Thursday, December 31, 2009
HAPPY NEW YEAR 2010!!!
What a finish to the year - with the ChartsEdge maps coming through for the day, and finishing in a way that leaves open bull and bear possibilities - after tagging some SPX projections this week! Well, there are some issues to mop up for commodities and currencies; and the SPX stayed over 1114 which it needed to do to avoid immediate bearishness, since it lost the 1122 (50% retrace level). I'm heading out to parties so for now will just say - HAPPY NEW YEAR!!!
Turning from 2009 to 2010 under planetary signs that auger unusual financial market movements: Raymond Merriman's comments for this week
Folks, we normally post Raymond Merriman's public weekly comments from his his weekly public comments. This week's set is at Merriman Market Analyst Weekly Preview Comments (his site is always in the list at right). I'm embarrassed that I didn't get them posted last Friday, I guess because of the Christmas holiday. But they're interesting, and you'll want to read them if only to keep up with the flow of what's going on. So here are the public preview comments he made for this week that began December 28:
MMA Comments for the Week Beginning December 28, 2009
Written by Raymond Merriman
Review and Preview
Last week was fascinating to Financial Astrologers for many reasons. First, it was the third and final passage of the 14-year Jupiter-Neptune conjunction, which took place on Monday, December 21. This was also the day that commenced the annual winter solstice, darkest and shortest day of the year for those in the Northern Hemisphere. Secondly, Mars began its ten-week retrograde journey the day before, December 20. This is a 25-26 month planetary occurrence, and symbolizes a time when the aggressive, assertive qualities of Mars tend to retreat, either due to force of circumstances, or on the basis of wisdom and strategic planning by those who also possess great initiative. Furthermore, these two powerful geocosmic events happened right in the middle of the December 10-29 time band when eleven important geocosmic signatures unfolded in short order. This constitutes what we call a “geocosmic cluster,” a period when many financial markets will frequently make a reversal of their trend within three trading days of such a midpoint. But this was also a pre-holiday trading week, a time when many markets don’t make trend reversals. So it was with great curiosity that Financial Astrologers approached this week. Would a trend reversal occur within three trading days of December 21, as the history of geocosmic signatures would suggest? Or would markets just continue their trend, as is usually the case when holidays and light volume are involved?
We won’t know the answer to this question until after next week. Yet there are many markets that are already implying a reversal indeed occurred last week. Gold and Silver, for instance, made an isolated low on Tuesday, December 22. After reaching an all-time high of 1227 on December 2, Gold had fallen to 1075 on December 22, a loss of $152 in just 14 trading days. But then it turned, consistent with thoughts expressed last week concerning Mars retrograde and Gold prices. It ended the week near 1105. Silver fell from its yearly high of 1950 on December 3 to 1678 on December 22, a loss of $2.72/ounce, or nearly 14%, in just 13 trading days. Silver ended the holiday shortened week at 1744. It is too early to state emphatically if the move down is over, but as stated last week, “As reported in the now out-of-print ‘Gold Book: Geocosmic Correlations to Gold Price Cycles,’ Mars retrograde stations have coincided with some of the most impressive reversals and contra-trend moves in Gold prices. There are several cases where a trend has been in force, only to reverse within ten trading days of Mars turning retrograde. The contra-trend move then continues into a two-week period surrounding the date when Mars turns direct, and then the trend returns to it former direction too. It doesn’t happen all the time, but often enough that it has to be watched carefully. When a reversal does occur near either the retrograde or direct date of Mars, that high or low oftentimes remains solid a support or resistance for several weeks, and even years.”
In equity markets, there were a number of interesting developments last week. In Europe, each of the indices we track made new yearly highs on their last day of trading. In the case of the AEX (Netherlands), DAX (Germany) and SMI (Switzerland), the last trading day was Wednesday, December 23. The FTSE traded December 24 and made its new yearly high then. However, the MICEX index of Moscow actually trended down all week, falling to 1340 as of December 24. Its yearly high was posted on December 14 at 1412.
In Asia and the Pacific Rim, only the NIFTY index of India made a new yearly high on December 24. The Nikkei of Japan had a very good week, rallying to 10,558 last Thursday and its highest price since its yearly high of 10,767 last August 31. The All Ordinaries of Australia also performed well, rallying to 4803 late last week. However, this is still well below its yearly high of 4897 on October 15. The Hang Seng index of Hong Kong, however, fell to a new cycle low of 20,932 last Monday as these aspects unfolded. However, by Thursday, it had recovered back to 21,592, which is still far below its yearly high of 23,099 realized on November 18, right after the first passage of the Saturn-Pluto square.
In the United States, both the Dow Jones Industrial Average and the NASDAQ Composite indexes gently rallied to slightly higher yearly highs on Christmas Eve, December 24. However, the Bovespa of Brazil and Merval of Argentina traded sideways-to-down last week. Both are well below their yearly highs, which was 69,785 on December 14 in the case of the Bovespa, and 2343 back on October 22 for the Merval.
Crude Oil rallied strongly last week, hitting 78.75 on Thursday after falling as low as 68.59 on December 14. The Euro also started to reverse upwards from a low of 1.4216 on December 22.
Short-Term Geocosmics
The impressive geocosmic cluster of December 10-29 ends this week with the final three important signatures. On December 26, Mercury will begin its three-week retrograde trek. This will be followed by Venus transiting over Pluto, and square to Saturn on Monday and Tuesday. Thus, Venus is making a “translation” to the Saturn-Pluto square, which highlights the continued concerns over debt and deficits by many governments.
There are two ideas to keep in mind here regarding two of these signatures. First, Mercury retrograde (December 26-January 15) is a usually a quirky time for financial markets. This is probably because it tends to coincide with a slew of mixed messages for politicians and release of economic data. Our motto under Mercury retrograde is to “Take profits too soon,” which simply means be a very short-term trader. Trends tend to get interrupted during this period, and price moves only last 1-4 days before suddenly changing directions. It wouldn’t be so bad, except that technical studies of support and resistance are oftentimes violated just slightly, and instead of markets breaking out, as these studies would suggest, they suddenly reverse back, creating what is called a “fake out,” or “whipsaw.” Buy and sell signals can be quickly negated for technical traders. One needs to be very nimble during these times. Otherwise it can be very frustrating.
We note that Mars and Mercury will both be retrograde through January 15. Since both represent periods of retreat and reassessment of decisions made, it promises to be a period of very vocal and heated discussion regarding the Senate’s passage of the Health Care reform bill, last week. How will they resolve the critical differences with the version of Health Care reform passed by House of Representatives? It is not going to be easy, according to these retrograde factors. In fact, the debate is likely to get even more hostile. Despite what many pundits say, the issue is far from a “done deal.” At the very least, mundane astrologers probably see this as a period of many changes to each proposal. Don’t expect either version to be passed in its current form without considerable modifications. There is even danger of implosion, for after Mercury turns direct, Mars will remain retrograde and we head right into the second of the Saturn-Pluto squares in late January, at the same time the Sun and Venus will be in direct opposition to Mars.
The second idea to keep in mind this week is that Tuesday’s Venus-Saturn square is usually a favorable time to buy any market that has been declining into it. Look for any market making a new two-week low, or a retest of a recent low, as a buying opportunity.
Longer-Term Thoughts
Sometimes you just have to step back from all the noise and quietly reflect on just how much progress – and regression – we are making as a world community. We are living in times where all the farthest out planets in our solar system (Uranus, Neptune, and Pluto) are in a waxing phase of their cycle to one another. Not only that, but Uranus and Neptune continue in a mutual reception to each another (they are in one another’s sign), and Neptune and Pluto continue in a favorable 100-year sextile to one another for several more decades. This condition hasn’t existed since the great European Renaissance of the 15th century. It is a 500+-year planetary cycle.
When the 171-year Uranus-Neptune conjunction occurred in 1993, it was at the end of the powerful Capricorn Climax (1988-1993). This was a time when Saturn, Uranus, Neptune, and the Moon’s North Node all crossed one another in Capricorn. It was the advent of a scientific and technological revolution. It was the time when the world’s applied knowledge of technology revolutionized the way we communicated and did business with one another. The fax machine, computer, internet, and email led to the idea that whatever we could dream could become real. There was no limit to what we could accomplish. Plus the Berlin Wall came tumbling down and all the Communist Protectorates of Eastern Europe were released to become consumers in the free market world, leading to one of the greatest economic advances of history. By the time we crossed into the 21st century, we were looking at a world with unlimited economic potential and an unending period of world peace. Industrialized nations were operating on budget surpluses, debt was under control, people were working and paying taxes and many could afford a home.
Somewhere around 2001 that path and that vision ended. Somewhere around then we went from economic prosperity and hopes for world peace, to fear of terrorism and explosive debt. The dream was lost. Or was it? Maybe – just maybe – as we look beyond Saturn to the further-out planets and see they are still all in the waxing phases (conjunction to opposition) to one another for most of this new century, we can get back on track. That is the hope I wish to keep in my mind as we enter this New Year, and new decade. I do believe the first two decades of this new century will be the most difficult, for Saturn will be in its waning (downward) phase to all the planets beyond its orbit. But I also hold hope that we will recognize the causes of what interrupted our pathway to progress (it was debt, the great killer of hopes), and make the necessary sacrifices to correct those errors. We can do this.
Announcements
CD’S, MP3’s, DVD’S, and webcast viewing of the Forecast 2010 speech are now available. The Forecast 2010 Webcast Speech took place December 20, 2009. We are offering a CD or MP3 download that contains the audio only. You can also view the webcast again in it’s entirety as a one-time download from Vibation until January 25, 2010. And it will be available in a DVD edited edition (without the newspaper headlines) by January 9. The cost for any of these recordings will be $45.00 and an additional postage charge if ordering in audio CD or edited DVD format. For further information, go to our website at www.mmacycles.com (it will be up sometime this week). Or drop us an email (ordersmma@msn.com) or fax (248-538-5296), or call us at 1-248-626-3034.
