Stocks on my watch list

The following stocks have a bullish ABC pattern (with confirmed "B" levels)
Las Vegas Sands ( LVS ), trigger @ $28
Ford Motor Co ( F ), trigger @ $14.7
Sprint Nextel Corporation ( S ), trigger @ $5.3

Bearish triggers activated (not shorting them)
NVIDIA Corporation ( NVDA )
Symantec Corp ( SYMC )
MICRON Tech ( MU )
Akamai Technologies ( AKAM ) , huge warning !
Teva Pharmactl Indus Ltd Ads ( TEVA )
Tech sector is giving us a WARNING signal ....

Parabolic rise warning (ready to crash/pull back hard)
Arena Pharmaceuticals Inc ( ARNA )

Pfizer Inc. (PFE) on my watch list

Pfizer Inc. (PFE) chart analysis ;
1) Current channel pattern has a clear resistance level
2) Current down trend (red) confirms resistance level
3) Buy if we get above $15.5 on increased volume and "good news"
Hoping to see a GVN condition ; Gap, Volume, and News !

SP 500 chart analysis

SP 500 chart analysis ;
1) Current resistance level is quite clear
2) SP 500 is sitting on an important support level (recent resistance level)
3) "Time" pattern ; SP rose from the lows in early July a "little too fast" (time pattern suggest we could head for a sideway pattern before the "next break out".
4) Green arrow scenario ; low probability unless we get some "miracle" economic numbers.
5) Blue scenario ; high probability
6) Pink scenario ; Low to medium probability
Conclusion ; All scenarios still suggest that "buy on the dip" is probably the best approach.
Main worry ; Chinese banks and the Shanghai index not willing to pop up.

Will the US government seize your Gold ?

US fund managers want their gold stored in Europe because they fear that at some stage the U.S. Administration might follow the path set by Franklin D. Roosevelt in 1933 and confiscate all U.S. gold holdings as part of the country's strategy in dealing with the nation's economic problems.
Source : Mineweb.com

Catalyst that could lead to a crash

"Chinese banks face state loans turmoil; about Rmb1,550B in questionable loans. "
This simple sentence reminds me of the Japanese Banks prior to the big Nikkei crash, that has not yet recovered (over 20 years).
What did we learn from the subprime mess ? The banks lied to us .....
What did we learn about the Nikkei crash ? The banks lied ....
1) Watch the Shanghai Index ! It has risen from its July's low to almost 2600 ; a key resistance level.
2) Watch light crude oil prices (key indicator for the Chinese demand)
3) Did you just make some money on this rally ? SELL !!!!
I am bearish ? No, its just NOT the time to "buy and hold"

Forget the SP 500, focus on the Bond market

US 10 Year Treasury Note Yield chart analysis ;
1) That last candle ; focus on it and that key resistance (red trend)
2) A reversal below friday's candle would send Bonds back up
3) A break above that red trend will send the SP 500 much higher
Focus on the bond market today

Financial fact du jour

In 1969, the U.S. gross domestic product was about $1 trillion, and the Dow Jones Industrial Average was at about 1000. Thirteen years later, the U.S. economy had grown to $3.3 trillion. The Dow? About 1000.
Source : WSJ
Wall Street Journal

Euro Dollar update

Euro Dollar weekly chart analysis ;
1) Notice the history of violent moves
2) Was that break below the yellow channel a "fake move" or was is part of a bigger chart pattern ? (bearish)
3) Euro Dollar is in a tight channel ready to pop out ..... hard !
4) The next week (within the next 10 days) should be quite violent !
5) Focus on those long/short triggers right outside of the channel

British Pound versus the US Dollar

British Pound versus the $USD Dollar weekly chart analysis ;
1) Higher lows pattern means current ABC pattern stands.
2) Focus on that yellow level, the Pound needs to get above it
3) Trigger reversal stands @ 1.5200
Probability of seing the Pound rising to 1.7000 ? Medium to high (mid 2011)
The worst is probably behind for the UK

SP 500 chart update

$SPX (SP 500 index) chart analysis
Just the facts ; pay attention to that recent "fake move", key resistance is clear, a reversal below 1050 would confirm a major bearish reversal.
Do not bet the house on the SP 500 ..... yet .....

