it takes for any pattern to form, the more staying power it has. In other words, this one could be setting up for a big move to the upside.

Thanks Bullitt. Never stop learning. Here's an observation for those in the F fund. Be careful. MACD is showing a bearish crossover. H&S may be a stretch, but something to watch.

http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:movi ng_average_conve

3213

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_t

[hessian]

XLF Inverse Head and Shoulders Pattern still looking good, after a slight adjustment with the head. Cannot predict future, pattern may still break down, but so far looking good.
http://www.tsptalk.com/mb/showpost.php?p=142412&postcount=80
3211
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_b
Hi Vectorman,
Very interesting last couple posts, that I just read/catching up on. This last one AGG - if it pans out - does this suggest stock/equities may run up??

-Or could it, (the suggested AGG-inverted head/shoulders), be related to bond insurers going under (therefore little to do with stocks/equity-funds)?
VR
PS Thanks for the link way back to... http://stocktiming.com/Tuesday-DailyMarketUpdate.htm Its now one of my Favorites -and Tuesday's (provided) suggests Institutional selliing is waning!). This might be some reinforcement/provide some confirmation! I expect next week will tell! :)
Very nice thread!

[vectorman]

VIX 15min 10 day chart. Downtrend still holding barely.


3231

[Bullitt]

Vectorman,

Any thoughts on the possible Double Top setup in the VIX on a weekly chart? Possible support line at about 18?

[vectorman]

Vectorman,

Any thoughts on the possible Double Top setup in the VIX on a weekly chart? Possible support line at about 18?

Sorry, no thoughts yet, but I see what your talking about. Credit worries vs the Fed ease.

3232

[hessian]

Any Elliott Wave Theory afficianados? This might help guide us -where we are - whwere we might be headed!! Any further clarification, explanation or speculation would be deeply appreciated?? :o
3242
"After a five year bull market, we're still getting accustomed to the new bear market. After years of looking for five waves up and three waves down. We now have to look for three waves up and down. Bear markets are all correctional. As compared to bull markets that impulse during uptrends, and are only correctional during downtrends. There are no five wave bear markets. Our longer term projections made in 2000 are still on course. 1932 - 2000 completed the Supercycle with a blowoff top, and the bear market from 2000 - 2002 corrected it all. Then in October 2002 a new Supercycle began, and the first bull market was naturally Cycle wave I. The market has just started Cycle wave II, which should unfold for five years. The first leg down should bottom this year around SPX 1100, ending Primary wave A. Then a strong rally up into 2009 to end Primary wave B. This is to be followed by a three year Primary wave C to retest the 2008 lows. Currently the market appears to have ended the first abc down, Major wave A, of Primary wave A. The market is now retracing part of that entire decline (SPX 1576-1270) in another abc structure, Major wave B. After this concludes, another abc down to the SPX 1100 level should follow, ending Major wave C and Primary wave A. This should be the low for the year! Then it would be acceptable to get bullish into 2009. It will not be a bonfide bull market, but many will call it that. For now, stay defensive and you may want to hedge or lighten up during this rally."
(This was posted after last Friday -on the weekend, at... http://caldaroew.spaces.live.com/ )

[vectorman]

Still watching the XLF index, possible Inverse H&S pattern so far intact. Yesterday gap down may still be part of an uptrend for the head. Neckline for right shoulder may end up being higher. Pattern may still break down, wait and watch.

3244

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_b

[vectorman]

SPX chart. Compare last Aug to now.

3245

[sdouglas3]

So, from the middle of Oct 07 until the low, was that the 5th wave down? Are we starting a new cycle?

Steve

[vectorman]

XLF, 'Inverse Head and Shoulders' pattern? Still watching.

3290

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_b

[vectorman]

VIX is starting to look pretty good.

3294

[vectorman]

Ron Walker puts out some interesting info for chart reading at his free Blog. This is for education only, for those who would like to get more involved with chart reading.

http://thechartpatterntrader.blogspot.com/

[James48843]

One thing I would like to note here- and that is the relationship of the S fund gains and the C fund gains.

