Mind if I hedge on crude oil, at least - in case it breaks down into less bullish (or even bearish) pattern?

Call me skeptical - but I'm still entertaining the possibility that crude oil is completing (or has completed) a B wave up. Meaning that the recent decline can already be the first wave down in a C wave down. I know Tony Caldaro changed from that idea to a more bullish count as you can see at bottom below on his daily and weekly charts of $WTIC from his public charts (see his site in lists at right - thanks Tony!). But I'm concerned that the cycles aspects of oil are taking over to pull it down again. On my monthly chart (the second chart below, under my daily $WTIC chart), you can see it's just crawling along on one of my trendlines. Breaking that - i.e., under $70 - should negate the bullish count and send it down.

Crude oil made it right by the Fibonacci and BB/MA resistance I described a few weeks ago, then dropped quite low from that. I'm really thinking now the game is to sell rallies rather than buy dips in $WTIC (or the ETFs like USO). Maybe we'll see a bounce soon - I frankly want to caution that any bounce isn't guaranteed. Definitely, even if you feel more bullish on oil than I do - if you see $WTIC under $70, SELL and sort it out later, is one way I can say it.

I'm not going to call it a head and shoulders pattern, since I'm not certain the neckline would work - the 2009 low was pretty low! But my real point is this: if the rally really is just a B, then C can re-test that 2009 low later this year or early next year. So don't be caught long, if oil proves my concerns are right and starts rolling lower in price.

Big bear or little bear? Andre Gratian weighs in with S&P 500 projections in Turning Points update

When the equity market's turning, we like to hear from the expert of Turning Points! Technical analysis can show timing, probabilities, even price projections. Andre Gratian presents his points of view by conducting classic technical analysis focusing on the S&P 500 index together with cycles, Fibonacci work and some thoughts about wave counts, in his Turning Points reports. We appreciate his work because it is always unbiased! His website is at Market Turning Points (always included in the sites list at right side of the page here). Andre provides his weekend updates also to his subscribers, and on occasion at Safe Haven as well. And of course his intraday updates and comments to his subscribers.

Let's see what Andre is showing about the stock market now:
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January 31, 2010
Turning Points
By Andre Gratian

A 3-dimensional approach to technical analysis
Cycles - Breadth - Price projections
“By the Law of Periodical Repetition, everything which has happened once must happen again, and again, and again -- and not capriciously, but at regular periods, and each thing in its own period, not another’s, and each obeying its own law … The same Nature which delights in periodical repetition in the sky is the Nature which orders the affairs of the earth. Let us not underrate the value of that hint." -- Mark Twain

Current Position of the Market

Long-term trend - Down! The very-long-term cycles have taken over and if they make their lows when expected, the bear market which started in October 2007 should continue until 2014. This would imply that lower prices lie ahead. As illustrated by the current market performance, this will not be a straight-down decline, but will consist of a series of intermediate-term rallies and declines until we have reached the low point.

SPX: Intermediate trend. The index made a high at 1150.45 on 1/19 and has been in a downtrend ever since. There is a possibility that this may be only a correction in an uptrend, and not the beginning of an intermediate decline.

Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discusses the course of longer market trends.

Daily market analysis of the short term trend is reserved for subscribers. If you would like to sign up for a FREE 4-week trial period of daily comments, please let me know atajg@cybertrails.com.

Overview:

After many weeks of frustrating the bears, the market finally reversed when it reached 1150.45. I had projected 1135 for a top, and if surpassed, 1155-60. The high came in the middle.

At this time, it is unclear if the January 19 reversal is only a correction in an uptrend, or if it is the beginning of something larger. The main cause of the decline is the bottoming of the 9-mo cycle which is ideally due next week. There are many signs that it will make its low on time. The kind of a rally that the SPX will be able to muster afterwards will determine if it is only a test of the high, or a rise to new highs.

There is another cycle which is due around March 1st. The 90-day cycle has been very dominant, bottoming in March, July and November of 2009. The current phase should continue to exert some pressure on the market until late February-early March and should be an impediment to a strong rally immediately after the 9-month cycle has made its low. But afterwards, the two cycles combined should be able to extend the “hope rally”, as it is called by some, into about May. After that date, the 4-year cycle should take over and send the market into a more prolonged decline into the Fall.

This is the basic scenario as I see it, and we cannot know, at this time, if mid-January will turn out to be the high of the “hope rally”, or if it will come in May or June.

Our immediate focus is on determining the extent of the current downtrend. It is possible that the bottom will not be made until the 90-day cycle has made its low.

What's ahead?

Chart Pattern and Momentum

The Daily Chart of the SPX clearly shows the deceleration which was taking place in the last few weeks of the uptrend. Prices kept rising with less and less upside momentum until a little past the half-way point of the 90-day cycle, and kept hugging the bottom trend line of an uptrend (black trend lines) which started after the July correction, unable to pull away from it decisively. These last few weeks were very frustrating to the bears who kept expecting a decline at anytime. Now that the decline has started, they may be further frustrated by the shortness of its duration.

By closing below 1085, the index has given a projection to 1050-1058. This is marked on the chart by the two lower pink lines, and there is at least a chance that it might not make it even to that level before it bounces. The two bottom indicators started to flatten out 5 trading days ago, and the A/D indicator is now showing some positive divergence. In this position, it does not take much to turn them up and give a buy signal. However, because of the 90-day cycle bottoming at the end of February, we could have a bounce followed by another decline into the target later.
Considering the position of most indicators, the market should make a low in the next 2 or 3 days.


The green channel lines represent the trend from last March. This decline will not become an intermediate downtrend until it has broken out of that channel and started to trade below the last short-term low of 1029.38.

We will now move to the Hourly Chart to evaluate when the 9-mo cycle might make its low.

I like to draw channels by connecting the appropriate lows and then drawing a parallel from the top. This technique seems to give a good representation of the trend the majority of the time. In this case, the decline which started when the index broke below its trend line from July, is framed by the two heavy black lines which form a down-channel. The index should continue to trade within the confine of these lines until the trend has reversed. The first indication of a reversal will come when the red trend line is penetrated on the upside. It will become confirmed when prices move out of the channel and above the last price cluster (about 1103).


There is already plenty of positive divergence in the indicators, which normally means that the reversal is imminent. The nearest projection of 1069 could indicate an interim low within the downtrend, unless enough strength develops to move through the trend and channel lines, in which case it would become the low of the decline. The main projection, however, is between 1050-58, and the small cycle bottoming on 2/3 in conjunction with a CIT occurring on the same date could mark the low of the 9-mo cycle.