The monthly MMA Cycles Report, and the MMA Japan Cycles Report, will be released this weekend to subscribers. This report covers our longer-term analysis of the U.S. stock market, precious metals, crude oil, currencies, Treasury Notes, and grain markets. The MMA Japan Cycles report will also be issued one this weekend. This report covers our monthly analysis of the Japanese Nikkei Index, JGB Bonds, and the Dollar-Yen markets. For subscription information, please go to SERVICES at www.mmacycles.com.
The next Forecast 2010 speech will take place in Lansing, Michigan on January 3, 2010 at 1:00 PM. Contact 517-676-1680, or LCAstrology@cs.com for information. That will be followed by the presentation in Amsterdam, Netherlands on January 16, 2010. Contact Schogt Market Timing for information at info@markettiming.nl or www.markettiming.nl or call 31-(0)-294-415-917. The next Forecast 2010 speech will then be in Moscow, Russia on January 19, 2010. Contact www.urania.ru or Urania@urania.ru for further information and limited seating reservations. This will be followed by a presentation at the Swiss symposia in Zurich on January 23-24. Contact AstroData at info@mma-europe.ch, or www.mma-europe.ch or 41-(0)-43-343-33-66 for reservations and further information.
The Forecast 2010 book are out!!! We have printed an additional 20% beyond the pre-orders, and they will likely sell out within the following 8 weeks, as has been the case three of the prior 4 years. For more information on this year’s book, visit our web site at www.mmacycles.com.
If you are an active short-term trader, you may be interested in our Weekly or even Daily Market reports with short-term trading recommendations. It is the only way I keep in touch with traders on a daily or even weekly basis, as I no longer offer personal consultations. These reports give in-depth analysis of the DJIA, S&P and NASDAQ futures, Euro currency (cash and futures), Swiss Franc, Dollar/Yen cash and Yen futures, T-Notes, Corn, Soybeans, Wheat, Gold and Silver. The daily reports cover all stock indices listed above, as well as futures in Euro, T-Notes, Soybeans, Gold and Silver. Subscription to the daily report also includes the weekly report. For more information, go to http://www.mmacycles.com/services, or call our offices at 1-248-626-3034. In the words of one of our subscribers: “I recently subscribed to your weekly report and am finding it to be excellent and a very useful companion to the MMA Cycles Report. I can't imagine now managing my investments without them.”
The MMA Catalogue of products and services for 2010 is now out!!! You can download it in PDF at http://www.mmacycles.com/option,com_docman/task,doc_download/gid,161/Itemid,63/. The ordering page is the last page of the catalogue. This is especially useful for those outside of the USA, since we do not send these by snail mail unless requested.
Disclaimer and statement of purpose:
The purpose of this column is not to predict the future movement of various financial markets. However, that is the purpose of the MMA (Merriman Market Analyst) subscription services. This column is not a subscription service. It is a free service, except in those cases where a fee may be assessed to cover the cost of translating this column from English into a non-English language.
This weekly report is written with the intent to educate the reader on the relationship between astrological factors and collective human activities as they are happening. In this regard, this report will oftentimes report what happened in various stock and financial markets throughout the world in the past week, and discuss that movement in light of the geocosmic signatures that were in effect. It will then identify the geocosmic factors that will be in effect in the next week, or even month, or even years, and the author’s understanding of how these signatures will likely affect human activity in the times to come. The author (Merriman) will do this from a perspective of a cycle’s analyst looking at the military, political, economic, and even financial markets of the world.
It is possible that some forecasts will be made based on these factors. However, the primary goal is to both educate and alert the reader as to the psychological climate we are in, from an astrological perspective. The hope is that it will help the reader understand these psychological dynamics that underlie (or coincide with) the news events and hence financial markets of the day.
No guarantee as to the accuracy of this report is being made here. Any decisions in financial markets are solely the responsibility of the reader, and neither the author nor the publishers assume any responsibility at all for those individual decisions. Reader should understand that futures and options trading are considered high risk.
Copyright MMACycles 2007-2009; you may link to this site or page, but you may not distribute these texts in any way (by email or otherwise).
Archives
Previous weeklies (2006) are archived at www.olmta.com
For other language editions of MMA´s weekly comments:
Dutch : www.markettiming.nl (Nederlands)
Spanish : www.mmacycles-spanish.com (Español)
German : www.mma-europe.ch (Deutch)
Japanese : www.merriman.jp
Russian : www.urania.ru
Serbian : www.mma-balkan.com
Polish : www.astrobiznes.pl
=============
MMA Comments for the Week Beginning December 28, 2009
Written by Raymond Merriman
Review and Preview
Last week was fascinating to Financial Astrologers for many reasons. First, it was the third and final passage of the 14-year Jupiter-Neptune conjunction, which took place on Monday, December 21. This was also the day that commenced the annual winter solstice, darkest and shortest day of the year for those in the Northern Hemisphere. Secondly, Mars began its ten-week retrograde journey the day before, December 20. This is a 25-26 month planetary occurrence, and symbolizes a time when the aggressive, assertive qualities of Mars tend to retreat, either due to force of circumstances, or on the basis of wisdom and strategic planning by those who also possess great initiative. Furthermore, these two powerful geocosmic events happened right in the middle of the December 10-29 time band when eleven important geocosmic signatures unfolded in short order. This constitutes what we call a “geocosmic cluster,” a period when many financial markets will frequently make a reversal of their trend within three trading days of such a midpoint. But this was also a pre-holiday trading week, a time when many markets don’t make trend reversals. So it was with great curiosity that Financial Astrologers approached this week. Would a trend reversal occur within three trading days of December 21, as the history of geocosmic signatures would suggest? Or would markets just continue their trend, as is usually the case when holidays and light volume are involved?
We won’t know the answer to this question until after next week. Yet there are many markets that are already implying a reversal indeed occurred last week. Gold and Silver, for instance, made an isolated low on Tuesday, December 22. After reaching an all-time high of 1227 on December 2, Gold had fallen to 1075 on December 22, a loss of $152 in just 14 trading days. But then it turned, consistent with thoughts expressed last week concerning Mars retrograde and Gold prices. It ended the week near 1105. Silver fell from its yearly high of 1950 on December 3 to 1678 on December 22, a loss of $2.72/ounce, or nearly 14%, in just 13 trading days. Silver ended the holiday shortened week at 1744. It is too early to state emphatically if the move down is over, but as stated last week, “As reported in the now out-of-print ‘Gold Book: Geocosmic Correlations to Gold Price Cycles,’ Mars retrograde stations have coincided with some of the most impressive reversals and contra-trend moves in Gold prices. There are several cases where a trend has been in force, only to reverse within ten trading days of Mars turning retrograde. The contra-trend move then continues into a two-week period surrounding the date when Mars turns direct, and then the trend returns to it former direction too. It doesn’t happen all the time, but often enough that it has to be watched carefully. When a reversal does occur near either the retrograde or direct date of Mars, that high or low oftentimes remains solid a support or resistance for several weeks, and even years.”
In equity markets, there were a number of interesting developments last week. In Europe, each of the indices we track made new yearly highs on their last day of trading. In the case of the AEX (Netherlands), DAX (Germany) and SMI (Switzerland), the last trading day was Wednesday, December 23. The FTSE traded December 24 and made its new yearly high then. However, the MICEX index of Moscow actually trended down all week, falling to 1340 as of December 24. Its yearly high was posted on December 14 at 1412.
In Asia and the Pacific Rim, only the NIFTY index of India made a new yearly high on December 24. The Nikkei of Japan had a very good week, rallying to 10,558 last Thursday and its highest price since its yearly high of 10,767 last August 31. The All Ordinaries of Australia also performed well, rallying to 4803 late last week. However, this is still well below its yearly high of 4897 on October 15. The Hang Seng index of Hong Kong, however, fell to a new cycle low of 20,932 last Monday as these aspects unfolded. However, by Thursday, it had recovered back to 21,592, which is still far below its yearly high of 23,099 realized on November 18, right after the first passage of the Saturn-Pluto square.
In the United States, both the Dow Jones Industrial Average and the NASDAQ Composite indexes gently rallied to slightly higher yearly highs on Christmas Eve, December 24. However, the Bovespa of Brazil and Merval of Argentina traded sideways-to-down last week. Both are well below their yearly highs, which was 69,785 on December 14 in the case of the Bovespa, and 2343 back on October 22 for the Merval.
Crude Oil rallied strongly last week, hitting 78.75 on Thursday after falling as low as 68.59 on December 14. The Euro also started to reverse upwards from a low of 1.4216 on December 22.
Short-Term Geocosmics
The impressive geocosmic cluster of December 10-29 ends this week with the final three important signatures. On December 26, Mercury will begin its three-week retrograde trek. This will be followed by Venus transiting over Pluto, and square to Saturn on Monday and Tuesday. Thus, Venus is making a “translation” to the Saturn-Pluto square, which highlights the continued concerns over debt and deficits by many governments.
There are two ideas to keep in mind here regarding two of these signatures. First, Mercury retrograde (December 26-January 15) is a usually a quirky time for financial markets. This is probably because it tends to coincide with a slew of mixed messages for politicians and release of economic data. Our motto under Mercury retrograde is to “Take profits too soon,” which simply means be a very short-term trader. Trends tend to get interrupted during this period, and price moves only last 1-4 days before suddenly changing directions. It wouldn’t be so bad, except that technical studies of support and resistance are oftentimes violated just slightly, and instead of markets breaking out, as these studies would suggest, they suddenly reverse back, creating what is called a “fake out,” or “whipsaw.” Buy and sell signals can be quickly negated for technical traders. One needs to be very nimble during these times. Otherwise it can be very frustrating.