During "normal times", the steady plodding on the upside, I have noticed that the S fund seems to take the lead, and then, when we've hit periods of stalling out, the C fund seems to do better for a while, and then they both start falling.

In December and January, it seemed to me (and again, this just may be nothing, but it's my feeling) that the C fund was leading the short term ups before the falling rocks again. C fund being the dominant fund in play.

However, this last week we've seen better moves by the S fund than the C.

This COULD be indicative of something new taking place. A foundation for a turnaround, perhaps.

Or, it could be nothing at all.

I just have been watching this. And today S fund seems to be healthier.

Just two cents for consideration.

[Boxholder]

James...could today's shining of the S be due to the fact that IBM is considered a tech industry stock?

[nnuut]

One thing I would like to note here- and that is the relationship of the S fund gains and the C fund gains.

During "normal times", the steady plodding on the upside, I have noticed that the S fund seems to take the lead, and then, when we've hit periods of stalling out, the C fund seems to do better for a while, and then they both start falling.

In December and January, it seemed to me (and again, this just may be nothing, but it's my feeling) that the C fund was leading the short term ups before the falling rocks again. C fund being the dominant fund in play.

However, this last week we've seen better moves by the S fund than the C.

This COULD be indicative of something new taking place. A foundation for a turnaround, perhaps.

Or, it could be nothing at all.

I just have been watching this. And today S fund seems to be healthier.

Just two cents for consideration.
"S" and "C" take turns!! Sharing is good!:D

[hessian]

One thing I would like to note here- and that is the relationship of the S fund gains and the C fund gains.
During "normal times", the steady plodding on the upside, I have noticed that the S fund seems to take the lead, and then, when we've hit periods of stalling out, the C fund seems to do better for a while, and then they both start falling.
In December and January, it seemed to me (and again, this just may be nothing, but it's my feeling) that the C fund was leading the short term ups before the falling rocks again. C fund being the dominant fund in play.
However, this last week we've seen better moves by the S fund than the C.
This COULD be indicative of something new taking place. A foundation for a turnaround, perhaps.
Or, it could be nothing at all.
I just have been watching this. And today S fund seems to be healthier.
Just two cents for consideration.
Hi James,
Below attached is current p&f for the S-Fund - it may show there's something to what everyone's discussing. What I'm confused over is the Price Objective (PO) shown as much Higher than the established Overhead Resistance (red) Line (& no Blue "Support-line below - (I thought, this is odd??). Any thoughts on this seeming anomally?? -Maybe this suggests any day we might indicate have the possiblitity that the worm may turn??
I do think the "S" will follow wherefore the "C" goes though! :)
VR
-PS: Just noticed this is same with the "C" p&f chart (in the other thread).
3389

[vectorman]

Its all about the Banks. Can the economy stand for it to go much lower?

3524

[vectorman]

XLF index.

3525

[vectorman]

VIX index.

3526

[vectorman]

The correction of 1998. If you were waiting for a big pull back after the double bottom to get off the sidelines, none really showed up after the MACD crossed zero.

3673

[vectorman]

SPX as of today.

3675

[Gumby]

The correction of 1998. If you were waiting for a big pull back after the double bottom to get off the sidelines, none really showed up after the MACD crossed zero.

3673

How do you factor in $108 bbl oil, rising unemployment, 25% increase in cost of food and 80,000 jobs lost into this chart?
It makes no sence to my why the market is going up..... Bear Trap???

[Birchtree]

Gumby,

You must remember the market is omnipotent and is a future discounting mechanism - it may already be seeing what is not yet visible to the rest of the unbelieving bears. That's just how it's supposed to work - be right and sitb tight.

[vectorman]

Not easy, but I'm stilll hanging in there. Many of my co-workers are still in G waiting for prove of a recovery. I find no Bullishness at all, just doubt.


3852

[vectorman]

The NASDAQ broke through its 200 day MA. Its now back up to its old uptrend channel.


3885

[vectorman]

DJTA still on a tear, but now at the top of a channel. No one is forseeing a new high soon, but if oil drops some more, could be just what the doctor ordered. I still don't see any bullishness from co-workers yet, mostly doubt and disbelief. Many still in the G fund too scared to move.


