CPCI:CPCE update

Huge divergence between CPCI:CPCE ratio and SPX. A big move is underway, I believe to the downside.

CPCI:CPCE update

A look at the above chart tell us to expect a correction similar in nature to the correction in July to the lower trend line. If that trend line is broken, then it will be a confirmation that the top is in for this rally since March and the bear is back.

Last push up for QCOM

One more push up for QCOM to complete the 5th wave. Target between 45.5 and 46.

QCOM 5th wave launched !!

5th wave underway as I mentioned the possibility in a previous post.

CPCI:CPCE update

CPCI to CPCE ratio confirming the correction. Target for this correction is lower trend line.

SPY road map update

See previous post about SPY road map on 10/12/2009. So far so good... 

QCOM 5th wave

According to my wave count QCOM  is in the late stage of a 4th wave correction. If the count is correct, it means that there is a 5th wave up missing. I would enter longs around 39.80. First target is 45.5, second target is 49.5. QCOM is reporting on 11/3 after the bell, if by then the stock is still at current levels it is a buy into earnings. On the contrary, if QCOM rises to 45.5 into earnings, I believe odds are higher that the stock will plunge after.

CPCI / CPCE update

CPCI to CPCE ratio has been climbing with the current rally in the markets since March. Currently it is signaling an impending correction that should start any day now, note similarities in the pattern with the correction experienced in June. Assuming that the correction starts, it will probably be stopped by the lower blue trend line. The drop to get to that trend line looks larger in this case than it did in June, indicating a larger percentage drop in SPX as well. My estimation is that about a 12%-15% correction  in SPX will bring the ratio to the lower trend line.

USD

Approaching the turn around ???

SPY roadmap

UNG waves

 Looking at UNG wave count from the September bottom around 9, we can see 5 waves up to about 12. It seems like a 3 wave correction recently took UNG down to 11. Not sure if the correction is over or if we are in a X wave, I believe it is probably over. If the count is correct further upside lies ahead.

Dean Foods

Dean Foods is at a critical point today. It held long term support at 17.45 which had been tested few other times this year. Today at the close it left a bullish hammer candle indicating a potential reversal but volume was just average. A solid break under 17.45 and DF can be headed to November 2008 lows in no time since there is no support below.

DYN Bullish breakout

DYN just broke out of a one year long inverse head and shoulders formation. Target price is around 4.00, which is a very good run from 2.39, closing price today.

CPCI:CPCE update

I was looking at the CPCI to CPCE ratio for clues to where SPX is headed in the near future. I found an interesting pattern during the July decline and bottom that seems to be repeating now. The pattern is a rising W pattern and would indicate that further upside is in store in the very near future. Also, notice the 9 day moving average has turned up again and didn't make it to the bottom of the channel, see August 24th post.

NSC

I was looking at NSC 2 year daily chart and realized how similar the current price pattern is to the one during summer 2008, see blue circles. After retracing about 50% from the March lows, NSC might be putting a top. If similarities continue, I would expect a bit more downside, then a temporal retracement up that would not make new highs and lower prices after. Something to consider is that the target of the nice inverse head and shoulders pattern has not been made or at least not yet.   

MON Bull Flag

Monsanto (MON) seems to be presenting a good buying opportunity as it has been tracing a nice bull flag. Buy around 77, potential target 87 and longer term target 94.

Copper / Gold ratio update

 

After today's rally, I looked at the Copper to Gold ratio to see if it was in fact confirming this rally. It looks like at the moment the ratio is not confirming this rally. The ratio has been making lower highs and lower lows while the SPX has been making higher highs. Obviously it has to do with the strong performance of Gold lately, and the ratio might catch up with the market later, but it also could be providing some warning signs.

SPX roadmap

Here is a weekly SPX Chart with my best guess road map for the rest of the year.

SPX Long term view

 

Above there is a monthly chart of SPX. Notice how the red and blue trend lines from 1987 top supported prices during 2002-2003 and 2009 bottoms. On the upside, SPX seems to be chasing after the red tred line, but first it needs to overcome significant resistance at the 1060 area market in red. After that a triple confluence is going to make really difficult for the SPX to move beyond the red circle. That area around 1120 is where the red trend line meets the downward green channel from the 2000 peak and the 2002-20003 and 2009 lows, it also happens to be the 50% fib retracement from the 2007 highs to the 2009 lows. On the downside, there is strong support in the 950 area, so a pull back in the short term will find good support at that level.

FSLR update

I posted the chart above on 8/23 calling for a retest of the long term trend line that had been hit numerous times. Well, below is the chart today.

