PowerShares DB US Dollar Index Bullish (UUP)

PowerShares DB US Dollar Index Bullish (UUP) ; Let's call this "The most improved ETF"
1) This chart pattern is "quite" reliable (Bullish reversal)
2) Raise your stop !
3) Main question for next week ; is the Euro, Gold and Oil oversold ?
4) Are markets oversold ?

SPDR Gold Trust ETF (GLD)

SPDR Gold Trust ETF (GLD) chart analysis & trading plan ;
1) Chart patterns do NOT predict future price action !
2) Patterns will help you "define" what price levels will lead to a probable move.
3) A rise above 107.5$ will give us the blue scenario
4) A break below 102.5$ will lead to a "panic sell"
5) The pink scenario means that while Gold is still in a long term uptrend, price will try to find a support level that could give us a channel pattern. Then ? Watch the Dollar !

Microsoft Corporation (MSFT)

Microsoft Corporation (MSFT) chart analysis ;
1) Clear price break down on higher volume
2) Next target ? That recent GAP ?
3) Expected scenario ; see that green arrow, bouncing above the GAP level

Apple Inc. (AAPL) trading plan

Apple Inc. (AAPL) trading plan ;
Good thing I was stopped out ......... (see latest message on AAPL)
Now what ?
Allow Apple to take a rest ; really, allow the market to "digest" the latest news
Trading plan in mind ?
1) Another fall below $190
2) Then, followed by a price break out above $190, $200 (and higher)
3) The plan is simple ; right now, just do nothing ; allow for a base pattern to take shape.
Buy the break outs ONLY
Expecting at least 5 to 10 days for this scenario to take place
Long term very bullish

SP 500 chart update, time for a channel pattern ?

Quick study of the SP 500 chart ;
Yes, I do use my own version of a trading system ; settings ? Not important, really !
Why ? All systems are based on either break outs, trend following, counter trends ....etc ...
Systems have to fit your character ; since I have no idea what character my readers are, I suggest you test several of them (avoid back testing that fits well), and you'll eventually find one that just "fits" you.
My character is quite simple ; the picture has to fit the price reaction of news events !
If price does not react to news events or new fundamentals ....... you will just be starring at the wrong picture that will eventually reverse in your face .....
1) Question ; how often do markets trend ? Not often !
2) Question ; how often does the SP 500 gets stuck in price channels ? Very often.
3) The following green arrow shows you what I am expecting ; been saying that quite often recently, but I like to repeat myself :)
4) Yes, I am expecting a HUGE rally thanks to the $USD Dollar.
PS : if you are a long term trend follower, you just have to sit it out patiently and expect the usual draw downs (part of the game) ; and yes, all signals are still very bullish.

The Boeing Company (BA)

The Boeing Company (BA) chart analysis ;
1) The break out early this year with a huge volume increase was a real buy trigger.
2) Price zoomed up, then pulled back to $57.5 (retracement) to find a reliable support level.
3) Price volume action confirms long term buy signals (LT weekly)
My only worry ? A possible parabolic rise, so we need to see Boeing form a higher channel before moving up again in a few months.
LT price target ? $90 ! (around 2011)

What is Cemex SAB de CV (CX) telling us ?

Cemex SAB de CV (CX) ; (CEMEX) is a Mexico-based holding company of entities whose main activities are oriented to the construction industry, through the production, marketing, distribution and sale of cement, ready-mix concrete, aggregates and other construction materials. CEMEX is a global cement manufacturer with operations in North America, Europe, South America, Central America, the Caribbean, Africa, the Middle East, Australia and Asia.
Chart pattern is quite clear ; we have a major bearish break down with huge volume increase.

