Huge head and shoulder in Copper ?

Weekly Copper chart analysis ;
1) Current pattern shows a clear head and shoulder, with a clear neckline level.
2) Once we get over that neckline, I have a target of 620 by 2012
While the majority of people are bearish on global markets, may I remind you that the market has a life of its own .....
Most often , mistakes are rooted not in ignorance, but fear ; fear of being wrong. That is why the majority is following the bearish crowd .....
Be an INVESTOR in the early stages of a bull market, and be a SPECULATOR in the latter stages of a bull market.
Trading the markets is an odds game ; the odds are in our favor

Barclays 20 Yr Treas.Bond ETF (TLT)

Barclays 20 Yr Treas.Bond ETF (TLT) chart analysis ;
1) The key question you should ask yourself is ; How long does an up trend last ?
2) Warning ; This is not an internet stock, we are talking about BONDS !!!
3) Break out from that channel pattern took place in mid April ; So, how long does a bond uptrend last ? I urge you to study past bond moves.
4) Parabolic rise ; When you see them, you know what the end result is ; A hard pull back.
5) Break away gap and huge volume pattern ; All signs giving us a top ??
6) Focus on the key levels ; 104 and 108 ; Expecting a violent move.
As usual, expect the unexpected .....

Pfizer Inc. (PFE) perfect ABC pattern

Pfizer Inc. (PFE) chart analysis ;
1) Probably a perfect ABC pattern
2) Price zooms fast, breaking above that red trend on huge volume, searching for "A" (we often see a gap up in these conditions).
3) Price then pulls back and looks for a reliable support level "B"
4) Price rises up again, heading to break above "A", we call this the "C" level. Watch the volume when the break out occurs.

Keltner channels sends us a buy signal on the Shanghai stock exchange

Understanding the Keltner Channels
Shanghai Stock Exchange "Weekly" chart using the Keltner Channels.
1) I prefer using Keltner than Bollinger ; Crossover method is more reliable
2) Three conditions ; see three colours on the chart
3) Condition "1" ; simple crossover 4 and 40 weekly exp moving average
4) Condition "2" ; crossover occurs below the lower band ; allows trader to use the crossover level as a stop loss level. (in this case the stop stands @ 2513.
5) Condition "3" ; allows you to "book" profits and use the crossover as a short trigger (using the crossover level as your stop).
6) Shanghai index stands @ 2652, main resistance stands @ 2750

Charts to watch next week

1) International Business Machines ( IBM ); the channel pattern seems "almost" perfect, 123 to 132.
2) Citigroup Inc ( C ) ; the support level at 3.59 looks reliable ("B" level in the ABC pattern), we did see a fake move up in July, now let's see if this next move will take us much higher.
3) Apple Computer Inc ( AAPL ) ; all the good (great) news priced in ? Why was Apple weaker on this bounce up ? Clear key support stands at 235. Still bullish on the stock, but this price action could be a warning signal. Remember, only fools do not change their minds !
4) Bank Of America Corp ( BAC ) ; the mother of all reversals ? If you draw a trend from April's high, you'll notice that 13.3 is our key long trigger up.
5) United States Oil ( USO ) ; now that's what you call a bounce on support :)
6) iShares MSCI Brazil Index ( EWZ ) ; do you see that head and shoulder ?

SP 500 chart update

Back in Brussels, landed around 2 PM from Toulouse (France).
Had the chance to go to the beach several times (Perpignan) :)
The trading seminar went quite well : )
Ok, back to the SP 500 ;
1) I bought some (see recent post) as well as other ETFs.
2) So far we are facing a clear wide trading range
3) Focus on the trigger levels (up and down)
4) What about all those bad news out there ? One fact we probably forgot ; they might be priced in ???
5) Shanghai index and light crude oil (my leading indicators) are "improving"

The saga of an investor

Will start to buy today

Will build positions in various ETFs today ; FAS, XLF, XLE, and the SPY.
Hope to see them go lower so I can buy more shares :)
Time to act like a VALUE investor and use common sense

Gut feeling

Still in the south of france, giving a trading seminar.
I don't buy this double dip story ......
Pay attention to the following possible events (Dollar, crude oil, SP 500)
1) Dollar index falls below 82.75
2) Euro climbs back up versus Dollar, Swiss, and Yen
3) Crude goes back up above $73
Conclusion ; watch candle reversals towards the end of trading day !
Focus on spikes down, expecting lots of buyers on the dip
Could I be wrong ? Sure, focus on the Dollar and Crude for signs of reversals !