BP Plc ( BP ) trading plan

BP Plc ( BP ) chart analysis ;
1) We do have a clear "A" & "C" level (see ABC pattern on the top right hand side of the blog) ; however, we do NOT have our "B" level yet .... (reliable support)
2) Bollinger bands (I prefer to use them after sharp rises/fall) suggests a tight channel to come with a low @ $33.14 (notice that my settings on BBands are 50,0.5).
3) Hope for the "blue" arrow scenario
4) Light green arrow ; no way .....
5) Red arrow crashing to $1 ???? As usual, expect the unexpected ; ie the lie was so big that when all is said and done, the cost could be over 100$ Billions .....
Bottom line ? A close below $32.5 means short it again

Light crude oil channel pattern

Light crude oil chart analysis ;
1) Current pattern suggest we are in a "wide channel", with clear overbought/oversold levels.
2) What events could lead crude oil higher ? (above the overbought levels). Shanghai index getting above 2700 (and staying above it)

US 10 Years treasury note yield, ready to short bonds ?

US 10 Years treasury note yield chart analysis ;
Main question ; what probability lies ahead ?
Gut feeling ? I see the blue arrow scenario as the "most probable"

Apple Inc. (AAPL), the good news was priced in ?

Apple Inc. (AAPL) chart analysis ;
1) I have been following Apple for years, and I do not like this current pattern
2) Was the GREAT news priced in ? We shall soon find out !
3) Pay attention to that "reversal level", right below $255
4) Pay attention to the past "fake moves"
5) Triple top break out ? No, at least not yet .... hope for a tight pattern to form, then a burst up in about a month ....
PS : Focus on that warning level"

Euro Swiss Franc analysis

Euro versus Swiss Franc chart analysis ;
1) Clear down trend with several "fake moves" up.
2) Is this recent "pop up" another "fake move" ? Too early to tell ...
3) Is the recent move a typical ABC pattern ? At least the "A" level is clear (@ 1.3700).
4) "B", our important support level is not clear yet ....
5) Way oversold ? Yes ..... but then again, every one is using the Swiss Franc has a safe heaven these days ....
6) Those pop ups you see probably come from the SNB (Swiss National Bank) ; wonder if they will try again to defend their currency ....
Too bad I was not employed in Geneva with that rate ..... mmmm
Oh well, at least you can bet that most stores on the French/Swiss border are doing quite well.

Euro Dollar, was that a fake move ?

Euro Dollar chart analysis ;
1) Was that a fake move ? We shall soon see ....
2) Reversal that started in mid Jun needs to retrace and test support (yellow channel)
3) A break below that yellow channel will confirm the Euro's down trend
4) If the break below that yellow channel does not take place, expect a tight sideway channel, and the next bullish break out will incite me to change my mind on the $USD Dollar
5) EU Bank stress test could cause some huge volatility

SP 500 moment of truth

SP 500 chart analysis ;
1) My trading system is still in a "neutral" mode on both short & long term signals.
2) People, we are facing a key moment of truth .... expect a wild move !
3) Current channel pattern (down) suggests we are heading down ....
4) This last "tight channel" will be our moment of truth
5) Focus on those "key triggers"
6) Short term trigger : long above 1100
7) Long term signal : long above 1130
PS : a break below 1050 could cause some serious damage .... a break below 1010 .... mmm

Bullish signal from the Shanghai Index ?

Shanghai Stock Exchange Index ;
Chart pattern shows how important the 2500 level is.
Is this a buy signal ? No, at least not yet.
My real "safe entry" trigger stands right above 2600

Forex, Japanese Yen moment of truth

Current chart shows the Euro Yen "weekly" ;
1) Resistance level = Yellow level
2) Support level = Green level
3) Main down trend (red) is quite clear
4) Current long term pattern suggests we are going down !!! Old support level (Yellow channel was the last support level) , but, that last break down could also be a "fake move".
5) BOJ will probably intervene .....
6) Expecting the blue arrow scenario ; I'll change my mind if the Euro Yen dips below 110 again.
PS : Dollar Yen ; Long term pattern still very bearish, testing the 2009 low. Expected scenario, we climb above 90, and much higher. Ignore scenario if we close the next two weeks below the 09 low.