3887

Primary Bull Market - Stage 1 - Accumulation
Hamilton noted that the first stage of a bull market was largely indistinguishable from the last reaction rally of a bear market. Pessimism, which was excessive at the end of the bear market, still reigns at the beginning of a bull market. It is a period when the public is out of stocks, the news from corporate America is bad and valuations are usually at historical lows. However, it is at this stage that the so-called "smart money" begins to accumulate stocks. This is the stage of the market when those with patience see value in owning stocks for the long haul. Stocks are cheap, but nobody seems to want them. This is the stage where Warren Buffet stated in the summer of 1974 that now was the time to buy stocks and become rich. Everyone else thought he was crazy.

In the first stage of a bull market, stocks begin to find a bottom and quietly firm up. When the market starts to rise, there is widespread disbelief that a bull market has begun. After the first leg peaks and starts to head back down, the bears come out proclaiming that the bear market is not over. It is at this stage that careful analysis is warranted to determine if the decline is a secondary movement (a correction of the first leg up). If it is a secondary move, then the low forms above the previous low, a quiet period will ensue as the market firms and then an advance will begin. When the previous peak is surpassed, the beginning of the second leg and a primary bull will be confirmed.

http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:dow_theor y

[luv2read]

Oil is going nowhere but up, no reason for it not to as long as there are countries like Japan that have to import all their fossil fuels, or until alternative energy resources are economically available.

[vectorman]

Oil is going nowhere but up, no reason for it not to as long as there are countries like Japan that have to import all their fossil fuels, or until alternative energy resources are economically available.

Banks...Oil...Dollar...Inflation , just never know what tomorrow may bring.:notrust:

http://en.wikipedia.org/wiki/Stock_market_crash_of_1973%E2%80%934

Stock market crash of 1973–4
From Wikipedia, the free encyclopedia

The stock market crash of 1973–4 was a stock market crash that lasted between January 1973 and December 1974. Affecting all the major stock markets in the world, particularly the United Kingdom,[1] it was one of the worst stock market downturns in modern history.[2] The crash came after the collapse of the Bretton Woods system over the previous two years, with the associated 'Nixon Shock' and United States dollar devaluation under the Smithsonian Agreement. It was compounded by the outbreak of the 1973 oil crisis in October of that year.

In the 694 days between 11 January 1973 and 6 December 1974, the New York Stock Exchange's Dow Jones Industrial Average benchmark lost over 45% of its value, making it the seventh-worst bear market in the history of the index.[2] 1972 had been a good year for the DJIA, with gains of 15% in the twelve months. 1973 had been expected to be even better, with Time magazine reporting, just 3 days before the crash began, that it was 'shaping up as a gilt-edged year'.[3] In the two years from 1972 to 1974, the American economy slowed from 7.2% real GDP growth to -2.1% contraction, while inflation (by CPI) jumped from 3.4% in 1972 to 12.3% in 1974.[1]

Worse was the effect in the United Kingdom, and particularly on the London Stock Exchange's FT 30, which lost 73% of its value during the crash.[4] From a position of 5.1% real GDP growth in 1972, the UK went into recession in 1974, with GDP falling by 1.1%.[1] At the time, the UK's property market was going through a major crisis, and a secondary banking crisis forced the Bank of England to bail out a number of lenders.[5] In the United Kingdom, the crash ended after the rent freeze was lifted on 19 December 1974, allowing a readjustment of property prices; over the following year, stock prices rose by 150%.[5] However, unlike in the United States, inflation continued to rise, to 25% in 1975, giving way to the era of stagflation.

All the main stock indexes of the future G7 bottomed out between September and December 1974, having lost at least 34% of their value in nominal terms, and 43% in real terms.[1] In all cases, the recovery was a slow process. Although West Germany's market was fastest to recover, returning to the original nominal level within eighteen months, even it did not return to the same real level until June 1985.[1] The United Kingdom didn't return to the same market level until May 1987 (only a few months before the Black Monday crash), whilst the United States didn't see the same level in real terms until August 1993: over twenty years after the 1973–4 crash began.

