Google Inc. (GOOG), the Google Bug

Did you feel/see that Google Inc. bug (GOOG) today ?
Will that affect Google ?
They did fix it fast, but I wonder what REALLY occured ....
A bug ?
Scary to think that someone can actually "bug" them ???
How about stealing data from Google's servers ?
Resistance level on the chart is quite clear ; I would only buy if we get above $360.
Now, lets hope their PR department will be quite honest about what really did occur.

Cartoon, Do the Math, your Bank is Broke

"Do the math, your bank is broke !"
Even without doing the math, you probably get that the government's financial-rescue effort is failing. The signs are hard to miss. Your friend in finance got pink-slipped. A house sale down the street fell through because the buyer couldn't get a mortgage. A local bank is closing a nearby branch or maybe shutting down altogether.
Source of story ; Time Magazine

Gold chart analysis

On Nov 22, I published the following charts ; (GDX) daily and the Gold weekly
http://gicharts.blogspot.com/2008/11/market-vectors-gold-miners-etf-gdx.html
While still bullish on Gold, gut feelings tell me that we are about to face a pull back soon.
Not normal to see Gold and the USD$ Dollar rise together

US Dollar chart analysis

Quick chart analysis of the US Dollar index ;
1) as mentioned before several times, long term pattern was still bullish
2) the first quick trend up in 2008 occured "too fast", it "had" to pull back
3) clear channel means that a break out now above 88 could send it into a huge uptrend.
PS : many of my readers keep sending me reports on how and why the Dollar should crash ; sorry to tell you, but you are still reading "old news".
Roubini here, Roubini there , blablablah, after every crash, someone comes out looking like a hero. Do you remember Acompora ?
Roubini was NOT the only one who warned about a market crash ; he was just better at marketing himself !

Cartoon Private Banking clients

Private banker telling client ;
"We now only sell shares of our bank", it has a great yield if you can hold for 10 years :)

Ready to buy Citigroup Inc. (C) again ?

You have probably notice my recent trade of Citigroup Inc. (C).
Getting ready to pull the buy trigger again ;
Is this level our "B" ? (from the ABC pattern)
Wait for the close of the day, and see if this last candle does signal a reversal.
No idea what the ABC pattern is ? look at the tutorial on the top right hand side of the blog.
If candle is still bearish near the close, wait for monday's action

Karl Marx and the financial crisis

Owners of capital will stimulate working class to buy more and more
of expensive goods, houses and technology, pushing them to take more
and more expensive credits, until their debt becomes unbearable. The
unpaid debt will lead to bankruptcy of banks, which will have to be
nationalized,and the State will have to take the road which will
eventually lead to communism.

Karl Marx, 1867

Should you buy Fortis ?

Should you buy Fortis now ?

1) Now I understand their logo ; a huge mess :)

2) Hope they change it and ask me to design it :)

3) BNP Paribas Bank, France’s largest bank, will take a smaller part of Fortis's Belgian insurance unit and more of its toxic assets

Now that's good news !

Why ? Insurance business is like milking a cow daily :)

Get ready to buy small positions in Fortis, wait, and add more as news do improve.

Bond crash ? Bond ETF (TLT)

After a long sideway trade, the iShares Leh 20 Year Treas Bond (TLT) bond ETF broke out at the end of 

Nov 2008 sending it in a parabolic rise.

We all know how a parabolic rise usually ends ....

First sell signals started in Dec 22, 2008.

Then ? followed by a head and shoulder pattern, sending it back down to test the 100 levels.

Swiss Franc chart analysis

The Swiss Franc is NOT what it used to be ; a safety heaven (:

All sell signals started in early Jan 2009.

Any buy signals yet ? No !

Remember, this is a currency index (compare to other currencies)

Resistance level (in red) is our main buy trigger if we get above it.

Are we heading back to test again our "key" support ? we shall soon find out if we need to short again.

British Pound chart analysis

I mentioned several weeks ago that the Pound was way oversold and ready for a pop up.

We are now facing a key trigger level (145)

Let me be clear about this scenario.