Citigroup Inc. (C), the big picture

Citigroup Inc. (C) chart analysis using the ABC pattern
1) Ok, the fake move was quite clear (see chart)
2) The "A" and "C" level are quite clear (big picture), our main problem is the "B" level (reliable support) ; Citi needs to remain "above" $3.8 !
3) Buyer ? Not yet, still waiting for the EU banks stress test results ....
4) Double bottom probability (Citi re testing the Feb levels) ; very low

Gold and the Euro Dollar

For a while, it was easy to spot the direct relation of the Euro versus the Dollar and the price of Gold.
The chart pattern correlation was "close to perfect" ..... then the Euro Dollar crashed.
One of them has to "snap" ..... expect some huge move soon :)

Focus on bonds next week

30 Year US Treasury Bond price versus the SP 500
1) Bond's trend is clear (Up)
2) Resistance level is clear
3) Focus on trigger 1 & 2 ; a break below those levels should send the SP 500 higher

US Dollar index chart analysis

US Dollar $USD Index chart analysis ;
1) A few months ago I mentioned the term "parabolic rise" in the $USD ..... No asset can shoot up this way without facing a hard pull back ....
2) We are right on a "key support level"
Some facts ; The US 10 Year Treasury Yield dropped again , putting pressure on the Dollar again. Will the Treasury Yield test the July's low ? (We are still in a higher lows).
Focus on bonds next week ; Heading towards 2008 highs ? I doubt it !

Stocks on my watch list

1) Home Depot ( HD ); chart pattern looks pretty bad with July low's support break down.
2) Merck & Co ( MRK ) ; chart pattern did hold up quite well, probably a must own when markets go back up.
3) Bank Of America Corp ( BAC ); Gap down , heading to test July's lows ? (Watch the value hunters buy it up soon)
4) Citigroup Inc ( C ) ; fake move ? Ok, at least we have our "A" level (ABC pattern).
5) Apple Computer Inc ( AAPL ) ; Start with mid April, we are in fact stuck in a tight channel ($250 to $265) with a few fake moves above $265. Expect a WILD break out !

Singapore Index Fund (EWS)

Singapore Index Fund (EWS) vis à vis the SP 500 ;
Chart is quite clear, Singapore is a MUST own once the SP 500 goes back up.

ArcelorMittal (MT)

ArcelorMittal (MT) chart analysis ;
1) I urge you to first watch the Shanghai Index before focusing on MT ; If Shanghai closes above 2500, the entry level 1 on MT will be re activated.
2) If Shanghai closes below 2350 next week, let MT drop .... to support

Citigroup Inc. (C), trading plan

Citigroup Inc. (C) chart analysis ;
The good news ? We now have our "A" level :) (ABC pattern)
Will support hold ? (Level "B") ; We need Citi to remain above $3.9 (will confirm the higher lows pattern).
Real entry is clear ; right above $4.3
How about a re entry much lower ? Sure, if we get a candle reversal, and price closes above $4.1

Confused bankers

"I prefer to invest in a confused artist than a confused banker"
Who is on my mind ? Goldman Sachs (GS) of course
A quick reminder of my trading rule number 8 (Liars, liars, liars)
And they always get away with it .....
I was a private banker, so beleive me, I know what I am talking about ; "They'll do it again", they can't help it, its in their genes ..... and key management will remain intact !
Financial marketing is quite simple ;
1) You wait for any asset to show a clear rise
2) When that asset gets on the news (main news), you start creating beautiful brochures.
3) In those brochures, you only show the last 6 months rise (not more).
4) You push the product to your clients (usually the product pays the best commissions), and voilà, you get your bonus at the end of the year for being the best salesman.
5) Bankers (today) means used car salesman !!!
Am I being to hard on them ? Noooooo ...... I just know them ......
Goldman won since their teams of lawyers where smarter than the SEC ......
Hedge Funds / Private Bankers relationship ;
Hedge Funds ? 90% of them are doomed to fail ; Once you understand that fact, just ask yourself who pushes those funds ? Who gets the big commissions from selling them ?
Like I said, I prefer to invest in a confused artist

