SPDR Gold Trust ETF (GLD)

SPDR Gold Trust ETF (GLD) trading plan ;
1) Resistance and "last support level" is quite clear
2) Volume spike will trigger the next break out (out of that tight channel)
3) Most traders beleive its a typical retracement where Gold should zoom up again.
4) Its all about the $USD Dollar ......... its back ......
Expect the unexpected as usual :)

Bank of America Corporation (BAC) warning signal

Bank of America Corporation (BAC) chart analysis ;
1) Notice those fake moves ? (Many fake break outs these days)
2) Current pattern suggests that price could test again the $14 levels
3) Watch out if we do get a volume spike on a sell off ; it could signal a real bearish reversal.
If BAC breaks below $14, expect a bearish reversal in the SP 500 !
PS : ignore this scenario if BAC manages to climb back up above $15.5 by Jan 5 2010.

iShares Dow Jones US Home Const. ETF (ITB)

iShares Dow Jones US Home Const. ETF (ITB);
1) Weekly chart
2) Trend is broken
3) Pattern suggests a bottom, and a potential channel
4) Resistance level is quite clear
Moody’s has raised the bias and outlook on the U.S. homebuilder sector.
"Shows Signs of Stability" , Moody’s believes or suggests that a bottom has been reached.
Gut feeling ? Its still far from over .....
Do not beleive the hype

Market Vector Russia ETF Trust (RSX)

Market Vector Russia ETF Trust (RSX) ;
1) Uptrend intact with confirmed higher lows
2) Main resistance is quite clear
3) What do we need to break out above $32 ? We need to see crude oil rise above $79.
Did you buy ? Raise stop to $30.5

Is the world really running out of oil and natural gas?

Euro Dollar chart analysis

Euro Dollar chart analysis ;
1) Are we facing an inverted ABC pattern ? (Gut feeling ; probably)
2) "A" is quite clear
3) We need our usual retracement to form "B" (could be around 1.4600)
4) Main trigger is a break below "A", giving us our "C" trigger right below 1.4200.
PS ; if that scenario occurs, target is 1.3000 by mid March (or sooner)

Shangai Stock Exchange chart analysis

Shangai Stock Exchange chart analysis ;
1) Weekly chart
2) Failed ABC buy trigger
3) Lower highs fighting higher lows
4) Current price is 3211
5) Main first buy trigger is at 3270
6) Main warning level is still at 3000

Short bonds, inflation is back

Short U.S. government bonds, inflation will lead to higher yields, which will drive down the price of the securities .... !
Source ; Finalternatives
I have to agree with that opinion after zooming in on the weekly chart of the 10 year treasury note yield.
Looks like an almost perfect inverted head and shoulder pattern !
No wonder the Dollar is baaaack !!!

Market opinion

As you can see ; its really hard to stay away from blogging .....
Why ? I take notes all the time ; this blog is actually my trading diary :)
So when I see something (chart pattern or news event) ; I have to write it down, and see if my opinion was right or wrong.
I weight the facts ; then look at the charts to see if we do have a divergence.
1) The Baltic Dry Index is still down .....(needs to get over 3200)
2) Shangai Stock Exchange did bounce up ; funny how it follows the same pattern as light crude oil ; as if our leading economic indicator right now is the price of crude ???
Where is the main divergence ? The Baltic Dry Index ......
Holding UNG, APPL and the SP 500 (so far all signals are bullish)
Watch the news ......
Gut feeling ? Dollar is now our safe heaven, Greece will issue more bad news (followed by other European countries), Dubai mess is far from over ...... unemployment is rising everywhere ..... so do not beleive the hype ......

Gold, time to buy on the dip ?

Time to buy Gold ?
Focus on that green price channel (now our resistance level)
DB Gold Double Short ETN (DZZ); Resistance is its 50 day exp MA.
Gold Miners ETF (GDX); Re entry level is a break out above $48.
Gold ETF (GLD); if price breaks out above $110 on huge volume, I'll re enter.