1) I am not a funny guru with a magic ball :)

2) I react to price action

3) Gut feelings are NOT always right

4) Price leads, news follow

5) Go long above 145

6) Go short if we reverse below 140

Stop reading the financial news ; read anything else !

PS : do not worry too much, England will be fine ; focus on what you will do next in your life/career

Euro Dollar chart analysis

Pay attention to that "red trigger line" in the Euro Dollar.

1) Chart pattern could have signaled an ABC signal ? No ! Why ? ABC patterns are usually not spread out as this pattern, they tend to be tighter.

2) Long term chart still gives us a lower highs pattern (bearish)

Japanese Yen chart analysis

Possible double top pattern in the Japanese Yen ?

1) Warning, main uptrend is still intact

2) We now have two trigger levels to watch (see 1 & 2)

3) The 106 level could also signal the start of a "long base pattern".

Canadian Dollar chart reversal ?

We "may" be facing a potential reversal in the Canadian Dollar ; 

1) Pay attention to that ABC pattern with level "C" standing at 85.

2) Cancel scenario if we go below 81

3) Chart pattern is now forming a "large base" ; meaning ? signal is more powerful

Selling positions

Just sold my Citigroup Inc. (C) and Apple Inc. (AAPL).
Am I still bullish ? Sure, just taking profits :)
Let it trade sideway now with much needed improved "news" first, and eventully buy
the "next" break out

How do you trade this ?

Let's take a look at how I look at a trade ; 

Of course, the main question I often get is ; "how do you trade this ?".

Lets start with some basic rules first ; 

1) You do not have to agree with me, its only my opinion.

2) My opinion is based on experience

3) There are many ways to make money in the market

4) If you do not focus on the same items (ETFs, currencies, stocks) your mind will get the wrong signals)

5) Stop drawing trendlines everywhere, if you did miss drawing classes, go back to Art 101 !

6) Moving averages will help you when you need to get OUT !

7) You enter a trade after you measured the risk !

Ok, let look at the CAC 40 (France stock market index)

The obvious ? 3000 is our KEY signal

2800 is the low to avoid or we shall face another crash.

The CAC 40 is trying to form a base.

Trying to form a base does not mean we shall buy ; it means we shall observe, and wait like vulturs.

Think like a lion ; wait for the prey to COME to you !

Cash is king ; write it on your wall 10 times.

Add small positions once we get over 3050.

Add more small positions when we get over 3100 (raise your stop).

Look at price levels in terms of small and big picture ; 

Small picture is 2800 to 3000

Big picture is 3000 to 3400 

If the CAC 40 get above 3450, you should be fully invested, using mid term moving averages as your stop loss

Case study, the Euro Dollar

Lets take a complete look at the Euro Dollar ; 

1) We can clearly see that the "yellow channel" was a strong support level ; why ? that past level triggered a recent buy signal (thus its importance). 

2) The 20 days moving average is still pointing down !

3) The Euro Dollar (regarding the 20 days MA) went from an overbought to an oversold condition.

4) Is this an ABC pattern ? I really doubt it ; why ? the "big picture" (when looking at the Dollar index chart) still gives me a bullish outlook for the $USD.

International Business Machines Corp. (IBM)

Is International Business Machines Corp. (IBM)on your "focus list ?"
It should !
Price pattern is telling us that IBM is a "must own stock" when the market turns up.

Weekly analysis

What should we focus on this monday ;

1) Oil ; The United States Oil Fund ETF (USO) is giving us a sign of a probable bottom ; is that a buy trigger ? Not yet ; allow USO to climb above $35, then use $32 as your stop loss.

2) Gold ; the Gold ETF (GLD) ; is in a huge buy signal ; use $85 as your stop loss.

3) Silver ; the Silver ETF (SLV) ; great looking reversal ; allow SLV to climb above $12 first.

4) S&P 500 ; the SP 500 is stil stuck between 800 and 850 ; bearish pattern, but also way oversold. Next week should be quite interesting, expect some huge volatility.