Cycles

The 9-mo cycle is mainly responsible for the current decline. Ideally, it should bottom in the next few days.
It will be followed by the 90-day cycle which has been very dominant and is scheduled to make its low towards the end of February.
Longer-term, the 4-year cycle should exert pressure in the second half of the year.

Projections:

There is an interim projection to 1069.
By breaking below 1085, the SPX has given a projection to 1050-1058.
We should also keep in mind that .382 retracement of the move from July to the top is 1043.

Breadth

This was the comment made in the last newsletter: “The NYSE Summation index (courtesy of StockCharts) has now reached overbought on its RSI. The rally in the SPX to its projection target has caused it to become overbought with severe negative divergence -- just what we need for a top. We now need for it to turn down for a sell signal.”

This is what the index now looks like. It is now just entering the oversold status and does not look quite readyto turn up -- which means that we might have more declining prices ahead of us before we find a low.

The short-term A/D is beginning to show a pattern of deceleration and divergence to price, which is an indication that an interim low may be just ahead of us.


Market Leaders and Sentiment

Also from the last newsletter: “The long-term sentiment indicator (courtesy of SentimenTrader, above) is now in a position to give us at least a short-term top.”

Currently, the indicator is showing the exact opposite of what it did two weeks ago: it is bullish and suggests that a low is imminent.

We should also note that the banking index has hardly participated in the decline.

Summary

This was the comment made in the last newsletter: “The SPX is now ready to have a short-term decline which could be the start of something bigger. To suggest that we have started a move of intermediate nature, we would have to trade below 1030. More topping action may be needed before we are ready to do this.”

I think that I will let it go at that.

Andre

ChartsEdge week-ahead cycle forecasts for equities and gold, plus comments on current downtrend

Below are the week-ahead cycle-based forecasts from ChartsEdge. And thanks to Mike Korell, who's the fellow doing ChartsEdge - and has also provided some additional comments about what his various indicators are showing (based on his Trader Confidence Index, BP and other cycle-based charting):
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Comment

The long-awaited top was put into place last week.

The BP and TCI charts experienced some problems. The BP data has been leading the market by 19-days for many months.  That lead abruptly changed to 11-days.  This week's chart reflects the change.

The Trader Confidence chart was showing multiple reversals.  It was difficult to interpret these signals since they were so close together.  The current chart attempts to make some sense of the signals. The Trader Confidence Index Chart gave a LOW signal on Friday.  That indicates a likely low on Monday.

The long term (LT) BP chart and Pattern Recognition show a likely move lower at the open on Monday.  The LT BP Chart and Cycle charts indicate that this week will generally be sideways trading with a high on Tuesday. They also agree on continued consolidation during the early part of the week of the 8th.

The Pattern Recognition Chart has a new feature. The Confidence Number will indicate the amount of variation in the predicted patterns.  The higher the number, the more likely the chart is to be correct. This week's 55.1 value is low.  Good values are over 100.

Gold may be at a decision point of its own - per these charts

Gold is in a consolidation period before its next big run. Thanks to the reader who asked about gold, I revisited my charts (below) and Tony Caldaro's gold charts from his Elliott Wave Lives On blog public charts (see sites list at right - thanks again Tony!). It can make a low very soon and very close in price. Or it could test lower - about the lowest it could go would be $950, around the apex of that triangle I fancy and marked on my chart below.

Tony's wave count (which is different from the idea of that triangle, actually) implies that gold's pullback could go down to the $1025 area of the smaller-level wave 4 he marked. But it wouldn't have to. In fact, if the idea of US Treasuries about to drop steeply soon works out (as I posted here a bit earlier this evening), that might help push gold along sooner ... will see.

If it failed $950 by falling under and just not being able to hold that support, then my "bearish" scenario of a deeper pullback would come into play. But frankly, that "C" wave scenario doesn't look very fitting on the charts. Either way, you've got to balance initiating a buy entry now or soon, against the possibility of a deeper test ($950 or lower) - with the thought that it should make an important low and buy entry/re-entry soon, or some time over the next 2-3 months. After this time window, gold should be already on the move upward.

Cycles for gold should also be consulted. I've got the general idea that gold is a buy over the next 2-3 months, and shouldn't go under $950. But I acknowledge that leaves a wide range of possibilities for actual trading gold now! After I can check some more on cycles, I'll add any further comments, though it may take several days.

Just one possibility, if gold needs more time to consolidate, might be that it's only completing a wave "1 of c" per Tony's chart and makes a shallow wedge that completes above the $1047 or $1025 area; rather than all the way to $950. That might be one way of drawing it out while staying over the 200-day moving average or within the channel on my weekly chart. Frankly I could see it either way, although Tony's count doesn't really lend itself to much lower than the $1025 area.

I realize Prechter is calling it bearish based on long-term Fibonacci. But I've been reviewing that Fibonacci relation for over a year. It doesn't have to be the bearish setup he sees. It might result in the deeper pullback scenario. But doesn't have to. In fact, as a pure Fibonacci pattern (and actually as a classic Elliott Wave Fibonacci relationship), all it really did was say that the 1.618 extension of the 1970's high would project to the $1200 area already reached. There's nothing in there that dictates a severe correction. And it can also proceed on to a 1.786 extension, or even a 2.618 or 2.786 extension. Just sayin'!

U.S. Treasury bonds and 10-year notes poised to make a serious drop very soon

Got TBT? U.S. Treasury bonds and 10-year notes are poised to make a very big move down, very soon, judging by the charts. Below I've posted a daily and then monthly chart of the bonds, $USB. Next are Tony Caldaro's daily and weekly charts of the 10-year notes $UST (from his public charts site, see his Elliott Wave Lives On site in the sites list at right - thanks again Tony!). The primary idea is that, after completing a gap fill and running into resistance such as the 34-week exponential moving average (EMA) and 200-day MA, these longer-term Treasuries are about to finish a wave 2 up. That will be followed in short order by a wave 3 down. The wave 3 down should be deeper than the recent wave 1 marked on Tony's chart, and mark new lows as it drops under the multi-month consolidation range.

Notice that recent wave 1 down on Tony's chart had some price gaps. Since gaps are more common in third waves (and C waves), and that wave 1 down had gaps (in its "wave 3 of 1"), then we should expect some serious gaps down during the wave 3 down (especially in its "wave 3 of 3"). So it's time to position for a significant trend change to persistent downtrending in these longer-term Treasuries.