Pfizer Inc. (PFE), clean uptrend

Pfizer Inc. (PFE) chart analysis ;
1) Been mentioning Pfizer a lot on this blog (type Pfizer in the blog search on the top left of the blog).
2) Clean uptrend, raise your stop to the "lower band" ; $18
3) Long term charts is also giving us a real nice buy signal :)

Bank of America Corporation (BAC)

Bank of America Corporation (BAC) chart analysis ;
1) When you decide to focus on a particular stock, avoid looking at intraday charts first. Look at the "big picture" ; not just the charts, go to Yahoo Finance and look at the news events that caused that price rise, followed by a channel.
2) Recent price was stuck in a tight channel
3) Latest news brought more fear
4) Price is now right on an important support level
5) Notice also that "key trigger" that could incite traders to short BAC once again.
(Not sure that we would be allowed to short financials again)
Anyways ; our trading plan is quite clear ; let the market players (the big guys) digest the recent earnings, let them fool around with the right direction, you just sit it out, be patient, let them show you what direction to take :)
Small is BIG ! :)

United States Steel Corporation (X), case study

United States Steel Corporation (X) weekly chart analysis using the ABC pattern.
You can find the full explanation of the ABC pattern (as well as the GVN condition) on the top right hand side of the blog.
Keep things simple ; Charts are just there to tell you that your scenario is working or not.
Fundamentals do rule the markets ; price actions are often too wild and are full of emotions ; that is why price tends to zoom up too fast .....
United States Steel Corp (X)'s price zoomed up to level "A"
Price now dropped to around $49 (will that be our "B" level ?)
Give X a few more weeks to come up with improved news ; in that case, price will bounce up on a reliable support level on huge volume increase.
The green arrow you see on that chart is the scenario I am expecting.
We now need to see X climb above $50 within the next 5 to 10 days to confirm our "B" level (reliable support).

Shangai Stock Exchange chart analysis

Shangai Stock Exchange weekly chart update ;
1) Clear failed ABC pattern trigger
2) Focus on that "last support channel" ; current price is @ 2986 !
3) "B" level still intact (higher lows pattern, see chart), could be your last chance to exit if price drops below those levels.
Chinese bubble ? I do not buy that story .....
They have so much cash ; they can "fix" any bubbles :)

PowerShares QQQ Trust ETF (QQQQ)

PowerShares QQQ Trust ETF (QQQQ) ;
1) Support confirmed ? Too early to tell ....... allow at least two days ....
2) Re entry ? Right above $45.5
Otherwise ? Let it slide ......

PowerShares DB Gold Double Short ETN (DZZ)

PowerShares DB Gold Double Short ETN (DZZ) chart analysis ;
1) Typical ABC pattern
2) Dec 7 ; Gap, long bullish candle and huge volume increase. Price zooms to find "A"
3) Price pulls back ; finds "B", and reverses upwards (confirms higher lows)
4) DZZ is now facing "THE" trigger ; "C", right above the $14.5 level (We really need some big volume increase to confirm that break out)

Possible bond crash ?

US 10 Year Treasury Note Yield chart analysis ;
Ok, you probably notice that I keep on posting charts about bonds, and yields ....
It means that I expect some "violent" bond price action ..... soon ....
1) Is the 10 year note yield facing an ABC pattern ?
2) If it is (meaning we do have a confirmed "B" level), watch the 3.7 level as a first key trigger.
3) Yields rise, bonds crash ......
4) Yields rise , SP 500 goes down ?
5) No wonder the $USD Dollar is back .....
Ok, its just me writing out a possible trading scenario ..........
When you write things down, you tend to know what kind of news to look for .....
Now watch the Dollar !

Euro Dollar chart analysis update

Forex : Euro Dollar chart analysis update ;
1) Typical down the stairs pattern
2) 1.4020 (and below) could signal a "free fall" .....
3) Reversal now stands @ 1.4150

Citigroup Inc. (C) trading plan

Citigroup Inc. (C) trading plan ;
1) Are we right on a reliable support level ?
2) Focus on trigger 1 & 2 (buy the break out only !)
3) Watch the volume, we need a huge increase in volume ..... soon ....

Alcoa Inc. (AA) trading plan

Alcoa Inc. (AA) trading plan ;
1) Allow Alcoa to test the $13 support level
2) Give this scenario at least 5 days
3) Buy the break out above $14 on big volume increase
Trading plan = Patience !!!

