Bonds are back

ishares Barclays TIPS Bond funds (TIP) chart analysis ;
1) Clear bounce up on its 200 days exp MA
2) Resistance is "broken"
3) Are you long ? Use $105 as your stop loss
PS : 10 year US treasury yield ; Recent break out was a clear FAKE move !
PS 2 : 30 year US treasury Bond price ; Clear bullish reversal, and now facing resistance at its 200 days exp MA

Goldman Sachs Group, Inc. (GS) cartoon

Goldman Sachs Group, Inc. (GS) cartoon.
Goldman's real strengh ; how to profit from the "dumb money" ...

Citigroup Inc, ( C ) right on key support

Citigroup Inc, ( C ) chart analysis ;
1) Citi is again testing its 200 days exp moving average
2) Quick reminder ; its 50 days exp MA is still BELOW the 200 ....
3) Will support hold ?
4) Will Greece, Portugal, and now Spain be the key trigger to short ?
Trading plan ;
Short below $4.20
Go long right above $4.60 (Stop loss @ $4.50)

US Dollar index chart analysis

$USD Dollar Index chart analysis ;
1) Current pattern suggest that a "huge move is on its way"
2) Current events (Greece, Portugal, etc ....) confirms the potential break out
3) Add the situation in Thailand .....
4) Shangai index keeps on dropping .....
5) The $USD Dollar is now a safe heaven
6) Abnormal situation ? Gold ..... meaning ? One of them has to snap ; Gold or the Dollar ?
We shall soon find out ....

Market opinion

Latest painting ; "Web 3.0 ; Information revolution"
Too much data out there, too many ways to find out what we think, how we behave, and what we might do next .... scary .... how about switching off ?
The green monster (Ecology geek) will thank you :)

Voilà ; enjoyed painting this one while watching most European markets CRASH today.

Merci Greece and now Portugal .... who is next ?

European banks are down close to 7% .....

Just surprised that this "crash" did not take place sooner ....

Big question ; what banks own Govt bonds from Greece and Portugal ?

PS : The Euro is dead .... RIP

SP 500 trading plan

My last post was about my Vix trading system, it did close (the Vix) over 5%, but the crossover did not take place yet. You can view the system here
Does that mean I will SHORT the SP 500 or buy inverted ETF's ?
No, I'll head back to cash .... first .....
The market is still in an uptrend, do not attempt to short right now !
I have been writing several times that my leading indicator (Shangai index) has been showing a chart pattern that should send us some shivers ....
Shangai was down again 3% ......

Vix trading system

Update on my "Vix trading system"
1) Vix is up over 3% right now
2) Crossover has not taken place yet .... getting close ....
3) Watch the 1200 level on the SP 500 !

Priceline.com Incorporated (PCLN), time to worry ?

Priceline.com Incorporated (PCLN) chart analysis ;
I have a rule (see the 7 rules on the top right hand side of my blog) ; a parabolic rise always ends up crashing ....
Does that mean you should short Priceline now ? No, we need a catalyst ....
Allow more FOOLS to push this stock up ....
Be patient .....

From the Congo

Picture taken in a village in the Congo (Kinshasa)
Allow me to do some translation :) since I was born and raised 18 years there :)
"Looking for a young employee"
1) May he/she be not a thief
2) May he/she be not a devil (El diabolo)
3) May he/she be not a "whore"
Now why does this picture make me think that Goldman Sachs should hang it on their wall ?

Direxion Financial Bear 3X Shares (FAZ), do not ignore the latest move

Direxion Financial Bear 3X Shares (FAZ) chart analysis ;
1) See that "A" level ? (Price/Volume action)
2) Pull back still stands in a higher low pattern
3) Pay attention to the $12 level, if price gets back above that level, sell all your financials.

Pfizer Inc. (PFE) chart analysis

Pfizer Inc. (PFE) chart analysis ;
1) Price/Volume action on Friday was a key reversal ?
2) PFE is now facing a major test at its 200 days exp MA
3) Notice that downtrend ? (From Jan high), needs to be broken, with buy trigger right above the $17.5 level

Dow Jones long term chart, just to scare you a little

Dow Jones long term chart ; just to scare you a little .......
1) Head and Shoulder top ?
2) Neckline line level is quite clear
3) Target is basically your current main uptrend line
4) Probability of a major crash ? Now that's the 1B $USD question ....
5) Stagnation ? (see 1960's to 1984)
Gut feeling ? Once the financial mess is clearly over, we shall zoom up again.
As usual, expect the unexpected.