This view will be negated if these Treasuries make new range highs above their end-of-November highs. So to keep it simple (KI$$), I'm thinking scaling into TBT starting Monday (and/or put options on TLT, and other traders may have other methods). With the initial stop at the end-November highs - which can be brought closer to just above the "wave 2" lower high once an expected trend reversal pattern manifests.

If Treasuries were to go above their end-November highs, I'd be thinking a bigger "abc" consolidation (maybe with its own b-wave triangle) that would be likely to break to the downside when complete. That isn't my primary scenario because I think a wave 3 down should start very soon; but, we'll keep it on the back burner just in case.

For price targets - one point to remember is that wave 3 is often 1.618 the length of wave 1 - not always, but often. It wouldn't surprise me if it takes Treasuries to a long-term trendline, which might contribute to a wave 4 consolidation before wave 5 of c breaks underneath that. Also, notice Tony's count is for a "wave c" and that could reasonably be at least equal to "wave a" by the time it completes. Then too - many are likely to see this as a large "head and shoulders" pattern, having a measured move target equal to the "head" from the "neckline" once the neckline - at $114 in the 10-year note, $UST - once it breaks under that neckline. From the 18-year cycle top about $130 to $114 is a difference of $16, so if the measured move target works, that would imply a target price about $98 in $UST. The drop we're expecting now should be sharp and swift (as a wave 3), but getting to $98 should take a bit longer because of the time scale.

Ultimately, Treasuries should go lower yet in a series of cyclic waves, because the big-cycle high appears to gave been completed in late 2008. If the 10-year note ($UST) exceeds about $125 that could postpone this huge turn. But it's looking more likely that the big turn is underway, and this next sharp move down should start as early as Monday, February 1. It doesn't necessarily imply what happens in equities, etc., because some of the long-standing financial asset correlations are also subject to change. Because the fundamentals aren't necessarily about "riskier" assets becoming more favored. It's also about U.S. Treasuries themselves becoming perceived as more risky than they used to be - that's a paradigm shift.

Projections for this bear - whether little bear or big bear: Objective Elliott Wave update of Tony Caldaro

It's good to have methods that warn you when to take profits or even prepare for and take advantage of trend change, isn't it?! And giving projections for where or when the next changes are likely. Tony Caldaro has been tracking the equities market turn with his Objective Elliott Wave analysis, at his the ELLIOTT WAVE lives on site - his great work is a reason we keep his site in the list at right. His predominant view is that the equities market topped a big "B" in the wave count - competing with the alternative suggestion of the market in a bigger uptrend that hasn't finished yet. So far, the sell signal that confirmed when the SPXost 1130 has worked great! Let's see what he's sharing now (thanks Tony!):
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the ELLIOTT WAVE lives on
Market analysis using proprietary Objective Elliott Wave techniques
by Tony Caldaro

January 30, 2010
weekend update
REVIEW

Interesting week. Early in the week the market stabilized on much worse then expected home sales reports. Then started making lower lows after the 'stay the course' FOMC statement on wednesday, on thursday, and after the better than expected, but exaggerated, Q4 GDP report. The economic reports for the week were generally positive, with the exception of new/existing home sales and case-shiller home prices. Consumer confidence/sentiment rose, Q4 GDP was reported at +5.7%, the Chicago PMI and durable goods orders rose, and weekly jobless claims eased a bit. For the week the SPX/DOW were -1.3%, and the NDX/NAZ were -2.8%. Asian markets lost 3.6%, Europe was -2.1%, and the Commodity equity sector was -1.7%. Bonds gained 0.2% on the week, Crude was -2.2%, Gold was -1.0%, and the USD gained 1.5%. The upcoming week centers around the ISM reports and friday's monthly Jobs report.

LONG TERM: bear market
We continue to maintain our long term count of a large three wave ABC bear market. The detailed zigzag decline from Oct 07 at SPX 1576 to Mar 09 at SPX 667 was labeled as Primary wave A. The zigzag rally from Mar 09 at SPX 667 to Jan 10 at SPX 1150 is labeled Primary wave B. This downtrend, that was confirmed by OEW a week ago, should be the first Major wave down of a larger five wave decline to form Primary wave C. We are expecting the SPX to bottom in late 2010 near the previous low of SPX 667. Should this scenario unfold, as expected, the entire bear market would form a three year ABC flat. Alternating with the three year ABC zigzag of 1929-1932. This scenario also fits with the reliable four year presidential cycle, which is due to bottom in the second half of 2010.

Anticipating future wave formations, using OEW and historical market patterns, is only part of the work. Monitoring and adjusting, when necessary, are the other parts of an analyst's mindset. We have detailed what appears to be the most probable outcome, for the next several months, in the above paragraph. Next we have to generally determine how each of these five Major waves should unfold. Then monitor their wave development. During Primary wave A each of the downtrends were impulsive five wave structures, and the uptrends were corrective three wave structures. Therefore, since we should now be in a similar large downtrend: Primary wave C. All of its downtrends should be impulsive five wave structures, and its uptrends corrective three wave structures. The first downtrend, of course, is the most important. If it is an impulsive five wave structure then the Primary wave C scenario is likely underway. If not, an adjustment of some degree will then be required.

MEDIUM TERM: downtrend hits SPX 1072
A week ago OEW confirmed downtrends in the SPX/DOW. This week most of the other US indices confirmed downtrends as well, including seven of the nine SPX sectors. On the international front, last week only 4 of the 13 foreign indices we track were in confirmed downtrends. This week that ratio rose to 10 of 13. Based on this data one would assume that the US has led the rest of world's markets lower. This, however, is only part of the picture. China's SSEC and Hong Kong's HSI have been in confirmed downtrends since late december. The leaders of the anticipated worldwide economic recovery, China and Hong Kong, rolled over first. It then took the rest of the world two to three weeks to follow. Something to keep in mind in the weeks and months ahead.

The extended uptrend from July 09 to Jan 10 ended on Jan 19th at SPX 1150. The top of Primary wave B fit nearly perfectly with the anticipated convergence of several technical observations. We started posting about this convergence in early december. In the eight trading days since then the SPX has dropped nearly 7%, wiping out over two months of market gains. The last time the market corrected this quickly, in percentage terms, was in Jan 09. Then the market dropped over 13% in just seven trading days after an uptrend high. During that downtrend, which ended Primary wave A, the market lost 29% of its value in just two months. We're not expecting that much damage during this downtrend. We are, however, expecting a potential decline into the OEW 961 pivot over the next two months. This would represent about a 16% market loss. This is certainly not a time to be complacent about the stock market.

