Wednesday November 14 2012
Here is an Elliott Wave Count and Cup and Handle formation on gold. This certainly seems like a fourth or corrective wave that beats us all down.
The exec at MSFT behind Windows left the company today. MSFT was down some 3.2% taking the end of day market with it.
Gold itself is having trouble getting through its 50 day Moving Average.
I have been reading a highly technical letter which requires one to first read a 144 page library explaining the all the hocus pokus. This fellow may be right, he suggests t a low later this month after setting a rebound high right here Wednesday through Friday. ALL the news of course, see our headline above, is negative. The House convenes this week and is expected to do nothing right into Thanksgiving.
The NASD advance decline line is already back at the June Lows. This of course has been helped by the drop in AAPL and MSFT. There is no point in showing any of the other usual internal indicators as none of them have bottomed yet, just as NAAD has not bottomed.
Is there on single positive I could find in my stack of charts? Here is one I have not shown but looks interesting.
SPX versus VIX
I have heard little to nothing from readers lately though the number of hits has been pretty good for TMP. Everyone on CNBC Marketwatch and other blogs is absolutely certain the market has to fall a good deal further, one reader did e mail me to expect a 400 point SPX drop. Okay, if everyone is absolutely certain things are going to fall apart, will they? This is a ratio chart of the SPX versus the VIX. When it is rising the SPX is rising relative to negative bets against it which is what the VIX represents.
In the main panel the indicator has exhibited the same pattern as at the June bottom. It overshot the 200 day MA, convincing everyone lower prices were inevitable, then rebounded. Now it has even rebounded over, count 'em, three longer term moving averages MAs.
In the bottom panel, what can it be, the MACD curls up a bit, note in May the MACD curled up a bit before the actual bottom of the indicator.
In the top panel, CCI also was an early warning indicator, bottoming before the main chart bottomed.
Hmmm, I was so intrgued that I took this a step further. The next chart is a ratio of the actual NYSE index symbol NYA versus the VIX.
The summation index NYSI is actually for the New York Stock Exchange so it is necessary to get an apple to apple in synch display with the NYSE all around. Now, what do you see? Oh turn down CNBC and Bloomberg and just take a look.
The black line is the Summation Index. While it looks to be hopelessly falling, in fact it turned in the proverbial dime at its June low. The mood changed. If the rally stays intact it really needs to find support at the red line in the bottom panel.
I showed Michael Gayed's column this week in which he said his model had his firm absolutely positively out of stocks. And they by golly weren't going back in till it got better. I wondered what would constitute enough better to get him to put in a buy order? My point being that psychologically it is tough to buy at a bottom, running toward the buffalo herd is just not an instinctive thing to do.
Is this significant or will the markets just fail again? I suspect things need to rapidly improve the next three trading sessions or in fact lower prices lie ahead.
One more thing, is GDXJ outperforming the NYSE?
GDXJ versus NYSE remains in a solid uptrend. IF it survives this test of the 50 day MA it will be moving up. Is MACD turning up at bottom? Hmmm....Stay tuned, we will keep you informed while others track the Petraeus Paula Jill e mails. Markets are modestly up this morning. Watch the US Dollar.
Thank you for your daily updates. I appreciate your charts and insight. What I like most about this site is that you have money in the game and share your trading hits and misses. Thanks.
Posted by: Angela | November 14, 2012 at 09:45 AM