3895

List of recessions in the United States...http://en.wikipedia.org/wiki/List_of_recessions

List of stock market crashes...http://en.wikipedia.org/wiki/List_of_stock_market_crashes

[Birchtree]

I remember 1973-74 well. That was when I first started investing - good thing I didn't have much money to throw away, but I certainly learned a few valuable lessons.

[vectorman]

SPX 99-2002, Bear market. 200ma was an important indicator. Notice in Apr and May of 2001 there was a double bottom support test that was broken a few months later.



3923

[vectorman]

SPX 2007-200?, Bear Market. Will the 200ma be an important indicator and will the double bottom support test hold? Be careful. The NASDAQ 2190 area may be a big test to watch for also.... http://www.tsptalk.com/mb/showpost.php?p=164337&postcount=134


3924

[vectorman]

XLF chart... critical area for testing.

3988

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=XLF

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_b

[vectorman]

It's all about the Banks. I find it interesting looking at the BKX chart, that there isn't more fear in the minds of investors. It seems the SPX and Dow Charts are lagging compared to what the BKX is telling us. In the big sell off in 1998 and during the Bear market from 2000 to 2003 the VIX hit greater than 40 several times. Investors now seem somewhat fearful, but very complacent. If investors in the BKX and XLF finally capitulate, we may see a real ripple effect across many markets. There is alot of debating on whether we're in a bear market or correction. I don't know. But the trend is your friend. If we are really in a Bear market then the next leg down for timers ( not Birchtree followers) will be very painful.

4043

[vectorman]

BKX Chart. If this was a chart of a company, one would have to wonder about the true condition of the company. Its now sitting on a 11 year support. Will it hold? Perhaps this is the real bottom.:confused: But what will happen if it breaks 60. :worried: Then it will be a great buying opportunity on capitulation.:laugh:


4044

[vectorman]

SPX Chart. If....really if...we are in a Bear Market the downside can be very painful if you time it wrong. The SPX has broken through again to the downside its 5 year up trend channel. Be careful.

http://www.amateur-investor.net/Secular_Bear_Markets_vs_Secular%20Bull_Markets.htm


4046

[vectorman]

I'll let the chart speak for itself. The next two weeks will be real interesting.:blink:

4145

[vectorman]

All about the Banks. Due for a bounce or perhaps a crash.


4148

[vectorman]

XLF Chart. Due for a bounce soon or crash???


4149

[vectorman]

We may or may not get a big sell off real soon. But the question is, how much of a snap back can we expect short term from those on the sidelines jumping in to try and take advantaged of a big sell off? Most of the Talking Heads Thursday and Friday were telling viewers that the markets will continue to sell off next week. :blink: For sure, those who are in cash will have a great opportunity to buy stocks at lower prices, but will they have the boldness to pull the trigger at the right time?

NASDAQ chart

4161

[vectorman]

Recent EFA chart


4162

[vectorman]

The majority are now waiting for the VIX to hit 30 to buy in. Increase in volatility with big swings can also work toward the positive. Big down days followed by big up days, or the other way around. Nasty whipsaws also increase. Many are ready to buy in now, but are waiting for several more down swings to jump in the market; sounds like easy money. :D The next month will be interesting.

Recent VIX chart

4163

[vectorman]

Hit VIX 30 back in July.

4401

[vectorman]

SPX has tested recent uptrend support three times. MACD still trending up. Looks to be setting up for a breakout.

4402

[vectorman]

DOW..'Falling Wedge Reversal' or trap?

4403

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:falling_wedge

[vectorman]

Big test for XLF. Will it hold above the 50ma or will there be a big sell off?

4405

[vectorman]

Guess we'll just see how it plays out. Sure seems to be alot of negative feelings about the market out there.

4506

[vectorman]

DJTA still hanging in there.

4508

[vectorman]

BKX index. Bottom? 1998 crash looks pretty small compared to the last year and a half.