Internap Network Services Corp. (INAP)

I shall use Internap Network Services Corp (INAP) to discuss the importance of a "long" flat channel. (Weekly chart)
1) Fundamentals DO NOT look good !
2) After a long period of "BAD" news, INAP entered a LONG flat channel
3) Price break out above a long flat channel "tends" to create a HUGE move
4) Why am I not buying yet ? (I would love to see a GVN condition ; Gap up with huge Volume, and real good News)
PS : keep it on your watch list

Citigroup Inc. (C) trading plan

Quick trading plan for Citigroup Inc. (C) ;

1) Focus on that "confirmed support level" ; price/volume action at the end of July and recently seems to confirm

2) We are facing a "tiny" ABC pattern (confirmed by higher lows)

3) Real buy trigger ? See that red line ? Buy the price break out right above it (not before)

PS : another break below $3.2 could cause some major damage with Citigroup

Recent chart studies

You can see the recent chart studies done with students here in Brussels here on Charts 101.
I am still amazed to find great chartists that are not able to "pull the trigger" (buy/sell)
I see this with at least 50% of students .....

Combining the ABC pattern with a GVN condition

If you have been reading this blog for a while, you probably noticed that I often write about AMD.
Besides the ABC pattern, I tend to trust what I call a GVN condition ;
Gap, Volume (very strong), and News (high impact news)
When a GVN condition occurs with an ABC buy trigger ; the signal is VERY strong !
Can you use the GVN condition alone ? Yes, I often do, but I first wait for price to create a quick flag (tight price channel) after the gap. Then ? I buy the price break out above that flag.

Apple Inc. (AAPL) chart update

Quick update on Apple Inc. (AAPL) ;
Hard to stay away from blogging :) Even on holidays ......
You get invited, and guess what ? The number one question my friends have is "wow, Apple just broke out !!!"
As mentioned on my Twitter account a few days ago, buy signal on AAPL was re activated. Used $195 as my stop (I am not raising my stop yet).
One important fact ; we have a NEW trend line !
What do I mean by "new" ?
A real trend connects the lowest low to the highest low "prior to the highest high" (without interference).
I shall also use that trend as a stop loss level.

A Christmas gift

I took a break from blogging ; and I'll tell you a personal story.
I use to reside in Cancun , Mexico (many years ago).
I had the honor to know an amazing person called Fernando Torres. He passed away a year after I left. (Car accident)
Fernando used to date a girl by the name of Susan Rajic. (He broke up with her, but was still in love with her).
For the past ten years, I only imagined the "pain" Susan Rajic suffered knowing Fernando passed away. The story is far from over ....
Thanks to Facebook, a common friend did catch up with me and asked me if I knew where Fernando was ..... and that Susan (still in love with him) was looking for him .....
Here comes the worst part ........
From the Mercury News
The story of the hit-and-run rampage was big news on Aug. 30, 2006. Omeed Popal — angry at his parents who wouldn't let him join his bride in Afghanistan — plowed through 19 people from Fremont to San Francisco, killing one pedestrian in Fremont.
Of all the victims who survived, Rajic sustained the worst injuries. Paralyzed from the neck down, she needed a respirator to breathe. Over the next three weeks at San Francisco General Hospital, Rajic hallucinated that the balloons tied to her bed were dead people floating above her; that someone's legs were pressing down on her chest and she couldn't get them off.