We note that Mars and Mercury will both be retrograde through January 15. Since both represent periods of retreat and reassessment of decisions made, it promises to be a period of very vocal and heated discussion regarding the Senate’s passage of the Health Care reform bill, last week. How will they resolve the critical differences with the version of Health Care reform passed by House of Representatives? It is not going to be easy, according to these retrograde factors. In fact, the debate is likely to get even more hostile. Despite what many pundits say, the issue is far from a “done deal.” At the very least, mundane astrologers probably see this as a period of many changes to each proposal. Don’t expect either version to be passed in its current form without considerable modifications. There is even danger of implosion, for after Mercury turns direct, Mars will remain retrograde and we head right into the second of the Saturn-Pluto squares in late January, at the same time the Sun and Venus will be in direct opposition to Mars.
The second idea to keep in mind this week is that Tuesday’s Venus-Saturn square is usually a favorable time to buy any market that has been declining into it. Look for any market making a new two-week low, or a retest of a recent low, as a buying opportunity.
Longer-Term Thoughts
Sometimes you just have to step back from all the noise and quietly reflect on just how much progress – and regression – we are making as a world community. We are living in times where all the farthest out planets in our solar system (Uranus, Neptune, and Pluto) are in a waxing phase of their cycle to one another. Not only that, but Uranus and Neptune continue in a mutual reception to each another (they are in one another’s sign), and Neptune and Pluto continue in a favorable 100-year sextile to one another for several more decades. This condition hasn’t existed since the great European Renaissance of the 15th century. It is a 500+-year planetary cycle.
When the 171-year Uranus-Neptune conjunction occurred in 1993, it was at the end of the powerful Capricorn Climax (1988-1993). This was a time when Saturn, Uranus, Neptune, and the Moon’s North Node all crossed one another in Capricorn. It was the advent of a scientific and technological revolution. It was the time when the world’s applied knowledge of technology revolutionized the way we communicated and did business with one another. The fax machine, computer, internet, and email led to the idea that whatever we could dream could become real. There was no limit to what we could accomplish. Plus the Berlin Wall came tumbling down and all the Communist Protectorates of Eastern Europe were released to become consumers in the free market world, leading to one of the greatest economic advances of history. By the time we crossed into the 21st century, we were looking at a world with unlimited economic potential and an unending period of world peace. Industrialized nations were operating on budget surpluses, debt was under control, people were working and paying taxes and many could afford a home.
Somewhere around 2001 that path and that vision ended. Somewhere around then we went from economic prosperity and hopes for world peace, to fear of terrorism and explosive debt. The dream was lost. Or was it? Maybe – just maybe – as we look beyond Saturn to the further-out planets and see they are still all in the waxing phases (conjunction to opposition) to one another for most of this new century, we can get back on track. That is the hope I wish to keep in my mind as we enter this New Year, and new decade. I do believe the first two decades of this new century will be the most difficult, for Saturn will be in its waning (downward) phase to all the planets beyond its orbit. But I also hold hope that we will recognize the causes of what interrupted our pathway to progress (it was debt, the great killer of hopes), and make the necessary sacrifices to correct those errors. We can do this.
Announcements
CD’S, MP3’s, DVD’S, and webcast viewing of the Forecast 2010 speech are now available. The Forecast 2010 Webcast Speech took place December 20, 2009. We are offering a CD or MP3 download that contains the audio only. You can also view the webcast again in it’s entirety as a one-time download from Vibation until January 25, 2010. And it will be available in a DVD edited edition (without the newspaper headlines) by January 9. The cost for any of these recordings will be $45.00 and an additional postage charge if ordering in audio CD or edited DVD format. For further information, go to our website at www.mmacycles.com (it will be up sometime this week). Or drop us an email (ordersmma@msn.com) or fax (248-538-5296), or call us at 1-248-626-3034.
The monthly MMA Cycles Report, and the MMA Japan Cycles Report, will be released this weekend to subscribers. This report covers our longer-term analysis of the U.S. stock market, precious metals, crude oil, currencies, Treasury Notes, and grain markets. The MMA Japan Cycles report will also be issued one this weekend. This report covers our monthly analysis of the Japanese Nikkei Index, JGB Bonds, and the Dollar-Yen markets. For subscription information, please go to SERVICES at www.mmacycles.com.
The next Forecast 2010 speech will take place in Lansing, Michigan on January 3, 2010 at 1:00 PM. Contact 517-676-1680, or LCAstrology@cs.com for information. That will be followed by the presentation in Amsterdam, Netherlands on January 16, 2010. Contact Schogt Market Timing for information at info@markettiming.nl or www.markettiming.nl or call 31-(0)-294-415-917. The next Forecast 2010 speech will then be in Moscow, Russia on January 19, 2010. Contact www.urania.ru or Urania@urania.ru for further information and limited seating reservations. This will be followed by a presentation at the Swiss symposia in Zurich on January 23-24. Contact AstroData at info@mma-europe.ch, or www.mma-europe.ch or 41-(0)-43-343-33-66 for reservations and further information.
The Forecast 2010 book are out!!! We have printed an additional 20% beyond the pre-orders, and they will likely sell out within the following 8 weeks, as has been the case three of the prior 4 years. For more information on this year’s book, visit our web site at www.mmacycles.com.
If you are an active short-term trader, you may be interested in our Weekly or even Daily Market reports with short-term trading recommendations. It is the only way I keep in touch with traders on a daily or even weekly basis, as I no longer offer personal consultations. These reports give in-depth analysis of the DJIA, S&P and NASDAQ futures, Euro currency (cash and futures), Swiss Franc, Dollar/Yen cash and Yen futures, T-Notes, Corn, Soybeans, Wheat, Gold and Silver. The daily reports cover all stock indices listed above, as well as futures in Euro, T-Notes, Soybeans, Gold and Silver. Subscription to the daily report also includes the weekly report. For more information, go to http://www.mmacycles.com/services, or call our offices at 1-248-626-3034. In the words of one of our subscribers: “I recently subscribed to your weekly report and am finding it to be excellent and a very useful companion to the MMA Cycles Report. I can't imagine now managing my investments without them.”
The MMA Catalogue of products and services for 2010 is now out!!! You can download it in PDF at http://www.mmacycles.com/option,com_docman/task,doc_download/gid,161/Itemid,63/. The ordering page is the last page of the catalogue. This is especially useful for those outside of the USA, since we do not send these by snail mail unless requested.
Disclaimer and statement of purpose:
The purpose of this column is not to predict the future movement of various financial markets. However, that is the purpose of the MMA (Merriman Market Analyst) subscription services. This column is not a subscription service. It is a free service, except in those cases where a fee may be assessed to cover the cost of translating this column from English into a non-English language.
This weekly report is written with the intent to educate the reader on the relationship between astrological factors and collective human activities as they are happening. In this regard, this report will oftentimes report what happened in various stock and financial markets throughout the world in the past week, and discuss that movement in light of the geocosmic signatures that were in effect. It will then identify the geocosmic factors that will be in effect in the next week, or even month, or even years, and the author’s understanding of how these signatures will likely affect human activity in the times to come. The author (Merriman) will do this from a perspective of a cycle’s analyst looking at the military, political, economic, and even financial markets of the world.
It is possible that some forecasts will be made based on these factors. However, the primary goal is to both educate and alert the reader as to the psychological climate we are in, from an astrological perspective. The hope is that it will help the reader understand these psychological dynamics that underlie (or coincide with) the news events and hence financial markets of the day.
No guarantee as to the accuracy of this report is being made here. Any decisions in financial markets are solely the responsibility of the reader, and neither the author nor the publishers assume any responsibility at all for those individual decisions. Reader should understand that futures and options trading are considered high risk.
Copyright MMACycles 2007-2009; you may link to this site or page, but you may not distribute these texts in any way (by email or otherwise).
Archives
Previous weeklies (2006) are archived at www.olmta.com
For other language editions of MMA´s weekly comments:
Dutch : www.markettiming.nl (Nederlands)
Spanish : www.mmacycles-spanish.com (Español)
German : www.mma-europe.ch (Deutch)
Japanese : www.merriman.jp
Russian : www.urania.ru
Serbian : www.mma-balkan.com
Polish : www.astrobiznes.pl
Closing the year with emphatic ambiguity; ChartsEdge equities map for 12/31/2009, and some notes
The year 2009 will close with a bang, not only because of the possibility of poking up to another high (or at least a good effort) as signaled by Mike Korell with his ChartsEdge Daily Maps below (thanks again, Mike!). His work also showed recently the probability of highs into year end. And we're grateful also to the work of Andre Gratian in technical analysis, and Tony Caldaro in his Objective Elliott Wave, who've shared their insights showing the same. As well as Terry Laundry whose T Theory work kept pointing toward rally resumption. (Each of these, listed in the sites links list at right.) So the market is closing emphatically! But also with ambiguity, because it hasn't confirmed the bull vs. bear alternatives that can lie ahead. We'll explore those more over the weekend. For now, here's the indicated intraday movement from ChartsEdge (their subscribers know whether the 3rd, pattern recognition map agrees - but even if it doesn't, this gives some guess of the odds - just remember it isn't necessarily a lock, especially with the light volumes and shortened trading day):
=============
ChartsEdge Daily charts for Dec 31
Posted: December 31st, 2009 | Author: Mike Korell |Filed under:One-Day Market Map | No Comments »
The charts all reflect a whole day. Ignore that due to the holiday.
Wednesday, December 30, 2009
Gold continues to slip as equities drift into the year's close
Today was a relatively dull, narrow-range day on light volume, with the intraday looking a lot like another triangle that ended this time with a move up. Bit not high enough for the continued bull case - yet not low enough to confirm the bearish case. Meanwhile, gold along with euro and other currencies sagged, as the dollar was strong again. It's difficult to read much into this drifting action, other than the obvious - traders are on holiday, closing their books, and the market isn't ready to signal whether or not the retrace levels in equities will mark the rally top.