The Big Short, by Michael Lewis

The Big Short: Inside the Doomsday Machine , by Michael Lewis.
Busy reading his book, really amazing, and well written.
PS : Buy one of his first book as well ; "Liar's Poker"
Make sure your financial library has both books :)

United States Natural Gas Fund (UNG) trading plan

United States Natural Gas Fund (UNG) chart analysis ;
1) Pay attention to that key reversal price/volume action at the end of March, that was the start of a key reversal/base pattern forming.
2) Price resistance level is now our main key trigger to go long
3) Higher lows pattern confirm current opinion
4) Go long right above $7.75

Apple Inc. (AAPL) trading plan

Apple Inc. (AAPL) chart analysis versus The Q's (QQQQ), Nasdaq 100
1) Apple zoomed up (Gap, Volume, and High impact news)
2) The Q's failed to break that key resistance
3) Techs main players ; Intel, Google, Rimm, Yahoo, Microsoft .... FAILED to follow Apple, and my take is that the Q's slight rise was pulled up by Apple's heavy weight in the Q's.
4) Book profit ?
Gut feeling ? Expect a sideway trade .....

10 Year Treasury Note Yield, no more bond crash ?

Ok, back in Brussels, after being stuck in the south of France, no flights....

Oh well, weather was great, had the chance to paint :)

Quick look at the 10 Year treasury note yield ;

1) Resistance, turned into support, and back into resistance again

2) Was that a MAJOR FAKE MOVE ????

3) Right about to break that trend line ?

4) No more inflation ?

5) Lower yield means $USD Dollar reversal ? (Too soon to tell)

6) Is the Fed behind this move ? (Lots of Hedge Funds have been shorting Treasury notes)

Exxon Mobil Corporation (XOM), raise your stop

Exxon Mobil Corporation (XOM) chart analysis ;
1) Clear bullish reversal
2) Uptrend intact
3) Raise your stop to $68
4) Main resistance stands at $70 (see level in late Dec 2009 and mid Jan 2010)

Business cartoon

Business cartoon ; CEO looking at his company's chart and telling analysts that business is improving .... mmm

US Dollar Index chart updated

US Dollar Index chart analysis ;
1) Price did get back above its 50 days simple MA
2) Support level is quite clear
3) See that "strong trigger" ? A move above will send the $USD zooming up
4) Uptrend intact, and still YOUNG
PowerShares DB US Dollar Index Bullish (UUP) ; that strong trigger confirms that $23.8 (and above) is our main trigger
Stop loss @ $23.6

Goldman Sachs Group, Inc (GS) trading plan

Goldman Sachs Group, Inc (GS) chart analysis ;
1) Forget past levels (supports)
2) High impact news events tend to create "new rules, new realities"
3) Focus on those clear present price channels
4) Yesterday's low is the main level that could trigger another market pull back
Gut feeling ? We could get stuck in a channel pattern (between these two levels) until another high impact news event sends GS in a clear break out .....
Probable scenario ? Bad news often bring more bad news .....
Focus on Direxion Financial Bear 3X Shares (FAZ) , buy trigger stands right above $13

My leading indicators are in trouble

Chart above ; "Light Crude Oil"
I use the Shangai Index and Crude Oil as my main leading indicators
Crude oil could be in trouble if it closes below $80 !
Shangai Comp Index is now BELOW 3000 ! (Down 4.79% !)
Gut feeling ? Stay in cash, the picture (Shangai chart) looks "scary"
You may view the chart HERE

Euro Dollar chart analysis

Euro Dollar chart analysis ;
1) Support and resistance channels are quite clear
2) Was that a fake break out ? (Above the red trend line)
3) Impact of Goldman and financials on the $USD Dollar ?
4) Short triggers are right below 1.3400 and much harder below 1.3300
5) Expect the unexpected ? Above 1.3500 could signal an attempt to reverse upwards

Time to test my Vix trading system

I posted a few days ago a link to the settings I use for the Vix (Volatility index)
Link on Stockcharts.com
The chart on top shows that the "crossover" has NOT taken place yet ......
The second chart shows the SP 500 with a broken trend

Video on what Goldman did

Goldman Sachs Group, Inc (GS)

Goldman Sachs Group, Inc (GS) ;
Price/Volume/News tells you one simple thing ; past support levels have NO value !
High impact news tells you one thing ; stay out, wait for the storm to clear .....
$147 to $150 levels (Daily of Weekly chart) may be a "psychological" support level, but you and I have no idea what most funds will do with Goldman next week ....
The financial giant had emerged relatively unscathed from the economic crisis. Let's see how they fight it out with the SEC.
Is this single event the trigger that will send the SP down over 10% ?

