Bottom Line:
- Long term trend is up. Mid-term trend is up (it may have topped). Short-term trend is down
- Weekly S&P stage is Strong Decline (4-A)
- Daily S&P stage is Early Distribution (3-A)
- As long as index is below 1215-1230, it’s either consolidating or declining
- As long as index is below 1215-1230, the bear may be back
- It takes a move above 1191 to perhaps indicate a short-term uptrend
- OEW pivot support at 1146 and 1136. Pivot resistance at 1168 and 1176
Chart Support
- Weekly: (1140-1150)
- Daily: (1160-1170)
Chart Resistance
- Weekly: (1200-1230), 1275, (1285-1290)
- Daily: (1160-1170), (120010-1230), 1240, (1260-1270), 1290
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GLD:
- Long term trend is up. Mid-term trend is up. Short-term is down
- Weekly GLD stage is Early Distribution (3-A)
- Daily GLD stage is Early Distribution (3-A)
- It takes a move above 166.40 to perhaps indicate a short-term uptrend
SLV:
- Long term trend is up. Mid-term trend is up. Short-term is trend is down
- Weekly SLV stage isMid Decline (4-A)
- Daily SLV stage is Mid-Distribution (3-B)
- It takes a move above 31.60 to perhaps indicate a short-term uptrend
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This is a weekly
Very rough week
In a way, it was straightforward. We had a contraction and it resolved downward. The contraction is still there as you can plainly see from flat MAs, that is weekly resistance to overcome by the bulls ASAP to prevent those MAs from rolling over
Thing are really bleak out there. News and sentiment should be poor near cycle lows — how else to get a low?
I am hoping that we finally get a high bolume, bad breadth sell day, or sell days to give a washout and daily cycle low
Market seems to be trying its best to force politicians and central bankers into some action and without that, I am not sure what other catalyst may ignite a rally that i can trade with comfort
I think the Oct low was an intermediate low and I think it will hold, but, my thinking is based on cycles and technicals. We do live in a purely technical world and external events, sentiment, and macro fundamentals are behind the market moves. Technicals just tell us how things are and also give us a statistical context for us to evaluate possibilities and decide on probabilities
We knew market was late in its trading cycle and we knew chances were that even if it did another push up out of the contraction we were watching, that push would cap the trading cycle and be soon followed by a move into the trading cycle low. More important than that, was the fact we stayed neutral and unbiased and did not try to tell the market what to do. We instead paid attention to the contraction and it resolved downward indicating strong probability of an end to the prior trading cycle move up.
Now, I am expecting a move into a trading cycle low. Market does not give a damn what I, or you, or anybody expects. It does what it does when it does.So, I can go on and expect all I want, but I have to be ready to admit mistake and move on if I realize I am making a mistake
Thinking that index has a good chance of holding the Oct low at least for a bounce or rally, I will act on a serious down day if I get one. I will not bet my house but just take a position with risk being a weekly close below Oct low. If that is too much risk, then I should wait for the bounce to start and take a position on the long side
Make no mistake about it. Fundamentals are terrible. They may even be worse that 2008 and that is something many don’t see or say. Why worse? because 2008 was a private banking crisis and this is a sovereign debt crisis. Had Euro-head not wasted 2+ years chasing each others tails meeting to meeting, they might have had contained it much sooner and with less damage. Now, it is spreading from one Euro-land to another like leprosy. It will take a gargantuan commitment to even have a chance at assuaging market’s angst
The problem is debt. Debt can be
1. paid off (good luck with that)
2. defaulted outright
3. inflated away
I don’t think meet and greet and empty promises from this podium or that is any solution to anything and market seems to have had enough words and promises from the Euro-land
A market that drags it busted behind in a chop may not be able to force decision makers to make decisions. That is why I am hoping for at least one heavy down day — preferrably closing at the bottom of teh daily range
I said that if one wanted to just watch one chart, USD might be good candidate
When USD moved below 200-day SMA, we thought it was a technical move and that was correct. One reason I though the dip below 200-day SMA by USD was only a technical move was another chart that I said might be good candidate for monitoring: the overlooked, yet mighty TED
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As for smaller, internal waves, this is one obvious alternate
This is a less obvious alternate
Regardless, we need a swing low, and then the low point must hold followed by a short-term trend indication
Daily volume shrank well below average (it was the day after US Thanksgiving holiday). Daily breadth was negative
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US markets went volatile and troublesome after the supposed end of QE2.Since then, there has not been any significant contraction in the 2+trillion of money supply. There has not been an expansion either
From what I hear of Europe and see of TED, liquidity is a problem. Dollar has been attracting interest, perhaps fleeing capital from Europe. Fed seems to have been doing just enough to hold things steady. That may not be sufficient if sovereign debt problem moves from the periphery of Greece towards the center of the Euro-Land. Will Fed, even if willing, be able to save the world and print enough to monetize all of the debt of Europe? I don’t know. I think Europe must find a away to at least deal with most of its own debt. But the problem is that debt of one is not debt of all so those who think they are better than others financially may be unwilling to sacrifice. If so, market may try its best to send the problem to the core of Euro-land, France and Germany and force a decision on the collective lot of them. This is one hell of a show we are watching unfolding 
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I find it hard to expect a vibrant precious metal performance if broader equities do poorly and if dollar does well. During the 2008-2009 fiasco, gold suffered. It did a lot better than so many other things, but it still got a good correction
I did a post with weekly charts and counts two days ago and not much has changed with the weekly frame
What has amused me has been the behavior of these two charts I have shown and discussed multiple times
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Another thing has been the behavior of miners that, so far, seem to be mired in a multi-month consolidation chop
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As far as realities of playing the market in real time with real money of our own very real making is concerned. Markets are run on emotions lubed with liquidity. It takes money. Market’s inherent message since the supposed end of QE2 seems to have been: Show Me the Money!
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Enjoy the Rest of Your Weekend!
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