For gold, it's difficult to recommend the long case right now, since it's falling back from what should have been moving average support, now looking like resistance. So chalk off another trading day, before the half-day tomorrow to finish 2009 and then parties to ring in the new year!
UPDATE: Now the futures are suggesting that we might see the turn upward in gold, euro and yen - depending how it goes, this can be precursor to the type of rally in gold, euro and yen (and equities) that we've been setting up to expect into mid-January.
For gold, it's difficult to recommend the long case right now, since it's falling back from what should have been moving average support, now looking like resistance. So chalk off another trading day, before the half-day tomorrow to finish 2009 and then parties to ring in the new year!
UPDATE: Now the futures are suggesting that we might see the turn upward in gold, euro and yen - depending how it goes, this can be precursor to the type of rally in gold, euro and yen (and equities) that we've been setting up to expect into mid-January.
ChartsEdge day (intraday) cycle forecast maps for equities 12/30
Here are the intraday forecast maps from ChartsEdge for (U.S.) equities like the S&P 500 index, for Wednesday, 12/30. Readers will remember that the ChartsEdge week-ahead cycle forecast (lower on this page, or which you can locate anytime with the "ChartsEdge weekly" label) suggests the markets moving higher into Wednesday and Thursday. Although that weekly cycle forecast (generated with different methods) would suggest a low open, then sharply rising - but these maps look like a different path intraday. So we'll see whether or not that can make a higher high with the SPX to 1133 - and if so, whether these maps suggest it can sustain. Remember that the indicated movement of these daily maps starts at the regular 9:30 ET open. So, thanks again, Mike Korell and ChartsEdge! From: http://www.chartsedge.com/wp/:
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ChartsEdge Daily charts for Dec30
Posted: December 29th, 2009 | Author: Mike Korell |
Tuesday, December 29, 2009
Equities indices still make higher highs as questions mount about bearish signs
As Gerald Celente, a forecaster, was just on Fox Business tonight predicting the "Crash of 2010",* the S&P 500 made another spike high this morning only to fall down again this afternoon. I'd thought it might trace out an intraday triangle, preparing for a thrust up to 1133 or maybe a bit higher tomorrow or Thursday. That doesn't look like the pattern, but it's still making higher highs and higher lows day by day, as you can see on the SPX 15-minute chart below. Remember this index is dancing just above its 50% retracement to its October 2007 high. So if and when it drops back under that level (which I've got noted as 1122, and some mark it for the SPH at 1126), it can be legitimate to treat it from the bearish perspective unless it rebounds above it again. So, its path from here really is important.
Speaking of triangles, look at the TLT weekly chart, below. I know Tony Caldaro has Treasuries marked as making a "C" wave down, and I'm on board with that. But it needs to break under $86 to confirm (for TLT). It will be interesting if it's working out a triangle that pushes upward instead. So far, the indicators are consistent with a standard triangle and don't guarantee a breakdown under the mid-2009 lows.
Another weekly chart that relates to the equity and bond markets, is IYR (an ETF for real estate), below. It's just tagged a .618 retrace level to a prior swing high on that weekly chart. If it can push higher, there's a 50% retrace level to its all-time high, slightly over $50. Either way, it's clear that IYR is vulnerable at these levels and can be subject to a trend reversal. Buying volume is shriveling up. On a reversal, the question will become whether a turn down will be merely corrective or point to new lows. There are some who argue that real estate may continue down into 2012, and perhaps well beyond.
So - this is once again a time to see these key markets as being at important levels. How these markets move from here will say a lot about what we can look forward to in 2010.
* For our own views for 2010, we're looking at how the SPX reacts here, but willing to go along with the ideas described in prior posts here about higher levels into mid-January, with the idea of weakness for a couple of months after that. And then, the possibility of higher highs in May and/or August, followed by a real crash ... Of course, if the SPX drops back under 1122 and can't rebound back above it, that will be more immediately bearish. Will see! And obviously will fine-tune as we go.
Speaking of triangles, look at the TLT weekly chart, below. I know Tony Caldaro has Treasuries marked as making a "C" wave down, and I'm on board with that. But it needs to break under $86 to confirm (for TLT). It will be interesting if it's working out a triangle that pushes upward instead. So far, the indicators are consistent with a standard triangle and don't guarantee a breakdown under the mid-2009 lows.
Another weekly chart that relates to the equity and bond markets, is IYR (an ETF for real estate), below. It's just tagged a .618 retrace level to a prior swing high on that weekly chart. If it can push higher, there's a 50% retrace level to its all-time high, slightly over $50. Either way, it's clear that IYR is vulnerable at these levels and can be subject to a trend reversal. Buying volume is shriveling up. On a reversal, the question will become whether a turn down will be merely corrective or point to new lows. There are some who argue that real estate may continue down into 2012, and perhaps well beyond.
So - this is once again a time to see these key markets as being at important levels. How these markets move from here will say a lot about what we can look forward to in 2010.
* For our own views for 2010, we're looking at how the SPX reacts here, but willing to go along with the ideas described in prior posts here about higher levels into mid-January, with the idea of weakness for a couple of months after that. And then, the possibility of higher highs in May and/or August, followed by a real crash ... Of course, if the SPX drops back under 1122 and can't rebound back above it, that will be more immediately bearish. Will see! And obviously will fine-tune as we go.
ChartsEdge day (intraday) cycle forecast maps for equities 12/29
Here are the intraday forecast maps from ChartsEdge for (U.S.) equities like the S&P 500 index, for Tuesday, 12/29. Readers will remember that the ChartsEdge week-ahead cycle forecast (which you can locate with the "ChartsEdge weekly" label) shows a low for equities Tuesday, right before a big rise into Wednesday/Thursday. We can't guarantee there'll be a rise of that exact level. But for a continuation wave up as Tony Caldaro suggests in his OEW updates, it could happen. So for identifying a buying point, in addition to Monday's afternoon low (especially if Tuesday provides a lower low, like 1122, 1117 or (unlikely I think) 1112), these intraday maps may help with that. Remember that the indicated movement of these daily maps starts at the regular 9:30 ET open. So, thanks again, Mike Korell and ChartsEdge! From: http://www.chartsedge.com/wp/:
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ChartsEdge Daily charts for Dec29
Posted: December 28th, 2009 | Author: Mike Korell |
Monday, December 28, 2009
Promise of continued rally into mid-January on track as market shows it isn't quite ready to crash
Today the equities markets looked like they made an "abc" corrective pullback rather than the prelude to a crash some EW(I) types are looking for. The pop up into the close (some will call a stick save) might be the first move up to complete a "wave (5) of 3" or just a small "b" wave of some level - I can see either possibility, and we'll just have to see if a cyclic pull downward tomorrow makes a lower level such as testing 1122 or 1117 (for the latter case), with the likelihood in any event that the SPX should remain above 1117 for now. Tony Caldaro has made his evening update of his Objective Elliott Wave (and I know Andre is updating to his subscribers. As for me, I'm happy to think that whatever low we may see tomorrow can lead up into year-end and then we may see a more choppy set of moves setting up for "the January high".
Meantime, notice the NYSE advance/decline was up again, supporting this view that the top isn't in yet. But there remains fraying and divergence. The banks were down, also semiconductors, and even the transports were weak. But it's just something to be aware of, as far as the broad indices are concerned. So either play for year-end games, or flatten out and enjoy the holiday season ... And start readying for the strategies we want to trade with in the new year. Currently that means expecting continuation higher into mid-January, even if it becomes choppy. Then a possible sharp drop for a couple of months, and then some real work in terms of whether or not we get higher or lower highs in May and August. That's about the best summary I can make right now. I know that Tony Caldaro is now counting the transports bullishly - so perhaps we'll see them make a large first wave top when the other indices are finally ready to call it a top.
Another sign I'll look forward to seeing in a few weeks will be some real low TRIN readings. Today it was rather high most of the day, as equities weakened, so that's another clue the markets aren't ready to roll over yet.
Meantime we'll also see whether the 50 dma is trouble for gold and oil, and whether the euro can make a higher retrace. And if bond yields will just march higher - as $TNX (10-year note yield) looks poised to do). Whereas the dollar has held the key for a long time, I'm getting the feeling that role will soon be played by interest rates. Meaning, if market rates force the Fed's hand and therefore throw cold water on the asset price rises. Something to keep in mind over the next few weeks.
Meantime, notice the NYSE advance/decline was up again, supporting this view that the top isn't in yet. But there remains fraying and divergence. The banks were down, also semiconductors, and even the transports were weak. But it's just something to be aware of, as far as the broad indices are concerned. So either play for year-end games, or flatten out and enjoy the holiday season ... And start readying for the strategies we want to trade with in the new year. Currently that means expecting continuation higher into mid-January, even if it becomes choppy. Then a possible sharp drop for a couple of months, and then some real work in terms of whether or not we get higher or lower highs in May and August. That's about the best summary I can make right now. I know that Tony Caldaro is now counting the transports bullishly - so perhaps we'll see them make a large first wave top when the other indices are finally ready to call it a top.
Another sign I'll look forward to seeing in a few weeks will be some real low TRIN readings. Today it was rather high most of the day, as equities weakened, so that's another clue the markets aren't ready to roll over yet.
Meantime we'll also see whether the 50 dma is trouble for gold and oil, and whether the euro can make a higher retrace. And if bond yields will just march higher - as $TNX (10-year note yield) looks poised to do). Whereas the dollar has held the key for a long time, I'm getting the feeling that role will soon be played by interest rates. Meaning, if market rates force the Fed's hand and therefore throw cold water on the asset price rises. Something to keep in mind over the next few weeks.