 

FSLR actually broke the trend line temporally, which was expected since it had done the same thing the previous times and quickly reversed course to hit 140 today. If you are long, I would take some profits here as the stock is facing some resistance (rising trend line that I had marked as target). I believe it will pullback.

Short idea, CAT

 

CAT is hitting a long term trend line that is providing serious resistance. A short here can provide a good risk reward trade. Pick your exit. I wouldn't be surprised if CAT visits the lower side of the channel. On the other hand, a break above the long term trend line would most likely take CAT to the top of the channel.

ANR Bullish configuration

 

ANR broke out 23 back in May with good volume. While consolidating, it painted a bull flag during the months of May, June and July. In July, it broke out of the 23-30.5 range with even higher volume than the previous break out. Currently ANR is in a consolidation phase that looks very similar to the previous one. Unless the stock breaks the raising trend line decisively, it looks like a good buy if you can get in around 30.5 to 31 range for a good risk/reward trade. First target, would be 37.5 and if it breaks out of the range with good volume a second target would be around 43.5.

Cooper/Gold ratio

I found the Copper to Gold ratio to be a pretty good tool to confirm and/or anticipate turns in the SPX. Back in October 2007, this ratio was making already lower highs while the SPX was still making a higher high, non confirming the rally and signaling a reversal. In March 2008, the ratio was putting a higher low, while SPX was making a lower low, a signal that a bottom was near.

Fast forward to 2009. The Copper to Gold ratio anticipated the bottom in March by putting a higher low while the SPX was bottoming with a lower low at 666. Also, during the July correction the ratio made higher lows hinting us that it was just a correction and not the start of a more serious decline.

After this week's decline, is the ratio giving us any clues about the current decline in the SPX ?. Are we in a correction similar to July or are we at the start of a significant downturn ?. I will let you be the judge. In my opinion, the ratio is confirming that the market is turning and that lower prices are ahead for the SPX.

TNX

When looking at the 10 year Treasury Note yield, I observed a repeating pattern from last year. The difference is that this time SPX is moving in opposite direction compared to last year. I am not able to draw any conclusion, but I thought I would post it to see if someone can find it useful. Could it mean that SPX will do the opposite this year and melt up ?

SPX time cycle

One can subdivide the current rally in the SPX from March in three stages (rally, consolidation and correction) that seems to be repeating in a fractal self similar fashion. Notice the second rally duration is exactly 50% of the first one. If the consolidation stage follows the same relationship, would mean that the next two weeks in the SPX are down. I believe SPX is going to 950.

UNG Target

UNG downside target as measured by triangle's wider section comes in at 9.15. Could that be the final bottom for UNG ? I believe UNG is tracing a 5th wave ending diagonal in EW terms. Once this wave is completed UNG should get a nice bounce, it's going to take a while though.

CPCI:CPCE update

CPCI to CPCE ratio might be tracing a divergence that would add weight to the idea that the top or an important intermediate top is near, if not here already.

Short VLO ?

VLO is facing significant resistance: a rising trend line that has been observed few times and a declining 200 MA. Current up move resembles a bear flag.

Zooming in to a 60 min. time frame. The ABC corrective move seems like is about to end. A good target to initiate short position is around 19.37 to 19.40 where there is Fibonacci confluence and a potential double top.

CPCI:CPCE ratio

CPCI to CPCE ratio was a good tool to spot intermediate term tops during the 2008-2009 decline. It looks like this same tool can be use to help anticipate intermediate term bottoms in this current rally.
The chart right now is telling us to be cautious in the long side since we are hitting the upper channel that is containing this ratio since March 2009.

FSLR short term trade

FSLR has been in a downturn lately tracing an ABC move. FSLR broke a significant uptrend line and could be very well heading to retest the November lows. I believe the descending trend line will provide support for at least a temporal bounce around the 117-119 area in the next few days.

GOLD ready for a breakout

After a long consolidation, Gold looks ready for a breakout of the symmetrical triangle. I expect the breakout will be to the upside with an approximate target of 1075 for GLD. Notice how volume has been declining during this consolidation phase.

Nasdaq very close to resistance

The Nasdaq is getting very close to a point of huge resistance, red dot. That is where the bear trend line from October 2007 top meets 50% Fib retracement from 2007 highs to March 2009 lows. It also happens to align perfectly with the 23.6% retracement from 2000 highs to March 2009 lows.
A potential huge inverse head and shoulders could be developing with the left shoulder completed and the head almost in place. The potential neckline would be the bear trend line.

And here is a daily chart of the Nasdaq. Note how the Fib lines align very well with areas of support and resistance within the current rally from the March lows. My target for this top is 2055.