SHORT TERM
Support for the SPX remains at 1061 and then 1041, with resistance at 1090 and 1107. Short term momentum continues to vacillate between neutral and slightly oversold. We are projecting that this downtrend, Major wave 1, will unfold in five Intermediate waves. This downtrend is only the first of five Major waves for Primary wave C. Thus far the decline continues to look like an impulsive Intermediate wave 1. None of the rallies have been sufficient to indicate that an Intermediate wave two has occurred. Thus far we are counting this decline as four completed Minor waves within Intermediate wave 1, and Minor wave 5 still underway, (green labeling). The count: Minor 1 SPX 1129, Minor 2 SPX 1142, Minor 3 SPX 1083, Minor 4 SPX 1100, and Minor 5 appears to be in the third Minute wave of its decline. With the next support pivot at 1061, we expect that Intermediate wave 1 will bottom within the pivot range: SPX 1054-1068. Then the market should experience a fairly good relief rally, potentially 50+% retracement, for Intermediate wave 2. This should take the form of an ABC three wave corrective rally. Then Intermediate waves three, four and five should unfold to complete the downtrend probably in March. Best to your trading!

FOREIGN MARKETS
Asian markets were all lower on the week losing 3.6%. All indices we follow are in confirmed downtrends with the exception of Japan's NIKK.
European markets (-2.1%) were all lower as well. All indices are in confirmed downtrends except the Swiss SMI.
Commodity equity markets all declined losing 1.7% on the week. All but Russia's RTSI are in confirmed downtrends.

COMMODITIES
Bonds gained 0.2% on the week. All Treasury rates are in downtrends, and Bond prices are now in uptrends.
Crude lost 2.2% on the week. The decline from $84 to $72 has been more than expected, and Crude has nearly retraced the entire Dec-Jan uptrend. With the GTX commodity index, nearly 70% energy based, already in a full retracement downtrend. Crude prices should remain under pressure.
Gold lost 1.0% on the week. The Intermediate wave four correction we have been anticipating, in the form of a flat, has occurred. There is a positive divergence on the daily chart, which is similar to the Intermediate wave two positive divergence low. It's time for Gold to start displaying some upside progress.
The USD gained 1.5% on the week. It has entered the anticipated resistance zone for its uptrend, see daily chart (page 12). It's quite overbought short term, so a pullback is likely. The next fibonacci resistance level is at 80.80 on the DX. Expecting an uptrend top in that area. The EUR lost 2.0% on the week and is quite oversold. The JPY lost 0.4% on the week, has rebounded off its lows, and is trying to confirm an uptrend.

NEXT WEEK
Busy week ahead. Monday we have Personal income/spending at 8:30, then Construction spending and ISM manufacturing at 10:00. Tuesday, Pending home sales in the morning and Auto sales in the afternoon. On wednesday, the ADP employment index and ISM services will be reported. Then on thursday weekly Jobless claims, Productivity and Factory orders. Friday is Payrolls day, with the Unemployment rate and then the Consumer credit report in the afternoon. As for the FED. Foreign exchange rates will be reported on monday. Then on wednesday a speech from FED governor Warsh in NYC. Best to your weekend and week!

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

Equities market analysts study the odds whether this drop is the big one - or comes later after another high in May

One of our favorite weekend features is to round up what other talented analysts are seeing and saying about the markets. There had been general consensus among those we respect that the stock markets would peak out during about mid-January (about the 15th-18th or as late as the 21st - we got about halfway between), somewhere above 1140's (though we didn't manage 1160+). Now what? While some see the markets retesting the March 2009 lows next, others are looking for less of a drop and then another rebound to new highs in May. Possibly as far out as August, but at least in May. Not that I can figure out what the Elliott Wave would be for that - will see in any event!

So - Here are some links to what various analysts are saying this weekend, which I believe my readers will find interesting:

T Theory Foundation: T Theory Calculations, Daily Updates, Charts and Data, 1/30 at http://www.ttheoryfoundation.org/t-theory-calculations.html. Click the link to his site to see his chart going along with his following comments:

Saturday Morning 9:00 AM Jan 30 2010 Comment for Friday Jan 29 Close: T Theory Forecast remains bullish for the longer term based on the long term AD T #13 but the S&P continues breaking down below the mid-channel support noted in the chart (Negative).

The W Bottom ? in the volume oscillator is likely to be false. Note as the S&P is breaking below the black mid-channel bullish market support line, the Arms Ratio for the last 3 days has been 0.75, 0.85, 0.99, all overbought readings that imply the market is not actually getting oversold. This in turn means the AD Line is weakening in line with the volume trend which is not good.

I would conclude the actual low before resumption of the AD T will have to come from the lower green envelope now around S&P 1046. And I wouldn't be surprised if the actual low was a selling climax type due these persistently bearish developments.

Terry

Also - Safe Haven | Technical Market Report, by Mike Burk 1/30 at http://www.safehaven.com/article-15650.htm. Always a good read for technical insight into the stock market.

Market Observation - Tim W. Wood 01.29.2010 - Discussing cycles and Dow Theory, at http://www.financialsense.com/Market/wrapup.htm. Tim seems to agree with the idea of this troughing action making one or two lows, then higher later in the year before the next devastating big move down.

Safe Haven | Global Default Problems? by Marty Chenard, 1/29 at http://www.safehaven.com/article-15636.htm.

Here's one that's new for me - at least it has some interesting chart views to consider. And even got me thinking about 1150 -60 to 1090, then 1097 -60 to 1037 (or something like that). Although another idea would be simply 1150 minus the classic 90 SPX points, to 1060 Hmm, dunno ... Anyway let this article speak for itself: Safe Haven | BANG: Right Down to
Support! by J.D. Rosendahl, 1/30 at http://www.safehaven.com/article-15645.htm.