5) The Bond ETF (TLT) known as the 20 year treasury bond ; reversal due to overbought condition, get out if we go below 105 (warning, pattern still bullish)

6) Advanced Micro Devices (AMD) ; ready for a take over ? come on Intel ! (or others)

7) CAC 40 (France index) ; 2750 is the level we DO NOT want to go below !

8) Dax (Germany's Index) ; 4000 is the level we DO NOT want to go below !

Conclusion ; I am mostly in cash with a small position in Citigroup, and still long Yen and Dollar.

Just bought Citigroup Inc. (C)

Just bought a small position in Citigroup Inc. (C) ; pay attention to that stop loss level.
Warning ! Highly volatile !
PS ; call this a "gut feeling"

Light crude oil and the PowerShares DB Crude Oil Dble Long ETN (DXO)

Is light crude oil back ? Not so fast !
Lets first get right above $50 to start to pay attention to the PowerShares DB Crude Oil Dble Long ETN (DXO).

PowerShares QQQ (QQQQ) Nasdaq 100

After this fake move (see circle in early Jan), QQQQ is now stuck in a pure channel trade.

It could have been worst ..... due to Microsoft, but this slight reversal could be a signal that investors are willing to "enter the market step by step".

Apple inc (AAPL) reported great numbers, while having a low PE ratio !

Pay attention to the round number "30$" on the Q's ; and consider that your real buy signal is right above $32 !

That fake move in early Jan is our "A" level ; are we now facing a "B" level ?

In any case ; "C" is right above 32$.

Case study on the Euro Dollar, when to enter a trade

You are probably often wondering when you should enter a trade.
Let's look at this chart of the Euro Dollar using those numbers ;
1) Clear break out pattern with higher lows ; probability of success ? High.
2) The year starts with a support break ; shorting probability ? Medium , why ? pattern was still in an uptrend.
3) Long dark candle, fake bullish move followed by a huge reversal, shorting probability ? Medium, why ? look at number "1", sitting right on an important support.
Conclusion ; pay attention to the letter 4 with that clear channel ;
A break below 1.2800 could be "fatal" to the Euro
A break above 1.3100 could confirm our ABC pattern with a target of 1.3500 (I doubt that scenario will occur)
My scenarios are always right ? No way !
Only fools do not change their minds !

Cartoon of your personal financial advisor

Apple Inc. (AAPL) buy signal intact

As mention on Jan 15 on this post regarding Apple Inc (AAPL) ; 

http://gicharts.blogspot.com/2009/01/apple-inc-aapl-buy-signal-activated.html

Stay bullish with the following observations ; 

Target is probably the 50 days moving average.

Then ? We need to get out of that channel (right above $100).

SP 500 chart analysis

Let's take a quick look at the S&P 500 chart analysis ; 

1) Level 1 is my real strong buy trigger ; meaning ? a close above it (not a fake move) should incite you to buy heavy.

2) Level 2 ; we can see that past fake move (break out) ; add positions if we close above it.

3) Level 3 & 4 is our new channel (real tight), expect a sudden break out on increased volume.

4) Level 5 is our last support ......

About level 5 ; in past posts on the S&P 500 I mentioned that I would buy step by step.

I now doubt that we will go below that support level.

Oh well too bad (: was hoping for a real bargain ......

Iran, Venezuela, Hamas and the price of oil

Where you surprised that Iran did not make a lot of "noise" during the war in Gaza ?

Venezuela expelled the Israeli ambassador. 

Hamas was probably expecting Iran to help them more ; they did not, they could not.

Pay attention to the price of oil in May/Jun of 2006 when Israel went to war with Hizbullah.

At that time, oil was trending up and could have been use as an "economic weapon".

That economic weapon probably forced Israel to pull out faster, the pressure from G7 countries was quite intense.

What did we notice during the Gaza conflict ?

No pressure.

With oil below $40, Iran had no more cards to play.

Venezuelan President Chavez is now inviting Western oil companies to submit bids to develop new areas of the Orinoco Belt for petroleum production.? Amazing ! 

In courting Western oil companies, Venezuela recognizes the need of "losing a battle to win the war" 

Now you read that Iran is willing to buy Boeing planes ????

