From: Fallondpicks.com
Bears stamped over the Bulls party, thrashing 2006 gains and leaving bull traps in all markets bar the Russell 2000 and semiconductor index. Unfortunately the semiconductor index was the biggest % loser from Friday's selling (of my watched indices) and it remains to be seen if it can hold the early January breakout. As has been the theme for the New Year, the Dow was the chief loser of the major indices, breaking below Fibonacci and 50-day MA support leaving the 200-day MA at 10,541, and October lows of 10,220, as the watch areas for future support. If you want to scrape the bottom of the barrel one could argue for 50-day support in the NASDAQ and S&P. The lower volume trading in the NASDAQ is a mixed blessing; fear selling, or complacency? Fibonacci support also comes to the rescue in the NASDAQ and the semiconductor index, but the NASDAQ 100 doesn't have much to look forward too other than January lows of 1,634 - some 40 points away from where it is now. Even with the Russell 2000 there was a bearish engulfing pattern left after Friday's close; a strong reversal signal.
Gold finished the week on a 'shooting star'; the last one to occur in December was followed with a couple of weeks of selling, watch for confirmation with a close below Friday's lows and a probable test of the 50-day MA (currently at $510). Silver looks to have completed a rising channel breakdown; note the bearish divergence in the MACD trigger line. A 4-year cycle top must be fast approaching in commodity prices (within a broader 20-35 year secular bull market). Joe Reed does show an interesting chart for gold which suggests the run in gold may not yet be done.
Not surprisingly, the tech secondary indicator $NAA50 crashed through its 5-day EMA trigger, lasting all of one day in a bullish state. The remaining two indicators; $BPCOMPQ and $NASI maintained their bullish readings but suffered losses Friday. The one indicator which did mark a fundamental change after Friday was the volatility index. Options will increase in price (allowing for both greater profitability - and losses), but we could be in for a rough few weeks ahead if rising volatility was to be followed with heavier selling. According to the point-n-figure chart, Friday's action qualified as a quadruple top breakout with a target of 33 (which is 5 points shy of resistance above which volatility marked the worst of the bear market from 2000 to April 2003). Buckle up, this could be rough.
Target hit: none
Stop hit: BK was a free feature for November 1st, and a Subscriber feature for September 23rd. The Subscriber feature closed for a 7% gain. The free feature for a less than 1% gain. CQB was a Subscriber pick for January 18th which failed to climb from its oversold level; it closed for a 3% loss.
Gold finished the week on a 'shooting star'; the last one to occur in December was followed with a couple of weeks of selling, watch for confirmation with a close below Friday's lows and a probable test of the 50-day MA (currently at $510). Silver looks to have completed a rising channel breakdown; note the bearish divergence in the MACD trigger line. A 4-year cycle top must be fast approaching in commodity prices (within a broader 20-35 year secular bull market). Joe Reed does show an interesting chart for gold which suggests the run in gold may not yet be done.
Not surprisingly, the tech secondary indicator $NAA50 crashed through its 5-day EMA trigger, lasting all of one day in a bullish state. The remaining two indicators; $BPCOMPQ and $NASI maintained their bullish readings but suffered losses Friday. The one indicator which did mark a fundamental change after Friday was the volatility index. Options will increase in price (allowing for both greater profitability - and losses), but we could be in for a rough few weeks ahead if rising volatility was to be followed with heavier selling. According to the point-n-figure chart, Friday's action qualified as a quadruple top breakout with a target of 33 (which is 5 points shy of resistance above which volatility marked the worst of the bear market from 2000 to April 2003). Buckle up, this could be rough.
Target hit: none
Stop hit: BK was a free feature for November 1st, and a Subscriber feature for September 23rd. The Subscriber feature closed for a 7% gain. The free feature for a less than 1% gain. CQB was a Subscriber pick for January 18th which failed to climb from its oversold level; it closed for a 3% loss.