Monday Morning Outlook: Dow, SPX Facing Major Technical Hurdles After Pullback, 1/30. Todd Salamone sees support 1040, resistance 1100-1110:

Whoops. The Dow Jones Industrial Average slipped another 1% last week, following on the heels of its 4.1% swoon the previous week. That helped add up to a 3.5% loss for the month of January, the worst performance for the blue-chip index since February 2009. Looking ahead to next week, Todd Salamone, Schaeffer's Senior Vice President of Research, is looking for bullish signs, but he concedes that the technical backdrop has weakened considerably. He notes, for example, that the S&P 500 Index has broken below its 80-day moving average for the first time since the March 2009 bottom. Next, Senior Quantitative Analyst Rocky White takes a look at the January Barometer -- whether the market's performance in January foretells the rest of the year -- and doesn't much like what he sees. Finally, we wrap up with a look at some key economic and earnings reports slated for release this week.

And here's another comment from "Method" today:

Method said...
Post from 1-9

Based on Fib time relationship, I have 4 turn dates coming up on Jan 17th & 18th. This suggests that the top will be next Friday (1/15) or the following Tuesday (1/19).
It could head down from here or bounce to a new high around Feb 15th. If the close on Jan 29th is higher than next weeks high close - the trend will change around Feb 14th - otherwise the trend change will be mid Jan.
The next trend change date will be May 22nd.
Corrections will come around
Feb 18-26
Mar 12-26
Apr 12-16
and maybe one more around May 13th.
The bottom for the year will be either Sep 7th or Oct 14th.

Jan 30 Fib Turn Date Update

The lower close on Jan 29th confirms the downtrend leg for Jan 19th as a trend change date. I do expect a one day hope rally - maybe Monday.

What to expect next
The turn point at Feb 14th should only produce a one day high on either side of that date and then continue down or sideways. This date may also correspond with a low in oil.
Counter trend rally - this should start moving up around the Feb 19th time frame (SPX 1030?) and end on or between Feb 23 - Feb 25th.

Next Trend Change Date
I was originally looking at May 22nd, but the Jan 19th top setup a potential trend change in March. I'm looking for a low to occur between March 12th to March 17th (SPX 993?) with an alternate date of March 26th if price goes lower after March 17th.
Unless the March turn date sets up another trend change date, it will be 2 months before the next trend change date, so I'm considering that this may be a large triangle or wedge formation.
Since the dates did not lineup exactly, I am little skeptical that this may not be a trend change but rather a counter trend rally that will end March 26th.

Price and Time: insights into the financial markets' surprising moves, plus inconvenient truths

Folks - the markets have gyrated from significant price and time areas for almost two weeks. These "surprising" moves have been forecast or expected in advance by various methods presented here; especially when some of them have converged. These methods also help us get a handle on how to trade, what it means, when to ve alert for changes. Now, after our mid-January trend change, we're in process I'd analyzing whether the markets proceed to re-test SPX 667 and the like. Or do we still expect new highs in May? Methods used to be aware of this have included cycles, Elliott Wave, classic technical analysis, Fibonacci and T Theory. Some of which I'm able to provide myself, and a great deal also shared as a free aspect of talented analysts in their areas of expertise - listed in the sites list at right, and posted here periodically. I'm glad that readers can get exposure to these great resources. I frankly recommend that readers go ahead and subscribe to the paid services of those analysts that "click" in a way that helps you to get a better grip on your trading plans. Maybe that's Andre Gratian's technical analysis, ChartsEdge's analysis of different time frames, Tony Caldaro's OEW tutorials, Ray Merriman's cycles services - any one or more that work for you.

Okay, now there's another I'd like to recommend. Gann analysis is a great method dovetailubg well with the other methods (and creates beautiful charts). Andy Askey with his PTV-Investing is one of my personal favorite sites. His charts always help me see the big picture better - and I've appreciated that he remained positive on the rally even while others were too bearish. Interestingly, he even provided a view of the dollar showing why it may indeed make a new low in May - right when Terry Laundry's T Theory, and Ray Merriman, say we should be prepared for the stock market to make a surprising new high. Today's news is that Andy is taking his analysis over to his paid subscription model. It's very reasonable - $105/year - so I'm sharing this news with my readers. A good price for objective and very detailed Gann analysis on various markets on the various time frames! My personal motives for touting this are two-fold: first, to share the news so readers eager for great Gann charts across markets and time frames can get on this good deal. Second, let's make sure Andy gets enough remuneration for his great work, so he keeps generating this work!

Below are - a post I made Jan. 15 at my UBTNB3 blog about Andy's big-picture view of the dollar. And then, Andy's description of his Gann charts services; so you can see why I'm recommending this:

Andy Askey posted a great US dollar chart a month ago that's well worth reviewing. At Weekend Outlook – 13Dec09 - PTV-Investing.com, http://ptv-investing.com/blog/2009/12/14/weekend-outlook-13dec09/.

Here's a quote with his big-picture view of the US dollar - notice the time significance of May 2010 - so his guess makes sense to me, as May is also a potential equities market high according to cycles and T Theory (with an echo high in August even if only marginally higher).

The 1992-2001 bull market cycle in the US Dollar has provided a usable cycle in the following correction. The 1/4 line prompt a selloff while the 1/2 cycle put in a top. The 3/4 line put in a bottom while the 7/8 line (not shown) put in a top. The 100% cycle time is next May which could put in a long term low for the US Dollar. (That is just a guess.)

Andy Askey will continue to provide his brilluant Gann analysis charts and associated unbiased commentary via his PTV-Investing.com, as described at http://ptv-investing.com/blog/subscribe/

Here's how Andy describes his subscription service:

In addition to the free charts and analysis, subscribers receive:

• More Detailed Weekly Price/Time workups of SPX, DOW, NDX, and VLE
• Detailed SP500 Index Roadmap
• Industry and Sector Workups (Financials, Technology, Energy, Commodities, Retail, Housing)
• More than 145 Individual Charts Updated Weekly
• Top Stocks Per Sorted Industry
• Best Stocks in any Industry with links to Individual Charts
• Gann Angles, Time Cycles, Square of Range, Square of 90, Square Root Price Progression
• Nasdaq, ValueLine Arithmetic, and SP500 Swing Charts
• Market Internals with Short Term Analysis
• Responses to Specific Questions about Charts and Analysis
• Request Specific Timeframes or additional Index Workups (if data available and request covers a valid timeframe)

Subscription rates:

Term	Cost	Cost Per Update
52 weekly updates	$105	$2.00
26 weekly updates	$65	$2.50
2 week Trial Follow up the trial with a 52 week subscription and receive 60 weeks for the price of 52	$15	$2.00 For those purchasing a 52 week subscription during the trial

Consequences of saying one thing about public debt, doing another, coming to roost: Raymond Merriman's weekly public comments

Raymond Merriman's prediction of the markets turning January 15-18 worked rather well, didn't it?! While we might have liked the SPX actually getting above 1160, it just didn't, by the time Ray's time window closed. He didn't issue public comments last weekend. But he's back with another fascinating set of insights and predictive public comments for the upcoming week. This isn't the same as his specific market subscription services - those are available as you can learn from his Merriman Market Analysis site (always in the list at right). So let's see what he's saying now:
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MMA Weekly Comments for the Week beginning February 1, 2010
Written by Raymond Merriman

Review and Preview

I am back from 2+ weeks of presentations in Amsterdam, Moscow, and Zurich. For a synopsis of what I learned on this trip, feel free to visit my web site and read my comments at http://www.mmacycles.com/the-news/about-mma/my-forecast-2010-european-winter-tour/.