Current market opinion

Stuck in the south of France right now (all flights to Belgium have been canceled).
Oh well, killed some time doing this painting :)
Title ; "Its my world"
Strong beleiver in "being yourself" : )
Just sold a European ETF called BNK (Same as XLF for the US markets), tracks European big banks.
Getting lots of questions concerning Citigroup, FAS, Gold, Oil ..... etc
Citi ; sell off done with "huge volume" , profit tacking ? Probably, so what ? Allow a pull back to load up on Citi.
Target for Citi ? $USD 7.5 by Dec 2010
FAS ; Focus on a weekly chart and consider the $100 level as your main stop loss. Does that mean you should buy now ? Yes, one step at a time, do not inject your full allocation to FAS in a straight shot, spread out your purchases.
Gold ; Its all about the $USD Dollar index, if the $USD index dips below 79.5, Gold could spike up above 1200 (I doubt it).
Oil ; Use the Shangai index as your main divergence indicator ; if it does not get above 3250, expect crude oil to dip back below $83

Advanced Micro Devices Inc. (AMD), perfect ABC pattern ?

Advanced Micro Devices Inc. (AMD) chart update ;
Do we have a perfect ABC pattern ? Yes !
(To understand this pattern, see the explanation on the top right hand side of the blog).
Pay attention to the stop loss level.

Do you trade what CNBC pounds on ?

The Euro, Greece, Google, Apple, Citigroup ........

SP 500 divergence

A little tip on how I spot a normal, bullish and bearish divergence using a weekly chart for the SP 500 index.
You can see the direct link on Stockcharts.com
I use the PPO indicator (see chart school in Stockcharts.com), using the settings 1,40,1
The PPO helps me find divergences vis à vis the 200 days exp MA
Current reading is bearish since the PPO is overbought and does not make any new highs

Why you should pay attention to Texas

"Texas has always been a very misunderstood State"
(Hugh MacLeod)
As a cartoonist, I often read Hugh's blog called Gapingvoid.com
Thanks to him, I have discovered that things have really changed in Texas !
He even calls Austin the "killer app"
Next place to visit for me :)

Apple Inc. (AAPL) trading plan

Apple Inc. (AAPL) trading plan and chart analysis ;
1) Basic rule with most stocks/commodities ; they trend 20 to 30% of the time, the rest ? They trade sideways (channel patterns)
2) Apple will not escape from that rule
3) Current uptrend is way too steep
4) Expected low of the next channel ? $230

Citigroup Inc ( C ) weekly trader

Citigroup Inc ( C ) weekly chart analysis ;
Settings used ; a simple 50 weeks moving average
While most of us focus on daily charts, I often find that weekly settings tend to reflect the "big picture".
The "big picture" combines a long term moving average, price channels, and improved news.
Let's put it this way ; if you are looking for a "major" home run, focus on long term trend reversals.
Citigroup's weekly chart is now giving us the "ideal" setting.
1) Fundamentals are improving
2) Price zooms up fast (see Aug 2009)
3) Followed by a strong retracement (but still in a long term higher lows)
4) Price is now trying to break that Aug 2009 resistance
Gut feeling ; Markets are still overbought, still expecting a pull back
Citi will soon give us a "green light" (long term buy)
Once it does, buy and hold will again be the only way to play it

Euro Dollar chart analysis

Euro Dollar chart analysis ;
1) We do seem to have a support level around 1.3300, plus a small higher lows pattern
2) Current price pattern just broke the main trend line (red)
3) Most moving averages are still pointing down ....
4) Most probable scenario ; see green arrow

SP 500 trading system using the VIX indicator

Simple trading system for the SP 500 using the VIX (Volatility index)
Lots of talks recently regarding the fact that many consider the VIX "dead".
Its been working quite fine for me.
Top chart uses an invisible mode (you can use the settings for Stockcharts here)
I use a combo (Exp moving average crossover ; 5 & 20)
The chart below is the SP 500
Note the green and red signals.
Pay attention to the "spread" ; 5 days versus the 20 days (often reflects overbought/oversold levels)
Voilà, it works for me

SPDR Gold Trust (GLD)

SPDR Gold Trust (GLD) weekly chart analysis ;
Pay attention to those long channels with large price swings
Gut feelings favor the green arrow scenario (based on past patterns)
Red scenario ? I'll agree to it if the $USD Dollar goes back into a major bearish reversal.
Blue arrow ? Do not ignore it, as usual, expect the unexpected !