10 Year treasury note yield

10 Year treasury note yield weekly chart update ;
1) Current pattern = inverted head and shoulder
2) Focus on the "reversal trigger" & the "long trigger"
Focus on the following high impact news events this week ; key macroeconomic data such as home sales, the Federal Reserve's rate decision and gross domestic product.

British Pound versus US Dollar

British Pound versus the US Dollar chart analysis ;
1) Stuck in a clear channel
2) Look at the big picture before jumping to conclusions on daily charts !
3) Long channel = HUGE break out !!!
4) Direction of the break out ? mmmmmm
5) Focus on those two triggers (see red boxes) ; trade the direction of the break out.

Swiss Franc versus US Dollar

Swiss Franc versus US Dollar chart analysis ;
1) Main trend broken (see red trend)
2) Possible inverted ABC pattern
3) "A" is quite clear
4) "C" , our main short trigger is right below "A" ; 0.9500
5) Cancel scenario if the Swiss Franc manages to climb back above 0.9700

Trading plan for the Dow

Dow Jones Industrial Average weekly chart & trading plan ;
1) Call it a huge "buy on the dip" trading plan
2) Am I dreaming ? Maybe, but would love to see a quick sell off so I can add more shares.
3) Will buy a small position if the Dow dips below 10,000
4) Will increase positions if it drops below 9500
5) @ 9000, almost fully invested :)
Like I said, I am probably dreaming .......
Financials, Banks, Financials .......
XLF, FAS ........ first ETF's on my watch list to buy as the Dow drops
XLE, OIH ..... energy ETF's on my buy list
QQQQ, XLK , tech ETF's on my buy list
Like I said earlier, expecting a pull back followed by the mother of all rallies :)

Apple Inc. (AAPL) chart analysis update

Apple Inc. (AAPL) chart update with trading plan ;
1) Notice that fake move (see blue square on the chart) , was stopped out. Getting lots of fake move is "expected", its part of the game, that's why you should always have an "exit" strategy.
2) $190 is an important support level.
3) When will I buy Apple again ? First, allow a pattern to take shape, do not anticipate the pattern, just give it time to form itself. What kind of pattern am I expecting ? (gut feelings) ;
A small sell off, followed by an important rally in the SP 500. Meaning ? Expecting a channel pattern where a close above $200 will be our key buy trigger.
4) What you do not want to see (as a pattern) ; a close below $190 and below, an attempt to climb above $190 (the new resistance), and a fall again on higher volume ! That would be a nightmare scenario for the tech sector .......

Market opinion

A pull back was quite "overdue".
The reason ? It does not really matter , really .........
Obama changed the rules (on banks), China is overheating, Greece and other European countries are in deep sh.....t
Its really all about earnings, and the quality of these earnings :)
Use the sell off to load up on the IBM's of the world, as well as Google , Apple etc ....
Fundamentals are "improving".
Unemployement is high, but it was slightly higher in 1982 prior to the biggest bull market that ended up in a crash (Oct 1987).
Yes, I am bullish on the $USD Dollar ; but let me be clear here, its not really due to the Dollar strengh, but to a Euro weakness ..... (finally).
The Yen ? The BOJ manipulates it so much, so I'll pass on that one .....
Ok, back to trading :)
Nasdaq ; 2200 is our real support level
SP 500 ; testing the 50 days exp MA , watch the 1100 levels as well
Gold ; chart reminds me on the Nasdaq's crash of 2000
Light crude oil ; its all about China ; really ! Focus on the Shangai index :) (huge support for crude at 72.5$)
TIP (Bonds) ; As mentioned a few weeks ago, was expecting a big move ! (Heading for a double top ? )
Shangai Stock Exchange ; 3000 is our next target ?
XLF ; Financial ETF ; watch the $14 levels for a possible bounce up

US Dollar index chart analysis

US Dollar index chart update ;
1) Very close to a "C" trigger level (see ABC pattern on the top right hand side of the blog).
2) Gold's bearish move confirms Dollar's strengh.
3) Dollar is now a refuge ?

We cannot have a major disconnect between the SP 500 and the Dollar ?