I urge you to visit Susan Rajic's web site "support Susan"
You can make a donation (she really needs it)
Its probably the best Christmas gift you can make this year
Happy Holidays

Quick update on Gold

Quick update on Gold :)
Can Gold's past chart patterns predict the next move ?
No.
Why not ? Fundamentals rule the markets (please remember that)
Chart patterns can help you enter or exit a trade, follow a trend or a counter trend.
The arrows you see on the right hand side of the chart (blue, violet and green) reflects my opinion based on current fundamentals, news, the Dollar etc ......
Gut feelings allow me to draw a plan.
Do not confuse chart reading with chart predicting.
Chartist REACT to a price move
Gut feelings tells me we could face the "blue" arrow scenario (a long sideway trade with violent up and down swings ; a typical situation that could wipe out any traders).
You could stare at those recent "parabolic rises" (see red trends on the chart) and assume that the next move should be the green arrow scenario ; meaning that Gold should zoom up again .....
PS : the yellow channels are you old resistance levels, now a support.
What am I watching right now ? DZZ (DB Gold Double Short ETN)
1) DZZ zoomed up to find "A" ("A" is facing a resistance at its 50 days exp MA)
2) We now need a "B" level
3) "C" ; our real trigger will probably be a close above its 50 days exp MA on huge volume.
That is "the" scenario I have in mind ; I will wait for DZZ to "call" me and tell me "when" its time to buy :)

Updates on Twitter

Back blogging on Jan 1, but will still update my Twitter account.
Follow the Tweets here on my blog (see right hand side), or get a Twitter account :)

Will be back on Jan 1

Will be blogging again on Jan 1, 2010.
Glad to see that the Dollar zoomed up
Pull back in Gold was expected (see past posts)
Oil is bouncing up again (was it oversold ?)
Glad to see UNG zooming up again :)

Happy Holidays :)
PS : freezing my behind in Brussels right now ....

Taking a break from blogging

Been really busy these days training traders (one on one).
I also give seminars on "everything" I know in this business (like the one I just did in the south of France.
Am taking a break from blogging, focusing on the markets daily with my students.
PS : I do travel if you need some training :)

Happy holidays :)

My students follow me on a blog called Charts 101

Valassis Comm Inc. (VCI), case study

Valassis Comm, Inc. (VCI) chart analysis with a special thanks to Tim Dowd !
1) Typical ABC pattern
2) Strong case for "B" ; an inverted head and shoulder pattern, with a broken neckline !
3) Volume did confirm the break out !
4) Next probable target is our huge trigger @ "C"
PS : if you decide to buy now, I would use $18 to $18.5 as your stop loss

Club Med, listed in Paris

A reader from France asked me to comment about "Club Méditerranée" also known as Club Med.
FR0000121568- CU
I was quite happy to respond since I am an ex G.O (Golf instructor), see photo on my first assignement in Sandpiper, Florida (good old days).
The Club has changed, but the spirit remains ; I'll probably never forget those days :)
Long term chart (10 years, monthly) ; pattern seem to show a possible bottom (huge monthly volume increase).
I would be a buyer if the stock climbs and remains above Eur 14.6
Strong Support stands @ 13.1

Greece Athens General Share huge warning

I posted a chart of the Ahtens (Greece) General shares a few days ago with a strong warning.
1) This index is down today again ! (at 2105)
2) A break below 2000 COULD send a panic signal to big institutions ......
3) Other Eastern European countries are in trouble as well ....
4) Bearish on the Euro ....
PS : No, the global financial mess is far from over .........

Apple Inc. (AAPL) trading plan

Apple Inc. (AAPL) trading plan ;
1) Sitting right on an important support channel
2) Focus also on that "last stop loss"
3) Re entry ? Price breaking out ABOVE $ 195
Gut feeling ? Apple Inc. (AAPL) could be oversold, expecting a bounce up, probably giving us a large channel pattern.
PS : Ignore scenario "if we close below the last stop loss level"

DB Gold Double Short ETN (DZZ), case study

DB Gold Double Short ETN (DZZ), case study ;
1) It often helps to show price/volume activity right near each other
2) DZZ gave us a gap up, key news, huge volume increase
3) Quick fact ; trend (LT) is still bearish !
4) Bottom for DZZ ? Will soon find out
5) Let's call the hight @ $13.18 our "A" level
6) Wait for "B" to take place (pull back expected)
7) "C" our huge trigger should be followed by huge volume increase and real bearish news for Gold.
Conclusion ; we have "signs" of a bottom ; keep it in mind :)