Light crude oil analysis

Let's take a quick look at the light crude oil chart ;
1) Time to focus on the PowerShares DB Crude Oil Dble Long ETN (DXO) ? Not yet!
2) What levels will incite me to be bullish on light crude ? Right above $50!

Sold PowerShares DB Crude Oil Dble Short ETN (DTO)

Sold my positions in the PowerShares DB Crude Oil Dble Short ETN (DTO).
Expecting now a trading range pattern ; real hard to trade.
Oil is oversold, will soon post my new positions when I enter the inverse of this ETN.
PS : not bullish on oil yet

US Dollar chart analysis

Multiple ABC pattern in the US Dollar.
I have been bullish on the Dollar since Aug of last year. The first break out gave us a clear "A" level, followed by a typical pull back to support "B", then we needed to take out the "A" level ; the level "C" took care of that.
That red "C" level was our real support level.
Clearly facing a huge ABC pattern (see blue letters)
Pattern confirms that the US Dollar is back in action

An Obama Tech rally ?

Pay attention to the Ultrashort ETF Proshares (QID).

QID is the inverse of (QQQQ), Powershares Q's (Nasdaq 100)

I see the following opportunity ; 

1) Buy signal on QQQQ will be activated if QID goes below $55

2) Huge buy signal on the Q's if QID goes below $50

Weekly ETF analysis

Powershares DB Crude Oil Double Short ETN (DTO) ; stay long.

Financial ETF (XLF) ; will re test lows of Nov, then ? wait for a technical rebound (if any occur)

Brazil ETF (EWZ) ; price is still in a higher lows pattern, real buy is right over 37.5$

Oil services ETF (OIH) ; bullish reversal, get ready to buy right above $80.5$

Powershares Agricultural ETF (DBA) ; improved pattern, buy right above $27

Russia ETF (RSX) ; major breakdown, will probably break support again and crash.

Biotech ETF (IBB) ; money flowing back to biotechs ? (improved pattern)

Gold Miner ETF (GDX) ; improved pattern, bullish right above 34$

Steel Index ETF (SLX) ; improved pattern, get ready to buy above 32$

United States Oil ETF (USO), will test lows of 27.5 ? Stay out !

Apple Inc. (AAPL), buy signal activated

Candle reversal on Apple Inc (AAPL) incited me to buy with a stop loss right at $80.
Channel pattern seems to hold.
By the way, tired to see the press and others write so many nasty things about Steve Jobs.
I pray that he gets better soon. A great leader, a great person, Apple still needs him :)

Gold dust for sale

Warning ! Do you get these kind of emails ?

Do not fall for this scam !

Warning ! Besides all those scams coming out of Nigeria (the famous 419 letter), this latest scam

incites you to go to Ghana, where they will kidnap you !!!!

Sample ;

Alluvial Gold Dust For Sale!!

Dear Sir/madam,

We the principal sellers are pleased to make this offer of AU Metal Gold/ Dust

under the penalty of perjury and with full corporate and legal responsibility to

the following terms and conditions.

1. Product : AU Metal (Gold)

2. Origin : Ghana West Africa

3. Type : Alluvial

4. Purity : 92.7%

5.Quantity: 640 kilos

PROCEDURES:

Buyer or representative of the buyer is suppose to come down to (Accra-Ghana)

for the inspection and random sampling of our Gold Dust. or make planes for the

goods to be shipment to he/she destination.

We look forward to establishing a long lasting business relationship with

you.

Mr John Kwame

------------------

Save those emails and send the IP number to your local authorities.

SP 500 ETF (SPY)

Quick look at the weekly chart of the S&P 500 ETF (SPY) :

1) According to Yahoo Finance, the PE ratio stands at 10 !!!!

2) Yield ? over 3%

3) Can you find another safe bet out there with a better yield ???

If you are a long term investor ; consider the following ;

1) See those buy level signals ? buy step by step (start with 5% of your capital)

2) Below 75, inject at least 20% of your capital

3) Wait

4) If we go below 60, be fully invested

Harley Davidson inc (HOG)

Weekly chart of Harley Davidson (HOG)

1) No need to be a genius to spot a "going down the stairs pattern (typical price break down).

