Showing posts from March, 2008 weekly review

Dr. Joe starts with his weekly review: Interesting to see a new high in the FXE, but no confirmation with a new low in the USD? Bullish divergence for the dollar?: Has Health Care hit support? A fairly ragged looking chart. Ted Burge cast his eye on the NYSE's 20-day and 50-day MAs. Horizontal support at 8,671 also within range: Maurice Walker has no weekly commentary, but his Streettracks Gold Tr (GLD) nicely shows the breakdown of one support level, but the presence of a stronger one nearby. Double top from here anyone? His Weekly Major Trendline is perhaps the best entry point for bulls: He has a good piece on the ADX: The acclaimed author, Dr. Alexander Elder of Trading For A Living fame, recommends taking a trade once both the +DI and ADX lines are above the -DI line. This would trigger a trade once the ADX line crosses above -DI, assuming that the +DI has already successful made the cross. Dr. Elder also suggests getting long if the +DI line is on top and the ADX has moved

Bargain basement US stock prices for Euro earners

Is there value for foreign investment in US markets? Given I now enjoy the benefits of earning in Euros I can look at my next trip to the U.S. (and corresponding shopping!) with the eagerness of someone getting $1.58 for each Euro I convert. Or this can be put another way, I can get 58% more U.S. company stock than someone paying for that same stock in hard earned dollars. So to buy Apple (AAPL) in Euros would cost me 88.76 euros (a veritable bargain), or I could get Google Inc (GOOG) at 281.06 euros, and maybe an Apple 32GB iTouch at a cool 300 euros. This relationship is perhaps best represented by pricing the S&P in Euros. In Euros, stocks are trading at levels last seen of late 1998, and very close to the lows of 2003. It may take a year for a discernable market rally and/or rising dollar/weakening euro to emerge (both of which would be considered bullish for U.S. equities), but for outsiders looking in there is real value in U.S. equities. Don't let the bears blinker you o

Google needs to learn some SEO!

*** Update *** Looks like Yahoo have reversed that decision. Date and time stamps are back. But Google still has its problems. *** *** With Yahoo screwing up with one of its better features (finance pages) you would think Google could step into the breach and steer people their way. Unfortunately, Google has its own niconpoops in charge of Google finance: D'oh!

Essential Reading

Yesterday's consolidation didn't change anything on the broader picture. Monday's bullish gains still hold as dominant until proven otherwise. Today's post looks at what is going around the Blogosphere. Timothy Sykes offers his usual low key assessment on Yahoo!s decision to removed date/time stamps from its posts. I cannot agree more with him... dumbasses. Maybe this is a strategy to scare off Microsoft. One of my favorite morning stop-offs is Maoxian's links . Abnormal Returns is my first port of call to get a working list of articles to read for the day. TraderMike is my second, although he is on vacation. And Charles Kirk when he publishes his linkfest (also on vacation). 24/7 WallStreet hvae the 25 most valuable blogs . Wouldn't mind a slice of that pie, although somewhat depressing to see a (hypothetical) range from $860,000 to $150 million across the 25. Oh to be numero uno on that list. Datawink has an excellent chart analysis tool. Bulli

Yen and the S&P

The relationship between the Yen and the S&P and the relevance of the "Yen Carry trade" has been described expertly by the ETF expert From a technical perspective, spikes in the relationship between the Yen and S&P mark bullish reversals for the S&P. But the degree of the spike may indicate the strength of this bottom. The current spike is of comparable measure to spikes of late 1998 and 2001, but didn't reach the extremes of late 2002 and early 2003. If markets are in the early stages of a cyclical bear market within a secular bear market, then the possible outcome for the current bottom would favor the 2001 scenario over the 1998 one. If this was the case the next rally could take the market back to 1,450 (prior price congestion) before turning down towards the next support level at 1,150. This whole process could take 12-months to evolve. But in the short and intermediate term (next 3 months), bulls should have control.

Transports break past 200-day MA and broadening wedge resistance

The core indices scrambled above their 50-day MAs (or came close to doing so), but one leader of economic activity, the transports, actually cleared its 200-day MA and broadening wedge resistance. A new bullish trend has yet to establish given the ADX knocks aroud 15, but if the 200-day MA can hold it won't be long before a new bull rally is confirmed. The point-n-figure chart shows a triggered Bullish Catapult Breakout from Monday with a target of 5,250. But the real challenge will come on a push to 5,400 resistance. So will the Dow clear its (developing) bullish ascending triangle, or is another trip to support needed? Going by the Transports a straight breakout would be favored. Going by pattern development - another trip to support (and a better opportunity to buy) would make for a stronger pattern. Should the straight breakout occur it should happen within the next few days. weekly review

The long weekend saw a spate of buying, but can it continue into next week? The Stockcharters comment. Dr. Joe sees a correction in the Euro with room to run to the downside: His weekly summary notes an S&P downgrade for the brokerages: Too early to say what impact that will have on the futures . On this chart there looks to be a 'Buy' for the Dow: Ted Burge has the PowerShares QQQ Trust (QQQQ) between support and resistance, although a rising trendline has been breached to the downside: The point-n-figure chart for the Qs has a target of $48.43. It would take a drop to $40.89 to negate that: However, interesting breakout in the Financial Select Sector SPDR (XLF). Note target of $35, part of Thursday's Triple Top Breakout: On the other hand, the Gold Trust Shares (GLD) has a downward target of $84.96 Maurice Walker actually kept things relatively brief this week: The last two candlesticks on the NASDAQ appear to be a Harami + pattern (1st chart below). It would not b