ChartsEdge equities pattern forecast map for 12/28
Here's Monday's intraday Pattern Recognition map from ChartsEdge Daily Maps (both the Pattern Recognition and the BP intraday maps for Monday are at the ChartsEdge subscriber site). Their two types of intraday cycle forecast maps, plus their weekly cycle forecasts (see below, and use "ChartsEdge weekly" label anytime), gain predictive power when they all look similar - follow links on their site for details, and much of that info is also posted at my NB3 blogspot - links above and at right):
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ChartsEdge Pattern Recognition for 12/28
Author: Mike Korell
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ChartsEdge Pattern Recognition for 12/28
Author: Mike Korell
Sunday, December 27, 2009
S&P 500 technical analysis with Turning Points update by Andre Gratian
Andre Gratian provides technical analysis for the S&P 500 with his Turning Points service, and is always included in the sites list at right. He is visiting family for the holidays and won't create a complete new report this weekend. But his previous weekly updates provide his big picture context for the S&P 500 (use the "Turning Points" label to locate here anytime). And his chart update below, written near the close on the most recent trading day sums up what traders need to know for the technical analysis picture coming up this week (with his intraday comments for subscribers - you can get a free trial by contacting him at his email address, shown below):
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The indicator that I have been waiting to give the final high signal is finally waking up and has entered the danger zone. Now the market could reverse at any time!
Be careful of a close below 1112 on the SPX! It could be the beginning of the intermediate correction that we have been looking for providing that it keeps going and closes below 1100. That would put it outside both the blue and black channels!
Below is the chart to reference for the SPX. I have adjusted the up-channel to better reflect the short-term trend from 1093.88. Breaking the the trend line would probably lead to another test of the bigger channel lines around 1100.
We've broken above the blue channel resistance line which has allowed prices to rise to fill the 1127 target. So far, we've reached 1126.29.The minor cycle was to make a low ideally in 2-3 hours and may have been overpowered by seasonality which caused a buying surge at the opening. There are greater forces at play and we should be keenly aware of them!-- The SentimenTrader gauge is now signaling a long-term sell signal, which it has not done in a very long time.
-- The SPX reaching 1127 could cause an important reversal, especially since it is being reached coincidentally with the QQQQ near its long term 46-46.50 target. It is now trading at 45.81.-- The hourly indicators are overbought and overdue for a pull-back.-- The daily indicators have now reached overbought.All this suggests that we are at or near an important top. We could still reach 1130-1135 after another short-term correction. It all depends on our ability to hold about 1100 on the SPX.Andre
ChartsEdge week-ahead cycles views in equities and gold
Here are the week-ahead cycle-based forecasts from ChartsEdge for the upcoming, holiday-shortened week of December 28. As they remind us from time to time, these primarily depict timing and not necessarily relative price highs and lows. These forecast charts also gain more predictive strength when similar moves are indicated by ChartsEdge's daily BP maps and Pattern Recognition charts (both of which are available daily before the open at ChartsEdge's subscriber site). More information on how they generate these cycle-based forecasts is available from the ChartsEdge site (link above and in list at right), much of which I've also placed at my NB3 education site (link at right). Recently they also showed an update of their TCI - Trader Confidence Index - I've posted that at my UBTNB3 blog (site feed and link at right).
So, here are their week-ahead cycle forecast charts for equities and gold:
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So, here are their week-ahead cycle forecast charts for equities and gold:
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Weekend review of financial markets analysis as we close 2009 and look toward 2010
A great roundup this weekend. To start:
ADDED 12:00 - STOCK TRADER'S ALMANAC BLOG: New Year's Wishes / 2010 Forecast.
STOCK TRADER'S ALMANAC BLOG: Free Lunch Aged One Day. This blog post shows the stocks they believe will show good gains into mid-January, as short-term swing longs to be sold for gains once
sizable gains occur about that time frame (since their "Free Lunch" method says the gains may be short-lived): http://stocktradersblog.blogspot.com/2009/12/free-lunch-aged-one-day.html.
Andy Askey's Price Time Volume Investing — Stock Market Cycles, Gann Angles and Squares - Views of the dollar and bonds (rates), 12/13 at http://ptv-investing.com/blog/.
Dr. Brett Steenbarger's new post, TraderFeed: What I See Among Many of the Best Traders.
Dr. Brett Steenbarger's Become Your Own Trading Coach: Indicator and Trading Pattern Posts - Volume One.
All Allan: Decennial Pattern in Stocks (quoting from EWI's Robert Prechter), at http://allallan.blogspot.com/2009/12/decennial-pattern-in-stocks.html.
Readers who want more info on the Decennial cycle pattern can click the "Cycles Review" label to locate Part X on that topic, including a depiction of that pattern (similar to the one I referred to when questioning Prechter's views about a top in early 2007, when the pattern suggested the high would be in the autumn - which did turn out!).
Just so readers here know - I don't agree with the view of a huge "wave three" down in 2010, as Prechter touts, but do agree there should be a significant drop or two during the year (especially after mid-January, and after a top that can appear on or between May/August) - and it's worth knowing about the Decennial pattern.
Be sure to look and listen to Terry Laundry's T Theory Observations today at http://www.ttheory.com/
Here's his intro:
Update for Sunday December 27 2009. Todays discussion is a general end of year summary of the current bull market, where is is going, and the big problems likely when it ends in August 2010 See the charts below with their Audio Comments.
Next - Mike Burk looks at the four years of the Presidential Cycle and specifically the last 4 trading days of the 1st year in it, which have a high probability of being positive. As well as the 2nd year probabilities, which apply to 2010. In his Technical Market Report, at Safe Haven 12/26/09, http://www.safehaven.com/article-15349.htm.
He also looks in depth at the 2nd year within this cycle, which is what 2010 will be here's a tiny quote but click to read his full analysis (even though we're not going to assume the year will track exactly):2010 will be the 2nd year of the Presidential Cycle, which, on average, has been the worst of the 4 years in the cycle. .... [T]he tendency for weakness from early May through early October has become more pronounced.Schaeffer's Monday Morning Outlook: A Very Merry Dow and SPX Crack Resistance Levels. One of the points made by Rocky White is that the upcoming year doesn't have very much statistically-based reason for optimism as 2009 - could go either way, net positive or net negative. And Todd Salamone in his report this weekend, states that for the near-term outlook, sentiment supports more upside, but then: "As we head into the last week of trading in 2009, we see short-term support for the SPX at 1,115-1,120; should this area break, look for additional support at 1,100. On the upside, we view 1,155 as the next target, site of the index's 160-month moving average. This trendline marked the bear-market low in 2002.". You'll enjoy reading the whole article including graphs and tables - here's their introduction paragraph:Santa Claus came to Wall Street a little early this year, as the major market indexes edged higher on strong earnings and positive economic reports. All three major market indexes finished the holiday-shortened week at their highest prices of 2009. The Dow finally cracked the 10,500 level, although it was on light trading volume, casting this strength in a small shadow of doubt. Regardless, the market finished the week firmly in positive territory, leaving investors to a long weekend filled with holiday cheer. Looking ahead, Todd Salamone, Schaeffer's Senior Vice President of Research, notes that sentiment may be shifting among options players. Next, Senior Quantitative Analyst Rocky White takes a closer look at the "lost decade," and what it means for the Dow following a weak 10-year period. Finally, we wrap up with a look at some key economic and earnings reports slated for release this week.On the Santa Claus Rally and Other Year-End, New-Year Indicators-- by Prieur de Plessis, at Seeking Alpha.He quotes Jeffrey Hirsch of the Stock Trader's Almanac for much of the interesting data on what's typical for the end of this year and into next year.
ADDED 12:00 - STOCK TRADER'S ALMANAC BLOG: New Year's Wishes / 2010 Forecast.
For their 2010 forecast they cite the Presidential cycle among other factors, with a forecast very like what that cycle generally predicts for the 2nd year. At http://stocktradersblog.blogspot.com/2009/12/new-years-wishes-2010-forecast.html.
And they make some other predictive comments, about which my best advice is "perhaps - but we'll see, and let the 2010 highs tell the story":
From the depths of the worst bear market since 1932 the current bull market was born on March 9, 2009. The rally has been fast and furious with a mild pullback in early summer and sideways action the past five weeks. The debate is on whether this is just another cyclical bull or the beginning of a new longer term secular bull that spans a decade or more. We are leaning towards the secular camp and expect the 2009 lows to hold. Save some catastrophic events or galactically stupid moves by our government we should be on the road to full recovery.
STOCK TRADER'S ALMANAC BLOG: Free Lunch Aged One Day. This blog post shows the stocks they believe will show good gains into mid-January, as short-term swing longs to be sold for gains once
sizable gains occur about that time frame (since their "Free Lunch" method says the gains may be short-lived): http://stocktradersblog.blogspot.com/2009/12/free-lunch-aged-one-day.html.
Andy Askey's Price Time Volume Investing — Stock Market Cycles, Gann Angles and Squares - Views of the dollar and bonds (rates), 12/13 at http://ptv-investing.com/blog/.
Dr. Brett Steenbarger's new post, TraderFeed: What I See Among Many of the Best Traders.
Dr. Brett Steenbarger's Become Your Own Trading Coach: Indicator and Trading Pattern Posts - Volume One.
All Allan: Decennial Pattern in Stocks (quoting from EWI's Robert Prechter), at http://allallan.blogspot.com/2009/12/decennial-pattern-in-stocks.html.
Readers who want more info on the Decennial cycle pattern can click the "Cycles Review" label to locate Part X on that topic, including a depiction of that pattern (similar to the one I referred to when questioning Prechter's views about a top in early 2007, when the pattern suggested the high would be in the autumn - which did turn out!).
Just so readers here know - I don't agree with the view of a huge "wave three" down in 2010, as Prechter touts, but do agree there should be a significant drop or two during the year (especially after mid-January, and after a top that can appear on or between May/August) - and it's worth knowing about the Decennial pattern.
