A Market Festivus

They say that Festivus is the “anti-Christmas”, but in this case we are going to call it the anti-Christmas Eve as the markets close out 2018’s Christmas Eve massacre.

“Many Christmases ago I went to buy a doll for my son. I reached for the last one they had, but so did another man. As I rained blows upon him I realized there had to be another way!”

This year markets are going another way.

Market festivus

We have been managing a potential Christmas Eve close-out sale in the stock market since SPX hopped the Bull Turnstile, negating topping potential and confirming bullish ascending triangles (not shown below as they appeared on daily charts) and its own major trends by breaking upward. Here is the most recent chart (from NFTRH 582) used to illustrate the situation.

Please consider this weekly chart for reference only. We had a lot of words in #582 about what I think is in play, but ultimately this public post is simply illustrating what is currently in play. And that is an upside extension (with associated sentiment readings to be updated this weekend in NFTRH 583) that would be roughly equal and opposite to the 2018 downside blow off (note: though the chart allows for higher levels, SPX has already qualified for a price and sentiment close-out, in the general spirit of the season). The blue box is the same height as the yellow shaded area. It’s more art than TA, but there you have it… some frame of reference. Continue reading "A Market Festivus"

This Is Status Quo Time

Hello MarketClub members everywhere! Despite the rally on Friday, there's been little change to the overall status quo of a broad trading range that I believe the indices are in.

Indices

On Friday the DOW (INDEX:DJI) closed at its best levels in 10 weeks, bringing it back up to the Nov/Dec lows which should act as natural resistance. The Dow is still in a 61.8% Fibonacci close-only retracement mode and should begin to falter around current levels. That's not to say that it can't go a little higher, but I think that it's doubtful that it can sustain higher values.

You can see much of the same picture with the S&P 500 (CME:SP500) as it is back into an area of Fibonacci resistance. I still believe that this index is cranking out a major top which began in August 2014. This week should be an interesting one as I expect to see more two-way trading, the key of course is where it closes Friday. Continue reading "This Is Status Quo Time"

If It Walks Like A Duck, Quacks Like A Duck, It's A Duck!

Hello MarketClub members everywhere! As the month of February rapidly comes to an end in just three trading days, I thought it would be interesting to look at where the markets closed at the end of January, which as you know was a very volatile month.

So here the closing values of the major indices, gold and crude oil on January 29th: Continue reading "If It Walks Like A Duck, Quacks Like A Duck, It's A Duck!"

Get Ready For A Buying Opportunity In Gold

Hello MarketClub members everywhere!

Gold

Is this pullback in gold a buying opportunity or a watching opportunity? I think it's the latter, and here are the reasons why.

Gold (FOREX:XAUUSDO) has had a remarkable rally from early December in 2015 to just a couple of weeks ago when the price of gold peaked at $1260 in the spot market. There are two things that I'm looking at in this market; one is for further consolidation and the second is that I believe that a major cyclic low will be occurring in the near future.

Looking at a chart of gold for the past 12 months you can see that gold had low periods in March, July and December. If that same rhythmic pattern holds true, the next low period should be coming up in April. I expect to see gold remain choppy until that time period.

The major reason why I want to pay close attention to gold is that I believe it is in a longer-term bullish cycle. One area to pay close attention to is the 50 support line on the RSI indicator. You also want to pay particular attention to the monthly RSI, which still remains below the 50 line indicating that it's not fully into a strong upward momentum cycle for gold. I believe that we will see further consolidation below the RSI line before it's broken on the upside. Continue reading "Get Ready For A Buying Opportunity In Gold"

A Santa Claus Rally Or Will The Grinch Steal December?

The massive equity market rally on Friday was driven by short covering and a jobs report that was more favorable than the market expected. This week is going to be a battleground between the bulls and the bears and is going to be a very important week, in my opinion. Are the markets going to continue last Friday's strengths or are we going to see a two-way trading market with a Grinch-like ending for December?

Since the beginning of December, I have been warning investors to be cautious as this month tends to be a difficult and volatile month because of the holidays. Not only do investors have the market to worry about, but also the threat of terrorism which I think is in the back of everyone's mind here and in Europe. Continue reading "A Santa Claus Rally Or Will The Grinch Steal December?"