A Dangerous Triangle

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As an owner of physical precious metals, I’ve been chagrined to see the weakness in this area over the past month or so. Today we got some relief, but I’ve got to say, gold needs to hold above the trendline I’ve pointed out, or else we could be in for a very nasty resumption of the tumble. That’s a well-formed triangle, and we’ve got to stay within its confines.

0826-gld

Interesting Parallel

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This will be the shortest post ever……….a trading friend of mine just wrote me and shared this interesting article called The 64-Month Bubble Pattern. It matches almost exactly the thoughts I was offering in my Six Six Six post from last night. The funny thing is that I didn’t set out writing the post with a conclusion already in mind. I was merely curious, and I counted out the months and was a bit shocked to find such a similarity. Anyway, check out the aforementioned article, since it’s a pretty cool correlate to my own (independent! honestly!) thinking.

Possible High Forming

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Last Thursday I was outlining the two main options for the current move as I see them. The first option is failure at 2010-20 resistance to make the second high of a double top targeting the 1800 area. The second option is that SPX breaks over that resistance and heads to currently theoretical channel resistance (from 1343 low), somewhere in the 2060-90 area. I said then that I favored the first option, but obviously we might see a break up into the second.

So where are we now? Well we haven’t reached my resistance area yet, but we have a clear 70% bearish rising wedge established from the 1904 low, and increasing negative divergence on the 60min RSI 14, the daily RSI 5 and, always nice to see, the daily NYMO. We have a promising looking top setting up for that 2010-20 test, and the odds of a failure there are improving. SPX daily chart:

140825-C SPX Daily Trendlines BBs MAs

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Six Six Six

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Well, today the S&P 500 finally did it: it pushed past 2,000, and it nailed a point value precisely three times – yep, 200% higher – than the March 2009 bottom.

The ascent since March 2009 has been pretty much straight-up. I was looking at the long term monthly history of the index, and the only other occurence I see of this kind of behavior in the nearly 100 years I looked at was in the last six years of the prior century.

Simply stated, the almost-straight-up bull run in the past ran from December 1994 to March 2000. That’s less than six years (64 months, to be exact). The almost-straight-up market we’re currently in has been raging for……….65 months. How about that! Here’s the chart (which, as always, you can click for a bigger version). I’ve also tinted a couple of mildly-interesting parallels along the way.

0827-spox

 

The obvious conclusion? Buy everything you can! Yellen’s got your back!