Year 2010 expectations within Presidential Cycle detailed by Mike Burk; Cycles Review Part XIV; and 2010 forecast by Chart of the Day
The Presidential Cycle is a 4-year cycle study based on the 4-year terms of the U.S. president. It's gained some respect in investment circles to the extent that certain times within it can be shown to have a statistically higher probability of gain or loss. Now - I'd like to caution that we don't want to set our portfolios based on it, especially not in terms of going long or short month by month simply by these averaged results. But the 2nd year of the cycle, which 2010 will be, does have correlations to significant market lows at some point during this year. Significant such as, dropping eventually into a low much below where the year starts out; before making up the loss in the last few months of that year. I'm going to be more careful in 2010 because, for example, Terry Laundry with his T Theory is showing technical reasons that the market may have high points in May and/or August (as I understand his T Theory at least through last week). And generally, based on Elliott Wave and other analyses, we're going to remain on guard for a high in January that may point to a low in March that will dictate whether any subsequent bounce has much strength. While I'm not making my own full forecast for 2010 yet, I'm going with a high in January, weakness into March, and then we'll see how high it can get into May or August. But now, let's get informed on this Presidential Cycle too:
A visual depiction of the averaged Presidential cycle is also charted out by Chart of the Day at http://www.chartoftheday.com/20091223.htm?T - as shown and quoted below. First: One thing interesting about this is that the depiction is a little reminiscent of Manfred Zimmel's free public version of the Bradley siderograph model, at least for the concept of going up into March and then dropping off. But we know the Bradley dates are just turning dates - they can be highs OR lows. And Zimmel's depiction of the Bradley shows March as higher than May ... so I'm only trying to say, it's interesting there's a rough similarity, but it breaks down when you look close. (Another reason to look at the Bradley siderograph as providing turning dates only; maybe the actual will be like Zimmel's free public version turned upside down.). Just as we don't want to assume that 2010 will look exactly like the averaged Presidential Cycle, either. So - back to the Presidential cycle - below is the quote abd chart from Chart of the Day:
So that's very interesting information provided by "Chart of the Day". One would expect some relationship between the general "4-year cycle" and the Presidential cycle. But the general 4-year cycle tends to analyze in terms of measuring trough low points, and then whether or not the market has respected the prior low by the time of the midpoint. There are many who believe that March 2009 was the 4-year cycle low. That's one reason why it will be important to see whether or not the market makes a lower low by March 2011.
A related point is that we'll need to see if 2010 brings a new all-time high in the Dow Industrials. Maybe that sounds strange to many readers. But Tony Caldaro has placed a bullish count on the Dow Transports. For that matter, if the Dow Industrials' "B" wave lasts through August and becomes an expanded flat "B" wave, then a higher high (than in October 2007) is theoretically possible. Strange, but possible. Either way, the "C" wave down afterward will be a steep downward move.
Much earlier in 2009, I posted a series of "Cycles Review" - so I'm adding this post as item fourteen (XIV) in that series. Anyone interested in the other types of cycles reviewed in that series, simply click on the "Cycles Review" label to see all posts in that topic. It's a fascinating round-up, including but not limited to the sunspot cycle (and yes, it's amazing how that correlates) and the Benner-Fibonacci which suggests a relative high peak sometime during 2010.
Mike Burk has devoted a collection of webpages to his detailed analysis of the 4-year Presidential Cycle, at http://alphaim.net/research/Pres_Cycle/index.html.
Here are his opening paragraphs:
Anyone having any interest in the statistical details of the Presidential Cycle by year, month, equity index, etc., should visit these webpages of his; and should also review this weekend's Technical Market Report by him, at Safe Haven, which is included among the links for this weekend's reading list being posted here on Sunday.The Presidential Cycle
Copyright 2009 Mike Burk & Alpha Investment Management
The Presidential Cycle is made up of 4 years beginning with the year the president is inaugrated. The material presented here is structured to help to identify some of the characteristics and/or dynamics of that 4 year cycle in the stock market.
....
It is interesting that the MDD [maximum draw-down, meaning biggest loss] has occurred during the 2nd year of the cycle all but four times since 1933. Two of the four occurrences were during the Eisenhower administration and a 3rd during the 2nd year of the Reagan administration when the crash of 1987 (the 3rd year of his 2nd term) exceeded all declines in 1986. The fourth, in 2008, during the 4th year of the second George W. Bush term was the first time the MDD occurred on the 4th year since the Hoover administration in 1932.
A visual depiction of the averaged Presidential cycle is also charted out by Chart of the Day at http://www.chartoftheday.com/20091223.htm?T - as shown and quoted below. First: One thing interesting about this is that the depiction is a little reminiscent of Manfred Zimmel's free public version of the Bradley siderograph model, at least for the concept of going up into March and then dropping off. But we know the Bradley dates are just turning dates - they can be highs OR lows. And Zimmel's depiction of the Bradley shows March as higher than May ... so I'm only trying to say, it's interesting there's a rough similarity, but it breaks down when you look close. (Another reason to look at the Bradley siderograph as providing turning dates only; maybe the actual will be like Zimmel's free public version turned upside down.). Just as we don't want to assume that 2010 will look exactly like the averaged Presidential Cycle, either. So - back to the Presidential cycle - below is the quote abd chart from Chart of the Day:
CHART OF THE DAY - December 23, 2009
Today's chart illustrates how the stock market has performed during the average mid-term election year. Since 1950, the first nine months of the average mid-term election year has tended to be flat/choppy. That choppiness was then followed by a year-end rally. One theory to support this behavior is that the party in power will make difficult economic decisions in the early years of a presidential cycle and then do everything within its power to stimulate the economy during the latter years in order to increase the odds of re-election.Quote of the Day
"Never try to walk across a river just because it has an average depth of four feet." - Martin Friedman
Events of the Day
December 25, 2009 - Christmas Day
December 26, 2009 - Kwanzaa (1st day)
January 01, 2010 - New Year's Day - Rose Bowl - Sugar Bowl
January 03, 2010 - US Congress convenes
January 04, 2010 - Fiesta Bowl
January 05, 2010 - Orange Bowl
So that's very interesting information provided by "Chart of the Day". One would expect some relationship between the general "4-year cycle" and the Presidential cycle. But the general 4-year cycle tends to analyze in terms of measuring trough low points, and then whether or not the market has respected the prior low by the time of the midpoint. There are many who believe that March 2009 was the 4-year cycle low. That's one reason why it will be important to see whether or not the market makes a lower low by March 2011.
A related point is that we'll need to see if 2010 brings a new all-time high in the Dow Industrials. Maybe that sounds strange to many readers. But Tony Caldaro has placed a bullish count on the Dow Transports. For that matter, if the Dow Industrials' "B" wave lasts through August and becomes an expanded flat "B" wave, then a higher high (than in October 2007) is theoretically possible. Strange, but possible. Either way, the "C" wave down afterward will be a steep downward move.
Much earlier in 2009, I posted a series of "Cycles Review" - so I'm adding this post as item fourteen (XIV) in that series. Anyone interested in the other types of cycles reviewed in that series, simply click on the "Cycles Review" label to see all posts in that topic. It's a fascinating round-up, including but not limited to the sunspot cycle (and yes, it's amazing how that correlates) and the Benner-Fibonacci which suggests a relative high peak sometime during 2010.
Saturday, December 26, 2009
Sizing up the financial markets for 2010: Objective Elliott Wave review of equities, bonds, currencies and commodities by Tony Caldaro
What a great time to reflect and analyze where the markets are and where they're headed! Elliott Wave analysis gives ways to assess support and resistance, price objectives, and trends. Especially when it's objective! For this period wrapping up 2009 and looking ahead to 2010, Tony Caldaro (whose Objective Elliott Wave site is always listed at right) is providing an expanded weekend update. Get comfortable and take a tour of the markets with him:
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the Elliott Wave lives on
by Tony Caldaro
December 26
weekend update
REVIEW
The highlight of the week was the second downward revision of Q3 GDP. From the original estimate in late October at 3.5% growth, it has now been revised down to 2.2% growth from the first downgrade of 2.8% growth. We posted a chart on wednesday of the year over year changes in quarterly GDP since 1948. Notice the spikes in growth coming out of a recession. No such spike has occurred yet. Also reported this week was a decline in consumer sentiment and new homes sales. On the upside were reports of existing homes sales, consumer income/spending, durable goods orders, and an improvement in the weekly jobless claims. The markets continued their year end rally with the SPX/DOW +2.1%, and the NDX/NAZ +3.5%. Asian markets were +2.5%, European markets were +2.8%, and the Commodity equity markets were +2.0%. Bonds lost 2.9%, Crude gained 4.9%, Gold slipped 0.6%, and the USD added 0.1%. Case-Shiller homes prices highlight the upcoming holiday shortened trading week. Happy holidays!
LONG TERM: bear market rally
Due to increasing interest in asset classes other than just equities. This week we are going to forgo the usual long term view of the US equity market. It has been covered quite extensively in the past two weekend updates. Instead, we are going to provide a bit more detail in the other various asset classes we cover.
MEDIUM TERM: uptrend makes new high at SPX 1126
The three Major wave Primary wave B has been rising since Mar 09 at SPX 667. The third of these Major waves has been rising since July 09 at SPX 869. This last uptrend has been quite complex to track, and it appears slightly different on the SPX and DOW daily charts. Nevertheless, we have been expecting one last five wave rally into the Major wave C and Primary wave B high. Most of our technical indicators point to a potential top near the SPX 1160's area some time in January 2010. Then after price, time, fibonacci relationships and the OEW pivots converge. The bottoming phase of the 4-year cycle should negatively impact the market. Currently we're expecting a retest of the Mar 09 SPX 667 low in late 2010. When this occurs Primary wave C should have concluded, and with it the bear market of 2007-2010.
SHORT TERM: Support for the SPX remains at 1107 and then 1090, with resistance at 1133 and then 1168. Short term momentum was quite overbought at thursday's close. From the mid-december SPX 1086 low the market has rallied in three waves: wave 1 SPX 1116, wave 2 SPX 1094 and wave 3 SPX 1126 thus far. This third wave has already entered the range of the OEW 1133 pivot. We're expecting this pivot to offer some resistance as the rally works its way into the long term 1168 pivot. This past week we observed light volume and gradually rising prices. Expecting more of the same in the week ahead. Best to your trading!