Monthly chart analysis between the SP 500 (top) and the $USD Dollar index (bottom)
1) Major disconnect between 06 and early 08
2) Is the Dollar a leading or lagging indicator ?
3) Dollar move in late 08 seem to have acted as a leading indicator for the SP 500
If the Dollar rises above 80, and zooms up towards 90 ; I expect a pull back in the SP 500 at first, then followed by the MOTHER of ALL RALLIES !!!!

iShares Dow Jones US Home Const. ETF (ITB)

iShares Dow Jones US Home Const. ETF (ITB) ;
1) Higher lows pattern confirm sector is "improving"
2) Focus on that break out (see chart)
3) Focus on that stop loss level

Euro Dollar chart analysis, ABC pattern activated

Euro Dollar chart with the "C" trigger activated ;
1) "C" (ABC pattern) fully activated
2) Focusing on the "green" "high probability" arrow
3) Target could be reached within 8 to 10 weeks
4) Low probability (blue arrow) ; watch the 1.4288 to 1.4300 as your reversal level

Apple Inc. (AAPL) buy signal

Apple Inc. (AAPL) buy signal activated ;
1) Support did hold
2) Buy ; use $207 as your stop

France CAC 40 index update

CAC 40 chart analysis ;
1) Was that a "fake break out" ? Will soon find out ....
2) Support level is quite clear (old resistance upper channel level)
Main question now is who holds Greek bonds ? Watch the Banks !

What banks will be burned by Greece ?

"At end-Q3 foreigners held EUR216bn of Greek government debt (72.3% of the total market, 90.2% of GDP), having doubled their position since end-04. Given recent downgrades and another round of revisions to budget data from previous years, a sharp slowdown or even reversal of inflows from foreigners into the local debt market has become an increasing risk."

Read the full story on FT Alphaville's blog, by Tracy Alloway

Greece General Share Index warning

Greece (Athens) General Share Index chart ;
1) Clear head and shoulder pattern
2) Target ? 1200 ? (I really hope I am wrong ....)
Watch other PIIGS countries as well (Portugal, Ireland, Italy, and Spain)
Domino effect ?
Picture (chart) looks scary ; fasten your seat belt, we are about to face some serious moves.

Another crash in Dubai ?

Dubai Financial Market General Index chart analysis ;
1) Typical case of a breakdown followed by an inverted ABC pattern
2) Head and shoulder pattern ?
3) A close below 1600 will cause a panic ....
4) A close below 1550 will cause some severe damage ......
5) A close below 1500 ..... with crude oil going below $75 ....... hmmmm .....
I hope my gut feeling is wrong ......

Australian Dollar, end of the uptrend ?

Australian Dollar chart analysis ; end of the uptrend ?
1) Main trend is broken (red trend) ; do not attempt to draw other trend lines since recent price did not break the high of mid Nov.
2) Price pull back to 0.8700 "changed" the long term bullish pattern
3) Australian Dollar "failed" to break out above 0.9300
Pay attention to the fact that everyone is bullish on the Australian Dollar and its economy ; use that simple fact as a contrarian indicator !
Expect the unexpected !!! (Black Swan theory)
$USD Dollar index is rising ..........
See that green arrow on the chart ? Its my probable scenario
Ignore it if price rises back up above 0.9300

Weekly opinion

Latest market action feels like we are about to face a pull back.
Buy on the dip or short ?
So far, most signals are still bullish (but overbought).
My main trading system is still bullish with several warning signals ;
QQQQ ; $44.75 should be your last stop loss level
SP 500 ; 1115 should be your last stop
GLD ; last stop stands @ $109 ; re entry level is right above $113
Light crude oil ; did break important support levels ; watch the $77 (buy on the dip ?)
TIP ; bonds ready for a major break out again ?

Time to invest in Toronto, Canada ?

Toronto's TMX Group is the third largest stock exchange in North America and the city is also the world leader in mining sector listings.
A new bull cycle in mining is on its way up again, so expect big gains for Toronto.
I am suprised that head hunters are not yet using that info.
Watch the local real estate market :)

Euro Dollar chart update with the ABC pattern

As mentioned a few days ago, was expecting to see the "B" level around 1.4600.
Euro Dollar is now probably heading to re test the "A" level.
Main short trigger (the "C" level) is right below 1.4200
What did the ECB teach us ?
1) Greece is in the Euro zone but we do not care about you
2) When things go bad, you are on your own .....
3) United Europe ? Yeah, big BS story .....
4) Credibility for the Euro ? Destroyed ......