Stocks on my radar screen

Bank Of America Corp ( BAC ) ; Pay attention to that resistance level at $18.20 since Sept 09. Current price pattern is actually retesting that level as a new support level. Will it hold ? Use it as your stop/exit.

Citigroup Inc ( C ) ; Been in and out of Citi lately. One thing is clear, the pattern is really improving. You could hold it and forget about it for several years (nothing wrong with buy and hold right now on Citi). If you are in a "trader's mood", use the recent break out around $4.35 as your stop.

Cisco Systems ( CSCO ) ; Stuck in a tight price channel since mid March. All signals are still very bullish, a break out above $27 is our next key trigger.

International Business Machines ( IBM ) ; Clear tight price channel (126 to 130) , buy the break out above 130. If you are already in, use 126 as your stop.

Microsoft Corp ( MSFT ) ; Clear ABC pattern (since the Feb lows), our "C" trigger is right above $30.50.

Ishares Silver Trust (SLV) ; Major bullish Silver reversal ? A break out above $18.50 could send SLV in a new major uptrend.

Exxon Mobil Corp ( XOM ) ; Buy signal activated, use $66.70 as your stop

US Natural Gas fund (UNG) ; Bullish reversal in play ? A break out above $7.65 will trigger a major reversal

SP 500 chart analysis (SPX)

SP 500 chart analysis ;
1) Typical "up the stairs pattern"
2) Stop should be raised to 1170
3) The main "past" resistance level (broken @ 1150) now needs to be TESTED
4) Red uptrend is WAY too steep .....
Gut feeling ? Very bullish on the SP 500 but STILL expecting a violent pull back.
A retracement, followed by improved fundamentals will confirm that the bull market is back.
Do not chase it yet .....

Dow Jones Industrial Average

Dow Jones Industrial Average chart analysis ;
Follow those numbers on the chart ; 1 is our main trend, 2 is our current steep trend (way overbought), 3 is our probable next channel pattern.
10750 should be your main stop.

Watch the bond market

The chart on top represents the US Treasury Long term bond price (30 year)
Chart below represents the 30 Year T bond Yield.
Yield chart (weekly) seems to be ready for a major break out, with an inverted head and shoulder pattern that gives me a target of at least 7% or more .....

If you do follow some bond ETFs ;
1) TLT (20 year Treasury bond fund) dropped by 1.66%, giving us a yield of 4.55% (according to Bigcharts) ; target is probably $80 with a yield of at least 6% .....
2) TIP, dropped by 0.71%, giving us a yield of 5.16 ; target is probably $100, with a yield of at least 7% (on extreme oversold)
Now jump back to the first chart (Long term bond price) ; focus on the oversold level, and hope for an extreme oversold ..... am I dreaming ?

Apple Inc. (AAPL) probable scenario

Apple Inc. (AAPL) chart analysis and probable scenario ;
1) Current pattern (steep uptrend from Feb) suggest we focus on green arrow
2) Pink arrow has a low probability due to a possible "buy the rumor, and sell the news".
3) Grey arrow has a low probability unless we do face a bond crash (long term US bonds)

Why you should watch Shangai

Shangai Stock Exchange weekly chart ;
1) Current pattern is still NOT bullish
2) A weekly close above 3250 is needed
3) China is trying to slow down its economy, so expect the unexpected
4) The media keeps on talking about a "buble" .....
5) Pay attention to a major reversal in agricultural prices (Corn, Oats, Soybean, Rice, Wheat, Sugar ....)
6) The Baltic Dry Index is once again below 3000 !
7) The CRB index is still not in a bullish trend .....
Wait a second, any good news out there ? Yes ;
Industrial metals , Energy, Livestock .....
Keep your eyes on Shangai, US long term bond prices (Yields keep on rising), The $USD Dollar index, Inflation, and ..... inflation ..... its back .....
Gut feeling ? Market indexes are overbought, a pull back should be expected, sending us in a channel pattern, waiting for Shangai to "wake up" ...... I mentioned several weeks ago that I was expecting the "mother of all rallies" ..... it will come, but not yet .....