PS : Nice sunny day in the south of France ; YES !!!!
Busy teaching the ABC pattern in a real nice villa, and drinking fine wine :)
PS 2 : Smoking cigars as well :)
Life is good :)

Heading to Toulouse, South of France

Heading to Toulouse and other cities in the South of France.
Will be blogging "light" from there :)
Going mainly to give trading seminars
On my radar screen early this morning ;
1) Gold of course
2) The Dollar !! :)
3) Japan (Nikkei) ; raise stop to 10,000 (Weak Yen does help)
4) India Bombay Sensex 30 ; warning, price below 17,000 right now

BSE India Bombay Sensex 30 Index

BSE India Bombay Sensex 30 Index chart index ;
1) 17,250 is a CLEAR resistance level
2) Support @ 17,000 could be broken next week
3) Last stop loss level stands @ 16,750

Ignore scenario if price breaks out above 17,250 (and stays above)

Gold, the Dollar, and the Euro

You can write several times that gold is facing a "parabolic rise", you can write several times that those parabolic rises ALWAYS end up hurting a LOT of investors .....
I can count over 200 emails from readers telling me "how wrong I am" .......
People, this is not about being wrong or right ; its about understanding what the chart patterns are trying to tell you ....
I have been "seing" for several weeks a "Dollar bullish reversal" ....... is it intuition ? Maybe.
Maybe its just the fact that after looking at charts for over 18 years you tend to understand what charts are trying to tell you.
So, what now ? Long $USD Dollar, and short Gold ???
Nope ........ its not that simple ......
Chart above is of the streetTRACKS Gold Shares (GLD) ;
1) Investors in gold will NOT sleep this weekend .......
2) Will they give SELL orders on Monday ???
3) Will dip buyers and value investors step in to buy gold ????
Gut feeling ? A pullback was expected, but long term buy signal is still intact

The Dollar ? Expecting a long U shaped pattern
Eurozone ? My latest chart of Greece shows that Eastern European countries are facing the scary word bankrup.......y
It could cost Western Europe a fortune to save those economies .....
Example ? Slovakia (Bratislavia)
Expecting a strong Euro pullback

Apple Inc. (AAPL) chart analysis

Apple Inc. (AAPL) chart update ;
1) Price is "slightly" below its 50 days exp MA
2) Volume did increase ....
3) Focus on that "last support" level
Gut feeling ? The volume pattern (see chart) could signal a channel pattern
Re entry level for Apple Inc. (AAPL) is a close right above $195

PowerShares QQQ Trust (QQQQ), daytrading

Before you start to focus on this 2 days (5 mins) chart of the Powershares QQQ Trust (QQQQ), I suggest you first pay attention to a daily chart where I see a price reversal warning if the Q's dip below $43.5.
Now back to this chart above ;
1) Resistance channel ($44.5) is quite clear
2) We now have another resistance level right @ $44.05
Gut feeling ? Probably oversold, we could see a bounce up this morning.

Japan ishares (EWJ)

Japan ishares (EWJ) weekly chart analysis ;
1) Price/volume action in March and April confirm bottom
2) Recent price/volume action (weekly) confirm "B" level
3) Huge buy signal right above "C" ; $10.5
4) If you did buy, use $9.4 as your stop.
Is Japan back ? looks like it

United States natural gas fund (UNG) versus Nat Gas price

United States natural gas fund (UNG) versus Nat Gas prices ;
1) Notice the "spread" starting in Sept ?
2) Chart pattern of Nat Gas prices do give us an ABC pattern
3) UNG is acting like a closed end fund ...... mmmm
4) Lower your price entry level right above $9 (for UNG)
PS : no more support level ..... how low can it go ?
Expecting gas prices to rise fast in about 2 to 4 weeks , lets see then how UNG acts

Micron Technology Inc. (MU), perfect ABC pattern

Quick look at Micron Technology Inc. (MU) ;
1) Perfect ABC pattern triggered
2) Price/volume/news confirm
3) Focus on that sop loss level

Tiger Woods ?