What do traders tell you with their most active active options

Once again, I'll use the iShares MSCI Brazil Index ETF (EWZ) ;
Pay attention to this link on Yahoo Finance (unusually high volume)
1) My focus was on EWZ ; EWZ Mar 2010 65 put (EWZOM.X)
2) The volume increase ; (111300.0%) !
3) The price target ? $65 (Support level of early Nov)
How does that help you ? Target price

Baltic Dry Index chart updated

Morgan Stanley is bullish on metals for 2010. Expecting on average a 30%+ rally due to continued demand strength. They're especially bullish on copper, platinum, and dry bulk commodities such as iron ore and coking coal.
Focus on the Baltic Dry index before fully investing in commodities ; use a basic 50 days exp MA to trigger buy/sell signals ; it works just fine :)

Could Brazil snap ?

iShares MSCI Brazil Index ETF (EWZ) chart analysis ;
1) Current chart pattern shows a "potential" double top pattern
2) See that red trend ? Use it as your stop loss (around $74)
3) Last chance to get out is right below $70
Ignore scenario if EWZ manages to close above $78

Time to short Exxon Mobil Corporation (XOM) ?

Time to short Exxon Mobil Corporation (XOM) ?
While the SP 500 and the Nasdaq have been rising up, Exxon has been quietly drifting down.
1) Focus on that Gap with the huge volume increase (mid Dec) ; its what I call a GVN condition ; Gap, Volume and News.
2) "A" level (see ABC pattern) is quite clear
3) "B" level is @ $70.5
4) "C" ; our main trigger is right below $68. Expecting to see lots of shorts below that level.
If Exxon goes below $68, get OUT of energy funds.
Could I be wrong ? Of course ; if XOM goes back above $71
PS : only fools do not change their minds !

Citigroup Inc. (C) trading plan

Citigroup Inc. (C) chart analysis ; let's use those numbers on the chart to understand my trading plan for Citi.
1) Gap, big price drop on huge volume (capitulation)
2) Another big volume day with candle reversal
3) Volume dries up, followed by a break out on increased volume
4) My typical "A" level in the ABC pattern
5) Support ? Is that our "B" level (ABC pattern)
6) Watch the volume, the next price move will need a big volume increase
PS ; buyer if price zooms up above $3.6 ; and very bullish above $3.7

PowerShares DB Gold Double Short ETN (DZZ)

PowerShares DB Gold Double Short ETN (DZZ) chart analysis ;
1) Volume increase in mid Nov was one of the main reason I insisted that Gold was way overbought and ready to "snap" (Parabolic rise)
2) Gap up on huge volume increase made me buy a "small" speculative position ; why small ? I never fight a clear uptrend (Gold price)
3) That gap down at the start of the year made me "book" profits on my small position.
4) Now what ? A close above $13.5 will make me buy another small position
5) My main BUY signal is the "C" trigger in the ABC pattern ($14.5)

Niall Ferguson, the Ascent of Money: A Financial History of the World

The Ascent of Money: A Financial History of the World by Niall Ferguson
"The shadow world of derivatives, credit-default swaps, the sales of U.S. bonds to China ; all seem to bring brilliant results, until they get too big."
Great book ; go out there and buy it, thank me later :)

Treasury note 10 years, inflation or deflation ?

Weekly chart of the Treasury note (10 Years) ; inflation or deflation coming ?
First, let me be clear here ; its not because I studied economics and finance and spent over 15 years in private banking that "makes me an economist" ; its just gut feeling here !
Its just me taking notes to see if my logic makes sense :)
Current chart of the treasury note (10 years) tells me we are right on a crucial crossroad.
Focus on those triggers (short and long).
1) Unemployement is around 10% (and over) in the US and the EU ; who controls the bond market ? Forces of nature or governments ? Will governments do all they can to fight inflation ? How do you do that ?
2) If inflation is back, consumers will spend less (they already spend less), it will create more unemployement ....
3) The case for deflation ; prices on almost "everything" are going down, margins are getting thinner .... it feels like we are about to copy Japan !! (Years of deflation).
PS ; Stop looking at equities and focus on the bond market ; something "big" is about to happen.