Weekly opinion

Will be heading to the south of France next week (trading seminars), so blogging will be "light", unless of course we get a major bullish reversal.
My trading system vis à vis the SP 500 still reads "Neutral" in both short and long term trading.
We are suddenly seing more talks of a double dip, bearish outlook, and all kinds of reasons why you should get out of the market ....
Experience teaches me one thing ; after a crash, markets tend to form "wild volatile bottoms", with large price swings.
In the meantime, we tend to forget that we are basically forgeting what drives the market ; future earnings .... and guess what , the future looks quite good :)
Oh, but you'll tell me about all those countries almost bankrupt .....
You'll remind me that the debt crisis is far from over .....
Focus on the items you will trade ! Do not try to become an expert at many things .....
Do not try to become an economist .....
I expect more wild swings to come, then a huge rally that will probably last 2 to 3 years until the next crash ....
Commoditiy related companies will rule , becoming the heavyweights of the SP 500.
Expect more mergers in the months to come, sending financials much higher

Euro Dollar moment of truth

Euro Dollar chart analysis ; ABC pattern or an Head and Shoulder ?
1) First, the big picture ; this could just be a typical retracement after the huge fall of the Euro.
2) Euro zoomed up (almost parabolic), snapping hard, and reversed to the yellow channel.
3) Are we facing a "B" level (support before zooming higher to "C"), or are we facing a right shoulder pattern with a down target at 1.2400 ?
4) Focus on key news event that should soon come out ; trade the DIRECTION of the break out.

Light crude oil probable scenario

Light Crude Oil chart analysis ;
1) Monthly higher lows pattern still intact
2) Typical buy "the retracement, sell the rally"
3) Pay attention to the "reversal level" ; avoid crude if prices go below $73.5
4) Buy when prices climb above $77
5) Crude oil and the Shanghai index are part of my leading indicators ; they should be considered as key triggers for the SP 500 index (ie : Crude above $77 will send the SP 500 higher)

What a high premium on a closed end fund teach us ?

PIMCO High Income Fund (PHK) has a premium of over 50% !
Source ; CEFA (Closed End Fund)
The Fund seeks high current income, capital appreciation is a secondary objective. The Fund will normally invest at least 80% of its net assets in debt securities that are, at the time of purchase, rated below investment grade.
How do I use the "closed end fund indicator" ? It usually shows where the overbought/oversold condition (premium/discount) is .....
Money flowing to bond funds .....

Current watch list

Current watch list based on improved chart pattern ;
United States Steel Corp ( X )
Las Vegas Sands ( LVS )
Pfizer, Inc ( PFE )
AT&T Corp ( T )
Home Depot ( HD )
Ebay Inc ( EBAY )
RF Micro Devices ( RFMD )
Sandisk Corp ( SNDK )
Amazon.Com ( AMZN )

Just before you buy Yahoo (YHOO), some quick facts

Lycos was one of the first Internet portals from the mid-90s. Ten years ago, the Spanish company Terra Networks paid more than $12 billion for Lycos. Terra later sold it to a Korean firm for nearly $100 million. This week, the Korean firm sold Lycos for $36 million.
Source : Npr.org
1) Remember the "content is king BS" ?
2) What is Yahoo really worth ? Do you recall that Yahoo bought Geocities for $6 B for nothing !
3) Remember theglobe.com ?
4) Lots of very smart marketing con artists out there .....
5) Now the big hype is focusing on Facebook ..... will wait for everyone and their cousins to buy it, then short it

Case study, ITT Educational Services Inc (ESI)

ITT Educational Services, Inc. (ESI) chart analysis ;
1) One of the reasons I focus on the SP 500 is its "chart pattern" ; If I find a stock/commodity with a better chart pattern, I'll place it on my watch list (ie : Apple inc AAPL).
2) Quick case study with ESI (a reader asked my opinion) ; We have a typical GVN condition ; Gap, Volume, and News.
3) The chart pattern was NOT better than the SP 500 (no higher lows in July)
4) The support break down at $75 (while the SP moved higher) was a clear warning signal.
5) Then ? Le coup fatal ..... News ..... followed by huge volume saying ; "Get me out"
6) Try to buy on oversold condition ? Forget it .... let it drop .....

Once again Shanghai is our leading indicator ?

Shanghai Stock Exchange Index ; The picture is quite easy to read, current pattern gives us a clear bullish and bearish trigger. A break out above 2700 will send the SP 500 back above 1090.

iShares Barclays 20 Yr Treas Bond ETF (TLT)

iShares Barclays 20+ Yr Treas.Bond ETF (TLT) weekly chart ;
1) Price/volume break out in mid April confirmed move up
2) Yield/Bond prices was my "focus du Month"
3) Situation is not the same (see parabolic rise in Oct 09)
4) Still facing a lower high pattern (big picture)
5) Expected scenario ; Bonds trading slightly higher, then a sudden crash ....
Gut feeling ? Yields will rise ($USD heading higher anticipating a rush to buy the $$ ?

SP 500 chart updated

SP 500 chart updated ;
1) Short term trigger is now back into "Neutral" mode, NOT shorting !
2) Last signal was based on my Vix trading model
3) Re entry (bullish) right above 1090 (will confirm the "B" level)
4) Bear signal now stands @ right below 1060

US Dollar index chart updated

US Dollar index chart analysis ;
1) If you have been reading this blog for a while, you know that I turned bullish on the Dollar in late 09. After that clear parabolic rise, a hard pull back was expected ....
2) These kind of patterns are part of a bigger pattern ; a huge ABC pattern ....
3) I urge you to focus on two triggers ; 83.5 and 81.5 ; if we close (weekly) above 83.5, expect a huge rally in the $USD Dollar index. A close (weekly) below 81.5, rush back to the Euro.