It was quite a stunning period since I left two weeks ago. Many stock markets of the world made new yearly highs between January 11-15, in concert with the Saturn and Mercury stations of January 13 and 15. Since that time, many have plummeted.

In Asia and the Pacific Rim, the Japanese Nikkei made its yearly high on January 15 at 10,982. Two weeks later, on Friday, January 29, it closed at 10,198, a loss of 7.14%. Australia’s All Ordinaries index made a new yearly high of 4984 on January 11, and declined to 4592 on Friday, January 29, a loss of 7.86%. It was even worse in India and Hong Kong. The NIFTY index of India topped out at 5310 on January 6, but then fell 10.25% to 4766 on Friday’s low. The Hand Seng fell from 22,671 on January 11 to a low of 19,916 on Friday, January 29, a loss of 12.5%. That high in January did not take out the yearly high of 23,099 on November 18, made under the first passage of the Saturn-Pluto square. Now we are entering the second passage of this same aspect on Sunday, January 31.

In Europe, similar declines were noted in some of the indices. For instance, the German DAX fell from a yearly high of 6094 on January 11 to a low of 5540 on January 28, a loss of 9.1%. London’s FTSE fell from its yearly high of 5600 on January 11 to a low of 5145 on January 28 and 29, a decline of 8.1%. Russia’s MICEX index also had a sizable decline, falling from a new yearly high of 1491 on January 20 to a low of 1363 just one week later on January 27, for a loss of 8.6%. Much more benign were the AEX of Netherlands and SMI of Switzerland. The AEX lost 6.26%, falling to 323.95 on January 28 after achieving its yearly high of 345.46 on January 11, along with the other Euro indices. The SMI was even milder, falling from 6666 on January 11 and 21 to a low of 6386 on January 26.

In the Americas, Brazil’s Bovespa took the biggest hit, falling 9.18% from its yearly high of 71,068 on January 11 to a low of 64,541 on January 28. Argentina’s Merval index was rather quiet and didn’t make a new yearly high or multi-week low during this period. The NASDAQ Composite fell from a yearly high of 2326 on January 11 to a low of 2140 on Friday, January 29, a loss of 8%. The Dow Jones Industrial Average dropped 6.39%, from its yearly high on January 19 at 10,729 to a low of 10,043 on January 29. The most important factor here is that almost all of these indices made their yearly highs within a couple of days of the Saturn and Mercury stations of January 13 and 15. But there was a lot of divergence, with some topping out just before the stations, and others topping out only a couple of days later. This is known as “intermarket bearish divergence,” and when that happens nearby to a critical reversal date (as in this case), it is usually a powerful reversal indicator. It worked very well this time.

Reversals were not only evident in stock indices around the world. The precious metals also fell hard from their secondary highs of January 11 through Thursday, January 28. Gold topped out at 1163 on January 11, then plummeted to 1072.20 on Thursday, January 28, for a loss of 7.72%. But Silver’s fall was spectacular. After making its secondary top at 1892 on January 11, it collapsed to 1602 on Thursday, January 28, for a loss of 15.33%. The loss in Crude Oil was almost as dramatic. From a yearly high of 83.95 on the same January 11 date, the nearby contract plunged 13.72% to a low of 72.43 on January 29. All of this may be related to the strength in the U.S. Dollar, which rose against most currencies during the past two weeks, which means other currencies declined against the Dollar. The Euro currency, for instance, fell below 1.4000 last week for the first time since July. In fact, it fell below 1.3900. It is not that the Dollar fundamentals are so attractive, but rather because the debt situation in many countries within the Euro union are much worst than thought just a few weeks ago. The European Union may be in jeopardy as the credit rating of several counties is now vulnerable to be downgraded, another victim of the Saturn waning square to Pluto, in effect October 2009-August 2010.

Short-Term Geocosmics

This week will be highlighted by the second passage of Saturn square Pluto, which takes place on Sunday, January 31. This is following Venus and Sun in opposition to the Mars retrograde, which took place January 27 and 29 respectively. As we have seen in recent days, the focus of political and economic leaders has switched, with their full attention now on to the world debt situation. This is a perfect theme for Saturn square Pluto, especially with the Saturn-Pluto cycle in its waning phase (2001-2020), a time when debt is almost always a huge concern. This particular Saturn-Pluto square is taking place under a full moon this weekend. In fact, it is a lunar eclipse, which simply intensifies the themes of the other planetary signatures unfolding. It is quite possible that we could see several markets reverse their short-term trends now, or collapse in a serious free fall. However, the polarity and bickering between political parties is not apt to reverse. To the contrary, under such signatures, the divisiveness is likely to become more acute in the weeks ahead. And along with that, the frustration of populations who just want their government leaders to do the right things, and act as if they truly care about the welfare of the people they serve, rather than solely their own political careers. With Pluto in Capricorn, the collective psychology seeks a return to basic values of Capricorn, like honor, honesty, integrity, responsibility, and personal accountability. What they don’t want is the opposite – projection and blame of others, without taking on genuine responsibility for their own contribution to the collective angst, and the tendency towards hypocrisy where they say they believe in one thing, but then their actions don’t compliment their words. It seems lately to be a choice between two negatives: one party that always says “no” to any change, and the other that promises change, but then qualifies or reverses each proposal immediately afterwards to render it as a disappointment or broken promise.

Longer-Term Thoughts

In the last column two weeks ago, I indicated that Jupiter was moving into Pisces January 17 through June 8. As stated at the time, “With Saturn and Pluto involved, it always has the potential to pertain to matters of debt, and the problems that increasing debt causes. Since three planets are changing signs this week, it will be interesting to note the new approaches to solving the debt crisis that may be introduced over the rest of this month. I am not sure that any of them are credible, however, with Jupiter (exaggeration) in the sign of Pisces (fantasy). My guess is that it will be more tough talk followed by actions that are exactly the opposite of the promises and tough talk. In other words, spending will increase, deficits will increase, and consequently so will risk-taking and speculation.”

