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The Charts You Absolutely HAVE to Watch Going Forward
First and
foremost, the bearish rising wedge pattern in the S&P 500 has broken to the
downside. These patterns have a nasty habit of dropping to their base, so we
could see stocks at 1100 in a hurry.
Indeed, not
only have we broken the lower trendline that supported stocks since September,
but we’ve also taken out major support at 1,300:
Elsewhere,
the US Dollar has rallied to test its recently broken multi-year trendline. If
it reclaims this line that it’s highly probable the Euro will implode and we’re
going to enter another round of deflation.
Indeed, the
Euro looks to have put in a double top at 140. We’re likely going to 135 if not
130 in short order here if the US Dollar can reclaim support.
Finally,
Gold needs to hold the line at $1,400. If it doesn’t then we could be breaking
the rising bearish wedge pattern which could see Gold falling as far as $1,250
per ounce.
Keep an eye
on these charts. They MUST be followed going forward.
Best
Regards,
Graham
Summers
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Thank You your insight
Forgive my ignorance, but the last time I read about technical analysis, the statement was made that support and resistance are created by buyers and sellers who have a psychological interest in what they paid or received for an individual stock or commodity. How can this apply to an index of 500 stocks? Or does buying and selling of S&P 500 futures drive the price of all the individual stocks up and down?
Uncle Ben has the air bags attached to this sinking ship, they are being kept inflated at least for a couple more months. It will not flounder much unless a huge wave comes.
Pardon me, but this guy has to be one of the laziest people ever to contribute to ZH. So what if he's right 50% of the time, so is a flipped penny. The only one he compares to is MHF guy. So he draws a few lines on a chart using conventional technical analysis. If it is that easy, he must be rich from his trading and not from from his hawking. What a joke!
What does it mean anyway to draw an ascending wedge on a semi-log chart? What crap!
When do we get treated to a chart on silver expectations? Or do we just expect it to keep exploding? Works for me!
Well done Graham. To many questions regarding QE v. 3.0 for me to get into calling mega drops quite yet. Horrific times and issues will lead to ultimate destruction. Shit is close to hitting the fan here and across the pond. Maybe I'm damaged a bit from years of manipulation and POMO. I don't doubt the 1100 target one bit. Lets get thru 1260 and then round level of 1200 first. POMO will allow the PPT to walk it down as the rats still on board jump ship with whats left of the public wealth. To get 1100 we'll need some inside help. One of the BD's is going to have to turn on the pack. Can a bot be programmed to sell? Form of the fall will be key. Want to put the cart ahead of the horse? EUR $125 then $116 targets.
btfd. up up and away. It is THe solution, there is no other way out.
but Bernanke and co is handing out $100B next month which will be levered up to cool $1T to support the S&P and OIL price, no?
if Benny the Bean can't reflate the property and MBS's on his own Fed balance sheet what chance do you think he has with stock markets and commodity prices?
Think about that... seriously this Fed and PPT manipulation myth is just that, utter BS
The Fed has referenced studies in belief change management that show the wealth effect from rising 401K/IRA balances and stock indices embue the stock holding public with 10,000 happinesses, and so the POMO and PPT programs have research to support their activities. The Working Group (PPT) and pictures of Brian Sacks "operatives" show these acronyms are NOT myths.
Their operation in the absence of meaningful reforms will prove to be failures and in that sense, your calling BS would be correct. As you expressed it here, you are denying hard-rock reality.
It's good to see that the 'bearish rising wedges' that I have warned about for some time - are now being recognized by others.
http://stockmarket618.wordpress.com
I'm not ready to shore any of the US markets but I've been adding to my EDZ position for the past week, and have moved over the past month out of tech to some select bios, some American and Canadian gold/silver miners and a few 250MM to 500MM 'Oil' drillers in Texas and Pennsylvania.
Stocks are for chumps and prior to earnings, with all the uncertainty around, I'd be surprised to see any meaningful upside move in equities. Last Tuesday's double engulfing day downdraft was a key reversal and today, new lows surpassed new highs on both the NYSE and the NASDAQ.
Daily new highs have led new lows for the past 22 months. If the filp is for real, which will be confirmed if new lows surpass new highs for the next 6-10 sessions. That's a hard directional change, and, I have to add, richly deserved by this stimulus-led market.
Anybody in equities should always be prepared for a whacking, but especially now. Technically, the past two years have been an over-hyped, over-hoped cyclical bear market rally on steroids. The primary trend remains in place. Lower we go.
Bernanke's policies will be repudiated by the best source out there - the market.
Not that hard to predict a downward trend after the hammering the above took today.
That 1300 on the SnP seems to be very important to a lot of people who study cycles and long wave patterns. I think tomorrow will start weak but the indexes will rally into positive territory by the close.
Why don't we see what the Euro does here around 138 first.
Ah, if the world's finances could really be predicted based on charts.
Ho-hum. More quant-cant.
So, you're saying that in the macro view watching certain charts is useful.
Couldn't agree more. If for no other reason than this is what those who are brave enough to trade are watching as well. That old herd mentality, doncha know.
Me, I'm going for that $1,250 gold so's I can back up my pickemup truck.
Graham Summers
Thanks for the charts. You've been 'banking' some decent articles lately after my criticisms of some of your recent postings.
But can you clear up one confusion please. You called for "deflation" in this article but your advise (end of your article) is and has always been about preparing investors for an inflationary meltdown! Which is it?
No way will the trend reverse down to 1100 or anywhere near it.
I am long the SKF, TZA, and VXX. They are all triple and short ETFs, as you likely know.
So, if they head towards Australia from the Northern Hemisphere, then my meager fortune would increase substantially.
And god would NEVER let that happen because it would make me too happy.
"And god would NEVER let that happen because it would make me too happy."
Sounds like a line one of those Simpsons writers came up with.. how stereotypical