4509

[vectorman]

Nice read, http://www.marketoracle.co.uk/Article5959.html


4511

[vectorman]

Just an observation:

6395

[JTH]

It's been a while, good to see you check in. :)

[vectorman]

6419




http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:descending_triangle

[turbo23dog]

Do you have an inclination in which direction VIX will breakout?

[vectorman]

I really don't know. I sometimes go to this free site to get another look at charts.

http://thechartpatterntrader.blogspot.com/

[alevin]

Morning everybody! For edification purposes only...this little item is going into my longterm chart analysis folder to help me avoid being fooled whenever the Golden Cross rolls around. By itself it means very little, just as I suspected. It really does pay to cross-check other signals.

From John Hussman:

Similarly, we are skeptical about things that cross our desks urging us to forget the economy's debt fundamentals and break into a chorus of Zippidee-Doo-Dah. Last week, for example, I was treated to a report on the so-called “Golden Cross” – the event where the 50-day moving average of the S&P 500 crosses above the 200-day moving average. Next to a carefully compiled set of dates were the purported returns of the S&P 500 over the following 1, 3, and 12 months. As one moves down the report, the analyst either figured that investors would no longer pay attention or forgot how to operate a calculator, so one-year gains of 100%, 200% and more were piled into the average (the figures were about 10 times the true returns). Suffice it to say that the true history of the Golden Cross is bronze at best, with actual 1, 3 and 12 month total returns in the S&P 500 (since 1940) coming in at 1%, 3% and 14% on average. Even those figures, however, benefit from three particular instances where the S&P 500 gained over 40% over the following year – those instances were 1942, 1953, and 1982 – each which began at multiples of just 7-8 times normalized earnings (not the current multiple of nearly double that). Excluding those three instances, the subsequent returns from the Golden Cross are no better than throwing dice.
In short, beware of analysts bearing indicators that all is suddenly well, and check their facts.

http://www.hussman.net/wmc/wmc090629.htm

[alevin]

....one of the patterns that has been highlighted quite often recently in many wrap-ups is a possible Head & Shoulder (H&S) pattern. Why do people see H&S patterns all the time? It has the typical characteristics of a Dow-Theory reversal when higher highs (lower lows) are interrupted by lower highs (higher lows). The only problem here is that a H&S pattern only becomes an H&S pattern when the neckline is broken and not before. Once the neckline is broken a price target can be calculated taking the distance from the top (bottom) of the market to the neckline and subtracted (added) from it. As a side note, a complex H&S pattern has multiple shoulders.

We don’t have enough of a corrective pattern yet to decide if this is a zigzag, flat, triangle, or combination of any of those three, so there’s no need to go over those types of corrections. The only thing I can be sure of is that we are now in a sideways trending market, working off a lot of the overbought readings this powerful rally has created. We don’t have the conviction from the market based on technicals until the previous support and neckline is broken to the downside or a new higher high is created. Quite simply, this market isn’t trending. We have the first sign that it “could” be trending with failure swing, but this hasn’t been confirmed by a lower low (which would also confirm a H&S pattern).

The chart he's looking at wouldn't post with the text, so I'll just note he drew the "neckline at about 880, which came close today but still hasn't broken. I'm still waiting. Sigh. Patience is a virtue, right? :suspicious:

http://www.financialsense.com/Market/wrapup.htm

[vectorman]

To follow are some charts from previous recessions, showing mostly the recovery stage.
Just interesting to look at. Intial recovery was usually pretty strong off
of bottom. Those on the sidelines in some recession periods
had a hard time waiting for a good pull back in the first few months of the bounce.

Recession Dec 1969-Nov 1970

6707

[vectorman]

Recession Nov 1973-Mar 1975

6708

[vectorman]

Recession Jan - July 1980

6709

[vectorman]

Recession July 1981 - Nov 1982

6710

[vectorman]

Recession Jul 1990 - Mar 1991

6711

[vectorman]

Recession 2000 - 2003

6713

[vectorman]

Current Recession recovery??? 2007-2009

6714

[Birchtree]

I really like those graphs from 1982 and 2003 - they give me confidence that this current bull run will exceed their gains by a wide margin. I'm bullish on America.