Nokia Corporation (NOK), case study

Nokia Corporation (NOK) chart analysis ;
I usually first focus on what I call a "time frame period" ; we know that the main trend is down, but I urge you to focus on the past 4 weeks only.
1) We have a higher lows pattern
2) We have a clear resistance/support level
3) We did get a gap up yesterday
4) Is that a buy signal ? Not, at least not yet
We need a "news event" that could trigger a break out above $9 on huge volume increase.
Gut feeling ? Nokia is ripe for a take over
Should Google (GOOG) buy it ? Why not ? It makes sense ..... Nokia's global mobile reach !

BP Plc ( BP ) trading plan

BP Plc ( BP ) trading plan ;
1) Bullish news sends BP to "A" (see ABC pattern on the top right hand side of the blog).
2) Market cap / Revenue ratio makes sense for a country's fund to buy shares in BP (Libya, China, Russia)
3) The cost of their mess ? Cost of Lawsuits ?
4) Where is "B" ? Not clear yet ; we actually need more bad news for BP to see where these buyers will come in to support its price ..... we need a reliable support level.
5) Then ? We need more good news with volume breaking above that volume resistance level.
6) We basically need a "C" trigger to be activated (right above $37.5)

Market opinion

You probably noticed that I changed the name of the blog from "Alpha Global Investors" to the SP 500 Bull Bear Signals. The reason is simple : Focus, focus, focus.
The SP 500 is "the" index that will move "most" global markets.
You can look at 100 other indexes (from commodities, currencies, to global ETFs), in the end, the one that counts the most is the SP 500.
So why do I post the chart of the Baltic Dry Index versus the Shanghai index ?
A slow down in China could signal a real double dip .....
Quick note ; the Baltic Dry could actually be really oversold !
And .... we are waiting for important news from China ...... Do not anticipate the next move, wait for a clear move
We had great numbers from Intel (INTC) , but not good enough to send the SP 500 higher ...
That is why the SP 500 stands @ Neutral

Focusing on the Euro Dollar

Focusing on the Euro Dollar ;
1) Stuck in a clear channel (yellow)
2) Fighting to get above that main trend line
3) Waiting for a key news event to break out or reverse down ? (Results of bank stress tests).
4) Suddenly the EU zone is back ? I doubt it .....
5) Expect the unexpected ; if the tests go well, we could see the Euro zoom up .....

Vix trading system

Vix trading system update ;
So far so good ; the system (I use it as a filter) does send us one clear signal ; the Vix should be part of your trading tools.
You'll notice that I have placed a banner on top of the blog regarding the SP 500 index.
Short term ; still neutral
Long term ; bear signal is intact
If I cannot update it (vacations) , I'll just write "On vacation"

Citigroup Inc. (C) update

Citigroup Inc. (C) chart analysis ;
1) Fake break out ?
2) We need some REAL volume ....
3) No major news event leading to a gap up ......
4) On my watch list as usual, but not a buyer yet

Is Sony Corporation (SNE) back ?

Sony Corporation (SNE) chart analysis ;
1) Yes, we did break out above that long term down trend
2) Resistance level is quite clear
3) Volume pattern ; see that red arrow ? would love to see that pattern take place
Bottom line ; pattern is improving, we now need some major "news" event with a real gap up on huge volume. No, its NOT back ..... yet ....

