Blog Archives

Does Anyone Else See a Giant Bear Flag in the S&P 500?

“Reality” is in the eye of the beholder, especially when it comes to technical analysis and economic tea leaves. It seems most stock market soothsayers are seeing a breakout of the downtrend that erupted in early February, and so the path to new all-time highs is clear.

Does anyone else see a giant bear flag pattern in the daily chart of the S&P 500? Maybe I’m the only one who sees a bearish signal instead of a bullish breakout.

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Weekly Outlook: Gold & Silver Earn Top Scores in Breakout as the Dollar Clings to Life Support

As we transition from August to September within the course of this trading week, we very well could have just experienced the Black Swan event over the weekend, and its name is Harvey. Gold & silver are breaking out right now, and the dollar, well, look out below…

After spending last week in “consolidation”, the metals are already making their moves.

We have been saying a move is imminent for weeks now, and while we have not seen the rises we have seen set up on the charts, we have not seen the big drops either, and this consolidation looks exhausted considering the lack of any on the year.

The smashing of late have had little effect on the gold price and silver price in the short term. Yes, they have been able to knock down prices, as evidenced by last Friday, but the prices have not stayed down for long.

On the daily, gold looks to be holding up and ready to punch through the stout resistance:

 

 

$1300 has acted as resistance, or the line in the sand, three times so far in 2017. The battle is not finished there, however. Going back a year, we can see that gold could have some more trouble in the $1310 – $1315 range. What we should really be hoping for is a break-out through that level, then coming back to bounce off it if we must. For this week, however, I guess we could settle for a close above $1300, but at this point, we should really be expecting more, unless the smashing will continue. There was calm overnight and no sneak attacks.

Silver is fighting resistance of its own:

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Midweek Update: Hold On – The Gold & Silver Bull IS GONNA KICK


The stage is set and the music is blaring the tune “Immediate price surge”

Haven’t seen the charts this bullish in the short term for a while, and haven’t felt this bullish in a while either. The bears do look like they could be in for a shocker as things are shaping up nicely. It is hard to argue against a price surge, but I suppose anything is possible.

The Gold Price is ready for another shot at $1300 based on the chart painting. The yellow metal has been holding in there:

 

For the better part of the year, the price of gold has been stuck in that sideways channel of, call it, $1220 and $1300. Well, there is just not much room left to float sideways on the daily chart. We are right up against the resistance line. What looks nice in the short term, is that when gold punched through $1300 last Friday, it drifted sideways to the support line of the upward sloping channel. That chart formation is going to have to break down as gold breaks out, and that break out is above the massive resistance at $1300.

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Wedges and Triangles: Big Move Ahead?

The central bank high is euphoric, the crash and burn equally epic.

Just out of curiosity, I called up a few charts of key markets: stocks (the S&P 500), volatility (VIX), gold and the U.S. dollar (UUP, an exchange-traded fund for the dollar). Interestingly, all of these charts displayed some version of a wedge/triangle.

In a wedge/triangle (a formation with many variations such as pennants), price traces out a pattern of higher lows and lower highs, compressing price action into the apex of a triangle as buyers and sellers reach an increasingly unstable equilibrium.

As price gets squeezed into a narrowing band, the likelihood increases that price will break out of the triangle, either up or down, in a major move.

So which way will these markets break–up or down?

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Gold Support At $1,180/oz and $1,161/oz, Then At $1,000/oz

Technically, gold is vulnerable to a further fall to test its bottom from July, 2010, at $1,161/oz. This is particularly the case in the very short term, in other words, this week. A breach of the $1,161/oz level could result in a rapid fall to test $1,110/oz and the long term support at $1,000/oz. Silver is also vulnerable after breaking below key resistance. Technical support is at $15/oz. The long term fundamentals remain very sound and those who are patient and focus on gold’s strong fundamentals and still robust global demand, especially from China and India, will be rewarded again.

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A Brief Note on the Difference Between Trading and Investing

Investing in oneself and enterprises one actively controls may be the only legitimate deployment of capital that qualifies as an investment in the traditional sense.

Since I’ve been discussing the stock market in general terms (Bull and Bear, etc.), it seems like a good time to briefly note the difference between trading and investing.

In general, investing is putting capital at risk for the long term, based on a trend or story that the investor believes will have a material impact on whatever financial vehicle he has chosen to invest in.

In general, trading is shorter-term and technical-based. A trader might buy and sell the investor’s chosen financial vehicle many times, based on technical trends and indicators.

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The Inevitable Stock Market Reversal: The New Normal Is Just Another Bubble Awaiting a Pop

Is the New Normal of ever-higher stock valuations sustainable, or will low volatility lead to higher volatility, and intervention to instability?

Though we’re constantly reassured by financial pundits and the Federal Reserve that the stock market is not a bubble and that valuations are fair, there is substantial evidence that suggests the contrary.

The market is dangerously stretched in terms of valuation and sentiment, and it does not accurately reflect fundamentals such as earnings and sales growth.

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Coppock Market Message: Get Out and Stay Out–Check Back in Q1 2015

This chart’s value is in posing an if-then question: if today’s S&P 500 follows these patterns, what will our reaction be?

Longtime contributor B.C. recently submitted a chart that combines two interesting market tools: the Coppock Curve and historical analogies. Coppock called his technical invention the Very Long Term (VLT) Momentum indicator, and the so-called “killer wave” is a top followed by a second lower peak.

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NASDAQ: Classic Head-and-Shoulders and Blow-Off Top?

If the advance from January 2013 to the top in early 2014 isn’t a blow-off top, it’s certainly a pretty good imitation of one.

Technical analysis seeks to identify trends and recognize signals. The predictive value of trends (up, flat or down) and signals (buy, hold or sell) is self-evident, hence the widespread interest in charts of price and various indicators.

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