Market Timing

Gold Price to Break Out by Labor Day?

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goldfutures20090828

Spot gold has some good upside action today but it is still early and we still do not know how the day will end.  But so far today I am seeing bullish signs and a good possibility of a bullish closing weekly price bar to set us up for next week.

It would be superb if we can get a bullish weekly close going into next week.

I am seeing that the daily MACD has crossed up on the spot gold price for the fourth time since being in this large triangle.  In the near term there is a slight tendency to an ascending triangle formation (green shaded area) in the chart.

Still, the spot gold price has not achieved a move above the 970 to 980 area that is necessary for me to say we are in breakout mode and have much higher confidence that the breakout is for real.

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Larry Pesavento Says the Market Goes Down Big Starting Next Week

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Larry P, a superb trader who uses precise Fibonacci pattern analysis has been talking about the market being at an important top starting end of this week and beginning next week.

Larry P is also the one who made one of the greatest market calls I have ever seen.  During the October 2008 period he precisely called the worse declining portion of the ‘crash’ at that time.  I believe it was October 6th to October 10th, 2008.   Larry P is also heavily into Astro Trading and uses precise planetary alignments to pinpoint turning points and continuation patterns in the market.

The time frame of October 6th to 10th 2008 was a similar astro configuration to the one that existed in 1881 during the banking panic at that time.  So the planetary aspect that he was talking about was almost the same and existed over that period of 4 trading days.

Those 4 trading days led to huge price destruction and volatility during 2008 and the rest they say is history.

When I look at the SP500 I can see the possibility of a break down coming soon.   But I have said before and I will say it again… We need to break down under 1012 to 1014 as a first sign that we may be heading into a more severe correction.  When and if a correction starts it may happen very quickly to start it off as a big sign of weakness. 

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I Can See the Future and it Looks Like the 1974 S&P500

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1974monthlysp500

I don’t have a crystal ball that tells me what is in store for the future.  But the closest thing to a crystal ball that I have found so far is the 1974 time period of the S&P500.  The entire structure of the market during the time frame of 1968 to 1982 has given me a lot of good perspective and understanding about our current market and has helped to give me great clues and better confidence about where our current S&P500 may be headed in the future.

Now you may be asking yourself, what on earth does 1974 have to do with today ? Nothing actually.  But what I have found over the years is that sometimes past market movements tend to rhyme and show similar structure and trend development.

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LEAP Leap Wireless International May Be Set up for a 10% Upside Move

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leap20090826

LEAP looks like a good setup to possible deliver about 10% returns starting from tomorrow in the AM.  I found leap by doing a stock scan of over 4700 nasdaq and NYSE stocks filtering for MACD daily buy signal and RSI less than 50.

Only 6 stocks came up from the scan because I had put the limitation that they should also be trading greater than 1 million shares.

LEAP looks good to me for several reasons.  It is doing a retest of an important late November 2008 swing low.  The daily MACD has extended to the downside and has given a bullish cross.  Relative Strength Index is very oversold and looks like it will soon give a buy signal.

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CBL CBL & Associates Properties May Get a Cup and Handle Breakout Soon

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CBL looks like it has a cup and handle setup and if CBL can get a price move above 8.80 I think we could see breakout type action and a continuation uptrend. CBL probably should have been the first stock I mentioned today.  All the others I have talked about so far today are not … Read more

GRRF China GrenTech Corporation May Fill the Gap then Find Trendline Support

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grrf20090825

GRRF had a huge upward breakout spike in early August on some good earnings numbers.  Since that price spike the price of GRRF has been trending down within a steep down trend channel denoted by the yellow dotted lines (click on chart to see full size).

Right now I am thinking that GRRF is going to retrace this huge move and attempt to fill the large opening breakout gap and maybe come down into the low 4 range.

If it can fill this gap and hold support at the 4.10 range then I think GRRF may have a shot at resuming the uptrend and get a test going of the high volume swing high that created the gap.

GRRF should be able to fill this channel and make a decision no later than September 8th, 2009.  But I am going to have to watch price and see how it behaves when and if it is able to get into the low 4 range.

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DRYS DryShips May be Headed for a Triple Bottom

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drys20090825

DRYS DryShips over the past year has had some really huge swings and enormous daily volumes.  It rallied from a price of 3 to 16 in the past and then made a double bottom and rallied from 3 to 11.  Clearly  DRYS is capable of making some big moves on the upside and downside.

The current structure of the chart suggests to me that DRYS is still not done with its bear market yet despite the huge intermittent rallies.  It has a strong down trending force defined by the green down trendline and so far has obeyed that downward force.  Price has not been able to break above this line. 

So we still have a generally bearish trend in DRYS.

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HBAN Huntington Bancshares is Nearing a Decision Point

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hban20090825

HBAN is nearing a decision point after a somewhat lengthy uptrend since March of this year and a few intermittent spike rallies.  HBAN has a somewhat similar setup to the FITB setup that I had written about in the past.

HBAN has been consolidating between roughly the 3.5 and 5 level for several months now and has already touched the bottom up trendline 5 times giving it good significance.

I cannot speak as to whether HBAN will be able to get an upside move off of this structure into the green shaded area.  Typically the market in general is vulnerable this time of year to some downside shakeouts.  But so far the broad market is holding up like a champ.  The retracements have been intraday retracement and not significant corrections.

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EPEX Edge Petroleum Breaks Out with a Sign of Strength

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epex20090824

I had mentioned EPEX a few other times casually because I though it had some good potential based on an important volume swing test in early June and early May 2009.

When I first started writing about EPEX I was intrigued by the substantial high volume swing test that occurred on June 1st.  That was a very important clue as to the behavior of this stock because it was telling me that we would have a good chance of revisiting those levels.

But when I first mentioned it on July 28th, 2009, the price was languishing in a somewhat choppy confusing price pattern that seemed like it was going nowhere.  Despite the confusing price action there were still well defined resistance lines and support lines that contained price and gave good parameters to work with.

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S&P500 Index has Possible Short Term Bearish Divergence

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spy20090824

The S&P500 had an intraday reversal today and price closed near the opening price creating a reversal hammer on the candlestick chart.  But perhaps more significant than that the S&P500 created this reversal hammer early in the week and has created a possible short term bearish divergence between the relative strength index and the S&P500 closing price for the month of August.

There are only 5 days left in the month of August not including today and it has me thinking some sort of correction may start here.  The follow through sign that a correction will continue is if the relative strength index fails to make anymore upwards headway and if the SP500 breaks down below minor support near the 1014 level.

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