Well, this is starting to materialize. At a panel a week ago at the Swiss Symposium in Zurich, we (panelists) were asked, “If Obama asked for your suggestions on what to do right now, what would you tell him?” My answer was: 1) put a 2-year freeze on any new spending programs and seek to reduce the deficit, and 2) put a two-year freeze on any new taxes for small businesses, so that they could enact plans that would involve hiring new people – outside of government - without the uncertainty as to what the tax situation will be. Lo and behold, I return home a couple of days later and the Obama administration announces a three-year freeze on new spending programs, and a new tax reduction incentive for small business. Maybe there is hope yet for this White House! But then a day later it is announced that the spending freeze won’t be for all government programs, only about 1/6 of them. And it will not take effect until 2012, not immediately when it is most needed. In the meantime, the Senate just announced it wants to raise the debt ceiling not from just $9 trillion to $12 trillion as reported in December, but now to over 14 trillion, with another shot at raising it again right after the mid-term elections in November 2010. This is plenty of time before the spending freeze is to take effect in 2012. I mean, how can one take the word of these people seriously when they first state exactly what you want to hear, and then invalidate it with the qualifications they impose a day later? A 3-year spending freeze sounds great! But what is the use of such a freeze if you first of all allow Congress to raise the debt ceiling for borrowing by over 50%? That is like saying I am going to stop smoking cigarettes in three years. But first I am going to increase my smoking habit by two packs a day.

Spending more than you have – creating debt - is like an addiction. Breaking addictions requires a painful sacrifice of your routines, of your very life style. No one wants to do it, and politicians simply don’t have the will power to even try it before giving themselves a large cushion to work from that protects their own self-interest. Is it any wonder that in a recent Gallop poll, more people rated used car salesmen higher in the issues of honesty and integrity, than members of Congress? This is what has to change, and this is exactly what will change as Pluto purges all the corruption, dishonesty, and hypocrisy out of government, business, and bank leaders in this new decade. That’s the nature of Pluto, and that is the arena of Capricorn. It’s a return to basic Capricorn principles. It is not about Democrats and Liberals, and it’s not about Republicans and Conservatives. It is about trust, and being connected to the values of the people who elect you. That is why there are populist uprisings all over the world today, but especially in the United States. If you want to succeed in politics, it requires only a couple of primary attributes now: truthfulness, authenticity, and the willingness to govern well, and not just campaign well.

Announcements

The February issue of the SOS Global Stock Market Cycles Report will come out this week. It will be posted on our web site for download by subscribers by Tuesday night, and available by email to others either later Tuesday night or Wednesday. The German edition comes out Wednesday. This report covers the long-term as well as intermediate and short-term outlook for the USA stock market (DJIA and NASDAQ Composite). It then covers the intermediate and shorter-outlook for the XAU Gold and Silver mining index, the German DAX, Netherlands AEX, Hang Seng of Hong Kong, and Australia’s All Ordinaries. The German translation of this report will come out Wednesday and will include analysis of the Swiss SMI stock index as well. This is our only subscription report that gives detailed discussion on geocosmic variables that are forthcoming. For subscription information, please go to SERVICES 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 first issue of the MMA Cycles Report And MMA Japan Cycles Report for 2010 came out last week. If you subscribe to this report, and for some reason did not receive it, let us know at once. The MMA Cycles Report coverts our analysis for the U.S. stock market, Gold, Silver, interest rates, T-Notes, Euro and Swiss Fran currencies, Grains, and Crude Oil. Japan Cycles cover the Nikkei, Dollar-Yen, and JGB Japanese Bonds. This week’s report was especially good.

Our next private meeting for MMA subscribers will take place at the Hyatt Regency Hotel in Cambridge (Boston) Massachusetts, on March 1 at 11:00 AM. There is no cost for yearly subscribers of MMA or SOS reports, or for any subscribers of our daily or weekly reports. For all others, the cost is $295.00. This special meeting will last about 2-1/2 hours. It will follow the NCGR conference on “Planetary Revolution: Geocosmic Alchemy II”, taking place February 25-28. Attendance is limited to about 15 persons, and reservations are suggested. There is nothing as exciting and informative as a gathering with MMA subscribers (to me), because they come from very interesting walks of life, from the fields of finance, banking, government, military, intelligence agencies, academia, psychology, internet technology, and astrology. During this special gathering, subscribers may ask any questions they wish, or they may make any statements that the group may then discuss. Great trading ideas tend to arise from this format. Please contract us at 1-248-626-3034 if you want to attend, as seating is limited. For information on what these meetings are like, read a review of my winter tour of Europe, where I met several subscribers at two separate meetings, in Amsterdam and Zurich.

CD’S, MP3’s, DVD’S, and webcast viewing of the Forecast 2010 speech will be available in about a week. 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 too. 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. “Thank You - it’s very thoughtful and thank you for sharing your knowledge. A whole new world opened for me.” Attendee to the Forecast 2010 webcast.

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, visit our web site at www.mmacycles.com. “Kudos… the 2010 forecasts – you’ve outdone yourself - I see Jupiter is playing a role not anticipated (if I recall correctly) last year .... it all clicks.” RR, Santa Fe

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 2007-2010; 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

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Polish : www.astrobiznes.pl

Chart of the Day - Dow down 79% this century

Here is today's chart and comments from the folks at Chart of the Day (see their links below):

Chart of the Day - Dow down 79% this century

The stock market has been rallying over the past 10 months. So, is the stock market performing well? It all depends on how you measure. When measured in US dollars, the Dow currently trades approximately 29% below its all-time record high. However, when measured with that other world currency (gold), the picture is even more bleak. To help illustrate the point, today's chart presents the Dow divided by the price of one ounce of gold. This results in what is referred to as the Dow / gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes 9.3 ounces of gold to "buy the Dow." This is considerably less that the 44.8 ounces back in the year 1999. When priced in gold, the US stock market has been in a bear market for the entire 21st century.

Notes:
- Where's the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron's recommended charts of Chart of the Day Plus.

