Monday, January 25, 2010

Weekly Review of Publishers' Charts

Trendline breaks galore. While this is likely to see weakness extend into this week, it's more likely to see the establishment of a broad trading range for 2010. But what had the Stockcharters to say about it?

Anthony Caldaro of Objectiveelliotwave has confirmed the 'B' top of the 'ABC' correction kicked off in March 2009. Will 'A' = 'C'? If so, 2010 will be a bad year...

Although he has a 'bullish count' for the NASDAQ - if not very convincing looking (e.g. don't see why the Oct-Nov correction is not wave 4 with the current high a wave 5 top?)

Yong Pan of Cobrasmarketview has the short terms primed for a bounce (with only one 'bear' signal) as the intermediate time frame has a mix of everything, but mostly neutral.

Will the market consolidation area play as support? I suspect it won't halt the decline as much as lingering support c1040; but today will be a test of it.

On the 60-min time frame technicals are way oversold for leading index ETFs

Richard Lehman of suggests the first sharp leg down is the start of something larger.

1/23 -- I have known for some time that portfolio managers were keeping their clients long to insure that they took advantage of the rally and didn't lag on performance, even while they knew it was not justified by fundamentals. Many had little choice. This week is the beginning of a mad scramble by individuals and money management folks to lock in gains (or more likely reacaptured losses), and it looks to me like the first leg of something much larger.

The one year charts show the Dow, SPX and RUT approaching the green upchannel line from last March, but the Naz and QQQQ have already broken theirs. I see that line as a minimum downside target, but I suspect it will eventually break all around. That would set up for a move to the lower green that I have been carrying on the charts -- the one that actually comes off the March low. That could be another 10% down from here if retested.

You probably know of course that Prechter told his subscribers to go 200% short not long ago as Elliott wave counts completed themselves on the upside. The momentum curves on the long term charts agree that there is much more to go, though we will expectedly have a few strong bounceback rallies along the way. Last year is still very fresh in poeople's minds. I suspect they will run for cover here to avoid being caught a second time. Money mkt funds will burst at the seams again.

1/21 -- This now shows how spooked people are about the rally as the downtrend accelerates. We may bounce soon in the new downchannnel, but it will almost definitely go further down. The Dow is breaking greens on the short term and is now heading down to the lower green on the long term chart, which could be as low as 10,000-10,200 by Feb. Brace yourselves for a ride. The technical people will seize this as a time to short and the fundamental people will want to take some profit off the table.

Richard's dollar chart from last week played support nicely (for those who took advantage)

Joe Reed gives his week in review

Look how oversold the Dow is on the CCI

'Sell' signal in full stochastics of the Nasdaq Summation Index

Daily x3 Bear ETF waking from its slumber with a counter move to the triangle break; these are usually sharp rallies with the best still yet to come?

Although I am wondering if the dollar 'buy' in slow stochastics has come a little early?

Finally, Michael G. Eckert of EWTrendsandcharts has Fib retracements on his radar

Decisive break on the S&P 60-min

Interesting wave projection on the S&P 30-min timeframe

So - looks like things are set for a counter rally - but only a rally to set up a larger move down. Shorts will be eager to sell any strength which gets close to January highs. Too early to say what it means for the longer term but profit (or minor loss) taking appears to be the name of the game.

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