[James48843]

Recession Nov 1973-Mar 1975

6708

This one is eerily not unlike the current one.....

[vectorman]

SPX might be able to stay up alittle bit longer. :blink:

6738

[vectorman]

Here's a few more charts that seem interesting.

SPX

6757

[vectorman]

So how far could the market go if above test fails?
The chart kind of looks like two big bubbles...Dot Com....and Housing combined with easy money from low interest rates.
As long as the Fed keeps the printing press running the market should continue higher. But if you look at the chart below
in the next frame below ATCJeff, the market will have to make some adjustments when interest rates start up again.

SPX

6759

[ATCJeff]

It's amazing that I heard a talking head calling 1200 this fall. That looks just about the top of the downward channel.

[vectorman]

SPX compared to 10 year

6761

[vectorman]

The big question is ' How soon will the Fed have to start tighting up rates
to clean up all the excess bills out there? '....Possible higher taxes and higher interest rates will put a pretty good load on the stockmarket Bulls' back down the road.

Dollar index

6762

[vectorman]

It's amazing that I heard a talking head calling 1200 this fall. That looks just about the top of the downward channel.

The market could go higher. But if the US has another job less recovery, combined with higher taxes to pay for all the government spending ( war, health care, social security..etc),and climbing interest rates, I don't see how the Dow could get back up to its previous high anytime soon. Unless the government changes its behavior, America is set up for some more huge problems, IMO. :worried:

[JTH]

The market could go higher. But if the US has another job less recovery, combined with higher taxes to pay for all the government spending ( war, health care, social security..etc),and climbing interest rates, I don't see how the Dow could get back up to its previous high anytime soon. Unless the government changes its behavior, America is set up for some more huge problems, IMO. :worried:

Great charts, thanks for the perspectives :)

[vectorman]

Something else to watch for. For those in the correction camp.

SPX Chart

6923

" the neckline can slope up, slope down or be horizontal. The slope of the neckline will affect the pattern's degree of bearishness: a downward slope is more bearish than an upward slope. Sometimes more than one low point can be used to form the neckline."

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patt erns:head_and_shoulders_t


" The head and shoulders pattern is one of the most common reversal formations. It is important to remember that it occurs after an uptrend and usually marks a major trend reversal when complete. While it is preferable that the left and right shoulders be symmetrical, it is not an absolute requirement. They can be different widths as well as different heights. Identification of neckline support and volume confirmation on the break can be the most critical factors. The support break indicates a new willingness to sell at lower prices. Lower prices combined with an increase in volume indicate an increase in supply. The combination can be lethal, and sometimes, there is no second chance return to the support break. Measuring the expected length of the decline after the breakout can be helpful, but don't count on it for your ultimate target. As the pattern unfolds over time, other aspects of the technical picture are likely to take precedence. "

[vectorman]

Something else I've been watching. Sure hope I wrong. Below is a chart of the Dow. In 1982 you can see from the 10 yr Treasury chart I posted below how interest rates started dropping and the market really took off. But if the US does have an inflation problem, what will be the response to the market when rates go back up? Short term may be positive, but for how long?

Dow Chart dated 7-0ct-08, with some notes I just added.

6924

Sorry for the type o note should have said 'rising' rates

[vectorman]

Dow Chart as of 7-Oct-09 Depending how you look at it, we could be near the near top of the range and soon start back down,
or like from 1965 to 1982 go sideways as interest rates went up.

6925

[vectorman]

10 yr treasury Chart with Dow added in.

6930

[tsptalk]

Nice work v-man!

[hessian]

Dow Chart as of 7-Oct-09 Depending how you look at it, we could be near the near top of the range and soon start back down,
or like from 1965 to 1982 go sideways as interest rates went up.
Very interesting v-man. On this chart, I'm intrigued by the volume. Any ideas/read on the volume (post #185 below)?

[malyla]

Does anyone have a link either to a post here or elsewhere on the M A pattern? I'm interested in where the peak of the A usually ends (a triple top?) and what an M A pattern foretells.

Thanks.