30 Year US Treasury Bond trigger levels

30 Year US Treasury Bond versus the SP 500 chart analysis ;
1) Bond right on key support level
2) Long trigger ; if we get back above 127, the SP 500 will "fail" to break that resistance and sink below 1060.
3) Short trigger ; bonds sink below 125, the SP 500 breaks above that resistance level and climbs above 1100
That was the "technical" part, now the gut feeling ; watch Bonds enter a tight channel pattern before the "real" break out. Expecting some violent move

America is back

$USD Dollar index on top, $TNX 10 year US treasury note yield on the bottom
1) ABC pattern in the $USD Dollar index
2) Pull back in the $USD coincides with break down in 10 year treasury yield
3) Pull back in the $USD index normal, pattern was slightly "parabolic"
Gut feeling ; Main down trend in 10 year treasury yield could easily break out to the upside, sending the $USD Dollar index back towards 88 levels and higher.
America is back !

Euro Dollar chart update

Euro Dollar chart update ;
1) Main trend is clear
2) Focus on that trigger level ; expecting a pull back to that trigger, followed by a break below that trigger level (green arrow = high probability). EU zone bank stress will no go as "smooth" as in the US ..... many banks and insurance companies (EU zone) hold PIIGS debt !
3) Blue arrow = EU zone bank stress test means all ok ? PIIGS debt will not affect banks ? I doubt it .....

Focus on Shanghai and commodities

If you have been reading me for a while, you'll know that I have three major leading indicators ;
1) Shanghai Index
2) Light crude oil
3) CRB, commodities index
I call it my new "Dow Theory" ; these three have to break out "almost" at the same time to send us back into a huge bull market.
The ABC pattern on the chart concerns the CRB index ; we need to close above 265.
The CRB now serves as a leading indicator for Shanghai
Now here comes a wild statement ; Oil will rise to over $300 in the next 5 years.
Am I nuts ? Well, I suggest you study the long term chart of Oil ; it is a huge ABC pattern, and we all know where "A" stands at .....

SP 500 chart analysis

SP 500 chart analysis ;
1) Yes, as expected, a technical rally was due (way oversold)
2) Key question ; was that break below support a fake move ? Or is it a key level to initiate a short ?
3) See that key trigger ? Go long if we "close" above it
Gut feeling ? No double dip ..... just a long "wide" channel ...... start learning how to use a combo with your MACD / Stochastic :)
The short term belongs to channel traders :)

Vix trading system update

Vix trading system update ;
1) Bearish crossover means SP 500 long
2) Warning ; use this system as a "filter only"
3) Will follow this post with a clear chart of the SP 500

Deutsche Bank AG DB Gold Double Short ETN (DZZ)

Deutsche Bank AG DB Gold Double Short ETN (DZZ) chart analysis ;
1) Price/Volume action tells me that you should pay attention to the similar price/volume action in May (Fake move)
2) Time to short Gold ? No, at least not yet.
3) Is this part of a bigger move to come ? We shall soon see ; we first need a pull back to re test the $11.25 break out (will confirm level as a reliable support), then if DZZ keeps on forming higher lows, with a break out taking place in about 2 weeks above $11.75, then I'll start buying DZZ (not before)
Gut feeling ? Gold has lost its momentum

10 Year treasury note yield

10 Year treasury note yield, weekly chart ;
1) Pay attention to the last weekly candle (possible bullish reversal)
2) Focus on both trigger levels
3) Green arrow = High probability
4) Wait for a clear break out "above" those triggers

Baltic Dry Index update

Baltic Dry Index chart ;
1) Clear long term channel pattern ; usually takes place after a major market crash ; the longer the channel, the more important its break out.
2) Green arrow reflects the scenario I am expecting ; with a buy trigger right above the 2500 level.
3) Notice how the Baltic Dry Index anticipated the bullish reversal (Jan 09)

Euro Dollar update

Euro Dollar chart update ;
1) Higher lows still fighting lower highs
2) That trigger level is now our "main stop"
3) If the Euro reverses below the trigger level, the main down trend will resume.
4) That trigger level can also be seen as "A" in our ABC pattern ; "C", the buy trigger was activated but could also be a fake move ! So pay attention to that trigger level this week.
5) $USD Dollar is oversold ......
6) EU zone stress test on banks ? Still no news ..... buy the rumor, sell the news ???
7) Main trend on the Euro is still bearish

