Comments in this blog refer to my charts collection found at
For intra-week comments go there, updated more frequently.

Saturday, July 30, 2011

Weekend wrap- Nader for president.

The good news is that the market did not collapse on Friday and held 200 days moving averages as well as June lows. The bad news is that it may easily collapse next week and that would confirm for me the transition to a bear market. From the Elliott Wave analysis perspective it is simply a choice between two wave 5 outcomes as below.
The move in ether direction will be swift and totally news dependent.
We are in a window for this cyclical bull top and any further drop will be just a confirmation that a top was build up over the past several months and that will be as clear as it could be. In case of a surprising "solution" over the weekend a blow off rally to cap-off this bull will likely materialize in short-term.

From the political perspective it just becomes clear to everyone (if you did not know before), that we truly need protection against our own government, and the best idea I could find about that is that we should  mobilize and start molesting Ralph Nader to try another run for the Commander-in-Chief spot.

Saturday, July 23, 2011

Weekend wrap- Sequential tops revisited.

It seems to be a good time to follow-up on the sequential tops theme rather than concentrate on short-term noise which is anyway just a part of the larger scheme of things and any political outcome will get interpreted according to the stock market outcome.
Just one comment: no fools in sight yet- see my old post Everybody knows-consensus.
Time has validated my contention that airlines cyclical bull has topped in November of 2010 and the sector is already in a cyclical bear, now accelerating.
Having one bear confirmed, let's look at the last cyclical bear topping sequence. I put together this chart a while back and it shows SPX top 9 months and oil top 18 months after airlines.
If that relationship is upheld this time, we are looking for SPX top in September.
I lost my gold chart so it is a recreated one. If you look closely, we may be at a beginning of a sweet 6-months rally to the top for gold and the miners.

Now a close-up of the last oil top.

If history rhymes enough we may have some rally till September followed by trading range till January where a final blow-off would commence. If the blow-off repeats its past performance it would take us to 200 bucks per barrel.
Now the disclaimer: things are not likely to repeat exactly same way.

Saturday, July 9, 2011

Weekend wrap- Welcome to Pamplona.

Well, nothing beats the fun of a nice bull run.
Just do not get yourself in the way.
After this precautionary notice, let's take a look at where the markets stand now.
The very first observation is that there was a palpable spike in bullishness last week, while the markets generally had minimal net gain by the Friday's close. This by itself, even without further looking at the charts makes a good case for correction to happen next week.
The charts tell a similar message. On most of them you could see a push towards resistance practically across the board.
Just few relevant charts below before further dissecting this bull run.
Now, just a follow-up on the 2010 bull run that was a wave 5 of the wave A of this bull, with reminder that we are in wave 5 of the wave C and both wave appear to have similar dynamics, at least looking from the perspective of this (assumed) early-stage of the wave.
I placed a tentative labeling on the current wave below.
As you can see, R2K may be on schedule for about 3% correction next week. Now the caveat:
Anything much more than 3% would bring the possibility of failed 5 as on this count.
And another caveat, and the reason I put the pictures of the Pamplona run at the beginning of this post.
Bull runs can be quite unpredictable, and we can just keep going up.

Saturday, July 2, 2011

Weekend wrap- wave 5 close-up.

Well, we did get some early 4th of July fireworks this year, and that's in the markets. If you look at my prior post, the scenario of wave 1 of the bear is clearly out of the window (as expected), and the failed 5th is highly unlikely now. Simply stating: we are in the wave 5 of the wave C of the cyclical bull as outlined in the last post.
There is plenty of interesting developments, including gold stocks outperforming gold (gold should bottom soon), bonds-mini-crash and euro consolidating in a triangle. But, not to waste anyone's time during this beautiful holiday weekend, I will just take a closer look at the wave 5 of the wave A, just to see what may be in cards for the balance of the summer.
Just to clarify, we are looking at the wave that started in February 2010.
As you can see, it was a very dynamic run, lasting about 2 1/2 months, with only occasional pullbacks to the 13 Days exponential MA, and the "flash crash" came after decisive breakdown of the trendline that was defined by the very first 1 and 4 days of the rally and of the 13DEMA. Now, looking at the current setup, you can see that the beginning of this wave is not so humble again, which lefts me wondering if the rest of the run will have similar features this time as well.
Obviously, that's a major conjecture on my part and anything could happen.
Have a nice holidays!