Source for this picture ; The Insider
Photo credit : Brian Teeter

PS : Its not a real picture, just hope he is doing ok :)

Price volume analysis with the ABC pattern

Case study of "price/volume" analysis and the ABC pattern using the ishares Dow Jones US Home Contruction (ITB).
1) Pay attention to the price volume reaction in early Nov
2) Pay again attention to the price volume reaction in early Dec
3) Quick fact ; we now have a real higher lows pattern
4) Another quick fact ? Its a typical warning signal for a ABC pattern
5) Level "C", our real strong buy signal stands at $12.50
PS : Those who feel the "urge" to buy ; buy now, use Level "B" (support) as your stop loss.

Apple Inc. (AAPL) chart updated

On Nov 25, I published the following regarding Apple Inc. (AAPL).
Now what ?
Quick chart update for Apple Inc. (AAPL) ;
1) Right now, $195 to $200 is our support channel (confirmed by the 50 days exp MA)
2) Resistance is quite clear
3) Focus on that "last stop level"
4) We now need a close ABOVE $200 to re activate a buy signal

Trading model

I will soon publish a "Trading Model Signals" on the right hand side of the blog, right below the "What is the ABC pattern".
The model is quite simple ; it will use multiple exp moving averages crossovers (short, medium, and long) , divergence indicators, warning levels, and of course the ABC pattern.
You will see daily the "model" opinion on ;
QQQQ, the CAC 40, the DAX, the SP 500, Shangai, India, and others
Model sample ; Shangai
LT buy signal : intact
MT buy signal : intact
ST buy signal : re activated (raise stop to 3200)
Divergence : Overbought

Chart Patterns by Bruce Kamich

Busy reading "Chart Patterns" by Bruce Kamich , you can order it on Amazon.com

Go to page 56, "The broadening Top" , and the inverted V top pattern !

What's on my mind ? Gold of course :)

SPDR Gold Trust ETF (GLD)

SPDR Gold Trust ETF (GLD) chart update ;
1) Multiple gaps tend to form at the top ..... (see circle on chart)
2) Volume increase/spike tend to form at the top .....
3) Expected scenario ? See red arrow

On my radar screen

Have you seen the Baltic Dry Index ?
Go to Stockcharts.com and use my current settings for it.
A bullish reversal in the Baltic Dry Index could send the SP 500 index above 1120.
Looking at the Q's (QQQQ) ; raise your stop to $43.5 (typical ABC pattern if you start from the Nov lows).
UUP (if you wish to trade the Dollar bullish index fund) ; lower your new entry level to $22.5.
UUP sitting right on support .....
GLD ; I'll post a chart about it. Top patterns tend to form multiple gaps ...

Dollar versus the Belgian Franc, the old days

A quick look at the old days (compare to today's Dollar action)
Chart above compares the Dollar versus the Belgian Franc , trading at 26.8
If you prefer to compare the Dollar versus the French Franc, trading at 4.3
Decided to show you this "monthly" chart after a long talk with an old client (82 years old).
Was a diamond dealer for over 40 years, and reminded me how he always made a fortune betting on "America and the almighty Dollar".
This gentleman does not look at charts, he just remember the years :)
(Too bad I do not have access to charts dating back to the 70's ....)
His argument is simple ; people do not understand the strengh of America.
I just sat and listened .......... and agreed with him .....
While new economies are showing strengh (BRIC) , they do not have the "stability", "creativity", "patents", "freedom" .... that America has ....
He is now buying the Dollar again ..... in full strengh :)

United States natural gas fund (UNG)

United States Natural Gas Fund (UNG) ;
1) Are we facing an ABC pattern ?
2) "C" ; our real buy trigger is right above "A" ($10)
3) Watch the support level !