Current market opinion

The chart above (CAC 40, France Index) is quite clear ; Every one is expecting a break below that key support level.
The Financial Media is now talking about the "Death Cross" ; most indexes now have their 50 days moving averages are below their 200 days moving averages.
As if every one is expecting a "Black Monday" .....
I am focusing on a single fact ; The spread (in % terms) with their 20 days exp moving averages.
You can see here the settings I use (Stockcharts.com)
ie ; The CAC 40 now has a 5% spread (Often is an oversold condition)
Conclusion/ Gut feeling ? We are oversold
Entry level for the CAC 40 ? A close above 3400

Rules I follow

1) Think like a value investor
2) Use basic charts (do not confuse your brain)
3) Plan for the risk before you trade, not the reward !
4) They ALL end up crashing eventually !! So learn how to short !
5) Fear is my best friend.
6) Expect the unexpected !
7) Change your mind all the time. If you cannot, trading is not for you.
8) Liars liars liars ; from Enron to the WMD (Weapons of Mass Destruction), meaning the complex derivatives, subprime, etc ..... Be patient, "THEY" will come back with another twisted product that will cause more crashes (human nature).
9) Master 2 or 3 patterns ; ie ; ABC pattern, GVN (Gap Volume News), and parabolic moves.
10) Health ; if you feel and look good, you'll be on top of your game. Many years ago, I use to weight 89 Kgs, eat junk food, lots of sugar products .Today, I work out every day, weight 72 Kgs, eat very healthy foods, no sugar. I sleep better, and my trading has improved in an amazing way.

Case study using the Nikkei

Case study using Japan's Nikkei Index ; (Weekly chart)
The goal here is to show you how my brain works :)
1) Real economy has improved (real all latest key stats on Japan), its trade with China is booming, their holdings in Asian nations have boomed, lots of Chinese tourists are now visiting Japan.
2) China is slowing down, EU zone is in a mess, and the Yen is still too strong for exports (the bearish argument)
3) Based on that , let's now see what the chart is telling us ; we have a clear failed ABC pattern that gives us a very clear message ; the next time we get above 11000, you need to own Japan in your portfolio.
4) Green or red arrow scenario ? Gut feeling favors the green one
5) 9000 is our clear major support level
6) Trading plan ; a huge bullish long candle above 9000 will be my key buy trigger ; does that mean I expect to see the Nikkei below 9000 ? Yes

Ford Motor Co. (F) buy trigger level

Ford Motor Co. (F) chart analysis ;
1) Price / Volume action confirms high impact news event
2) Buy trigger stands right above $10.75

SP 500 re entry level

Candle pattern in the SP 500 gives me a clear re entry level (see chart)
Let price "close" above it first, ignore an intraday move with a close below the red line !
Key sectors to focus on ; FAS & OIH
PS ; Citigroup acted pretty well :)

Is the Euro anticipating a bullish reversal ?

Euro Dollar chart analysis ;
1) What is the Euro trying to tell us ? Bullish reversal ?
2) Focus on that trigger level
3) Spain's problems are priced in ?
4) If the Euro gets above 1.24 , expect a huge bullish reversal in equities

The mother of all buy on the dip

Nasdaq index chart (I just posted it on my wall) ;
1) Charts are great to look (stare) at ; they just reflect the past. You can have fun drawing all bunch of lines (trends), add head and shoulders patterns, drawing support/resistance levels, etc .... but in the end, the main question is ; "what will you do next ?"
2) The key to success in trading is "having a well defined trading plan"
3) My trading plan is based on my understanding of macro economic events.
4) That is why I have a 70% probability on that green arrow (see chart).
5) Spain is our "target du jour", but the ECB did learn from its past mistakes with Greece.
6) Austerity measures and more liquidity (from the ECB) will send Euro zone indexes in a long channel pattern (with higher lows)
7) I call this the mother of all buy on the dip since we shall not often get such an opportunity.
Getting ready to load up on QQQQ (Nasdaq 100) soon :)