Bonds: bearish
The following link: http://stockcharts.com/h-sc/ui?s=$TYX&p=M&b=1&g=0&id=p99568977581&a=155859886 provides the best picture we can offer for the US bond market. Bond yields have declined from Oct. 1981 and 14.59% yield, until Nov. 2008 and a 2.52% yield. This illustrates a 27 year decline in long term yields, and inversely a 27 year bull market in bond prices. Nearly the entire life of a 30YR government bond. In OEW terms, we count this entire bond yield bear market as a Primary wave double zigzag into that climatic 2.52% spike low. Notice during the entire decline every rally has been contained by the 89 EMA.
Switching now to the more commonly traded 10 YR bond. We present a more detailed chart of bond yield activity since 2003: http://stockcharts.com/h-sc/ui?s=$TNX&p=W&st=2003-01-01&id=p00306120473&a=109167051. Notice the 10YR yield bottomed at a lower 2.04% in Nov. 2008. Since then, however, yields have been rising. Quite dramatically at first, in the first six months, then after a consolidation period they are now rising again. We're expecting the 2008 highs (4.32%) to be challlenged first. Then the 2007 highs (5.32%) will be challenged after an interim correction. Overall we anticipate bond yields will be in a bull market for the next couple of decades. This suggests rising yields for bills, notes and bonds, with declining bond prices for years to come. You can review all the bill, note and bond charts on pages 11 and 12 with the following general link: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987.
Crude and Commodities: bullish
The following link: http://stockcharts.com/h-sc/ui?s=$GTX&p=W&st=1999-01-01&id=p84888091294&a=154815069 provides a long term view of the GS Commodity index. The GSCI is a weighted index based upon worldwide consumption of the major commodities, and is adjusted annually. The largest component is naturally energy (70%), then agriculture (14%), followed by basic metals (8%), livestock (4%) and precious metals (3%). Historically, commodity bull markets last about 13 years and are followed by about 21 years of bear market activity. This commodity bull market cycle started in 1999. After a nine year bull market advance from just under 2,000 to just under 11,000 the index collapsed in the panic of 2008. We labeled the rise as Primary wave A and the collapse as Primary wave B. A rising Primary wave C should carry the index back to the 2008 highs or beyond by 2012. Crude, the largest component, displays a similar pattern and its chart looks even more bullish: http://stockcharts.com/h-sc/ui?s=$WTIC&p=W&st=1998-01-01&id=p66556942900&a=67200088. The other sectors have been bottoming one by one. Agriculture and precious metals bottomed along with crude in late 2008. This was followed by bottoms in basic metals early 2009, natural gas in Sept. and then livestock in Oct. All sectors are now rising and in support of the overall bull market in commodities. You can review all the commodity charts on pages 9 and 10 with the following general link: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987.
Currencies: USD bearish
The following link: http://stockcharts.com/h-sc/ui?s=$USD&p=W&st=2004-10-01&id=p33400751035&a=67200089 provides a view of the USD index (DX) from 2004-2009. It covers a shorter timeframe than the other charts. Yet we feel it is representative of the USD since all the OEW patterns have been repetitive since 2001. Longer term, in 1985 the USD peaked at 165 and last year it traded as low as 71. This represents a greater then 50% decline, versus other major currencies, over the span of two decades. Naturally this does not represent the loss of purchasing power over the decades, due to the debasing of the USD and all currencies worldwide. The USD resumed its bear market in Mar 09. We're expecting the 2005-2008 wave pattern to be repeated between 2009-2012. We continue to like the AUD, CHF, EUR, GBP and JPY after their current corrections conclude. You can review all the currency charts on pages 12 thru 14 with the following general link: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987.
Foreign Markets: Of the thirteen foreign market indices we follow, the two most bullish wave patterns are being displayed by Brazil and Hong Kong. Both indices bottomed in 2008 and have been impulsing higher, in similar wave structures, since then. At this point in time, Hong Kong: http://stockcharts.com/h-sc/ui?s=$HSI&p=W&st=2002-10-01&id=p95762089655&a=114063035 and Brazil: http://stockcharts.com/h-sc/ui?s=$BVSP&p=W&st=2002-01-01&id=p94014598473&a=106223079 could experience serious corrections during the upcoming weeks and months. Especially when Primary wave C gets underway in the US markets. The best time to enter these types of bull markets is during sharp corrections. Like the corrections both indices displayed in early 2004.
NEXT WEEK: Economic activity is light again in the upcoming shortened holiday week. On tuesday, Case-Shiller reports on housing prices and Consumer confidence is released. Wednesday we have the Chicago PMI, followed by the weekly Jobless claims on thursday. That's it! Thursday the markets close early and friday is January 1st 2010. Hope we have been of some assistance in navigating these markets during 2009. Wishing you and yours a healthy, happy and prosperous new year.
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987
=============
the Elliott Wave lives on
by Tony Caldaro
December 26
weekend update
REVIEW
The highlight of the week was the second downward revision of Q3 GDP. From the original estimate in late October at 3.5% growth, it has now been revised down to 2.2% growth from the first downgrade of 2.8% growth. We posted a chart on wednesday of the year over year changes in quarterly GDP since 1948. Notice the spikes in growth coming out of a recession. No such spike has occurred yet. Also reported this week was a decline in consumer sentiment and new homes sales. On the upside were reports of existing homes sales, consumer income/spending, durable goods orders, and an improvement in the weekly jobless claims. The markets continued their year end rally with the SPX/DOW +2.1%, and the NDX/NAZ +3.5%. Asian markets were +2.5%, European markets were +2.8%, and the Commodity equity markets were +2.0%. Bonds lost 2.9%, Crude gained 4.9%, Gold slipped 0.6%, and the USD added 0.1%. Case-Shiller homes prices highlight the upcoming holiday shortened trading week. Happy holidays!
LONG TERM: bear market rally
Due to increasing interest in asset classes other than just equities. This week we are going to forgo the usual long term view of the US equity market. It has been covered quite extensively in the past two weekend updates. Instead, we are going to provide a bit more detail in the other various asset classes we cover.
MEDIUM TERM: uptrend makes new high at SPX 1126
The three Major wave Primary wave B has been rising since Mar 09 at SPX 667. The third of these Major waves has been rising since July 09 at SPX 869. This last uptrend has been quite complex to track, and it appears slightly different on the SPX and DOW daily charts. Nevertheless, we have been expecting one last five wave rally into the Major wave C and Primary wave B high. Most of our technical indicators point to a potential top near the SPX 1160's area some time in January 2010. Then after price, time, fibonacci relationships and the OEW pivots converge. The bottoming phase of the 4-year cycle should negatively impact the market. Currently we're expecting a retest of the Mar 09 SPX 667 low in late 2010. When this occurs Primary wave C should have concluded, and with it the bear market of 2007-2010.
SHORT TERM: Support for the SPX remains at 1107 and then 1090, with resistance at 1133 and then 1168. Short term momentum was quite overbought at thursday's close. From the mid-december SPX 1086 low the market has rallied in three waves: wave 1 SPX 1116, wave 2 SPX 1094 and wave 3 SPX 1126 thus far. This third wave has already entered the range of the OEW 1133 pivot. We're expecting this pivot to offer some resistance as the rally works its way into the long term 1168 pivot. This past week we observed light volume and gradually rising prices. Expecting more of the same in the week ahead. Best to your trading!
Bonds: bearish
The following link: http://stockcharts.com/h-sc/ui?s=$TYX&p=M&b=1&g=0&id=p99568977581&a=155859886 provides the best picture we can offer for the US bond market. Bond yields have declined from Oct. 1981 and 14.59% yield, until Nov. 2008 and a 2.52% yield. This illustrates a 27 year decline in long term yields, and inversely a 27 year bull market in bond prices. Nearly the entire life of a 30YR government bond. In OEW terms, we count this entire bond yield bear market as a Primary wave double zigzag into that climatic 2.52% spike low. Notice during the entire decline every rally has been contained by the 89 EMA.
Switching now to the more commonly traded 10 YR bond. We present a more detailed chart of bond yield activity since 2003: http://stockcharts.com/h-sc/ui?s=$TNX&p=W&st=2003-01-01&id=p00306120473&a=109167051. Notice the 10YR yield bottomed at a lower 2.04% in Nov. 2008. Since then, however, yields have been rising. Quite dramatically at first, in the first six months, then after a consolidation period they are now rising again. We're expecting the 2008 highs (4.32%) to be challlenged first. Then the 2007 highs (5.32%) will be challenged after an interim correction. Overall we anticipate bond yields will be in a bull market for the next couple of decades. This suggests rising yields for bills, notes and bonds, with declining bond prices for years to come. You can review all the bill, note and bond charts on pages 11 and 12 with the following general link: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987.
Crude and Commodities: bullish
The following link: http://stockcharts.com/h-sc/ui?s=$GTX&p=W&st=1999-01-01&id=p84888091294&a=154815069 provides a long term view of the GS Commodity index. The GSCI is a weighted index based upon worldwide consumption of the major commodities, and is adjusted annually. The largest component is naturally energy (70%), then agriculture (14%), followed by basic metals (8%), livestock (4%) and precious metals (3%). Historically, commodity bull markets last about 13 years and are followed by about 21 years of bear market activity. This commodity bull market cycle started in 1999. After a nine year bull market advance from just under 2,000 to just under 11,000 the index collapsed in the panic of 2008. We labeled the rise as Primary wave A and the collapse as Primary wave B. A rising Primary wave C should carry the index back to the 2008 highs or beyond by 2012. Crude, the largest component, displays a similar pattern and its chart looks even more bullish: http://stockcharts.com/h-sc/ui?s=$WTIC&p=W&st=1998-01-01&id=p66556942900&a=67200088. The other sectors have been bottoming one by one. Agriculture and precious metals bottomed along with crude in late 2008. This was followed by bottoms in basic metals early 2009, natural gas in Sept. and then livestock in Oct. All sectors are now rising and in support of the overall bull market in commodities. You can review all the commodity charts on pages 9 and 10 with the following general link: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987.