Apple Inc. (AAPL) chart analysis

Apple Inc. (AAPL) chart analysis ;
1) Past resistance is now our support level ; pay attention to that bullish candle that created a triple top break out; its low is now our "last stop loss level"
2) Warning level ; some will use it as a stop loss level (I can't blame them)
3) Re entry is quite clear
PS : long term bullish signal still intact

PowerShares QQQ Trust ETF (QQQQ)

PowerShares QQQ Trust ETF (QQQQ) chart analysis ;
Let's use those numbers on the chart to understand what I see
1) Prive / volume action confirms bullish reversal
2) Gap in the bullish direction confirms trend (use low of that candle as a stop)
3) Price does find support ; again, confirms uptrend
4) Clean break out
5) Candle reversal, use that low as your stop (notice how the blue trend can also be used as a stop loss level)
Gut feeling ? Recent volume action could signal a probable test of that blue trend line.

Euro Dollar chart analysis

Euro Dollar chart analysis ;
1) The following ABC pattern is my "trading plan" concerning the eurodollar.
2) Could I be wrong ? Sure , If "B" manages to stay above 1.4650 (and remain above it for at least 5 days).
3) Otherwise, I have a visual picture of what should take place in the eurodollar.
4) Why use a visual picture ? It helps me define a trading plan.
5) Current pattern did cause a "break" in the main uptrend
6) Could we just be facing a huge channel pattern ? Sure, that scenario is also possible ; its harder to trade.
PS : focus on key news events that could send the Euro lower

Industrial SPDR ETF (XLI)

Industrial SPDR ETF (XLI) chart analysis
1) Weekly
2) Clear inverted head and shoulder pattern
3) Price target ; around $32
4) Uptrend is "too steep" ; expecting a sideway trade (channel)
5) Use that blue weekly trend as your stop loss

Way of the Turtle by Curtis Faith

Just finished reading "Way of the Turtle" by Curtis Faith
See link on Amazon.com
Way of the Turtle reveals the success of the trading system used by the group known as the “Turtles.”
How the Turtles made money-the principles that guided their trading and the step-by-step methods they followed
Why, even though they used the same approach, some Turtles were more successful than others.
Easy to read, simple method ........ and yes, it does work :)

Warning signal from the Vix and Financial ETF (XLF)

Vix (volatility index) weekly chart versus the SP 500 ;
1) Do not ignore the Vix !
2) SP 500 could "snap" ; one bad fundamental news could break that uptrend and cause some real damage.
3) We need some real retracement
4) Financial Select Sector SPDR ETF (XLF) ; financials have NOT broken out of their channel pattern ; could they be the ones leading the SP 500 down again ?
5) XLF breaking below $14.75 could trigger a bearish reversal in the SP 500

Orange Juice spiking up

Weekly price of Orange Juice (frozen) ;
Note the latest spike up due to the cold weather

United States Steel Corporation (X)

United States Steel Corporation (X) weekly chart analysis ;
1) Weekly chart pattern break out confirms that "X" is back !
2) Weekly ABC pattern long term buy signal activated

Amazon.com Inc. (AMZN)

Amazon.com Inc. (AMZN) chart analysis ;
1) If you bought Amazon, use that "key support level" as your stop
2) Notice the lower highs pattern ?
3) Watch the volume ! (a break out with a falling price could cause heavy damage)
PS : ignore warning if AMZN can get back up above $133 (within the next 5 days)

US Dollar index update

US Dollar index update ;
1) Clear ABC pattern
2) Use "B" as your stop (focus also on the "last stop")
3) Huge main long trigger is right above "C"
PowerShares DB US Dollar Index Bullish (UUP) ; Stop @ $22.7.
Re entry right above $23
Long confirmed bull right above $23.2