2) Charts versus Fundamentals ???

Charts do spot a "problem", but they do not spot an opportunity!

Why ?

Charts have no idea we are talking about a MAJOR high quality BRAND !

PE ratio stands at 4.16 !!!!!

Return on Equity ??? 31% !!!!

Return on assets ??? 12% !!!!!

Hello !!! Mr Warren Buffet where are you ??????

Market cap is 3 B

Revenues ?   6 B !!!

If you have no idea what an Harley is you are probably residing in Somalia (where the pirates are).

How to plan a trade with such a great brand ; 

1) Pray !!!! yes, pray hard that the price keeps on going down :)

2) Buy step by step ; if you have $10,000 ; inject soon only $1000.

3) Pray that HOG goes below $10!

4) Send daily emails to Mr Buffet that HOG is an amazing opportunity :)

5) Below 8$ ???? be fully invested.

6) Wait 3 to 5 years, and do not forget to send me a tip :)

PowerShares DB Crude Oil Dble Short ETN (DTO)

Once again bought the Powershares DB Crude oil short ETN (DTO), using 160$ as my stop.

Japanese Yen

On December 9, I posted the following chart regarding the Yen ; 

http://gicharts.blogspot.com/2008/12/japanese-yen-chart-analysis.html

Trend is intact ; stay long Yen for a while.

Consider this currency as a safe heaven (as well as the US Dollar)

Case study, The US Dollar

A little case study on the US Dollar.

How to you spot a trend reversal ?

1) Higher lows pattern ; while the pattern is spread out for more than three months.

2) 50 days moving average points slightly up, and price is near the 200 days MA.

Then what ?

Price broke out right above the 200 days MA.

You may not pay much attention to that long term trend signal ; but long term investors do!

Then ?

Price zooms up, reverses, goes back up (your typical ABC pattern)

PS ; that is why I love to use the ABC pattern with the 50 or 200 days MA.

Then ?

Of course, as usual, traders get too excited and send prices to the moon (sort of)

Price was way too far from its 200 days MA ; price gets back to "re test" that long term MA.

Next step ?

The Dollar zooms up again to test the 50 days MA ; gets right above it and is now trying to reach that previous high of 88.

Use 83 to 84 as your stop.

Add more positions if we go above 85

Gold weekly chart

Gold weekly chart  from my friend "Vlada" ;  

http://stockweb.blogspot.com/2009/01/gold-big-picture.html

Light crude oil analysis

Let's take a quick look at the crude oil chart ;

1) Trading range is quite clear (see yellow and grey levels)

2) 50 days moving average served as a resistance level

3) Target is the low of 32.5$ level

Then what ?

Ok, we did find a great product to trade (see post on DTO).

What else should we look at ? What is the "big picture telling us ?

Low oil price should be good news for shipping companies (as well as airlines), BUT ! that sector is not yet pointing up ! Meaning ? That global slowdown might continue for at least two to three more months.

I have been quite bullish on the Dollar and the Yen (see past posts) ; why ? call that a safe bet.

When things go bad, you need safety ; the only safety out there seem to be those two currencies.

Gold ? you can try and trade it , but its recent pattern suggest that a huge break out is about to occur ; so stay out and play the direction of the break out.

Now back to oil :)

No more news coming out of Iran ; are they broke ???

You do not hear Mr Chavez (Venezuela) anymore ? broke as well ?

Here is a scenario I expect to see in the next five years ;

Before you read this, I have to warn you that I have a lot of "imagination" (that is why I love to paint), but this imagination is also based on intuition and real facts.

Iran will soon face a "major shift" ; extreme high inflation, no more oil revenues and the fact that over 60% of its youth is out of work will cause new Iranian leaders to "warm up to President Obama.

Iran will once again need US help ; no more embargo will mean that US oil companies (as well as construction companies) will be allowed to enter Iran.

Those US companies will boost Iran (thanks to US loans) with 25 years contracts.

Those high interest loans (hard to repay) will allow US companies to "control Iranian assets".