Currencies: USD bearish
The following link: http://stockcharts.com/h-sc/ui?s=$USD&p=W&st=2004-10-01&id=p33400751035&a=67200089 provides a view of the USD index (DX) from 2004-2009. It covers a shorter timeframe than the other charts. Yet we feel it is representative of the USD since all the OEW patterns have been repetitive since 2001. Longer term, in 1985 the USD peaked at 165 and last year it traded as low as 71. This represents a greater then 50% decline, versus other major currencies, over the span of two decades. Naturally this does not represent the loss of purchasing power over the decades, due to the debasing of the USD and all currencies worldwide. The USD resumed its bear market in Mar 09. We're expecting the 2005-2008 wave pattern to be repeated between 2009-2012. We continue to like the AUD, CHF, EUR, GBP and JPY after their current corrections conclude. You can review all the currency charts on pages 12 thru 14 with the following general link: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987.
Foreign Markets: Of the thirteen foreign market indices we follow, the two most bullish wave patterns are being displayed by Brazil and Hong Kong. Both indices bottomed in 2008 and have been impulsing higher, in similar wave structures, since then. At this point in time, Hong Kong: http://stockcharts.com/h-sc/ui?s=$HSI&p=W&st=2002-10-01&id=p95762089655&a=114063035 and Brazil: http://stockcharts.com/h-sc/ui?s=$BVSP&p=W&st=2002-01-01&id=p94014598473&a=106223079 could experience serious corrections during the upcoming weeks and months. Especially when Primary wave C gets underway in the US markets. The best time to enter these types of bull markets is during sharp corrections. Like the corrections both indices displayed in early 2004.
NEXT WEEK: Economic activity is light again in the upcoming shortened holiday week. On tuesday, Case-Shiller reports on housing prices and Consumer confidence is released. Wednesday we have the Chicago PMI, followed by the weekly Jobless claims on thursday. That's it! Thursday the markets close early and friday is January 1st 2010. Hope we have been of some assistance in navigating these markets during 2009. Wishing you and yours a healthy, happy and prosperous new year.
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987
Crude oil's perilous position shows that it may drop unexpectedly in 2010
Crude oil may surprise, even disappoint, a lot of traders during the upcoming year, 2010. My reference to a perilous position is mainly to the way it looks on my monthly chart, below. Of course it fell off recently with the dollar's bounce, and hasn't been making higher highs. Oil's drop was from its Fibonacci .382 retracement level to its 2008 peak just over $147. Originally I thought the rally would be merely a "B" wave dead-cat bounce, and Tony Caldaro with his Objective Elliott Wave (in sites list at right) was showing that too. Then Tony shifted his wave count to a bullish one, indicated on his $WTIC charts at his public charts list (available at his site). I was good with that into the $82 test it made. But now I'm concerned that its pattern and path aren't bullish. So I'll revisit the "B" wave idea here.
A daily chart of USO is below. It's barely back up to the 50-day moving average (DMA), on volume lighter than the selling volumes that pushed $WTIC down to poke the $70 level. Tony's weekly chart of $WTIC is next, then my monthly chart of $WTIC. Crude oil hasn't managed to decisively break through the monthly chart Bollinger Band midline and near-term moving averages, and the monthly MACD hasn't moved over the zero line. While I don't rule out that it might manage a quick higher retest at the Fibonacci 50% retrace (about $91/92) to the 2008 high, it's already been almost a year since it made its lows. It's taken roughly twice as long as the time it dropped from the high, to retrace 38.2% (and perhaps 50%) of the way back. These metrics fit a "B" wave scenario quite well.
From a fundamental perspective, while there are better sources of info on that, it would seem the supplies are sufficient and that, barring some international turmoil influencing it strongly, there's enough supply to depress prices. That's one of the points made by Phil Davis of Phil's Stock World, in Outlook for a Merry Christmas Eve -- by Phil Davis, at Seeking Alpha, http://seekingalpha.com/article/179779-outlook-for-a-merry-christmas-eve. What are other technical analysts saying about oil? A very quick look turned up Slope Of Hope with Tim Knight: Energy Markets, at http://slopeofhope.com/energy-markets/. He seems to be turning skeptical, although I don't know if his time frame is just short-term. And there's a review from a couple of weeks back, at Decision Point®: Chart Spotlight 12/11/2009, at Energy and Financials Weakest Sectors, by Carl Swenlin on December 11, 2009, at http://www.decisionpoint.com/ChartSpotliteFiles/091211_cspot.html. It's basically pointing out the relative weakness, which can be a precursor toward more bearishness first for oil, later for equities markets generally.
Technically, the key levels are close at hand. Above are $80 and $82, and below is $69, $70. A move by $WTIC outside this range will be important. But a move above $82 won't guarantee it's bullish, unless it lasts longer than a month or so. Once it gets to March, it would get beyond the one-year time frame. And there's a possible four-year cycle at work that could point oil toward a cycle bottom late in 2010 or early in 2011. That's a reason to take a break under $69/70 in $WTIC rather seriously. A "C" wave down, whether it's already started or might start in a month or so after testing a bit higher - would lead crude oil down to retest the mid-$30's again or even lower.
So we're not going to expect oil to follow with gold or even with other commodities, since different factors are likely to start influencing different asset classes differently. True, the US dollar will still be important. But these factors may only influence the actual level of lows to which oil may sink. For now, we'll watch the levels mentioned above and be ready for oil to move down. While I respect Tony Caldaro's decision to move to a bullish count, I believe it would be negated if and when $WTIC moves back under $70 - so we can let that level be the deciding line at this point. If oil indeed disappoints many by going under $70 again, it may trigger a selling wave that produces a bearish "C" wave down. (For Elliott Wavers - an alternate would be a wave 2 IF it remains above the prior lows - but what a gamble! Better to sell it under $70, which might turn out to become one of the best trades of 2010 as we get several months in.)
I've added the Commitments of Traders graph for crude light (CL), from the COT site in the list at right. You can see the commercial traders were right to be quite short into the high at $82, and since then have lightened up. But their short positions still outweigh the net longs of large and small speculators. Not the only reason to be defensive on oil, but it's certainly a factor to remember as we watch our levels.
A daily chart of USO is below. It's barely back up to the 50-day moving average (DMA), on volume lighter than the selling volumes that pushed $WTIC down to poke the $70 level. Tony's weekly chart of $WTIC is next, then my monthly chart of $WTIC. Crude oil hasn't managed to decisively break through the monthly chart Bollinger Band midline and near-term moving averages, and the monthly MACD hasn't moved over the zero line. While I don't rule out that it might manage a quick higher retest at the Fibonacci 50% retrace (about $91/92) to the 2008 high, it's already been almost a year since it made its lows. It's taken roughly twice as long as the time it dropped from the high, to retrace 38.2% (and perhaps 50%) of the way back. These metrics fit a "B" wave scenario quite well.
From a fundamental perspective, while there are better sources of info on that, it would seem the supplies are sufficient and that, barring some international turmoil influencing it strongly, there's enough supply to depress prices. That's one of the points made by Phil Davis of Phil's Stock World, in Outlook for a Merry Christmas Eve -- by Phil Davis, at Seeking Alpha, http://seekingalpha.com/article/179779-outlook-for-a-merry-christmas-eve. What are other technical analysts saying about oil? A very quick look turned up Slope Of Hope with Tim Knight: Energy Markets, at http://slopeofhope.com/energy-markets/. He seems to be turning skeptical, although I don't know if his time frame is just short-term. And there's a review from a couple of weeks back, at Decision Point®: Chart Spotlight 12/11/2009, at Energy and Financials Weakest Sectors, by Carl Swenlin on December 11, 2009, at http://www.decisionpoint.com/ChartSpotliteFiles/091211_cspot.html. It's basically pointing out the relative weakness, which can be a precursor toward more bearishness first for oil, later for equities markets generally.
Technically, the key levels are close at hand. Above are $80 and $82, and below is $69, $70. A move by $WTIC outside this range will be important. But a move above $82 won't guarantee it's bullish, unless it lasts longer than a month or so. Once it gets to March, it would get beyond the one-year time frame. And there's a possible four-year cycle at work that could point oil toward a cycle bottom late in 2010 or early in 2011. That's a reason to take a break under $69/70 in $WTIC rather seriously. A "C" wave down, whether it's already started or might start in a month or so after testing a bit higher - would lead crude oil down to retest the mid-$30's again or even lower.
So we're not going to expect oil to follow with gold or even with other commodities, since different factors are likely to start influencing different asset classes differently. True, the US dollar will still be important. But these factors may only influence the actual level of lows to which oil may sink. For now, we'll watch the levels mentioned above and be ready for oil to move down. While I respect Tony Caldaro's decision to move to a bullish count, I believe it would be negated if and when $WTIC moves back under $70 - so we can let that level be the deciding line at this point. If oil indeed disappoints many by going under $70 again, it may trigger a selling wave that produces a bearish "C" wave down. (For Elliott Wavers - an alternate would be a wave 2 IF it remains above the prior lows - but what a gamble! Better to sell it under $70, which might turn out to become one of the best trades of 2010 as we get several months in.)
I've added the Commitments of Traders graph for crude light (CL), from the COT site in the list at right. You can see the commercial traders were right to be quite short into the high at $82, and since then have lightened up. But their short positions still outweigh the net longs of large and small speculators. Not the only reason to be defensive on oil, but it's certainly a factor to remember as we watch our levels.
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