Ideas come from everywhere

This person is using limited resources for an idea which doesn't have a solution, yet.

Just a thought.



Klatuu

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The Greek Riot Line

I'm showing a chart of the Emini-SP500 with a trendline that has not been crossed since the socialist began displaying their lack of productivity and walking around burning and throwing things, killing others in Greece.

A breach of this line will be an event in itself. Otherwise, stay on the short side.



Klatuu

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Dollar Down, Market Up?

The dollar has been dropping out of it's consolidation, piercing below 80.000 and appears to be headed for 79.500. This morning the dollar has trended below last night's chart.

A break of the 38% fib and fib-fan project it toward the 50% fib-fan line near the 79.500 level. Correspondingly, the SP-500 could follow it's trend and head towards 1180 over the next couple of weeks. Support could slow down this decline in the dollar, however, it would need to get to 79.000 before it begins to see a substantial supply. It may take that before we were to get a reversal.


Good Trading,

Klatuu

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Dollar drops, now where from here?

Some readers have been asking for an update to my recent post about the dollar. The dollar traded sideways a few more days, staying in the zone of consolidation described earlier. Today, as there are a few more hours left of trading, it has already dropped into support mentioned earlier at the 38% fib-fan line.

I've marked a support area in red on the chart below and you can see how it intersects a 38% fib-fan line there as well, near it's current price of  80.060. Should this breakdown a likely support area would be the 50% fib-fan line near 79.000. However, if it does get some support followed by upward momentum, it's possible we could see a rise to 81.500. Further weakness on the dollar could push the commodities like copper (JJC) up even higher.



May you live in interesting times,

Klatuu

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Is the tide going out? Who's not swimming with a suit?

Overbought may be the only way to describe the market of the past nine days. Up on every session. It's no wonder we're getting short signals.  The Dow Jones Industrials ($DJI) are lagging the SP-500 ($SPX.X) which seems unusual. Yet the Dow Jones Transports ($DJT) are leading both the Indiustrials as well as the SP-500. So, Dow theory is leaning bullish. It is a Bull driven market, and waiting for these usually profitable counter trend pull backs can get old. But I would be remiss if I didn't update you on the current readings of last night's MktDiff indicator.

You can see the recent three signals we've had indicating a short here and how similar this period is to our more recent January 2010 series of days that did pretty much the same thing.

The decline in volatility over the last six months has brought trading back to June 2007 levels (chart of $VIX.X below) and put many traders to sleep. While the decided lack of volume makes one wonder if there's not a better place to put your money? Fear not, someone somewhere will do something to rattle the stability and make the spreads go wider. Make sure you're wearing a suit when the waves go out. I hear those tsunami's can really pull the water out from under you before they hit.

Keep your pants on,

Klatuu

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Mouthwash Swing Short Strategy Now All In

I was filled today on my last scale-in for the current Short signal based on the Mouthwash Market Breadth Indicator. Psychologically, it has been hard sticking to my pre-defined scale-in levels in the face of a raging bull market. However, as the chart and performance report below show- the indicator rarely gets beyond its present levels without at least a pullback of a day or two.

My gut says I will be stopped out before the pullback. But with the system track record, I trade the signals without hesitation, and let the market do what ever it’s going to do. As the performance report shows this has been a consistent strategy over several years (both long and short).

Anyways, I’m now all in with a calculated risk, my OCO GTC exit orders are in, and my trade is at the mercy of the Randomness God.

Good Trading,
kw

Click Chart for Full Size

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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Gold Miners GDX may be loosing steam

Recently a friend asked me about GDX and I thought you might be interested in it too. First I'll give you a long term look. You can see on this chart, the 76% Fibonacci level from back on January 2008 shows a resistance at $47.18.

Now, let's zoom in to a more recent view of the same chart. Drawing another set of fibonacci retracement lines on last December's peak down to the Feb 2009 low we see a 50% retracement at $47.44, which is very close to the longer term 76% retracement at $47.18, causing a more significant area of resistance.

You can next see the recent pattern of a bearish flag drawn in here. I've drawn in red what I think may be a likely scenario for this stock. If it continues up, a resistance near $44.50 may be a good headwind and then a decline back to the $39.48 low is likely. This is my favored path. Otherwise, should it power through the $44.50 level, $49 is in the cards and possibly up to $52.


Trade happy,

Klatuu

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