Venezuela will face the same scenario ; only difference is that Chavez will be removed with violent local riots.

Venezuela will again ask those same US companies to come back.

Thanks to this oil crash, the next investment theme is quite clear ; 

Oil rich nations will crash and need loans.

1) Focus on oil big caps such as XOM

2) Focus on big US construction companies

This "buy trigger is NOT yet activated, will keep you informed :)

PowerShares DB Crude Oil Dble Short ETN (DTO)

Please refer to a post regarding 

PowerShares DB Crude Oil Dble Short ETN (DTO), 

posted a few days ago 

with an entry level right above 120$.

Raise your stop to 160$.

BSE India Bombay Sensex 30 Index

We see a clear "failed" signal (ABC pattern) in the India Bombay BSE Sensex 30 Index.

"C" ; the buy trigger level at 11000 "failed".

The candle reversal (see the failed arrow) confirms that this index will retest the "B" level.

Was that a Satyam effect ? How many more Satyams are out there in India ????

Investors now are wondering "who else cooked the books" ???

I wrote about Indian stocks last year, and how easy it is to "cook the books" . Well, after the Maldoff case, it seems that anyone with money and influence can cook the books.

Now you undertand what I prefer ETFs, currencies and commodities.

"If" we go below 8500, every emerging market fund will try to get out of India

Building your portfolio in 2009

I often get asked this question by long term investors ;
"I can wait over three years, what do suggest I do ?"
At these levels, (regarding only the S&P 500 or the Dow Jones Index) ; do a Dollar cost average.
Inject 5% of your capital per level (see chart).
"If" the S&P 500 goes below 700, inject over 40% of your capital.
No individual stocks here.
Use the S&P 500 ETF (SPY)
If you prefer a foreign portfolio , I have a VERY STRONG buy (long term) signal for China, Thailand, South Korea, Brazil, and India. (Target is three years)

Apple Inc. (AAPL), bullish divergence

Pay attention to the bullish divergence seen in Apple Inc (AAPL).
Lower indicator is PPO with settings ; 1,50,1 (same settings can be used on the MACD).
We now need a close above 95

Brazil ETF (EWZ)

Ok, last post of the day :)

Busy writing this since the pattern is so "obvious"

The Brazil ETF (EWZ) is giving us a buy signal ; volume increase seems to confirm !

Use 38 $ as your stop loss.

Ok, back to work :)

Busy selling a "debit card" provider to a bank in Central Africa (client is late  for to the meeting)

PowerShares DB Crude Oil Dble Short ETN (DTO)

Do you know what "made my day" this morning ?

A reader send me an email with a perfect explanation of the Powershares DB Short Crude Oil (DTO).

1) Price managed to get back above the 50 days moving average

2) Need a volume break out

3) Channel pattern is clear

Conclusion ; 

A) if price gets back below 100, stick to your Powershares DB Long Crude Oil (DXO)

B) If price gets above 120, cut DXO and go long DTO

The great bull market of 2009 ?

Wow, hard to really take a break, getting so many emails asking me to even post "less".

Ok, here is a quick look at the S&P 500 index chart.

I'll post when I see real patterns in ETFs (sorry people, got way too much work on my hands)

We see a typical ABC pattern , but, yes, big but, I raised the "C" level to the round number "1000".

Traders/investors tend to be attracted to round numbers as key psychological "entry/exit" levels.

If we manage to close the week above 1000, focus on high relative strengh ETFs.

Will soon travel again back to Central Africa to visit some commodity related companies.

Alpha Global Investors Blog

Back in Brussels, its freezing and snowing ....

Too much work on my hands right now, a lot of one on one coaching.

This financial mess has been a wake up call for many investors.

(Will take a break from blogging) , if you need some coaching, feel free to contact me.

I basically teach you everything I know, as well as money management.

Remember these simple facts ; 

1) No financial education = key to failure in investing

2) Banks are "experts" at marketing BS financial products

3) How many Maldoffs are out there ? You would be surprised .....

4) Dump all the Hedge Funds you own, create your own

5) Trust me, you are smarter than your banker