Bullish Percents sing from the same hymn sheet

Yesterday's losses weren't enough to prevent a bullish cross of the 5-day EMA for the Nasdaq Bullish Percents. This follows earlier crosses for the S&P and Dow bullish percents. What is clear from these charts are the bullish divergences between January and current lows for the bullish percents with respect to the parent indices. Basically, more stocks are on point-n-figure buy signals now than back in January, even with the indices making new lower closing lows. What is important going forward will be the need to break declining (closing) resistance initiated in January for the Dow, S&P and Nasdaq. The Nasdaq looks best placed to challenge, although the Dow is closest to the major moving averages (20-day and 50-day MAs). Thursday probably won't reveal too much going into the long weekend, but next week should be interesting.

First Scratchback Purchase

I would like to thank Larry of for the first purchase of my Scratchback link service. As is customary, I have allocated his payment to the Mashari Fahari Yetu Group on This brings the number of KIVA loans made to 48 . Mashari H. Rutindi, age 27, is single and has two children (ages 4 and 1). She has a pharmacy which she began 4 years ago. She works from 8.30 am to 9pm daily and is able to make a monthly profit of about US$173. In the past, Mashari has taken out one previous loan with Tujijenge Tanzania to buy more medicine. She hopes for a new loan to increase the size of her business and to start selling cosmetics. Mashari will share this loan with her subgroup members dealing in selling pharmacy, clothes and cosmetics. In the picture Mashari is 2nd from left in a green blouse Scratchback is a great way to promote your site or blog on my blog, and the money is put to good use helping somebody else. Get a link today.

Assoc Estates Realty Corp

Associated Estates Realty Corp ( AEC ) was one of only three picks on my breakout scan. The Residential REIT pays out 6.4% in yield, but the interest here were the multiple on-balance-volume breakouts, which eventually led to Tuesday's break of price resistance. There is the issue of overhead resistance at the 200-day MA ($11.95), but the intermediate trend is bullish (20-day > 50-day MAs). Technicals all sit on the bull side. The point-n-figure chart is neutral for a price pattern; although a move to $11.50 would trigger a breakout. The point-n-figure chart has no new price target, although resistance at $16 can be used as an alternative target. Trade my Stock Picks at

Volatility and the 2000 top

I took a look at the 2000 top for the S&P and compared how volatility from then compared to now. During the 2000 peak there were four small sub-30 micropeaks, a sharp drop, then a rally to 35 which was associated with the cliff fall for the early part of the 2001 decline in the S&P. Monday's peak above the recent triple top may precede such a decline, although breadth indicators do suggest otherwise (i.e. this will shape into a double bottom). However, it has been a while since the VIX has seen a spike to 45. It would be hard to argue against another one happening soon, which would mean more pain for the markets. The Fed may bring some short term welcome relief, but when the guts of next rally are done we could have the kind of setup where a VIX spike to 45 would be favored. Perhaps September/October of this year??? Who knows, but the beast is out there - lurking, waiting to strike.

What you should be reading for today

Looks like St. Paddy's day was not one for Bear Stearns (or its employees) to celebrate. The subsequent action in the markets reflected the panic. Bill has an excellent chart showing the relationship between the VIX and 10-year Treasury Yield . This ratio is at levels last seen in the 2002/2003 bottom TraderMike has his usual succinct summary. He is watching 2,200 closely in the Nasdaq. Market reaction to Fed decision will decide whether we have support or resistance. Will the Fed cut by a full 1% ? Will Markets view it as the needed cure? Or a panic reaction to the current state of affairs? It sounds like a lot to me - but what do I know. Barry has Lehmans on B.S. watch. Steven Smith at noted heavy option trading volume in B.S. over the course of the last couple of weeks. Kevin's Market Blog is looking for a measured move target down to $39-39 for the Qs . Quantifiable Edges notes how Bear ruined the traditional pre-Fed rally. But, not to be outdone, the Fed

Happy St. Patrick's Day

Image weekly review

The week which started as a viral infection is now an ear infection, so this week's review may be brief. George Zimmerman has a good overlay showing the NYSE Bullish Percent Index and the S&P. Compare the 2002 and 2008 lows and decide whether you should be bullish or bearish? Joe Reed is looking for strong bottom in the Retail Index: And sees bigger problems for the Bank Index: The Nasdaq still ranks as a breakdown on the weekly chart: Maurice Walker has his weekly essay: Who Let The Bears Out Of Their Cage Today? Bear Stearns! The genie is still in the bottle according to the latest Consumer Price Index (CPI) data released today. Headline inflation declined by .3 % in February to an annualized 4.0 %, from the previous 4.3 % recorded in January. There was a decline in the annualized core rate of inflation from 2.5 % in January to 2.3 % in February. This positive turn on the inflation front, gives the Fed the room they need in order to aggressively cut interest rates on March


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