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Quote of the Day
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice." - Henry Hazlitt

Events of the Day
January 31, 2010 - Grammy Awards - NFL Pro Bowl
February 02, 2010 - Groundhog Day
February 07, 2010 - Super Bowl XLIV

Chart of the Day is provided to subscribers without warranty of any kind and accepts no responsibility for its accuracy or for any consequences of its use. Journalists and bloggers may post the above free Chart of the Day on their website as long as the chart is unedited and full credit is given with a live link to Chart of the Day at http://www.chartoftheday.com

SPX remaining in downtrend shows lower support needed for the first real low we're seeking

While there are many thoughts on how to interpret the stock markets' action, many that we covered last weekend could agree that if the SPX couldn't get support around 1100, it would need to test toward 1050. Well - it's looking that way now! Tony Caldaro's Friday update mentions his 1061 pivot as another level to consider. So I borrowed his SPX daily chart (below - thanks Tony!) from his public charts at http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

You can see that the 1097 number which is siginificant in my "string" and based on price movement too, is also the upper level of Tony's 1090 pivot, and the SPX 8-day ema is almost there (1098.89 today). The SPX couldn't surpass it despite several efforts. So it's on down! I'm sure we'll have another good weekend lineup - with Andre's 9-month cycle low; reminders of Jim Curry's recent comments on the number of trading days to expect for the swing down; Terry Laundry's lower band now about 1046. And my personal memories of the importance of SPX 1060 in years past.

So far, swing shorts from either the Jan. 18 time or the 1030 price break don't have a classic trigger to cover, so it all depends on your trading style. If waiting for a buy entry, we'll see if it presents on Monday. So enjoy your Friday evening, and "see you" for the reviews and analysis this weekend!

,SPX - Daily HLC Bars, Wide (700)

l

As equities rocked like Haiti's earthquake, here's ChartsEdge pattern map for equities Jan. 29

Equities continue to be rocked by the drop from mid-January top, an eerie coincidence alongside the time-concurrent devastation in Haiti. I hope readers who locked in profits or even switched to reap profits from going short (especially after the confirmation from losing 1130) are continuing to send donations or other help toward the Haitian victims. Meanwhile, once 1100 was lost this threatens to take the SPX to about 1150. But we can also see if 1083 provides a bounce of some proportion. And the 70-30 vote for Bernanke yesterday might help, though a larger majority didn't happen so it's not all that positive.

Thanks again to Mike Korell and his ChartsEdge - here's his Pattern Recognition map for today. It's a dicey time, including with the BP and TCI that his subscribers can see; and Andre Gratian's 9-month cycle low due approximately Feb. 1 (Monday). Once a bounce finally takes hold - from 1083/1078 yesterday, or maybe 1050 soon - we'll have to see if it's merely a wave 2 up bounce, or something more. But frankly, we're still thinking the best buying opportunities aren't due until March .... So - here's today's map from Mike's ChartsEdge Daily Maps (webpage at http://www.chartsedge.com/wp/):

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ChartsEdge Pattern Map for Jan. 29

The yen marching to a different drummer, heading north again

We haven't had to bring out the bearish alternative view for the yen because it found support where it needed to. At the 200-day moving average on $XJY (FXY), where there was also Fibonacci support as I'd shown a while ago here, going into that swing low. Now it's near the 111.49 pivot again on the $XJY chart and if it gets above 114 again it should proceed higher. The daily FXY and monthly $XJY charts below look like it can do that. (Remember that the "yen" often quoted on CNBC, Bloomberg, etc., is typically the dollar-yen pair which goes down as the $XJY (FXY) goes up.)

Once again the yen needs to remain over its recent swing low. Traders should consider going with $XJY long on its move above 111.49 again. The FXY is an ETF that tracks it; others may be using futures, options or extra-charged ETFs.

Yen strength is not what the Japanese government and Bank of Japan (BOJ) want. Their efforts to push it down coincided with that drop to the 200-day MA. But as we noted, the effort wasn't likely to be successful. Now it's floated back up by that 111.49 level which is a key Fibonacci level on the monthly chart. The yen charts are showing that, while it has been taking time to play out, the $XJY remains on track to vault to new highs.

SPX retrace target for a bounce moves lower as the wave down drops lower too

Being early feels like being wrong, as the old trading saying goes - and today felt like ChartsEdge was right the first time about their TCI graph showing a high today! But the morning fade indicated by the ChartsEdge map - and common for fading the FOMC-induced movement yesterday - led to new lows as the SPX ultimately hit 1078. It rebounded back over 1083 but settled only slight over 1074. The movements reflected well from the pattern map for daytraders. For swing players - we obviously don't have higher highs breaking above downtrend channels. So the possibilities for a wave "ii" target are dropping too. Perhaps only to about 1114/1128 but we need to confirm a wave "i" low first.

There's potential still building for a better bounce. It depends on your style of trading, how you play it. Classically a swing player needs a reversal pattern plus indicators like positive divergence (there's a bit more now). As for levels - well, I really don't have a good feel if we've gotta go to 1050/1060 now that the SPX probed under 1082, or if it can make today's low the wave "i" low.

I do think it must be getting more clear that the drop will be more significant than some initially expected. But at the same time, I don't think there's anything that definitively rules out some of the scenarios that call for higher levels later in the year. It's just that the drop is substantial and needs to be respected. We knew the mid-January turn would be important ... and we've just got one trading day left. We'll see if the new month-new money idea will help put the trough in on Andre's 9-month cycle low and Tony's wave "i".

Once we see a bounce turn, look for similar corresponding moves in the euro, dollar, and probably gold, oil and grains. As for gold - bit of a wild card, it's always possible it makes a low and moves relatively higher since it's on its own path. While I don't rule out some of the bearish alternatives for gold, Tony Caldaro's more bullish thoughts on gold also deserve respect.

ChartsEdge day map/TCI comment for equities Jan. 28

Below is the ChartsEdge Pattern Recognition map for today. As readers should know, it's getting a little different from the equities weekly forecast - though that differed anyway between the SPX and NDX. And subscribers to ChartsEdge know what today's BP map looks like. All in all, traders should remain on your toes. Even though swing traders can relax a bit, knowing that yesterday's low should make an important swing low point for future reference. And about that - Mike Korell posted a comment about his TCI graph this morning I'm glad because his comment confirmed what I suspected. As posted at his webpage, http://www.chartsedge.com/wp/

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ChartsEdge Pattern Map
From: Mike Korell Date: Jan28

ChartsEdge TCI Comment

Posted: January 28th, 2010 | Author: Mike Korell |

Filed under:One-Day Market Map | No Comments »